author: Mr. Justice Gridley

text:
    Omar H. Wright and Oliver L. Watson et al., Complainants, v. Thomas H. Matters and Marguerite L. Matters et al., Defendants, Appellees, on appeal of Noyes L. Jackson, Receiver, Appellant.
    Gen. No. 25,593.
    1. Mortgages, § 514

      —when receiver is entitled to credit for expense incurred. Where, In foreclosure proceedings, the court, following the provisions of the trust deed, appointed a receiver with power to collect the rents for a period of time not exceeding the equity of redemption from any sale, and to pay all taxes becoming due during that period, and subsequently ordered before the foreclosure sale, that he pay the taxes for a certain year, and the legality of his appointment and of the powers conferred upon him are not questioned until after the expiration of the period of redemption, and no attempt was made' to have the order for the payment of the taxes vacated nor was any notice served upon the receiver that he would be held responsible if he obeyed, the receiver is entitled to credit in his final account for the taxes paid pursuant to the order, even though the payment was not actually made until after the foreclosure sale.
    2. Mortgages, § 514*—when payment of expense by receiver is erroneous. Where a receiver, appointed in foreclosure proceedings with power to collect the rents for a period of time not exceeding the equity of redemption from any sale, pays taxes out of funds in his hands, without any order of court authorizing such payment, more than a year after the foreclosure sale and shortly before the expiration of the redemption period, he should not be allowed credit for such payment in his final account.
    3. Mortgages, § 640

      —when receiver does not wrongfully withhold deficiency. Where premises sold on foreclosure did not sell for an amount sufficient to satisfy the mortgage debt and the interest due thereon and the costs and expenses and the court entered a deficiency decree and the receiver appointed to collect the rents for a period not exceeding the equity of redemption from any sale, in his final report, after showing his cash balance on hand after the expiration of the redemption period, asked authority to pay the deficiency decree out of such balance, such decree should be satisfied out of the funds in the receiver’s hands against the claim of .a third person who was not a party to the foreclosure proceedings and claimed no interest in the premise's and did not attack the validity of the deficiency decree until after the redemption period had expired, and, on his final account, the receiver cannot be held to have wrongfully and illegally withheld the amount of the deficiency decree.
    4. Mortgages, § 524*—when receivership terminates. Where the order appointing a receiver in foreclosure proceedings directed him to take possession of the premises and collect the rents “for a period of time not exceeding the equity of redemption from the sale which may be had in this proceeding,” and there was a deficiency and he continued to act as receiver in obedience to the order without objection being raised thereto until after the expiration of the redemption period, such receivership did not terminate on the date of the foreclosure sale, notwithstanding no order was entered extending or continuing the receivership during the period of redemption.
    5. Judgment, § 520*—when judgment is res adjudicata. Where, after the expiration of the period of redemption, certain of the defendants in the foreclosure proceeding sued a writ of error out of the Appellate Court attacking the order appointing the receiver of rents in the foreclosure proceedings in which they made and argued the point that the circuit court erred in appointing such receiver for the period of redemption and the decision was adverse to them, neither they nor their grantee or assignee can object, on proceedings to confirm the receiver’s final report, that ther receivership terminated on the date of the foreclosure sale and did not extend through the period of redemption, since the question is, as to them, res adjudicata.

      6. Mortgages, § 540

      —what disbursements receiver is entitled to credit for. On appeal from a decree confirming in part the master’s report on the final account of a receiver in foreclosure and sustaining certain exceptions, certain disbursements by the receiver considered and held improperly disallowed as having been for “betterments and not necessary repairs” and that the receiver should have received credit for such disbursements.
    7. Mortgages, § 526*—what compensation of receiver is proper. On appeal from a decree which confirmed in part the master’s report on the final account of a receiver in foreclosure and sustained certain exceptions, certain allowances for fees of the receiver’s solicitors considered and held proper.
    8. Mortgages, § 531*—who may object to master’s report. One who was not a party to the foreclosure proceedings and set up no claim to the premises until after the expiration of the period of redemption, such- claim being based on a conveyance by one of the defendants in foreclosure, is properly allowed to file objections and exceptions to the master’s report on the receiver’s final account.
    Appeal from the Circuit Court of Cook county; the Hon. Kickham Soanlan, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1919.
    Reversed and remanded with directions.
    Opinion filed November 30, 1920.

      Certiorari denied by Supreme Court (making opinion final).
    Statement by the Court. This is an appeal by-Noyes L. Jackson, receiver, from a decree of the circuit court of Cook county, entered June 20, 1919, confirming in part the report of a master in chancery as to said receiver’s final account, but sustaining certain exceptions thereto and disallowing certain items contained in said final account.
    On September 1,1911, one Albert Atkinson, widower, to secure an indebtedness of $35,000 to Omar H. Wright, executed a trust deed to Oliver L. Watson, trustee, conveying certain premises, situated in the City of Chicago and inproved by a large apartment building and known as 810-818 East 51st street, “together with all rents, issues and profits of said premises.” It was provided in the deed that the grantor should pay prior to July 1 in each year all taxes and assessments against the premises, and that in the event he failed to do so the grantee might pay them, and that such payment might he treated as so much additional indebtedness secured by the deed. It was further provided that:
    “The grantor waives all right to the possession of, and income from said premises, pending such foreclosure proceedings, and until the period of redemption from any sale hereunder expires, and agrees that upon filing of any bill to foreclose this trust deed, a receiver shall and may at once be appointed to take possession or charge of said premises, and collect such income, and the same, less receivership expenditures, including repairs, insurance premiums, taxes, assessments and his commissions, to pay to the person entitled to a deed under the certificate of sale, or in reduction or redemption money, if said premises be redeemed. ’’
    On the same day said Atkinson executed another trust deed of the same tenor conveying the same premises to said Watson, as trustee, to secure notes for $10,000 held by said Wright. Prior to the execution of said trust deeds, to wit, on September 13, 1910, said Atkinson had executed another trust deed on said premises- to one Fishburn, trustee, to secure a note of $35,000. On October 24, 1911, said Atkinson, by warranty deed, conveyed said premises to Thomas H. Matters, subject to said three trust deeds, the indebtedness secured by which Matters assumed and agreed to pay.
    On October 11, 1912, a bill to foreclose said trust deed of September 1, 1911, was filed in said circuit court, in which ,said Omar H. Wright, said Oliver L. Watson, trustee, and one Kelley, successor in trust,- were the complainants, and said Thomas H. Matters and Marguerite L. Matters, his wife, and others, were the defendants. The bill also prayed for the appointment of a receiver.
    On October 14, 1912, an order was entered appointing Noyes L. Jackson as receiver, with power to take possession of the premises, and to collect the rents “for a period of time not exceeding the equity of redemption from the sale which may be had in this proceeding,” and giving him the further powers “to pay all taxes,” both general and special, “now due or to become due during the said prescribed period,” and “to put and keep the said premises in repair,” and to spend the rents, issues and profits thereof for each and every purpose aforesaid, including the running operating expenses of the improvements thereon, “holding the balance of said money * * * until the further order of the court.”
    Jackson immediately qualified as receiver and took possession of the premises. In the apartment building there were 288 rooms, divided into 62 apartments. Some of the apartments were vacant and the building was not paying operating expenses. The receiver was obliged to advertise, to decorate, and to put the building in good condition, in order to fill the vacancies. He lived in Belvidere, Illinois, and shortly after his appointment he, for convenience, employed the firm of Oliver L. Watson & Company to collect the rents on a 3 per cent commission basis, which firm had previously collected rents for Matters on the same terms. A new janitor was hired who as-^ sisted in making necessary small repairs and in collecting rents. The receiver supervised the repair work done, checked over the expenditures for such work, and was personally at the building once or twice every week. The net receipts from rents were increased. The receiver frequently consulted with Matters and kept him advised as to receipts and expenditures. The latter lived in Omaha, Nebraska, and sometimes the consultations were had in that city. According to the receiver’s testimony Matters at no time during these interviews raised any objections to the receiver’s accounts, but on the contrary complimented the receiver on the way he was handling the building.
    On April-13, 1914, a decree of foreclosure of said trust deed of September 1, 1911, was entered finding that there was due to said Omar H. Wright the sum of -$39,211, and ordering that unless payment of said sum be made within 3 days the premises be sold at public auction, and that said Wright be entitled to a decree and execution against said Matters in case of any deficiency. This decree bore the notation of “O. K. Harold V. Amberg,” the then solicitor of Matters and wife. On May 14, 1914, at the master’s sale, the premises were sold to said Omar H. Wright. There was a deficiency of $1,482.91, and on June 3, 1914, the sale was approved by the court and the deficiency decree entered. The receiver remained in possession of the premises until August 14, 1915 (the expiration of the period of redemption), without objection by any party concerned, and continued to colleet the rents and otherwise perform his duties as receiver.
    On April 29, 1914, about 2 weeks before the sale of said premises, the court, on petition of the receiver, ordered that he pay the taxes on the premises for the year 1913, which he did on July 30, 1914. He had previously, by order of court, paid the taxes for the year 1911, which were delinquent. On July 22, 1915, before the expiration of the period of redemption, he also paid the taxes for the year 1914, which became a lien on May 1, 1914, but he made this payment without an order of court.
    On August 17, 1915 (3 days after the expiration of the period of redemption), one Della N. Holverson, by her solicitors Henry & Robinson, filed by leave of court a petition in said foreclosure suit and a rule was entered upon said Wright, Watson and the receiver, Jackson, to answer the same. Before the answer was filed certain amendments were made to the petition, and on August 27, 1915, said Henry & Robinson were given leave to file their appearance in said foreclosure suit for Matters and wife, in lieu of said Harold V. Amberg, withdrawn.
    In said petition, as amended, it is alleged that Holverson became the owner of the premises on March 13,1914, and is now entitled to the possession thereof; that said Matters conveyed the same by deed to Thomas B. Moore; that said Moore and wife conveyed the same by deed, dated March 13, 1914, and recorded April 8, 1915, to petitioner; that petitioner is entitled to all the rights of said Matters and said Moore in said premises, including the rents and profits thereof, subject to the incumbrances; that the master’s sale of the premises to said Wright on May 14, 1914, is void and of no effect; that said Wright, Watson and Jackson are the owners of or have an interest in the master’s certificate of sale issued to said Wright on said date; that since said date said Jackson, as receiver, has collected as rent from the premises a sum exceeding $25,000, which is rightly due. petitioner but which has been withheld from her; that upon an accounting between petitioner and said Wright it will appear that nothing is due him; and that, although said Wright has extended the time of redemption from the sale for a period of 4 months from August 14, 1915, upon certain terms and conditions which petitioner has complied with, yet said Wright threatens to have a deed issued to him for said premises by the master by virtue of said sale. The petitioner prayed that said Jackson, as receiver, file an account of all his acts and doings since his appointment; that all moneys in his hands be declared to be the property of petitioner and be turned over to her; that the master’s certificate issued to said Wright be turned over to her; and that a master’s deed be issued to her.
    On September 4, 1915, the receiver filed a final report and account. This was afterwards superseded by a supplemental and amended report and account, filed October 4, 1915, by order of court.

