text:
    Helen W. S. Johnson et al., v. Northern Trust Company, Trustee, et al. Northern Trust Company, Trustee, v. Hannah M. Williams et al. Edward A. Shedd, Appellant, v. Northern Trust Company, Trustee, et al., Appellees.
    Gen. No. 18,887.
    1. Appeal and error, § 269

      —when provisions in decree do not affect its final character. Provisions in a decree for an accounting and reserving jurisdiction for the purpose of enforcing the decree do not affect its final character.
    2. Equity, § 149

      —determination of character of hill. A bill in equity which is in its essence and effect a bill to declare a forfeiture of a lease will be considered as such, though the complainant by ingenious phrasing of the prayer of the bill asks to have the leasehold estate decreed to have been surrendered by operation of law.
    3. Fobbeitubes, § 6

      —enforcement of forfeitures in equity. Equity will not interfere on behalf of a party entitled to a forfeiture to enforce the same, but will leave him to his legal remedy, if any, even though the case might be one in which no equitable relief .would be given to the defaulting party against the forfeiture. The functions of a court of equity are to grant relief against a forfeiture in a proper case, but never to enforce it.
    4. Landlobd. and tenant, § 415

      —effect of attempted assignment of leasehold to nonexisting corporation. Where an attempted assignment of a leasehold by the lessee, with consent of the lessor, to a corporation fails because of the nonexistence of the corporation, such assignment does not amount to a surrender of the leasehold estate by operation of law as between the lessor and lessee, and the lessee in such case holds as a trustee for the stockholders and bondholders of the corporation for the amount paid him for the leasehold by the persons acting in the name of the corporation.
    5. Landlord and tenant, § 470

      —when lessor estopped to insist on forfeiture of lease. On bill in equity to enforce a forfeiture of a lease, alleging that there had been a surrender of the lease by operation of law resulting from an assignment of the lease by the lessee to a corporation not in existence, and that the lessee had made a conveyance without lessors’ consent, subsequent acts and conduct of lessors together with prior adjudications held to estop the lessors to insist upon a forfeiture.
    6. Trusts, § 4

      —when trust created for money paid. Where a person holds an estate for which he has been fully paid by another or others, a trust results for the benefit of those who paid the money.
    Appeal from the Superior Court of Cook county; the Hon. Richard E. Burke, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Reversed and remanded with directions.
    Opinion filed January 16, 1914.
    Rehearing denied January 27, 1914.
    Harry S. Mecartney, for appellant.
    Judah, Willard, Wolf & Reichmann, for appellee, Northern Trust Company.
    James Hamilton Lewis, for appellee, John C. Patterson.
    Scott, Bancroft & Stephens and Stewart Johnson, for appellees, Helen W. S. Johnson and Stewart Patterson; Edgar A. Bancroft, Redmond D. Stephens and Lester L. Falk, of counsel.

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

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

   Mr. Presiding Justice Smith

delivered the opinion of the court.

Appellee, Helen W. S. Johnson, on July 29, 1910, filed her hill of complaint in the Superior Court of Cook county against the Northern Trust Company, trustee, Hannah M. Williams, Fannie Y. M. Johnson, Stewart Patterson, John C. Patterson, H. H. Kohlsaat, Albert M. Johnson, E. A. Shedd, Charles B. Shedd, Edward J. Shedd, and Illinois Trust & Savings Bank, trustee. December 8, 1910, Stewart Patterson was given leave to join Mrs. Johnson as a party complainant. On the same day, an amended bill of complaint was filed which sets up the facts stated in Patterson v. Northern Trust Co., 132 Ill. App. 208, the same case on appeal in 230 Ill. 334; Patterson v. Northern Trust Co., 132 Ill. App. 63, the same ease on appeal in 238 Ill. 601.

The amended bill then sets up the judgment declaring that the articles of incorporation of "the Merrimac Building Company and the certificate of incorporation of the Secretary of State were null and void, and the affirmance of the judgment in People v. Shedd, 241 Ill. 155; that after the entry of judgment of ouster in the Circuit Court of Cook county, and pending the determination of the appeal in People v. Shedd, supra, Edward A. Shedd, Charles E. Shedd and Edward J. Shedd continued to act as a corporation in the name of the Merrimac Building Company and continued in its name to pay to the Northern Trust Company, trustee, the various sums specified as rentals in the lease, the Northern Trust Company receipting for the same in the name of Herman H. Kohlsaat, and continued so to do until the commencement of this suit; and that Edward A. Shedd, Albert M. Johnson, Charles B. Shedd and Edward J. Shedd, or some of them, have continued to retain the possession of the premises and to collect the rents, issues and profits thereof.

The bill further sets up a conveyance and quitclaim deed by Kohlsaat and wife, dated January 30, 1905, to Edward A. Shedd and Albert M. Johnson, of the leasehold estate created by the lease to Kohlsaat, which deed was filed for record in the office of recorder of deeds for Cook county, on July 26, 1910, and that this conveyance was given without the consent of the trustee, the Northern Trust Company, and without the knowledge or consent of the complainants; and that under' the terms of the lease the making and delivery of the deed by Kohlsaat was ground for forfeiting the lease, and that it was the duty of the trustee to exercise the option contained in the lease and declare a forfeiture thereof.

It further appears from the bill that subsequent to April 2, 1897, a trust deed was executed in the name of the Merrimac Building Company to the Illinois Trust & Savings Bank, trustee, conveying the leasehold estate to secure an issue of bonds and that the bonds are still outstanding and held by various persons to complainants unknown, and that neither the trustee nor the complainants ever consented to the execution of the deed of trust, and that the instrument created no rights in the premises; and on information and belief John C. Patterson served a demand on the trustee requesting the trustee to take possession of the premises and to take appropriate proceedings to effect an accounting with the various persons claiming an interest therein, and that complainant, Helen W. S. Johnson, requested the trustee to act as in said demand requested, but the trustee has neglected and refused to take any action whatsoever to regain possession of the premises.

The bill makes the Northern Trust Company, as trustee, Hannah M. Williams, Fannie V. M. Johnson, John C. Patterson, Herman H. Kohlsaat, Albert M. Johnson, Edward A. Shedd, Charles B. Shedd, Edward J. 'Shedd, and the Illinois Trust & Savings Bank, as trustee, parties defendant, and prays, among other things, that the Northern Trust Company, trustee, be enjoined from collecting, receiving or receipting for any further payment of moneys as an instalment of rent under the lease, and from making or delivering any receipt for any such payment or instalment to Herman H. Kohlsaat, or to any other person or persons as lessee or lessees, for the payment of rental under the lease; and for a receiver of said Stewart Building and of its rents, income and profits, who shall take immediate possession of the building, etc., and for an accounting1 with the Shedds and Albert M. Johnson and others; and that the court decree that the full title and sole right to complete possession and control of the Stewart Building is in the Northern Trust Company as trustee for the benefit of the beneficiaries under the trust deed, and that the lease be delivered up and canceled.