      On September 7, 1915, said Wright, Watson and Jackson (individually and as receiver) filed their joint and several answer to said amended petition in which they demanded strict proof as to Holverson’s alleged interest in the premises, admitted that they had an interest in the certificate of sale issued to said Wright on May 14, 1914, alleged that a master’s deed had already, on August 17, 1915, been issued to said Wright and that it on the same day had been recorded, denied that Wright had agreed to extend the period of redemption, alleged that said Jackson had filed his final account as receiver, and denied that all moneys in his hands should be turned over to petitioner or that said certificate pf sale or deed to said Wright should be set aside.
    In the receiver’s supplemental and amended final report, filed October 4, 1915, all of his receipts and disbursements were set forth in detail, showing a cash balance on hand on August 14, 1915, of $3,906.22. He asked that out of said sum he “be authorized and directed to pay the deficiency decree of $1,482.91,” which with interest thereon from May 14, 1914, amounted to $1,575.55; to pay his solicitors for services $500; and to retain for his own services $975. He further asked that the court direct to whom he should pay the balance of $855.67.
    On January 11, 1916, the joint written objections of Matters and wife and said Holverson to said report were filed by Henry & Robinson, their solicitors.
    In the meantime, on October 13, 1915, Matters and wife, by their said solicitors Henry & Robinson, sued out of this Appellate Court a writ of error in which proceeding’ they attached the order of the circuit court of October 14, 1912, wherein said Jackson, as receiver, was given power to act as receiver and to collect the rents “for a period of time not exceeding the equity of redemption from the sale”; and also attacked the validity of the deficiency decree of June 3, 1914, entered against said Matters for $1,482.91. The action of the circuit court was affirmed on March 20, 1917. (Wright v. Matters, 204 Ill. App. 398.)
    On October 19, 1916, Holverson, by her said solicitors, gave notice that she would appear in the circuit court and ask for an order on the receiver to turn over to her the sum of $6,196.50. This sum included the following items: (1) the $855.67 stated in the' receiver’s final report to be in his hands; (2) two payments of $962.50 each for 6 months’ interest due on the first mortgage, made by him after the foreclosure sale as shown in said report; and (3) two payments of $1,735.65 and $1,680.18, respectively, for taxes on the premises for the years 1913 and 1914, made by him, as shown in said report, after said foreclosure sale and on July 30, 1914, and July 22, 1915, respectively.
    On November 6, 1916, on Holverson’s motion, the circuit court entered an order finding that said Holverson was entitled to said sum of $855.67, and directing that the receiver immediately pay the same to her and referring the cause to a master to take testimony with respect to said final report of the receiver and report his conclusions. The receiver subsequently paid said sum of $855.67 to Holverson.
    On November 22, 1916, notice was given that the receiver would ask leave to pay said deficiency decree of $1,482.91.
    On July 2, 1917, the receiver filed an additional supplemental report in which he claimed an allowance for additional expenditures made since he filed his report on October 4, 1915, amounting to $219.09, and also asked for an additional allowance of $750 for legal services rendered by his solicitors after October 4, 1915.
    There was a lengthy hearing before the master—the testimony and exhibits covering about 500 pages. During the hearing it was stated by the solicitor for the receiver, in substance, that as to the two payments made by the receiver after the foreclosure sale of $962.50 each for 6 months’ interest due on the first mortgage, these payments had been made without any order of court, and without authority of law, and should be and would, be refunded.
    On August 16, 19Í8, the master’s report ivas filed. The master had had access to the receiver’s vouchers and he substantially approved the receiver’s final report and account, including said item of $219.09 for additional expenditures and said item of $750 for additional legal services of the solicitors for the receiver. He also approved the payment of the amounts for the taxes of 1913 and 1914, but he debited the receiver with said two interest payments of $962.50 each. Objections had been made to the master’s report, and overruled and these objections were ordered to stand as exceptions before the court.
    On June 20, 1919, the decree appealed from was entered. By it the report of the master was “in all things approved and confirmed except as otherwise provided in this decree. ’ ’ The chancellor found:
    (1) < < That the receiver wrongfully, improperly and illegally paid the taxes for the year 1913, in the sum of $1,735.65, on July 30, 1914.
    (2) “Also the taxes for the year 1914, in the sum of $1,680.18, on July 22,1915.
    (3) “That the receiver wrongfully, improperly and illegally withheld the amount of the deficiency decree, namely, $1,482.91, entered June 3, 1914. -
    (4) “That the receivership herein terminated on May 14, 1914, when the property was sold pursuant to a decree herein, and that no order was entered extending or continuing said receivership.
    (5) “That the receiver made permanent improvements to said property, and that said permanent improvements were betterments and not necessary repairs to said property; that the said permanent improvements and the respective amounts expended therefor were as follows, to wit:

      Sept. 1, 1914 $ 16.85 Aug. 6, ” . 60.00 Aug. 19, ” 60.00 Plumbing supplies Painting fire escapes Balance—painting fire escapes
    Aug. 24, ” 110.00 Sept. 22, ” 94.87 Mar. 5, 1915 ■ 180.00 Dec. 10, 1914 120.00 Dec. 24, 1914 25.00 Painting front windows Becoating roof One pump Alterations—entrance Wiring work on halls and fixtures
    Jan. 20, 1915 149.60 Jan. 5, 1915 40.00 June 5, 1914 15.00 Wiring halls and fixtures Cementing boiler room Painting screens
    June 17,1914 6.00 Bepairs to screens and painting
    Feb. 10, 1915 39.60 Painting and decorating screens
    Feb. 26, Aug. 3, May 8, 99 99 99 54.00 15.45 21.50 Putting in pipe in boiler Plumbing supplies Window shades
    Total......$1,007.87
    (6) “That the receiver herein neglected his duty and otherwise exercised bad faith and conduct in the administration of the office to which he was appointed by the court, and that the said receiver is not entitled to the fee of $975 claimed by him nor to any fee.
    (7) “That the solicitors for the receiver spent part of their time in the hearing before the master herein in defending unjustifiable acts of the receiver, but that on the other hand the solicitors for the receiver have spent a great deal of time before this court (five days) arguing on these various matters and have requested the court to allow them an additional amount; and because of that fact the court finds that one balances the other, and that therefore the same amount allowed by the master as solicitors’ fees will be allowed by this court.”
    The foregoing holdings of the chancellor are assigned as error as well as that the court erred in permitting the' solicitors for Holverson to file and argue objections to said master’s report. Cross errors are also assigned by Matters and wife and Holverson. The various points made have been .elaborately argued by respective counsel.
    Cooke, Sullivan & Ricks, for appellant; Olives R. Babbett and Fbanois L. Daily, of counsel.
    Henby & Robinson, for appellees.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

      See Illinois Notes Digest, Vols. XI to XV, ami Cumulative Quarterly, game topic and section number.

      See Illinois' Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

First. As to the payment by the receiver of $1,735.65 for taxes for the year 1913, it appears that before the foreclosure sale and on April 29, 1914, the receiver was ordered by the court to pay said taxes, and that the payment was actually made on July 30, 1914, after the foreclosure sale. No attempt was made to have this order vacated nor was any notice served upon the receiver that he would be held responsible if he obeyed it. It further appears that on October 14, 1912, the court, following the provisions of the trust deed, appointed the receiver with power to collect the rents for a period of time not exceeding the equity of redemption from any sale and to pay all taxes becoming due during that period. The legality of the receiver’s appointment and of the powers conferred upon him were not questioned until the suing out of the writ of error in this Appellate Court on October 13, 1915, about 2 months after the expiration of said redemption period, and in that proceeding the action of the circuit court was subsequently affirmed. In Rearden v. Youngquist, 189 Ill. App. 3, 12, it is said:

“A receiver is an officer of the court and subject to its orders. The real custody of the property in his hands is in the court, of which he is an officer. * * * He must obey the orders of the court so long as they are unimpeached. * * * Expenditures made in pursuance to such orders cannot be questioned on the receiver’s accounting. * * * Neither can the propriety of entering the order be challenged on exceptions to the master’s report on the receiver’s account. * * * Obedience to such orders is his sufficient protection. * * * It was clearly the duty of appellees, if they desired to oppose the payment of those various items by the receiver out of the funds in his hands, to have opposed the entry of the order by showing to the court why it should not or could not legally be entered, or at least to have sought its vacation on motion and a showing. Failing in this they should have notified the receiver that they would hold him responsible for a misapplication of the funds, if he obeyed the order.”

We think that in the present case the chancellor erred in not allowing the receiver credit in his final account for this payment.

Second. As to the payment by the receiver of $1,680.18 for taxes for the year 1914, it appears that this payment was made out of funds in the hands of the receiver, without any order of court authorizing the same, on July 22,1915, more than a year after the foreclosure sale and shortly before the expiration of the redemption period. In Stevens v. Hadfield, 90 Ill. App. 405, 406, it is said:

“The purchaser at the foreclosure sale took the title with all its infirmities and burdens, and it was not for the receiver to apply' the rents and profits accruing during the period of redemption to the removing of such infirmities or burdens for the benefit of such purchaser.” (Citing Davis v. Dale, 150 Ill. 239; Stevens v. Hadfield, 178 Ill. 532.)

And, in referring to a payment for taxes made by the receiver in the Hadfield case, it is further said (p. 407):

‘‘ The same reasons which preclude the receiver from assisting the purchaser at the foreclosure sale by an application of the rents and profits accruing during the period of redemption upon the first mortgage' lien also preclude him from assisting here in the matter of taxes. This item was also properly disallowed.”

This Hadfield decision was affirmed by the Supreme court (196 Ill. 253) and that court in its opinion says (p. 256):

“The receiver held the money received as rents and profits for the holder of the equity of redemption, subject only to the payment of such proper charges against it as might be allowed by the court, and not, in any sense, for the benefit of the purchaser at the foreclosure sale.”

In the present case we think that credit to the receiver in his final account for this payment was properly disallowed.

Third. As to the holding of the chancellor that the receiver “wrongfully, improperly and illegally withheld the amount of the deficiency decree, namely $1,482.91,” it appears that at the foreclosure sale on May 14, 1914, the premises did not sell for an amount sufficient to satisfy the mortgage debt and interest thereon due to said Omar H. Wright and the costs and expenses, and that on June 3, 1914, the court entered a deficiency decree against said Matters and in favor of said Wright. It further appears that the receiver, in his amended final report, filed October 4, 1915, after showing his cash balance on hand on August 14, 1915 (the expiration of the redemption period), asked that out of said balance he be authorized to pay said deficiency decree with interest thereon from the date of said foreclosure sale; that on October 13, 1915, Matters and wife sued out a writ of error in this Appellate Court in which they attacked the validity of said deficiency decree entered against said Matters, but were unsuccessful in that attack (Wright v. Matters, 204 Ill. App. 398); that the petitioner, Holverson, was not a party to the bill to foreclose; and that it was not until August 17, 1915 (after the expiration of the redemption period), that she first appeared and filed her petition in which she claimed an interest in the premises derived by deed from Matters to Moore and by deed from Moore and wife to her, dated March 13, 1914. We think that the deficiency decree, as against any claims of Holverson, should be satisfied out of the funds in the receiver’s hands. (First Nat. Bank of Joliet v. Illinois Steel Co., 174 Ill. 140; Trussing v. Lancaster, 234 Ill. 462; Townsend v. Wilson, 155 Ill. App. 303; Ellison v. Miller, 137 Ill. App. 208.) And, under the facts and circumstances disclosed, we think that the chancellor erred in holding, that the receiver wrongfully and illegally “withheld” the amount of the deficiency decree.

Fourth. As to the holding that “the receivership herein terminated on May 14, 1914,” etc., we think that therein the chancellor also erred. While it is true that on or after the date of the foreclosure sale, May 14, 1914, no order was entered extending or continuing the receivership during the period of redemption, it is also true that in the original order appointing the receiver, October 14, 1912, he was directed to take possession of the premises and to collect the rents “for a period of time not exceeding the equity of redemption from the sale which may be had in this proceeding,” that there was a deficiency, that he continued to act as receiver in obedience to the court’s order, and that no objection was made by any one to his so continuing to act until after the expiration of the redemption period. Furthermore, in the writ of error proceeding, commenced by Matters and wife in this Appellate Court on October 13, 1915, one of the points made and argued was that the circuit court erred in appointing the receiver for the period of time mentioned, and the decision was adverse to Matters, and res adjudicata as to him, and we think that under the circumstances disclosed, Holverson, as grantee of Matters or assignee of his rights, should not have been allowed to again raise the question in the present proceeding.

Fifth. As to the holding that certain disbursements of the receiver, aggregating $1,007.87, were for “betterments and not necessary repairs” to the premises, we have reached the conclusion after careful examination that therein the chancellor also erred. We think that these disbursements should be allowed the receiver as a credit in his final -account. And we also think that other disbursements allowed to the receiver by the court, complained of by the appellees, Matters and wife and Hoi vers on, were proper.

Sixth. We are of the opinion that the chancellor should have allowed the receiver the fee of $975 claimed by him. And we think that the two allowances for fees of the receiver’s solicitors, viz., $500 for services from October 14, 1912 to October 4, 1915, and $750 for services after October 4, 1915, on the hearing before the master in the contest over' the receiver’s account, were proper, but we think that the court should have allowed in addition a reasonable fee for the services of the receiver’s solicitors for the 5 days spent on the hearing before the chancellor on exceptions to the master’s report. And we are of the opinion that it was proper to allow Holverson to file objections and exceptions to the master’s report.

For the reasons indicated the decree of the circuit court is reversed and the cause remanded with directions to enter a decree approving and confirming the master’s report, except as to the allowance to the receiver of the item of $1,680.18, payment for taxes for the year 1914, and allowing to the receiver a reasonable fee for the services of his solicitors on the hearing before the chancellor on exceptions to the master’s report.

Reversed and remanded with directions.

Barnes, P. J., and Matchett, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Virginia Amusement Company, Appellee, v. Mid-City Trust & Savings Bank, Appellant.
    Gen. No. 25,600.
    1. Landlord and tenant, § 274

      —when deposit for rent may not be kept by lessor. Where a lessee according to the terms of a 12-year lease deposited $17,000 with the lessor, $8,500 to apply “as rent” for the first year of the term and $8,500 for the last year, and the lessee was dispossessed before the last year of the term by forcible detainer proceedings on account of the nonpayment of 3 months’ rent, the lessor was entitled to withhold from the $8,500 only the 3 months’ rent due, notwithstanding a provision in the lease, that should the lessees he guilty of a breach of any of their agreements "all sums of money paid by them upon said lease as rent, shall immediately he forfeited to said first party as liquidated damages,” since this was a provision for a penalty and not for liquidated damages.
    2. Landlord and tenant, § 274*—when tenant is not liable for abandonment of premises. A provision in a lease, that the lessee satisfy any deficiency in rent collected from a new tenant should the lessee “abandon or vacate,” has no application where the lessee is dispossessed by the lessor.
    3. Landlord and tenant, § 274*—when tenant is not liable for repairs under lease. A lessor is not entitled to a credit for sums disbursed for repairs, even though a lease provides that the tenant shall he liable for the cost of repairs, when it appears that the disbursements were not for such repairs as the tenant was required to make under the terms of its lease.
    Appeal from the Municipal Court of Chicago; the Hon. Wells M. Cook, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1919.
    Affirmed.
    Opinion filed November 30, 1920.
    M. W. Borders and Norman G. Collins, for appellant.
    Busby, Weber, Miller & Donovan, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

By this appeal the Mid-City Trust & Savings Bank; a corporation (hereinafter referred to as the bank), seeks to reverse a judgment rendered against it and in favor of the Virginia Amusement Company, a corporation (hereinafter referred to as the Amusement Co.), on May 21, 1919, for $6,557.65, by the municipal court of Chicago, in an action of the first class in contract, tried before the court without a jury.