Attached to the bill of complaint as exhibits are the lease referred to therein, the deed from Herman H. Kohlsaat and wife, dated April 2, 1897, to Merrimac Building Company, conveying the leasehold interest; also the instrument of consent by Pullman and Matthews, as trustee, to the assignment from Kohlsaat to the Merrimac Building Company, dated April 2, 1897; also the deed of trust from Hannah M. Williams and others to the Northern Trust Company, dated December 20, 1897; also the so-called forbearance of rent agreement -of March 15, 1898; the rent foreclosure decree of June 25, 1902, in the Circuit Court of Cook county; the petition of Shedd and Johnson of February 21, 1905, for leave, as bondholders and stockholders of the Merrimac Building Company, to redeem under the rent foreclosure decree; and the order entered in the rent foreclosure case, giving leave to Shedd and Johnson to make redemption, etc. All of the above exhibits were before the courts in the cases above cited.

In addition to the exhibits above mentioned, appear the petition and information in People v. Shedd, supra, being the quo warranto proceedings by which the validity of the organization of the Merrimac Building Company was attacked, and the judgment of ouster in those proceedings. The final exhibit attached to the bill of complaint is a quitclaim deed from Kohlsaat and wife to Shedd and Johnson, dated January 10, 1905.

The answers of the defendants admit the averments of the hill based on documentary evidence and the various proceedings above referred to, and present substantially the same contentions which were made by the respective parties in the previous litigation, with the exception, however, that the answer of Edward A. Shedd sets up the purchase by him of the bonds of the Merrimac Building Company in February, 1905, and that Shedd and Albert M. Johnson announced to the Northern Trust Company their purpose of obtaining a deed from Kohlsaat of the leasehold estate and building in 1905 in order to cover any contingency with relation to the legality of the charter of the said Merrimac Building Company, which had then been attacked as void by the defendant, John C. Patterson, and that no objection was then raised by the Trust Company to the proposed deed or transfer of the leasehold interest from Kohlsaat. Later on, the defendant Shedd, appellant, having purchased all of the interest of Johnson in the Merrimac Company, leasehold and building, Johnson and wife executed to him a quitclaim deed of said leasehold and building, of which deed the Northern Trust Company was duly apprised. The deed contained the following clause:

“And said Edward A. Shedd hereby covenants and agrees to and with all the parties to said lease and with Albert M. Johnson, that he hereby accepts and assumes all the terms, covenants and conditions in said lease, and will faithfully comply with and be bound by the same.”

Shedd’s answer further sets up that he was, on January 30, 1905, and has been since and was at the time of filing his answer, of full financial responsibility to accept and hold this leasehold estate under the requirements of said lease, and that he was the bona fide owner of property worth over $500,000 above all his debts and liabilities, and that that fact had been well known to the Trust Company and to the beneficiaries. The answer further sets up in detail the bond issue of the Merrimac Building Company and the mortgage securing the same, and avers that he has been the owner and holder of each and all the bonds for more than two years and last past, and denies that the trustees or beneficiaries did not consent to the execution of said mortgage deed, and avers that, on the contrary, they each and all did so consent, and each and all knew of the execution of said trust deed at the time of its date, and avers that the trust deed created an equitable lien upon the leasehold estate which was held in trust by Kohlsaat from and after the time of his assignment thereof to the Merrimac Building Company; and that the mortgage deed securing the bonds was a first lien upon the interests of the parties claiming under the Merrimac charter. His answer further sets up that prior to February 21,1905, Johnson and Shedd purchased the bonds of the Merrimac Building Company aggregating $294,500, and that they then purchased a large majority of the stock of said company, and subsequently the remainder of it.

After referring to the various cases above mentioned, the answer of appellant Shedd avers that the Northern Trust Company, as trustee, as well as all the other beneficiaries were parties to the litigation, and that the question of the alleged lack of power in the Merrimac Company to acquire said leasehold and building and to collect the rents from the various tenants of the building was raised and asserted by Patterson, but the courts each held and ruled that Patterson and the Northern Trust Company, and each and all the beneficiaries, on account of their acts and doings and on account of their consent to the assignment of the leasehold and of the filing of said bill to foreclose the landlord’s lien and of the decree entered therein, were es-topped to deny and barred from denying that the Merrimac Company had such power of acquisition, and from claiming a forfeiture of said building and leasehold; that the mistake of supposing that the charter of the Merrimac Company was legally authorized was an innocent mistake and was mutual to all parties dealing upon the faith of the charter, and with the said purported corporation, or its officers, acting as such; and that all of such parties, including the lessors, the Northern Trust Company and the beneficiaries, actually participated in the furtherance and perpetuation of the project of using or attempting to use the charter as a legal charter and for the building up of rights and equities upon the basis thereof and according to the tenor thereof, and of holding a leasehold in the name of said corporation and using it as the actual tenant under the lease; that the quitclaim deed given from Kohlsaat to Shedd and Johnson was given and known to said Trust Company to have been given to further the transaction of redeeming from the foreclosure decree of June '25, 1902, in which the trustee and the beneficiaries participated and received the proceeds of such redemption, and that the right to object to the redemption, if any then existed, was waived by the said trustee and the beneficiaries as well, by their failure to act in that respect; that the provision against the assignment in the ground lease was further waived by the recognition of the conveyance in trust to the Illinois Trust & Savings Bank made more than fourteen years prior to the commencement of this suit, and remained unquestioned at any time by the lessors or beneficiaries.

Appellant Shedd’s answer admits that Kohlsaat surrendered possession of the premises in question, but avers that it was done shortly after the execution and delivery of the first deed of assignment. He denies that the assignment was an entire nullity, and avers that even though the charter of the Merrimac Building Company was ultimately held void, Kohlsaat was paid for the leasehold estate in full by the parties acting as said Merrimac Company and under its charter; and that Kohlsaat then and there became and from that time remained the holder of the legal title of the leasehold estate in trust for the benefit of the parties acting as the Merrimac Company and according to their interests as evidenced by the stock certificates and the charter of the Merrimac Building Company. He denies that Kohlsaat was released from all liability to lessors under the lease by the assignment to the company, and that the transaction had the effect of a surrender of all rights or any rights to the lessors.

Shedd admits the filing of the petition in the foreclosure suit on February 21, 1905, set out in the amended bill by himself and Albert M. Johnson, and the entry of the order thereon permitting Shedd and Johnson to redeem,-and avers that on the same day Shedd and Johnson paid the amount specified in the order, namely, $210,487.20, to the Northern Trust Company, trustee, and satisfied in full the foreclosure decree. Defendant Shedd admits that the rent due under the lease has been paid, and avers that it has been promptly and fully paid ever since February 21, 1905, and by parties acting in the name of the Merrimac Building Company, and on its behalf, down to the entry of defendant Shedd upon said premises on June 4, 1910, from and after which date defendant, Edward A. Shedd, has paid such rent and has been in the sole and exclusive possession of the leasehold estate. The answer, then asserts that Shedd has the full and absolute title to the leasehold estate; and, independently of that, he has an equitable right or title to the leasehold and building.