On March 26, 1907, by written lease, Alexander- W. Hannah leased to Howse and Ritchey, the lessees, certain- premises on West Madison street, Chicago, Illinois, “together with the theatre to be erected thereon” for a term of 12 years, commencing September 15, 1907, and ending September 14, 1919. By mesne conveyances the lease was assigned by the lessor to the bank, and on November 12, 1907, the rights of said lessees therein were assigned to the Amusement Co. The lessees covenanted to pay as rent for the premises the total sum of $102,000, payable in instalments of $1,000 in cash, $2,000 on July 1, 1907, $3,000 on August 1, 1907, and $11,000 on September 1, 1907, “said sums to apply as rent for the first year of said term and the last year of said term”; and also instalments of $708.33, each in advance, upon the first day of each and every month of said term, from and including September 15, 1908, to September 15, 1918. It will be observed that the lessees were to pay $17,000 before the commencement of the term, which sum was to apply “as rent” for the first and last years of said term, or, in other words, $8,500 was to apply as rent for the last year, viz., the year commencing September 15, 1918, and ending September 14, 1919. The lessees further covenanted that they would keep the premises in good repair at their expense, and that, “upon the termination of this lease in any way,” would yield up the premises to the lessor “in good condition and repair (loss by fire and ordinary wear excepted).” The parties agreed that if the lessees should “abandon or vacate” the premises, the lessor might relet the same for such rent and upon such terms as he might see fit, and that, if a sufficient sum should not be thus realized after paying expenses to satisfy the rent reserved, the lessees agreed to satisfy and pay all deficiency. The parties further agreed that, “if default be made in the payment of the rental above reserved, or any part thereof, or in any of the covenants and agreements herein contained,” to be kept by the lessees, it should be lawful for the lessor, at his election, at any- time thereafter, without notice, “ to declare said term ended, and to re-enter said demised premises,” and to expel or put out the lessees or any persons occupying the premises, “without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenants.” The lessees further covenanted to pay all reasonable costs, attorneys’ fees and expenses that should be incurred by the lessor “in enforcing the covenants and agreements of this lease.” The parties further agreed that should the lessees “be guilty of a breach of any of the covenants or agreements in said lease to be by them kept and performed, then and in such event any and all sums of money, paid by them upon said lease as rent, shall immediately be forfeited to said first party as liquidated damages.”

The Amusement Co., before it took possession of the premises, paid to the bank the $17,000, and also thereafter paid the stipulated monthly rent up to and including the rent for'April, 1918, but then ceased making rent payments. Under date of July 1, 1918, an attorney for the bank sent a letter to the Amusement Co., saying that the owner of the premises had placed in his hands for collection rent for the month of June, “with strict instructions to bring suit for possession” unless the amount was immediately paid, and that unless payment was made before July 5, legal steps would be taken on that day “to recover possession of these premises.” On July 12, .1918, the bank served on the Amusement Co. a landlord’s five-day notice, notifying it that there was then due as rent the sum of $2,187.48, and demanding payment thereof, and saying that unless payment of said sum was made on or before July 17, 1918, “your lease of said premises will be terminated.” On July 18, .1918, the bank filed a complaint in forcible detainer in said municipal court against the Amusement Co. to recover possession of said premises. On July 20, 1918, summons was served, and on July 24, 1918, judgment was entered for possession but not for rent, and on July 31,1918, a writ of restitution was issued. On the same day, and before the writ was served, the Amusement Co., in obedience to the court’s order, vacated the premises and the bank took possession thereof. On August 10, 1918, the Amusement Co. served on the bank a written demand for the sum of $8,500, “being the amount which was heretofore deposited” by the Amusement Co. “under the terms of said lease as security therefor,” less the sum of $2,187.48, “being the amount of rental accrued and payable to you for our possession of the premises.” The bank did not comply with the demand, and on August 28, 1918, the Amusement Co. commenced the present action, seeking to recover from the bank said difference of $6,312.52, together with legal interest thereon from-the date of service of said written demand.

To plaintiff’s statement of claim the bank filed an affidavit of merits and as amended statement of set-off. In the latter pleading it was alleged, in substance, that the Amusement Co. had failed to yield up the premises in good condition and repair and that, by reason thereof, the bank had been required to expend in repairs the sum of $1,298.82; that the premises were vacant from August 1 to December 1, 1918, when they were rented to another tenant for a term ending April 30, 1924; and that the bank had sustained a further loss of $3,954.12, on account of the difference in the amount of rent which it would have received had the Amusement Co. performed its covenants as to payments of rent. In the affidavit of merits of the Amusement Co. to said statement of set-off there were set forth in detail the service on the Amusement Co. of said landlord’s five-day notice, the forcible detainer proceedings, the entry of the judgment for possession, and the issuance of the writ of restitution; and it was alleged that, in compliance with said judgment and writ, the Amusement Co. vacated the premises and surrendered the possession thereof to the bank, and that thereby, said lease and said tenancy became and were terminated, and that upon said termination the Amusement Co. had yielded up the premises in good condition—ordinary wear excepted. The Amusement Co. denied that because of any default on its part the bank had been compelled to expend any sum for repairs, and alleged that if any sum had been expended it was for the purpose of making alterations and not repairs. The Amusement Co. further denied that it owed the bank any of the sums of money mentioned in said statement of set-off.

On the trial the facts as above outlined were disclosed. It was stipulated that at the time of the service of said landlord’s notice, July 12, 1918, the Amusement Co. owed the bank for 3 months’ rent, and that if the court should hold that the Amusement Co. was entitled to recover, there should be a deduction from said $8,500 of $2,187.48, for said unpaid rent. The finding of the court was in favor of the Amusement Co. for the full amount of its claim including interest.

The main contention of counsel for the bank is that the Amusement Co. is not entitled to recover back any portion of said $8,500, because the same, when paid to the bank in accordance with the terms of the lease, was a payment of an existing obligation and not merely a deposit as security for the performance of the covenants of the lease on the part of the Amusement Co. The contention of counsel for the Amusement Co. is just the reverse, and that, notwithstanding the provision in the lease (viz., that should the lessees be guilty of a breach of any of their agreements “then and in such event any and all sums of money, paid by them upon said lease as rent, shall immediately-be forfeited to said first party, as liquidated damages”), under the facts disclosed said sum should not be considered. as liquidated damages but only as a penalty. The trial court held as a proposition of law that said provision in the lease “is a provision for a penalty, and, by reason of the fact that the defendant terminated said lease in the month of July, 1918, and dispossessed the plaintiff through forcible detainer proceedings, the defendant is only entitled to withhold from the sum of $8,500, then in its possession to apply upon the last year’s rental under said lease, the amount due as rental for the months of May, June and July, 1918, and such- further sum, if any, in the way of damages as may have been suffered-by the defendant by reason of the plaintiff’s breach, if any breach there was, of any of the other covenants of said lease prior to the termination of said lease by the defendant.” Under the facts shown, and under the law as disclosed by decisions of courts of review of this and other states, we are of the opinion that' the above holding of the trial court is correct. (Advance Amusement Co. v. Franke, 268 Ill. 579; Kay Gee Amusement Co. v. Cave, 177 Ill. App. 250, 255; Weber v. Moy, 183 Ill. App. 200; Billos v. Kozlowski, 205 Ill. App. 285; Caesar v. Rubinson, 174 N. Y. 492; Chaude v. Shepard, 122 N. Y. 397; Cunningham v. Stockon, 81 Kan. 780; Moumal v. Parkhurst, 69 Ore. 248.)

It is further contended by counsel for the bank that the trial court erred in refusing to admit in evidence the offered testimony of the witness, Alexander Friend, as to loss of rent claimed to have been sustained by the bank after the Amusement Co. was dispossessed, viz., the difference between what the bank collected from the new tenant for the balance of the term, after such dispossession, and what the bank would have collected from the Amusement Co. had the latter remained in possession and paid its stipulated rent. The court held as a proposition of law that the provision in the lease, to the effect that if the lessees should “abandon or vacate” said premises the same should be relet by the landlord, etc., and if a sufficient sum should not be thus realized, after paying the expenses of such re-letting and collecting, to satisfy the rent reserved, the tenant agreed to satisfy and pay all deficiency, “has no application under the facts of this case, for the reason that the plaintiff did not abandon or vacate said premises, but the landlord elected to terminate said lease and dispossess the plaintiff.” Under the facts disclosed and under the law we are also of the opinion that the court’s holding was substantially correct and that no error was committed in refusing to admit said testimony. (Snell v. Owen, 63 Ill. App. 377, 378; Johannes v. Kielgast, 27 Ill. App. 576, 579; Michaels v. Fishel, 169 N. Y. 381.)

Some evidence was introduced by the bank in the endeavor to show that it had disbursed certain sums for repairs on the premises after the Amusement Co. was dispossessed, and the bank claimed it should be allowed credit therefor. The court refused to make any such allowance, and properly, we think, for the reason that it appeared that such disbursements were not for such repairs as the Amusement Co. was required to make under the terms of the lease.

The judgment of the municipal court will be affirmed.

Affirmed.

Barnes, P. J., and Matchett, J., concur.


text:
    Robert E. Barbee, Agent, Appellee, v. Jackson M. Evans, Appellant.
    Gen. No. 25,676.
    1. Landlord and tenant, § 88

      —when tenancy from year to year is created. A tenancy from year to year is created where a tenant holds over, after the expiration of a former lease for one year, and pays rent at the old rate, nothing being said between the parties, and no agreement as to the time he shall hold being made.
    2. Landlord and tenant, § 478*—how tenancy from year to year is terminated. A tenancy from year to year cannot be terminated by a demand for immediate possession, but such tenant must be notified to quit in accordance with the requirements of the Landlord and Tenant Act, Hurd’s Rev. St. ch. 80, sec. 5 (J. & A. ¶ 7043).
    3. Landlord and tenant, § 478*—how notice to terminate tenancy must he served. The mailing of a notice to quit to a tenant from year to year is not service in compliance with the Landlord - and Tenant Act, Hurd’s Rev. St. ch. 80, sec. 10 (J. &. A. ¶ 7048), providing that such notice may be served by “delivering” a copy thereof to the tenant.
    4. Trial, § 199*—when directed verdict is improper. A directed verdict is improper where there is an important issue of fact to be passed on by the jury.
    5. Evidence, § 39*-—what presumption arises as to receipt 'of mailed matter. Testimony as to writing, stamping and mailing a letter raises only a rebuttable presumption that the addressee received the letter within a reasonable time thereafter.
    Appeal from the Municipal Court of Chicago; the Hon. Harry C. Moran, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1919.
    Reversed and remanded.
    Opinion filed November 30, 1920.
    Daniel S. Wentworth and David B. Maloney, for appellant.
    William; Arthur Anderson, for appellee; Max C. Liss, of counsel.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Gridley

delivered the opinion of the court.

On May 1, 1919, Robert E. Barbee, as agent, filed in said municipal court a complaint in forcible detainer, alleging that he is entitled to the possession of certain premises in said city, described as “the second flat, No. 347 West 72nd Street,” and that Jackson M. Evans unlawfully withholds the possession thereof from him. A summons was duly issued and on May 5, 1919, Evans entered his appearance and demanded a jury. On May 12,1919, at the conclusion of the trial, at which evidence was introduced by both parties, the court instructed the jury to return a verdict finding Evans guilty of unlawfully withholding the possession of the premises from Barbee, which they did, and thereupon the court entered the judgment appealed from in favor of Barbee that he recover possession of the premises.

It appears from the undisputed evidence that on March 27, 1917, Barbee, as agent, by written lease, rented the premises to Evans for residence purposes for a term of one year, beginning May 1, 1917, and ending April 30, 1918, at the stipulated rental of $420, payable in instalments of $35 each on the first day of each and every month during said term; that Evans took possession of the premises and paid the rent as stipulated; and that at the end of said term Evans held over without any new lease being executed and other agreement made and paid rent of $35 each month (which was accepted by Barbee) up to and including the rent for the month of April, 1919.

In the case of Johnson v. Foreman, 40 Ill. App. 456, decided by the Appellate Court of this district, it is said (p. 460): “A tenancy from year to year will be created where a tenant holds over, after the expiration of a former lease, for one or more years, and pays rent, nothing being said between the parties, no agreement as to the time he shall hold being made.” In the case of Hately v. Myers, 96 Ill. App. 217, decided by the branch court of this district, it appears (p:, 226) that there was a “holding over by the tenant after the determination of a lease for a definite term of one year, with the consent of the landlord and the payment of rent at the old rate, but without any new agreement as to the time .of the holding ’ ’; and it was held that under such a state of facts a tenancy from year to year was created. In Goldsborough v. Gable, 140 Ill. 269, 273, it is said: “Appellee having remained in possession after the expiration of the' term described in the deed without any new contract with appellant in respect, thereto, it was optional with appellant to treat him as a trespasser, or waive the wrong of holding over and treat him as a tenant;' and by accepting the payment of the month’s rent thereafter from appellee, appellant made his election, and appellee then became a tenant of the premises, under appellant, from year to year, upon the same terms and subject to the same rent, etc., as is provided to be paid in the original deed.” (Citing cases.)

It would seem, therefore, that under the undisputed evidence in the present case, Evans became a tenant of the premises in question, under Barbee, from year to year, the first year ending April 30, 1919.

In section 5 of the Landlord and Tenant Act (Hurd’s Rev. St. ch. 80, J. & A. ¶ 7043) it is provided:

“In all cases of tenancy from year to year, sixty days’ notice, in writing, shall be sufficient to terminate the tenancy at the end of the year. The notice may be given at any time within four months preceding the last sixty days of the year.”

In Streit v. Fay, 230 Ill. 319, 326, it is said:

“Á tenancy from year to year cannot be terminated by a demand for immediate possession, but such tenant must be notified to quit in accordance with the requirements of section 5 of chapter 80, Hurd’s Statutes of 1905.”

In' section 7 of said Act (J. & A. ¶ 7045) it is provided that “where a tenancy is terminated by notice,” under said section 5,- “no further demand shall be necessary before bringing a suit under the statute in relation to forcible detainer or ejectment.”

In sections 10 and 11 of said Act (J. & A. ¶¶ 7048, 7049) it is provided:

‘‘ Sec. 10. Any demand may be made or notice served by delivering a written or printed, or partly written and printed, copy thereof to the tenant, or by leaving the.same with some person above the age of twelve years, residing on or in possession of said premises; and in case no one is in the actual possession of said premises, then by posting the same on the premises.

“Sec. 11. When any such demand is made or notice served * * * by any person not an officer, the return may be sworn to by the person serving the same, and shall then be prima facie evidence of the facts therein stated.”

It appears from the testimony of Barbee that on February 14, 1919 (more than 60 days before April 30, 1919), he wrote, stamped, and mailed a letter, bearing said date and addressed to Evans at said premises, in which it is stated:

“The lease which you now have for the second floor at No. 347 West 72nd Street expires April 30, 1919, and this notice cancels your present lease. * * * The owner finds it necessary to raise the rent to $38 per month. Enclosed find lease for the coming year. If you wish to keep the apartment for another year under these terms kindly notify me not later than February 22nd. If I do not hear from you by that time it will be necessary for me to place your apartment on the rent list.”

It appears from Evans ’ testimony, in . substance, that he received this letter some time early in the month of April, 1919; that he found it, with said proposed lease for the coming year inclosed, while looking through a desk in his flat, and did not remember ever seeing the letter before that time; that after he had found the letter he had a conversation with Barbee over the telephone regarding the letter and regarding having certain decorating done in said flat; that Bar-bee then gave him the name and telephone number of his decorator and told him to call the'decorator, arrange for the decorating, and to “fix up the lease and send it in”; that the decorator came and conversation was had with him regarding decorations on the basis of Barbee’s allowing Evans one month’s rent, or $38, for decorating, and that during said month of April certain decorating was done; that shortly after the telephone conversation with Barbee, Evans examined said proposed lease for the coming year, made certain changes and additions therein, signed it, and sent it to Barbee, together with a check for $38 for rent for the month of May, 1919; and that thereafter he received the following letter, dated April 9, 1919, from Barbee:

“The conditions of the leases which you returned is not at all satisfactory, and I am therefore returning them to you. The check which you sent is not for the April rent. You will also find it enclosed herewith. I wrote you sometime in February that unless the leases were returned to me by a certain date the flat would be for rent. You failed to return the leases by that date, therefore it is up to you to vacate the flat by May 1, 1919.”

Evans did not vacate the flat on or prior to May 1, 1919, and was still in possession of the same at the time of the trial. On said May 1, Evans was personally served with a written demand, signed by Barbee, that the latter demanded “immediate possession of the premises” (describing them).

Assuming that Barbee’s letter to Evans, dated February 14, 1919, was actually received by Evans 60 days prior to April 30, 1919, and further assuming that it was a sufficient notice, in writing, as to its form and substance, under section 5 of the Landlord and Tenant Act, to terminate Evans’ tenancy from year to year, it was not served on Evans in the manner provided by section-10 of said Act. And if it could be successfully contended that a notice by a landlord to terminate a tenancy from year to year, sent by mail to the tenant and actually received by the tenant more than 60 days before the end of the year, was sufficient, still, in the present case, the court erred in directing a verdict that Evans was guilty of unlawfully withholding the possession of the premises, because there was an important issue of fact to be passed upon by the jury, viz., whether Barbee’s letter of February 14, 1919, was actually received by Evans 60 days or more prior to April 30, 1919. While the effect of Barbee’s testimony as to writing, stamping and mailing the letter on February 14, 1919, was to raise a presumption of fact that Evans received the letter within a reasonable time thereafter, yet that was a rebuttable presumption. (Henderson v. Carbondale Coal & Coke Co., 140 U. S. 25, 37; 2 Wharton on Evidence, sec. 1323.) And Evans testified that he received this letter some time early.in the month of April, less than 60 days prior to April-30, 1919, when he found it in a desk on said premises.

The judgment of the municipal court is reversed and the cause is remanded.

Reversed and remanded.

Barnes, P. J., and Matchett, J., concur.


author: Mr. Justice Matchett Mr. Justice Matchett

text:
    K. Arakelian et al., trading as Arakelian Brothers & Company, Plaintiffs in Error, v. Southern Pacific Company, Defendant in Error.
    Gen. No. 25,341.
    1. Commerce, § 5

      —what governs interstate shipments. Where shipments are interstate, the contract of shipment, federal legislation on interstate commerce, together with decisions of the federal courts construing the same, must control in the decision of all questions involved.
    2. Carriers, § 69*—what is liability of carrier of goods. Under the federal law a common carrier is an absolute insurer of the safety of goods transported except, loss resulting' from the act of God, the act of the public enemy, authority of law, the fault of the shipper, or the inherent nature or vice of the article shipped.
    3. Carriers, § 137*—when shipper has burden of showing loss due to carrier. While the question of diligence on the part of a carrier in an action for injury to goods shipped is ordinarily wholly immaterial, yet, where the condition of the goods as delivered is shown by the evidence to be such as to indicate prima facie that the injury was the result of one of the excepted causes, exempting the carrier, the burden is cast upon the shipper to show that the damage resulted from the negligence of'.the carrier.
    4. Carriers, § 138*—what evidence is admissible on issue of injury to goods. Where the evidence showed that the damage to a shipment of cantaloupes was caused by ripeness, softness and moldiness, evidence on the part of the carrier as to its due care was admissible as tending to show that the deterioration in the fruit was not caused by any matter or thing which could have been prevented by it.
    5. Carriers, § 138*—when evidence of refrigeration tests is inadmissible to show injury to goods. In an action against a carrier for injury to a shipment of cantaloupes, evidence of certain refrigeration tests, made in connection with shipments of cantaloupes other than those in suit, is inadmissible without first showing a similarity of the shipments in all essential particulars.
    Barnes, P. J., dissenting to modified opinion.
    Error to the Superior Court of Cook county; the Hon. Oscar Hebel, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1919.
    Reversed and remanded.
    Opinion filed November 30, 1920.
    Rehearing denied and opinion modified and refiled December 17, 1920.
    Charles A. Butler, for plaintiffs in error.
    John A. Sheean, for defendant in error.