It is not important to state the answers of the other defendants to the bill except perhaps the answer of the Northern Trust Company. As to that, it is sufficient to say that its position is stated in its original bill for instructions filed in the Superior Court on the same day that the Helen W. S. Johnson bill was filed. The bill of the Trust Company makes the five beneficiaries parties defendant, and also Kohlsaat, Edward A. Shedd and Charles B. Shedd. Issues were made up under this bill and the cause was consolidated by order of court with the Johnson cause. The Northern Trust Company bill set up the making the lease, the execution of the trust deed to it, the participation in the transactions with the Merrimac Company by the various lessor interests, the quo warranto proceedings and the judgment of ouster. It alleges that after all these things had transpired, John C. Patterson had served the notice of July 9, 1910, demanding that the trustee take action in the premises to forfeit the leasehold estate; that the attitude of the beneficiaries in respect to said forfeiture was different; that Helen W. S. Johnson had taken the same attitude in respect thereto as had John C. Patterson. Mrs. Williams had notified the trustee that she preferred the lease to continue in force. Stewart Patterson had taken no attitude in the matter and Mrs. Fannie Johnson had taken none. The trustee therefore prayed for instructions.

The bill of the Northern Trust Company was duly answered by the defendants therein, replications were filed and an order consolidating the causes was entered and the two causes thereafter proceeded as one consolidated case.

On February 4, 1911, appellant Shedd filed a cross-bill in which, after reciting briefly the prior proceedings, he embodied therein his answer to the original bill, thus setting up in substance the facts set forth in his answer. After showing the complications that had arisen between the parties and that might ensue from the situation stated, the cross-bill prays for a decree establishing the facts in reference to the assignment of the lease and the acquiescence therein by the lessors and the estoppel of the trustee and beneficiaries to question his title, etc., Bind that it might be formally found and declared that he was the owner of all the stock and bonds of the Merrimac Company, and in equity, as well as at law, the holder of the leasehold estate, and for other and further relief.

The court, on hearing, entered decree declaring that the Merrimac Building Company had never had any legal existence as a corporation, and that the bonds and stocks issued in its name were issued without any authority of law and conferred no rights upon the holders thereof in and to the premises in question; that the attempted assignment by Kohlsaat on April 2, 1897, and the deed executed by him theretofore on April 30, 1896, passed no title in and to the leasehold estate then owned by him to- the Merrimae Building Company, or any persons then and thereafter acting as a corporation, and in the name of the Merrimae Building Company, and passed no title and conveyed no rights or interest in or to said leasehold estate or the building located on the above described real estate to the Merrimae Building Company or- to any persons claiming to be stockholders or bondholders thereof; that on or about April 2, 1897, the leasehold estate of Kohlsaat, which had been theretofore created by said lease of May 1, 1893, was surrendered by operation of law and thereupon Kohlsaat was released from all obligations under the lease, and that since said April 2, 1897, Kohlsaat has had no right, title or interest in or to said leasehold estate or the building located upon the real estate; that upon the surrender of said leasehold estate as aforesaid the legal title to said leasehold estate merged with the legal title to the fee in the above described real estate; that the Northern Trust Company, as trustee, is the owner of the legal title to the real estate, free and clear of any leasehold estate created by the lease executed by Pullman and Matthews as lessors, and merges the leasehold estate in the fee; and that the Northern Trust Company holds its legal title subject solely to the terms and conditions of the deed of trust to it; that Edward A. Shedd, Charles B. Shedd and Edward J. Shedd have no title, right or interest in or to the premises or the building located thereon or in the leasehold estate; that the cross-bill of the complainant, Edward A. Shedd, is without equity, and it is dismissed without costs; that Edward A. Shedd, Charles B. Shedd and Edward J. Shedd, or such of them as are now in pos: session of said real estate and building, are tenants at will thereof, and that it is the duty of the Northern Trust Company, as trustee, to take immediate possession of the premises and to hold, manage and operate same for the benefit of the beneficial owners of such real estate and building, and the said Shedds, or such of them as are now in possession of said real estate and building, are ordered and directed to deliver to said Northern Trust Company, as trustee, immediate possession of the above described real estate and building, together with their excluded copy of the aforesaid lease, dated May 1, 1893, and to cease occupying the said real estate and building, and to cease collecting rents from the tenants occupying the same.

A motion was made by John C. Patterson, appellee, to dismiss the appeal upon the ground that the decree appealed from is not a final decree and this court is without jurisdiction to hear and determine the cause. This motion was reserved to the hearing.

The decree denies to appellant Shedd all rights and equities in the subject-matter of the litigation and transfers the right of property and the possession thereof to the Northern Trust Company, as trustee, and orders appellant to deliver up possession of the premises to the Trust Company and also the executed copy of the lease. It finds and decrees upon the substantive rights and equities of the parties. The provisions in the decree for an accounting and reserving jurisdiction for the purpose of enforcing the decree do not affect its final character. This appeal is properly taken to this court. 2 Encyc. Pl. & Pr. 71. The motion to dismiss this appeal is denied.

The bill of complaint of Helen W. S. Johnson and Stewart Patterson is in its essence and effect a bill to declare a forfeiture of the lease. The ingenious phrasing of the prayer of the bill for an injunction against the Northern Trust Company from “collecting, receiving or receipting for any further payment of moneys as an instalment of rent under said lease, and from mating or delivering any receipt for any such payment or instalment to said Herman H. Kohlsaat, or to any other person, or persons, as lessee, or lessees, or the payer of rental under said lease,” and for a receiver of the Stewart Building and of its rents and profits, etc., and that the “court decrees that the full title and sole right to complete possession and control of said Stewart Building and appurtenances is •in said Northern Trust Company, as trustee, for the benefit of the beneficiaries under said trust deed, ‘Exhibit D,’ and that such possession and control be delivered over to said trustee by such receiver, and that said lease, ‘Exhibit A,’ be adjudged surrendered, and be ordered delivered up and canceled,” cannot deceive or mislead a court of equity. Nor will the specious contention and argument that the leasehold estate of Kohlsaat was surrendered by operation of law in 1897, when Kohlsaat executed the first assignment, based upon the undisputed facts shown by the record, avail to persuade the court that complainants are not really seeking a forfeiture of the lease, for that is the real meaning and essence of the bill. .

If the leasehold estate was surrendered by operation of law, it was terminated. If the leasehold estate was forfeited, it was terminated. The same result is sought and upon the same state of facts by both theories and methods. As said in Patterson v. Northern Trust Co., 238 Ill. 601:

“The apparent object of the present bill is to obtain a holding to the effect that the lease to Kohlsaat and the assignment thereof to the Merrimae Building Company are void, and that the building erected upon the premises, by reason of the forfeiture of the lease, now forms a part of the fee, and to require the Northern Trust Company, as trustee, to account to appellant for his proportionate share of all rents which have been earned by the premises covered by said lease since the date of the notice to the lessees by the Northern Trust Company that the lease had been forfeited. Substantially all the contentions raised by the brief of counsel for the appellant in this case were raised by the appellant in the other cases when they were here and were disposed of adversely to appellant.”