      See Illinois Notes Digest. Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Matchett

delivered the opinion of the court.

Plaintiffs in this case went to trial before a jury upon issues raised under a declaration which alleged that the defendant was a common carrier, and that at certain points in California the plaintiffs had delivered to it certain property described as raisins and cantaloupes, to be carried and delivered by the defendant at points named without the State; that the defendant promised plaintiffs to safely and securely carry the same, but that it defaulted in said promise and delivered the property in a damaged condition.

To this declaration defendant filed the general issue with notice that it would rely upon the provisions of the bills of lading under which the property was shipped, and that the shipments were interstate in character and covered by federal laws.

The plaintiffs also filed a bill of particulars, stating the number of the cars used in shipment, with dates of shipment, points of origin and destination, with the amount of damages claimed as to each shipment.

Upon the trial the plaintiffs offered evidence tending to show that the cantaloupes and raisins were delivered at the respective points of origin in good marketable condition, and the same, were received at the respective destinations in a damaged condition. Evidence was also offered as to the amount of damages sustained, and as to each shipment. These were computed on the difference in the market value of the fruit at the time and in the condition it was when delivered to the defendant for transit, and the market value thereof at the time and in the condition when delivered at respective destinations, plus the charges paid for transportation. The hills of lading were also offered in evidence. These acknowledged the receipt of the goods “in apparent good order except as noted (contents and conditions of contents of packages unknown),” that the service to be performed should be subject to all the conditions mentioned in the bills of lading, whether printed or written therein or thereon. By these it was provided that no carrier should be liable for any loss or damage or delay “caused by the act of God, the public enemy, quarantine, the authority of law, or the act or default of the shipper or owner, and that, except in the case of the negligence of the carrier or party in possession (and the burden to prove freedom from such negligence should be on the carrier or party in possession), such party should not be liable for loss, damage or delay occurring while the property was stopped and held in transit upon request of the shipper or owner” “or resulting from defect or vice in the property.”

Upon these bills of lading under which the cantaloupes were shipped appear directions in writing to “keep fully iced to destination.” The defendant offered evidence tending to show the exercise of due care on its part to prevent injury to the fruit, from the time of receiving of the same until the delivery thereof. This evidence tended to show that cantaloupes were' of a perishable nature; that after being removed from the vine and reaching a certain stage of maturity, they have a tendency to deteriorate, and that this deterioration may best be prevented by refrigerator cars, which are thoroughly insulated and constructed in such a manner as to give proper protection to property of this kind against dangers from the weather. The distance traversed by the cars was proved, the lines over which they passed, and a complete record was furnished of the equipment, and the “in and out” time at important stations on the route, with complete United States Government temperature records, covering the 24-hour period' of each day any car was at any particular point.

The defendant also offered and the court received and allowed to go to the jury certain tests made in connection with other shipments of cantaloupes from California to eastern destinations, which will be discussed more fully later in this opinion.

All of this testimony was objected to by the plaintiffs at the time it was offered, and at the close of the case the plaintiffs moved the court to exclude the entire evidence of the defendant and asked that an instruction to the jury be given to find a verdict for the plaintiffs. These motions were denied and the cause was submitted to the jury under instructions which we must presume were correct since the same are not abstracted. The jury brought in a verdict for defendant upon which the court entered judgment, from which this appeal is taken.

The principal errors assigned and argued are that the court admitted improper evidence offered in behalf of the defendant, and in refusing to strike such evidence out, and in refusing to direct a verdict for the plaintiffs.

It is, of course, conceded by all the parties that since the shipments were interstate, the contract of shipment, federal legislation on interstate commerce, together with decisions of the federal courts construing the same, must control in the decision of all questions involved. The federal law has superseded all local or State law on this subject. Adams Exp. Co. v. Croninger, 226 U. S. 491; Gamble-Robinson Commission Co. v. Union Pac. R. Co., 262 Ill. 400. Under this federal law we think it must further be held that a common carrier is an absolute insurer of the safety of the goods transported except, first, loss resulting from the act of God; second, loss resulting from the act of the public enemy; third, loss resulting from authority of law; fourth, loss resulting from the fault of the shipper; fifth, loss resulting from the inherent nature or vice of the article shipped. 1 Hutchinson on Carriers (3rd Ed.), sec. 265; Adams Exp. Co. v. Croninger, supra; Cincinnati, N. O. & T. P. Ry. Co. v. Rankin, 241 U. S. 319.

Appellants contend that since it appeared in this ease that the fruit was received in good condition and was delivered in a damaged condit.ion, the burden was thereby cast on the defendant carrier to show, if it could, that the cause of loss was within one of the excepted causes, and that until such fact was made to appear, the question of diligence or ordinary care by the carrier in transit was wholly immaterial, and in this connection, with other authorities we are cited to Hutchinson on Carriers (3rd Ed.), vol. 1, sec. 4, where it is said: “* * * But the question of negligence, when the purely common-law relation of common carrier to the goods exists, is ordinarily wholly foreign to the inquiry whether such a carrier is to be held liable for their loss or injury, and, as will hereafter be seen, evidence on his part of the most exact diligence will be wholly irrelevant and inadmissible. * * *” See also 10 Corpus Juris, page 107; Fisher v. Clisbee, 12 Ill. 344; Cudahy Packing Co. v. Atchison, T. & S. F. Ry. Co., 193 Mo. App. 574; John Lysaght, Ltd. v. Lehigh Val. Ry. Co., 254 Fed. 351.

While it may be conceded that this is the general rule, some of the federal decisions also hold that where the condition of the goods as delivered is shown by the evidence to be such as to indicate prima facie that the injury to them is the result of one of the excepted causes, the burden is then cast upon the shipper to show that the damage resulted from the negligence of the carrier. Thus in the case of The Folmina, 212 U. S. 354, the court said:

“Of course-, where goods are delivered in a damaged condition plainly caused by breakage, rust or decay, their condition -brings them within an exception exempting from that character of loss, as the very fact of the nature of the injury shows the damage to be prima facie within the exception, and hence the burden is upon the shipper to establish that the goods are removed from its operation because of the negligence of the carrier.”

See also the case of The Patria, 132 Fed. 971.

This doctrine of the federal court seems also to have been recognized in Illinois. Illinois Cent. R. Co. v. McClellan, 54 Ill. 58, as well as other States. Truax v. Philadelphia, W. & B. Ry. Co., 3 Houst. (Del.) 233; Rixford v. Smith, 52 N. H. 355.

The undisputed evidence in this case is that the damages to the cantaloupes were on account of ripeness, softness and moldiness, and we think that under these decisions, and under the provisions of the bills of lading, these facts being made to appear, evidence on the part of the defendant as to its due care was admissible as tending to show that the deterioration in the fruit was not caused by any matter or thing which could have been prevented by it. It is to be noted this form of bill of lading provides that the burden of disproving negligence in such case is on the carrier.

A more serious question, however, is raised by the error argued, in that the court admitted the testimony of certain tests made by one Richardson, and others, in connection with the shipment of other cantaloupes from California to eastern destinations. The witness testified to a number of shipments which were made in standard refrigerator cars, which were similar in construction to those used in the instant case; that he made experiments on ears moving in transit to the number of one hundred and forty, carrying cantaloupes, bananas, oranges, lemons, peaches, potatoes and onions, originating at Pacific coast points and destined for Chicago or New York City, covering a period between 1916 and 1918 in different months of the year. That he took temperature readings on these trips by means of an apparatus consisting of a reading box, incorporating a diary on which temperatures were recorded by means of a wheatstone bridge and battery attached to the reading box, each car being equipped with a main table that ran along the top of the car from the outside through the side door to the inside of the roof, being flattened in going through the door into a flat copper strand about one-eighth of an inch thick. That inside of this main cable were the common and battery wires,.and these wires running to as many different connections; that from the main cable inside the car six drop cables were attached, and at the end of each was attached a small cap about the size of one’s finger, and pointed on the end, and in this cap or bulb was a small coil of wire made of special alloy, and specially sensitive to temperatures, so that when the current was turned on to the main table, resistance was felt in'this coil, being more or less according to the temperature of the coil, and by measuring this resistance, he would get the temperature of the air immediately around it; that these six bulbs were placed in the fruit itself, two next to the bulkhead near the ice, two quarter way of the car and two in the center of the car, one each being in the bottom and upper layers of .the load where placed in the car; that usually six readings were taken and sometimes twelve in different parts of the car; sometimes of the air six inches from the top of the load; that the first temperature taken was immediately when the car was completely loaded; when the inside temperatures were taken of the commodity, but also took outside temperatures by placing a certified thermometer in the shade; that inside temperatures were taken from five to seven times a day, three to six hours apart. Notes of these temperatures were taken on a tab form prepared beforehand, and these 'records showed the towns and States, the hour, day of month and month of year, outside temperatures, and those of six different readings in the car, the parts of the car, the number of the car, commodity and method of loading were recorded on these sheets. The notes were afterwards transferred to graphical test charts three feet by four feet in size, the temperatures represented thereon by curves and lines, exactly reflecting the notes in the information; one side of the chart was graduated into degrees of temperature and the other side into days and hours, one of eight lines therein representing the outside temperature, the second, the average temperature of the commodity in the car en route, and the other six temperatures of the commodity in the six different places in the car en route. These lines were put in different colors to distinguish them, symbols therein indicating what the particular line had reference to. At the top of the chart the icing stations were printed and brown lines representing the amount of ice placed in at each icing station, and other lines showing the meltage of ice en route, and showing also where certain icing stations were passed.

It was stipulated that if R. C. Dearborn, who accompanied Richardson, was called as a witness, he would corroborate him to the effect that Richardson’s testimony as to the manner of taking and recording the temperature readings was correct. The original notes of all these shipments were offered in evidence, but the court, on objection by the plaintiffs, excluded notes referring to articles other than cantaloupes, but as to these admitted in evidence twenty of the exhibits. The graphical charts were, however, excluded. Also over objection the witness was allowed to testify as to the condition in which the cantaloupes were found to be by Mm upon examination at the end of the journey'; that in one of the cars he found 8 per cent “soft,” 30 per cent turning,” and 60 per cent “solid,” the latter meaning firm. Similar testimony was offered and received, over objection, as to the other shipments. As authority for the admission of this evidence appellee refers us to the discussion in 17 Cyc. 283, with reference to the receiving in evidence of similar occurrences “and experiments.” It is there stated:

“That a fact ‘existed or event occurred at a particular time cannot be shown by evidence that another fact existed or event occurred at another time, unless the two facts or occurrences are connected in some special way, indicating a relevancy beyond mere similarity in certain particulars. Such relevancy is found where similarity in all essential particulars is shown to exist. Evidence of other facts or occurrences is then admitted, provided the court deems this course a wise exercise of its administrative discretion. The probative fact or occurrence may be first found in actual life by observation, or, second, reproduced voluntarily in an experiment. ’’

We think, within this statement of the doctrine on which appellee relies, this evidence should not have been admitted for the reason that the foundation for its introduction was not laid by showing a similarity in all essential particulars. We think it is apparent that the condition of the fruit at the time of shipment would be clearly an essential particular, on which evidence of similarity should have first been received. This is wholly lacking in this case, and this omission, we think, clearly renders the evidence offered inadmissible.

Also it is made to appear in the evidence that there are different kinds of cantaloupes, some of which are less subject to deterioration than others. What kind of cantaloupe was shipped in the experiment made by the witness does not appear from the evidence. As is said in 4 Chamberlayne on Evidence, sec. 3174, page 4375:

“While it may be frankly conceded that should a collateral occurrence, involving the uniformity of natural law, be presented, which should be precisely similar in all its circumstances to the principal case, and result in the creation of a particular state or the happening of a given event, the results of such collateral occurrence would be highly probative, the administrative difficulty experienced by the courts consists in the fact that such precisely similar collateral occasions are seldom encountered in practice. The rule, therefore, as usually stated, permits the reception of collateral occurrences which are substantially similar in their circumstances, i. e., are similar in all esential particulars. Where, however, the collateral occasion fails to present some substantial similarity to the one involved in the enquiry, i. e., where important or material variations in the phenomena of the two occasions are presented, proof of what happened on a collateral occasion will be rejected.”

See also Hawks v. Charlemont, 110 Mass. 110; Campbell v. Russell, 139 Mass. 278; Emerson v. Lowell Gas Light Co., 3 Allen (Mass.) 410; 8. Samuels & Co. v. Texas & N. O. R. Co. (Tex. Civ. App.), 150 S. W. 291; Cox v. Steed, 62 Tex. Civ. App. 193, 131 S. W. 246; P. & A. R. R. Co. v. Atkinson, 20 Fla. 450; Names v. Dwelling House Ins. Co., 95 Iowa 642, 64 N. W. 628.

It is admitted by appellee that this evidence probably had considerable effect upon the jury, and its admission being erroneous, irrespective of the other questions involved, the judgment must be reversed and the cause remanded.

Reversed and remanded.

Barnes, P. J., and Gridley, J., concur.

Modified Opinion.

Mr. Justice Matchett

delivered the opinion of the court.

The defendant in error has filed a petition for rehearing in which it is said that the court “has apparently misconceived the condition of the record”; that the court has assumed that the purpose of the testimony offered and received with reference to the “test cars” was for the purpose of showing that the fruit was not in good condition at the time it was delivered to the carriers at the point of origin, whereas, the purpose of the evidence was “to prove the effect of the refrigeration upon the temperatures inside the test cars and thereby to justify the natural deduption arising from the unvarying effect of the application of the ice in reducing the average temperature of the fruit in these cars to a stage of about forty degrees, that the average temperature of the fruit in the cars in suit was reduced to a like extent and that therefore the defendant was in the exercise of due care in handling the shipments in question so far as the icing feature of the service was concerned.”

We are of the opinion, however, that the evidence was not admissible on the' facts as the same appear in this record even for that limited purpose; and this for the reason that substantial similarity of all essential particulars was not shown. If the only purpose of the testimony was to show that ice in a refrigerator car has a tendency to reduce temperatures, we think an experiment of this kind would not be necessary to prove that fact. It was necessary as the statement of defendant in error indicates to show that the effect of the icing was to reduce the temperature of the fruit to a certain degree and thus justify the inference of due care. The defendant attempted to show this by proof that the temperatures had been thus reduced in other shipments of the same kind of fruit over similar routes in similar cars where ice was applied in substantially the same manner. In order to make this evidence at all admissible it was necessary under the authorities to show similarity of the shipments in all material and essential matters. Defendant showed the shipment of similar kind of fruit in similar cars over similar routes, with the application of ice in a somewhat similar manner and with outside temperatures somewhat similar. It was found that the inside temperatures were thus reduced in such manner as due care might be inferred therefrom as to those particular shipments. But defendant did not show that the condition of the fruit before or at the time of the use of the ice was the same or that the conditions of the cars remained the same or similar during transit as in the instant case, or that in other respects the same degree of care and diligence was used by the carrier. No sufficient foundation was therefore laid for the introduction of the evidence.

The petition for rehearing will be denied.

Rehearing denied.

Barses, P. J.,- dissenting.

Gridley, J., concurs.


author: Mr. Justice Matchett

text:
    W. S. Sparr, trading as Sparr Fruit Company, Appellee, v. Southern Pacific Company, Appellant.
    Gen. No. 25,443.
    1. Commerce, § 5—what governs interstate shipments. In an action against a carrier for failure to carry goods safely where the shipments are in interstate commerce, the Interstate Commerce Act, with the decisions of the federal courts and the provisions of the contract, are controlling, irrespective of local law.
    2. Commerce, § 3*—what is effect of Interstate Commerce Act. The provision of section 20 of the Interstate Commerce Act, that nothing in the act shall deprive the shipper “of any remedy or right of action, which he has under existing law," means the common law as declared by the federal courts.
    3. Carriers, § 69*—what is liability of carrier of goods. Under the common law and under the statutes as construed by the federal courts, a common carrier of goods is liable not for negligence alone, but also as an insurer in all cases except where the damage is caused by the act of God, by the public enemy, by authority of law, by fault of the shipper, or by result of the inherent vice or natural infirmity of the goods shipped.
    4. Carriers, § 138*—what evidence is admissible to show injury to goods. In an action against a carrier for damage to shipments of lemons delivered in a deteriorated condition, while negligence is not the gist of the action, evidence tending to show freedom from negligence, such as the route of shipment, its arrival in customary time, ventilation of cars and inspection of the shipment upon arrival by carrier’s expert, is admissible as tending to show that the injury was due to the inherent condition of the fruit.
    Appeal from the Superior Court of Cook county; the Hon. Joseph B. David, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1919.
    Reversed and remanded.
    Opinion filed November 30, 1920.
    John A. Sheean, for appellant.
    Charles A. Butler, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Matchett

delivered the opinion of the court.

Plaintiff sued in assumpsit, defendant, a common carrier, to recover damages on eight cars of lemons and oranges, delivered by plaintiff to defendant, at points in California, to be delivered at various eastern destinations. The shipments were made in the years 1914, 1915 and 1916.

The declaration, at the time of the trial, charged that defendant had defaulted in its promise to safely and securely carry and deliver the fruit at the respective destinations, and certain counts in it charged defendant with negligence as a warehouseman. The defendant filed pleas of the general issue, with notice that it would rely on the bills of lading and provisions of the Interstate Commerce Act, as amended.