There can be no doubt that equity abhors a forfeiture and will not declare and enforce it. “It is a well settled and familiar doctrine that a court of equity will not interfere on behalf of the party entitled thereto, and enforce a forfeiture, but will leave him to his legal remedy, if any, even though the case might be one in which no equity relief would be given to the defaulting party against the forfeiture. The few apparent exceptions to this doctrine are not real exceptions, since they all depend upon other rules and principles.” Pomeroy, Eq. Jur., sec. 459; Douglas v. Union Mut. Life Ins. Co., 127 Ill. 101, 116; Patterson v. Northern Trust Co., supra. The function of a court of equity is to grant relief against forfeiture in proper cases but never to enforce it.

In recognition of this elementary principle of equity, and of the decisions in the Patterson cases, supra, solicitors for appellees, Helen W. S. Johnson and Stewart Patterson, do not base their argument in this court in support of the decree upon the right of the complainants to a forfeiture of the lease, but upon the doctrine of surrender by operation of law. In other words, the contention is that “by the performance by both lessor and lessee of acts which the law says amount to a ‘surrender by operation of law,’ the leasehold estate has become merged in the fee.” To state the contentions more specifically, it is not that there was any surrender of the leasehold estate by express agreement, but that such surrender is implied from the attempted assignment which was void, the relinquishment of possession by Kohlsaat, the lessor’s subsequent collection and enforcement of rental payments from the owners of the Merrimac Building Company, and failure to receive and demand any such payment from Kohls aat and “the lessor’s acceptance of the persons acting as ‘Merrimac Building Company’ as tenants,” and thereafter collecting all rental payments from them, constituted a surrender of the leasehold by operation of law.

In regard to the surrender theory thus put forward, it is necessary in order to reach a just conclusion to consider all the circumstances in which the parties, complainants and defendants, acted at the time of, and subsequent to, the attempted assignment of the lease.

The lease provided that the lessee might assign his interest in the premises, but not without first obtaining the written consent of the lessors so to do, “and provided also, that no assignment shall be made to any corporation not having the power and authority under the law of its organization and the laws of Illinois to accept such assignment * *

The lease contains the further provision that if the lessee did assign such interest, “after complying with the conditions and covenants set forth in the foregoing, the lessee shall be released by the lessors from all liability under this lease arising after the proper execution and delivery of such assignment.”

It is beyond question, we think, that the attempted assignment to the Merrimac Building Company did not release Kohls aat from the lease, for that company Fad no existence. There was no grantee or assignee. What the parties tried to do, but did not do, was to substitute the Merrimac Building Company for Kohlsaat as lessee and owner. There was no such company, and hence the effort failed and, as between the parties to the lease, it was left standing precisely as if no assignment had been made. There was no substitution, and where there is no actual substitution there was no surrender by operation of law, and no release of Kohlsaat by the consent of the landlord to an assignment with no assignee to receive and hold it. Barnes v. Northern Trust Co., 169 Ill. 112; Grommes v. St. Paul Trust Co., 147 Ill. 634, 648. The question of substitu tion of tenants for the unexpired portion of a term rests upon the doctrine of novation. In 21 Am. & Eng. Encyc. of Law, 672, it is said:

“It is essential in every case of novation that the resulting obligation is an enforceable one. Although there may be present competent parties and sufficient consideration, the prior obligation is not extinguished unless the new obligation be such as may legally take its place. Thus, if it be inchoate or lacking in some necessary element, or illegal and, therefore, unenforceable, or conditional, novation either fails entirely or is suspended until the objectionable element in the contract is removed.”

To the same effect are Wood’s Landlord & Tenant, sec. 494; 18 Am. & Eng. Encyc. of Law, 359; and 24 Cyc. 1370, 1371, and authorities there cited. In Coe v. Hobby, 72 N. Y. 141, 147, the Court said:

“The farthest that our courts have gone is to hold that to effect a surrender of an existing lease by operation of law, there must be a new lease, valid in law, to pass an interest according to the contract and intention of the parties.”

See also Brewer v. National Union Building Ass’n, 166 Ill. 221.

Thus far we have considered the question of surrender by operation of law wholly apart from and unaffected by estoppel and prior adjudication which we shall consider later. The attempted assignment of the» lease by Kohlsaat- with the consent of the lessor and the delivery of possession of the premises by Kohlsaat to the persons acting in the name of the Merrimac Building Company, in our opinion, did not amount to a surrender of the leasehold estate by operation of law as between the lessor and lessee. But, Kohlsaat, having been fully paid by the persons acting in the name of the Merrimac Building Company for his leasehold and building, became a trustee for the stockholders and bondholders of that company, upon the familiar and elementary principle that where a person holds an estate for which he has been fully paid by an•other or others, a trust results for the benefit of those who paid the money. This principle as applied to a similar case is illustrated in Walker v. Taylor, 252 Ill. 424.

Without pausing here to discuss this principle as applied to this case (which we shall do later on), we proceed to refer to other controlling facts on the question of surrender by operation of law.

On March 15, 1892, nearly a year after the date of the deed from Kohlsaat and wife to the Merrimac Building Company, the Northern Trust Company, as trustee, and the beneficiaries of the trust, including the complainants and the Merrimac Building Company, entered into the so-called “forbearance of rent” agreement, which recited the lease in question, the erection of a new building on the premises in accordancp with the intent of the lease, the assignment of the lease, defaults in the payment of rent, and that notice in writing of said defaults had been given December 29,1897, and that this company had given notice that it would apply for the protection of a court of equity to prevent a forfeiture of the lease and to enable it to redeem the building and leasehold from said defaults on equitable terms, the desire to avoid litigation, and then stipulated and agreed that no steps should be taken by the Trust Company and the beneficiaries to enforce the forfeiture of the leasehold estate, provided the covenants and agreements of the lease be kept and performed, until July 1,1900. The Merrimac Company agreed to deliver possession forthwith to the Northern Trust Company. The remaining provisions of the agreement it is not necessary here to state.