The evidence showed that the shipments moved under uniform bills of lading, material provisions of which were as follows:

“No carrier or party in possession of any of the property herein described shall be liable for any loss thereof or damage thereto or delay caused by the act of God, the public enemy, quarantine, the authority of law, or the act or default of the shipper or owner, or for differences in the weights of grain, seed or other commodities caused by the natural shrinkage or discrepancies in elevator weights. For loss, damage or delay, caused by fire occurring after forty-eight hours (exclusive of legal holidays) after notice of the arrival .of the property at destination or at port of export (if intended for export) has been duly sent or given, the carrier’s liability shall be that of warehouseman only. Except in case of the negligence of the carrier or party in possession (and the burden to prove freedom from such negligence shall be on the carrier or party in possession) the carrier or party in possession shall not be liable for loss, damage or delay occurring while the property is stopped and held in transit upon the request of the shipper, owner or party entitled to make such request; or resulting from-a defect or vice in the property or from riots or strikes. When in accordance with general custom, on account of the nature of the property, or when at the request of the shipper the property is transferred in open cars, the carrier or party in possession (except in case' of loss or damage by fire, in which case the liability shall be the same as though the property had been carried in closed cars) shall be liable .only for negligence, and the burden to prove freedom from such negligence shall be on the carrier or party in possession.”

The plaintiff proved that the fruit shipped was sorted and crated in California in a careful manner, that all bruised, damaged or decayed fruit was thrown away, and, generally, that the fruit when delivered to the defendant was in good condition. It was further proved that upon arrival at destination from 6 to 16% per cent thereof was found to be decayed and damaged. Some of the boxes were broken.

Plaintiff also proved by competent testimony the market value of the various shipments at the time and place of loading, and the market value of the same in their damaged condition at the points of destination, and claimed the difference, plus freight, as the measure of damages which he was entitled to recover. The defendant made motions for a directed verdict in its favor as to each count at the close of plaintiff’s evidence, which were denied by the court, whereupon evidence was offered in behalf of defendant. Proof was received as to the routes and destinations' of the respective shipments and the times at which each of them arrived at its destination and notice thereof given to the consignee. The defendant further offered to show by a stipulation that the cars used in the litigation were handled from the points of origin to destination within the usual and customary time for the handling of trains of the kind in question over the routes taken; further, the distances between certain railroad stations on the route and the hours of arrival and departure of the cars; the ventilation record of the car at such times; the temperatures as taken at the United States Government Reporting Stations at the time the respective cars were at or near said stations; that the cars in question were standard refrigerator cars and in apparent good order at the time the shipment in question moved.

Defendant also offered to show by one M. J. Ryan that he had had many years' experience in the shipments of perishable property, including California oranges and lemons arriving in carload lots; that he knew the diseases with which they were sometimes attacked; that he had made inspection of the certain consignments at the time of arrival of the same at destination; that he found a certain percentage of decay was in the form of blue mold, which ran uniformly throughout each box and throughout the different boxes in each of the cars, and that the condition of the fruit at destination was, in his opinion, due to over-ripeness; that fruit of this kind was of a perishable nature.

Defendant also offered to prove by one Enright that he had had many years of experience as an inspector of perishable property, such as lemons and oranges; that lemons and oranges were of a perishable nature; that there is a tendency of the fruit to deteriorate as soon as it is taken from the tree and has become matured, unless it is checked by some artificial process of handling, such as refrigeration. The defendant also offered to prove through one. Carnes, chief clerk to the assistant superintendent of the Pacific Fruit Express Company, which owned the cars involved in this case, that he had, through .his experience, become acquainted with the time usually made in handling fruit shipments from southern California to eastern destinations; that the cars in question moved between the points of origin and respective destinations in the usual and customary time of cars handled under the same or similar circumstances, at or about the time at which these cars in question moved; that no charge, other than the regular freight rate, was made for cars shipped under ventilation from the point of origin to the different destinations at the times in question; that a car that was iced to capacity before loading' at Fillmore, California, took a certain refrigeration rate, in addition to the regular freight charge, and that where a particular car was loaded at Fillmore, California, before icing at the first regular icing station, in the manner in which the ice cars in this transaction were handled, the refrigeration charge was $7.50 less than the refrigeration charge would have been for the same car had it been iced before the load was placed in the car.

By the witness Richardson the defendant offered to prove the construction of the cars in question in which the fruit was transported.

All of this evidence was objected to by the plaintiff, and objections sustained by the court, and at the close of defendant’s evidence, plaintiff moved the court in writing to exclude all the evidence and to instruct the jury to find the issues for the plaintiff, which motion was sustained by the court. A verdict was accordingly returned for plaintiff .with damages for the full amount claimed, on which the court entered judgment.

It is, of course, conceded by all the parties that since the shipments were in interstate commerce, the Interstate Commerce Act, with the decisions of the federal courts and the provisions of the contract, are controlling and must determine the rights of the respective parties, irrespective of local law. Adams Exp. Co. v. Croninger, 226 U. S. 491; Gamble-Robinson Commission Co. v. Union Pac. R. Co., 262 Ill. 400. The provision of section 20 of that Act, that nothing in the Act shall deprive the shipper “of any remedy or right of action, which he has under existing law,” means the common law as declared by the federal courts. John Lysaght, Ltd. v. Lehigh Val. Ry. Co., 254 Fed. 351; Southern Ry. Co. v. Prescott, 240 U. S. 639.

It is the contention of appellant that negligence is the gist of an action against a common carrier by a shipper for loss or damage to a perishable commodity which is delivered to a carrier at a point of origin in good condition and by the carrier delivered at its destination in a deteriorated condition, and appellant says that the action of the trial court was based on a misconstruction of the language of the United States Supreme Court in St. Louis, I. M. & S. Ry. Co. v. Starbird, 243 U. S. 597, to the effect that the “bill of lading contained the entire contract upon which the responsibilities of the parties rested.” We agree with the contention of appellant that when the facts of that case are considered, the language cannot be properly so construed (Southern Exp. Co. v. Byers, 240 U. S. 614), and that the defenses of a common carrier are not necessarily limited to such as are named in the bill of lading. We do not understand, however, that appellee bases his argument on any such theory, but, on the contrary, contends that under the rule which obtained at common law, and which now obtains under the statutes as construed by the federal court, a common carrier of goods is liable, not for negligence alone, but also as an insurer in all cases except where the damage is caused, first, by the act of God, second, by the public enemy, third, by authority of law, fourth, by fault of the shipper, fifth, by result of the inherent vice or natural infirmity of the goods shipped.

Appellee also contends, and this seems to be the real point at issue, that when it has been proved, as here, that goods are delivered by a shipper in good condition at the point of origin to a common carrier, and the carrier delivers the goods at destination in a damaged condition, the burden of proof is then cast upon the carrier to show, if it can, that the injury was due to one of the causes excepted and that, until such exception is first established, the negligence or care of the carrier is wholly immaterial, and evidence is not admissible for the purpose of showing due care on its part, and that this is especially true, where as here, the bill of lading acknowledges the receipt of the goods in apparent good order. Texas & Pac. Ry. Co. v. Reiss, 183 U. S. 621; 1 Hutchinson on Carriers (3rd Ed.), sec. 4; Cau v. Texas & Pac. Ry. Co., 194 U. S. 427. In Hutchinson on Carriers, supra, the author says:

“But the question of negligence, when the purely common-law relation of common carrier to the goods exists, is ordinarily . wholly foreign to the inquiry whether such a carrier is to be held liable for their loss or injury, and, as will hereafter be seen, evidence on his part of the most exact diligence will be wholly irrelevant and inadmissible * * * .”

We think the authorities indicate negligence is not necessarily the gist of the action against the carrier on a declaration, which, as here, sets up' a cause of action based .only upon the breach of defendant’s promise to carry safely. 10 Corpus Juris 107; Cudahy Packing Co. v. Atchison, T. & S. F. Ry. Co., 193 Mo. App. 574; John Lysaght, Ltd. v. Lehigh Val. Ry. Co., supra; Missouri, K. & T. Ry. Co. v. Harriman Bros., 227 U. S. 673; Kansas City Southern Ry. Co. v. Carl, 227 U. S. 639.

But while this is true, an examination of the cases shows that, as a matter of fact, most of them have turned on the question of whether the carrier was, in fact, negligent, and we think it will often be found to be true that evidence tending to show freedom from negligence will also ,be found material and relevant for the purpose of proving whether the damage was the result of an inherent vice or natural infirmity of the goods, or indeed whether there may not have been some fault of the shipper not apparent upon the examination of the goods presented for shipment.

In a certain sense all property is perishable in that it has a tendency to change the particular form in which it appears, and it is true that inanimate things, as well x as animate ones, are subject to infirmities. The common carrier does not insure against these. He does not contract and the law does not impose upon him the obligation of delivering any given article of commerce in precisely the same condition in which it was received from the shipper. It would be manifestly impossible for him to do this and, therefore, manifestly unjust for the law to require him to do it, unless some grave reason of public policy should require him to assume such a liability.

When loss or damage has occurred to the goods while in the carrier’s possession it may arise from causes for which he is liable, or it may arise from those for which he is not liable.

We fail to see why the evidence, such as was here offered and excluded, was not admissible as tending to show that the injury to the fruit was the result of its own inherent tendencies. We do not mean by this to hold that the evidence of experiments made by one Richardson on other shipments of fruit in no way connected with any of these was admissible.

For reasons stated in another opinion this day filed we hold that such evidence was properly excluded. Nor do we assume to pass on the sufficiency of the evidence as offered. That question is not now before us. We hold, however, it should have been submitted to a jury.

For the reasons indicated the judgment will be reversed and the cause remanded.

Reversed and remanded.

Barnes, P. J., and Gridley, J., concur.