The further facts of the foreclosure decree of June 25, 1902, in the Circuit Court of Cook county; the redemption by Shedd and Johnson, who paid $210,427.20, the amount due under the decree, on February 21, 1905; the review of the order permitting them to redeem in Patterson v. Northern Trust Co., 132 Ill. 208, and affirmed in 230 Ill. 334; the adjudications in Patterson v. Northern Trust Co., 139 Ill. App. 681, and Patterson v. Northern Trust Co., 231 Ill. 22, and Same v. Same in 238 Ill. 601,—are all important as facts and adjudications to be taken into consideration upon the rights of appellee to the relief sought in their bill. They show that the complainants and their trustees, The Northern Trust Company, with their consent and approval, recognized the Merrimac Building Company and those acting in that name as the assignee of the lease which they alleged and treated as still in existence after the alleged surrender by operation of law, and collected and received the rents as such reserved received the rents as such reserved in the lease. These in the lease. These facts, in connection with the uncontroverted facts that the parties acting in the corporate name took possession of the premises and paid the rent reserved under the lease and performed all the covenants of the lease for thirteen years, and after the continued recognition and express assertion of the lease and its enforcement by legal proceedings by appellees and their trustee, ICohlsaat, holding the naked legal title of the leasehold estate for. the benefit of Shedd and Johnson who had become owners of the interests of every person in the leasehold estate, conveyed the title to appellants Shedd and Johnson,—leave no basis in law or equity for contention that there was a surrender by operation of law, or a forfeiture thereof in any other form, or by any other method. The bill of Helen W. S. Johnson and Stewart Patterson is without equity and should have been dismissed by the chancellor on the hearing.

We come now to a consideration of the equities of appellant Shedd, if any, imder his cross-bill. It appears without controversy that appellant Shedd has acquired all the rights of the stockholders and bondholders of the illegal corporation known as the Merrimac Building Company. 'The stock certificates and bonds issued by that organization are valueless as evidencing the ownership of stock and bonds by the holders thereof. These papers, nevertheless, show who contributed the money to erect the building now standing upon the leased premises and other moneys expended for the benefit of the leasehold estate and the payments of rents in accordance with the covenants of the lease, and the equities of these stockholders and bondholders, now vested in Shedd. As said in Walker v. Taylor, 252 Ill. 424: ‘ ‘ Those who subscribed and paid for stock issued by the illegal association and with whose money the land was purchased did acquire an equitable interest in the property. Their interests are entitled to be protected by court of equity as against the creditors of Could, who never had any interest in the land except to the extent of the stock he subscribed and paid for.”

An interesting and well considered case on the subject of equities arising out of an illegal corporation attempted to be organized to engage in the business of buying and selling real estate, and affirming the right of stockholders to enforce a trust with reference to real estate held for the benefit of the stockholders in such a corporation, is Fisk v. Patton, 7 Utah 399.

The leasehold was legally created in Kohlsaat. He sold and was paid for that estate and attempted to assign it, but the assignment failed for reasons already given. The estate was thereafter held by him in trust for the parties who had purchased it and paid for it. In equity he could have been compelled to execute a conveyance of the leasehold to appellants Shedd and Johnson, the then holders of the equitable rights, on January 30, 1905, when he voluntarily conveyed it to them. The lessor owners of the fee had then recognized the Merrimac Building Company by consenting to the assignment of the lease, by entering into the so-called “forbearance of rent” agreement, and by filing their bill in the rent foreclosure case, and pressing the case to a decree entered June 25, 1902, and by receiving rent under the lease and giving receipts therefor to Kohlsaat. These acts and proceedings operated as a waiver of all right of forfeiture and of the right to object to the conveyance to Shedd and Johnson as an assignment without the lessor’s consent as provided in the lease. Webster v. Nichols, 104 Ill. 160; 18 Am. & Eng. Encyc. Law (2d Ed.) 385-386.

Upon the facts shown in the record and the acts of the parties and in view of the legal proceedings instituted by the equitable owners of the fee, and to which they were parties, and upon the several adjudications referred to above, we hold that the defendants in the cross-.bill are estopped from denying that the Kohlsaat assignment carried the leasehold estate to the Merrimac Building Company for the benefit of the persons acting in that name and that Shedd, complainant in the cross-bill, is the equitable owner of the leasehold estate. We further hold that Shedd is the equitable owner of the leasehold estate under the doctrine expressed in Walker v. Taylor, supra; Fisk v. Patton, supra, and other cases and authorities cited; and that by the deeds from Kohlsaat to Shedd and Johnson and by Johnson to Shedd, the title to the leasehold estate was vested in Shedd. And in view of the questions presented to the courts in the several cases instituted and litigated by the original complainants and John C. Patterson, Shedd is entitled to have his title to the leasehold estate quieted by a decree on his cross-bill.

In view also of the continued litigation with reference to this lease and the disagreement of the beneficial owners of the fee as to the proper position, duty and action of the Northern Trust Company, as trustee, with reference to the lease and the estate thereby created, the Trust Company is entitled to a decree giving to it instructions and directions.

The decree is reversed and the cause is remanded with directions to the trial court to enter a decree dismissing the bill of Helen W. S. Johnson and Stewart Patterson for want of equity; and to enter a decree on the cross-bill of Shedd and the bill of the Northern Trust Company not inconsistent with the views herein expressed. ■

Reversed and remanded with directions.


source: Caselaw Access Project

author: Mr. Presiding Justice Fitch

license: Public Domain

text:
    Oliver J. Wright, Defendant in Error, v. John L. Bolen, Plaintiff in Error.
    Gen. No. 18,519.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Edwin K. Walker, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed on remittitur; otherwise reversed and remanded.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Oliver J. Wright against John L. Bolen to recover for work and labor performed by the plaintiff as a carpenter and foreman for the defendant for certain periods of time stated in his statement of claim. From a judgment in favor of plaintiff for $858.70, defendant brings error.
    Park Phipps, for plaintiff in error.
    Gideon S. Thompson, for defendant in error.

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

   Mr. Presiding Justice Fitch

delivered the opinion of the court.

Abstract of the Decision.

1. Master and servant, § 87 —when defendant in suit for wages entitled to deduction of credits. In an action for wages a verdict in favor of plaintiff held too large in view of evidence showing that defendant was entitled to certain items as credits, and judgment was affirmed upon condition of remittitur.

2. Witnesses, § 33 —competency of plaintiff’s wife to testify. In an action for wages where plaintiff testified that his wife on several occasions collected money for him from the defendant, held not error to permit plaintiff’s wife to testify to a conversation with the defendant concerning plaintiff’s account.

3. Appear and error, § 523 —method of making objections to oral instructions. Improper on making objections to oral instructions to divide the oral charge into separate numbered paragraphs.


text:
    William C. Regelin and William Jenson, trading as Regelin-Jenson & Company, Defendants in Error, v. Thomas Conran, Plaintiff in Error.
    Gen. No. 18,677.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Edwin K. Warner, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by William C. Regelin and William Jenson, copartners, doing business as Regelin-Jenson & Co., against' Thomas Conran to recover commissions earned in securing a purchaser for certain property belonging to defendant. From a judgment in favor of plaintiffs for $650, defendant brings error.
    Henry M. Hagan, for plaintiff in error.
    George H. Mason, for defendants in error.

      Abstract of the Decision.
    1. Brokers, § 46*-—ichen entitled to commissions though the contract between purchaser and seller was made under a mutual mistake as to the subject-matter. In an action for commissions for procuring a purchaser for property belonging to defendant, where the seller and purchaser entered into a written contract whereby the seller agreed to convey the property in consideration that the purchaser would convey to defendant other property described as being of certain dimensions, more or less, held that plaintiffs were entitled to commissions notwithstanding the purchaser and seller were mutually mistaken as to the dimensions of the property to be conveyed by the purchaser, the contract being made in good faith and enforceable in a court of law according to its terms.
    2. Vendor and purchaser, § 64*—words “more or less” construed. The words “more or less” as applied to quantity in a contract to convey land are to he construed as qualifying a representation or statement of an absolute or definite amount, so that neither party can avoid it or set it aside by reason of any deficiency or surplus occasioned by no fraud or want of good faith, if there is a reasonable approximation to the quantity specifically stipulated in the contract.
    3. Reformation of instruments, § 34*—jurisdiction. A court of law has no power to correct a mistake and reform a contract; such power rests alone in a court of equity.
   Mr. Presiding Justice Fitch

delivered the opinion of the court.


text:
    Rocco Lofaro and Frank Rossi, trading as Lofaro & Rossi, Defendants in Error, v. Alessandro Maggi, Plaintiff in Error.
    Gen. No. 18,705.
    1. Municipal Court of Chicago, § 16

      —-what does not constitute waiver of jury trial. Failure of defendant to file a written demand for a jury trial when he appears to require nonresident plaintiffs to file a bond for costs, held not to waive his right to trial by jury.
    2. Municipal Court of Chicago, § 16

      —-when demand for jury trial may be filed. Defendant sufficiently complies with statute requiring the filing of a written demand for jury trial where he files such demand and pays jury fees when he appears for the first time in answer to plaintiff’s claim upon the merits.
    Error to the Municipal Court of Chicago; the Hon. John R. Newcomer, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Reversed and remanded.
    Opinion filed January 22, 1914.
    Cairoli Gigliotti, for plaintiff in error.
    Culver, Andrews & King, for defendants in error.

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

   Mr. Presiding Justice Fitch

delivered the .opinion of the court.

The only question raised in this case is whether the defendant (plaintiff in error) was entitled to a jury trial in the Municipal Court. The plaintiffs sued upon a promissory note. Upon the return day of the summons the defendant filed a written appearance, “for the special purpose of having plaintiff, who is a non-resident, give security for costs,” and, on motion of the defendant, the plaintiffs were then ordered to file a bond for costs within five days. By the terms of the same order, defendant’s time within which to file an affidavit of merits was extended ten days. A bond for costs was filed at once, and four days later the defendant filed another appearance in writing, in which he demanded “that the issue in the above entitled cause be tried by a jury.” Within the time limited by the order of the court, defendant filed an affidavit of merits, from which we assume that his defense is that the consideration for the note failed. The record shows that thereafter the cause came on in the regular course for trial before the court without a jury; that the court heard the evidence and entered a finding and judgment in favor of the plaintiff for $92.68. The statement of facts, however, shows that when the case was so called for trial, defendant objected to a trial by the court without a jury and presented an affidavit in support of his objection, stating, in substance, the facts regarding his first and second appearance, and also stating that at the time of making his written demand for a jury trial, as above stated, he had paid $6 to the clerk for jury fees; that thereupon defendant moved the court to have the case placed upon the jury calendar for trial, but the court overruled the motion, to which the defendant excepted; that following this ruling, “defendant and his counsel left the court room and refused to submit to a trial by the court instead of a trial by jury as demanded;” whereupon the case was tried by the court, in the absence of the defendant.

Section 43 of the Municipal Court Act (J. & A. ¶ 3355) provides that upon the return of any summons duly served upon the defendant, plaintiff shall be entitled to judgment as in case of default, unless the defendant shall either appear in person, or file his appearance in writing, at or before the time fixed in the summons. Section 30 of the same act (J. & A. ¶ 3342) provides that every suit of the fourth class in the Municipal Court “shall be tried by the court without a jury, unless .the plaintiff, at the time he commences his suit, or the defendant, at the time he enters his appearance, shall file with the clerk a demand in writing of a trial by jury.” The fifth paragraph of section 56 (J. & A. ¶ 3373) provides that if the defendant files with his appearance a demand in writing for a jury trial, he shall pay to the clerk the sum of $6. Section 19 (J. & A. ¶ 3331) provides that until otherwise determined, and except as by that act is otherwise prescribed, the practice in the Municipal Court “shall be the same as near as may be, as that which may from time to time be prescribed by law for similar suits or proceedings in circuit courts, excepting that in cases of the fourth class * * * the issues shall be determined without other forms of written pleadings than those hereinafter expressly prescribed or provided for.” Section 1 of chapter 33 of the Be-vised Statutes (J. & A. ¶ 2715) provides that in all cases at law or in equity, where the plaintiff is not a resident of this State, he shall, “before-he institutes such suit,” file, or cause to be filed, a written security for costs; and section 3 of the same chapter (J. & A. ¶ 2717) provides that if any such action shall be commenced without filing such a written instrument, “the court, on motion, shall dismiss the same, * * * unless the security for costs shall be filed within such time as shall be allowed by the court.”

In Morrison Motel Co. v. Kirsner, 245 Ill. 431, the Court said: “The constitution secures to the citizen the right of trial by jury, and unless he waives that right it is his privilege to have controverted questions of fact decided by a jury and not by a judge sitting as a court. * • * * We have held that provisions of the Municipal Court act requiring a party to a suit of this class, at the time of entering his appearance, to file with the clerk a demand in writing for a trial by jury and to pay $6 for jury fees are valid, and that otherwise the cause may be tried by the court. (Williams v. Gottschalk, 231 Ill. 175.) In view, however, of the provision of the constitution that the cherished right of trial by jury shall remain inviolate, the statute should be liberally construed in favor of the right and the inclination of the court should be to protect and enforce the right.” Upon the principle thus stated, it was there held that the failure of a defendant, against whom a judgment by confession had been entered, to file a written demand for a jury trial with his motion to vacate the judgment does not waive or bar his right to a jury trial if he makes his written demand and tenders the jury fees at the time the motion to vacate is allowed. We think the reasoning of the opinion in that case is applicable to the facts of this case. It was the statutory duty of the non-resident plaintiffs, when they commenced their suit, to file with the clerk a written security for costs. Their failure to do so entitled the defendant to have the suit dismissed on Ms motion, unless the court should allow further time to the plaintiffs to file such security. The court recognized this right of the defendant when it entered a rule on the plaintiffs to file a bond for costs within five days. Until that rule was complied with, or the time allowed for compliance expired, it could not be known whether there would be any issue to be tried either by the court or a jury. If no bond for costs had been filed, the maMng of a written demand for a jury trial and the payment of the jury fees would have been wholly unnecessary and futile. To hold that under such circumstances the failure to make such a demand and payment before any bond for costs was filed amounted to a waiver of the constitutional right of trial by jury would be to adopt a most narrow and technical, instead of a liberal construction of the statute. When defendant appeared for the first time in answer to plaintiff’s claim on the merits he filed his written demand for a jury trial. We think this was a sufficient compliance with the statute, and that the court erred in refusing to give him a trial by jury.

The judgment of the Municipal Court will be reversed and remanded.

Reversed and remanded.


text:
    Greer-Wilkinson Lumber Company, Defendant in Error, v. George A. Neeves, Plaintiff in Error.
    Gen. No. 18,726.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Frederick L. Fake, Jr., Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Rehearing denied February 3, 1914.

      Abstract of the Decision.
    Compromise and settlement, § 5

      —when compromise of disputed claim sufficient consideration for a note. Where a person as a result of a compromise agreement gives his promissory note in settlement of a doubtful claim he is liable thereon and cannot urge want of consideration for the note, even though the claim could not have been legally enforced against him, where there was neither actual nor constructive fraud and the parties acted in good faith with full knowledge of all the facts.
    Statement of the Case.
    Action by Greer-Wilkinson Lumber Company, a corporation, against George A. Neeves on a promissory note given by defendant to plaintiff in renewal of another note for the same amount. The original note was given to plaintiff as a result of a compromise agreement in payment for materials purchased by a contractor and used by the contractor in constructing a house for defendant after defendant had disputed his liability to pay therefor, and after defendant had refused to pay the contractor on the ground that the building did not conform to specifications. The defense to the note was want of consideration. From a judgment in favor of plaintiff for $586.15, defendant brings error.
    George A. Neeves, Jr. and Leland K. Neeves, for plaintiff in error.
    Eastman & White, for defendant in error; Ralph R. Hawxhurst, of counsel.

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

   Mr. Presiding Justice Fitch

delivered the opinion of the court.


text:
    Percival Steele, Appellant, v. George A. Lamb et al., Appellees.
    Gen. No. 18,738.
    1. Attorney and client, § 150

      —when evidence shows want of good faith in serving statutory notice for lien. On bill filed by an attorney to enforce a lien for attorney’s fees under Hurd’s R. S. 1912, ch. 82, ¶ 55, J. & A. ¶ 611, a decree dismissing the bill for want of equity on sustaining a plea alleging that complainant’s notice for a lien was not served in good faith, but was served for the purpose of defrauding a creditor of the judgment creditor, held sustained by the evidence.
    2. Appeal and error, § 1165

      —when court may consider only questions parties see fit to present. Where adult litigants are concerned and private rights, only, are involved, the practice considered proper is to decide such questions as they see fit to present.
    Appeal from the Circuit Court of Cook county; the Hon. Charles M. Walker, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Harvey L. Cavender, for appellant.
    F. W. Balcomb, for appellees; Charles D. McGrath, of counsel.

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

   Mr. Presiding Justice Fitch

delivered the opinion of the court.

By this appeal it is sought to reverse a decree of the Circuit Court sustaining a plea to the hill of complaint and dismissing the bill for want of equity. The bill alleges that the complainant (appellant) is a lawyer, practicing in Chicago; that about May 1, 1909, he was retained by the defendant, Lamb, to collect certain claims against H. O. Tomlinson & Co.; that no definite amount was agreed on for attorney’s fees, but it was understood that a reasonable fee should be paid to the complainant for his services; that, complainant brought suit in the Municipal Court for $60,000 on behalf of Lamb against Tomlinson & Co., and on July 15, 1909, a judgment in Lamb’s favor for $7,164.21 was recovered, from which judgment an appeal was perfected, which was pending at the time the bill was filed; that the reasonable, customary and ordinary charge in Chicago for such services as were rendered by complainant in that suit was $4684.49, and that amount, it is claimed, is due and owing to the complainant from Lamb; that on June 10, 1909, complainant caused to be served upon Lamb and upon Tomlinson & Co. a written notice, stating that in pursuance of paragraph 55, chapter 82, of the Illinois statutes (J. & A. ¶ 611), he claimed an attorney’s lien, in the sum of $7,500, for services rendered and disbursements made in said suit of Lamb v. Tomlinson & Co., “upon all papers and claims of, and amounts due and to become due to, said plaintiff, George A. Lamb, in connection with said action.” The prayer of the bill is that the court will “ascertain, adjudicate, 'and enforce” the complainant’s alleged lien for attorney’s fees. To this bill the defendant, Lamb, filed a plea, stating in substance that the notice described in the bill “was not served in good faith by said complainant for the purpose of complying with the statute in the said bill pleaded, or for the purpose of protecting said complainant’s right to compensation for services rendered,” but was served in pursuance of an arrangement between the complainant and defendant to “place beyond the reach of other creditors” of Lamb, and “to fraudulently cover up,” any judgment that might be secured in the suit of Lamb against Tomlinson. The cause was then referred to a master in chancery to take testimony and report the same, “together with his conclusions thereon, on the issues raised by the special plea.” The evidence heard before the master consisted chiefly of the testimony of the complainant and the defendant, Lamb. From their evidence it appears that during the trial of the Tomlinson suit in the Municipal Court, and after complainant had spent considerable time and effort in preparing for the trial and,in partly trying the case, a suit was brought against Lamb by one DeBuys for $10,000; that upon inquiry complainant learned that DeBuys held Lamb’s notes for large sums which the latter was unable to pay; that complainant thereupon prepared a notice to be served upon Lamb and Tomlinson, claiming a lien to the amount of $5,000 upon the cause of action involved in the Tomlinson suit; that before this notice was served, however, there was a conference between complainant and Lamb at the office of complainant, at the conclusion of which, the complainant, with the consent of Lamb, altered the notice he had prepared, by increasing the amount of his claim, as therein stated, from $5,000 to $7,500, and in that form the notice was served upon Lamb and upon Tomlinson & Co. As to these facts there is no controversy. The only dispute is as to what was said at the conference in complainant’s office. Only Steele and Lamb were present at that conference. Steele testified that when he produced the notice he had prepared and showed it to Lamb, the latter looked it over and said, “What is the objection to making the amount $7,500?” to which Steele replied, “So far as I am concerned there is no objection to making it $7,500,” whereupon Steele called in his stenographer and had the notice rewritten as suggested by Lamb. Lamb testified that when the notice was produced, he told Steele that he was in an impoverished condition financially, and would be justified in going into bankruptcy, but that he wanted to escape that stigma; that he felt reasonably sure he would recover a judgment for $8,000 or $10,000 against Tomlinson & Co. in the pending suit, “and DeBuys will simply grab it;” whereupon Steele said that there was a better way than going into bankruptcy; that he (Steele) had prepared the papers claiming a lien for $5,000 against the Tomlinson claim; that Lamb said, “Well, in that case why not make it $7,500; I suppose a lien of $7,500 would about cover it,” to which Steele replied, “Very well, we will raise it.” Upon this evidence, the master first found and reported that the notice was served in good faith so far as the claim for reasonable fees was concerned, and “to that extent” the notice was good. Upon exceptions filed to this report, the cause was re-referred to the master “to further report,” whereupon the master submitted a further report in which he found and reported that the plea of fraud in giving the notice had not been proved, that the notice was good, and recommended that the plea be overruled. Upon exceptions filed to this report, the court took a different view of the evidence, and found that the plea was sustained by the proofs and held it sufficient, in fact and in law, to bar the complainant’s suit.

The statute creating attorneys’ liens and providing for the enforcement of the same (Hurd’s St. 1912, Ch. 82, § 55,) J. & A. ¶ 611 gives to attorneys at law “a lien upon all claims, demands and causes of action * * * which may be placed in their hands by their clients for suit or collection * * * for the amount of any fee which may have been agreed upon by and between such attorneys and their clients, or, in the absence of such agreement, for a reasonable fee, for the services of such attorneys rendered or to be rendered for their clients on account of such suits, claims, demands or causes of action: Provided, however, such attorneys shall serve notice in writing upon the party against whom their clients may have such suits, claims, or causes of action, claiming such lien and stating therein the interest they have in such suits, claims, demands or causes of action.” The statute further provides that the lien shall attach from the time of the service of such a notice.

Under this statute, no lien exists until the prescribed notice is served, and such notice must state “therein” the" interest the attorney has in the suit or cause of action. As originally prepared by Steele, the notice undoubtedly expressed his view of the amount of his interest in the cause of action against Tomlinson & Co. When he changed it, the notice stated that his interest therein was much greater than was the fact. Steele knew that this was so, and although he made the change at his client’s request, yet, as an attorney, with knowledge of the facts regarding the DeBuys’ suit, he must have known that Lamb’s purpose in requesting such change to be made was to place the whole Tomlinson claim beyond the reach of DeBuys. No other reasonable explanation is offered by Steele or warranted by the evidence.

It is assumed in the briefs and arguments of counsel on both sides that if the notice was in fact thus changed by mutual consent for the purpose of hindering, delaying or defrauding DeBuys, then the notice was fraudulent and no rights can be based upon it in a court of equity. "Whether this assumption is correct, necessarily and as a matter of law, we need not stop to inquire, for the reason that its correctness is not questioned in this case. In the recent case of Heppes Co. v. City of Chicago, 260 Ill. 506, the Court said: “Where adult litigants are concerned and private rights, only, are involved, the practice considered proper is to decide such questions as they see fit to present.” In this case adult litigants are concerned and private rights, only, are involved. It also appears that both parties are trained in the law, and the only question they have seen fit to present is whether the finding and decree are supported by the evidence, upon the assumption above stated. This question, we think, must be answered in the affirmative, for the reasons given above, and the decree of the Circuit Court will therefore be affirmed.

Affirmed.


text:
    Illinois Life Insurance Company, Appellant, v. Joseph Beifeld, Appellee.
    Gen. No. 18,765.
    1. Contracts, § 52

      —when memorandum is a complete contract and not an agreement for execution of formal contract. A memorandum signed by the parties relating to the leasing of a portion, of certain premises and the assignment of leases as to other portions, held to constitute a complete contract and not a mere skeleton or outline for the preparation of contracts to be thereafter agreed upon and executed.
    2. Contracts, § 173

      —when contract is incomplete. Where it is apparent from the language of a contract to convey that some of the terms and conditions which are to be inserted in the instrument of conveyance are still unsettled and open to further negotiations, then the agreement to convey is incomplete because there is no agreement in fact.
    3. Contracts, § 8

      —when not void for uncertainty. A contract to lease a portion of premises for a term of years and to make an assignment of existing leases on other portions, held not void for uncertainty for the reason that it does not provide for all possible contingencies, where it expresses the agreement of the parties in such form as to leave little room for doubt as to what was intended and what matters were in fact agreed upon.
    4. Contracts, § 8

      —when contract for assignment of leases or subleases not uncertain. A contract to lease a portion of certain premises and to make an assignment of leases or subleases to other premises as soon as the same can be conveniently prepared, held not subject to objection that it is uncertain whether assignments of existing leases or subleases should be prepared, where the whole term of the existing leases was to be conveyed and subleases if executed would amount in legal effect to assignments.
    5. Contracts, § 12

      —when not void for want of mutuality. A contract whereby one party “agrees to take” a lease of certain property and assignments or subleases of other property as soon as the same can be conveniently prepared, at a stipulated rental, and also agrees to deposit securities concurrently with the execution and delivery of the lease, held to clearly import a present agreement by such party to accept an offer made by the other party to execute and deliver the lease and assignments, since the word “take” may be construed to mean “accept” so as to give effect to the intention of the parties.

      6. Corporations, § 420

      —power of life insurance corporation to lease real estate. The power given a life insurance corporation under Hurd’s St. 1911, ch. 73, ¶ 182, J. & A. ¶ 6460, “to sell and dispose of” real estate lawfully acquired but no longer necessary for the transaction of its business, does not preclude it from making a lease of such property for a term of ninety-seven years. The words “dispose of” may be eonstfued to mean “to alienate” or to convey by proper instruments of conveyance.
    7. Corporations, § 404

      —when life insurance corporation may sell property no longer required for its business. Hurd’s St. 1911, ch. 73, ¶ 182, J. & A. ¶ 6460, does not require a life insurance corporation having property which is no longer required for the transaction of its business to immediately sell and convey the same. Under such statute it may hold such property a reasonable time in order that the same may be sold to advantage.
    8. Corporations, § 344

      —who may attack contract made by corporation because it is ultra vires. Where an ultra vires contract is one which the corporation was not under any circumstances authorized to perform, it is void and may be attacked anywhere by any one. But where the validity of the contract depends upon the question whether the corporation has abused, or unjustifiably used, a power which it had the right to exercise, if exercised in good faith, then only the State can attack it.
    Appeal from the Superior Court of Cook county; the Hon. Clarence N. Goodwin, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Reversed and remanded with directions.
    Opinion filed January 22, 1914.
    Rehearing denied February 9, 1914.
    Statement by the Court. This appeal brings up for review a decision of the Superior Court, sustaining a demurrer to a declaration in assumpsit.

    The declaration alleges, in substance, that the plaintiff is a corporation, organized under the laws of Illinois for the purpose of carrying on the business of life insurance; that,on April 17, 1906, it was the owner and in possession, through its tenants, of certain property at the corner of LaSalle and Madison streets, in Chicago; that a part of said property, hereinafter called the Oriental property, was owned by the plaintiff in fee, and the remainder was held under ninety-nine years’ leases, which, with one exception, began May 1, 1905, and will expire April 30, 2004; that one parcel, called the Jennings property, was held under a lease expiring April 30, 1987, and as to that parcel the plaintiff had entered into a contract with the owner of the fee thereof for the execution o'f a new lease of the same for a term ending April 30, 2004, “so as to make all of the leasehold estates on the entire premises expire at the same time, in order that a building or buildings covering the entire premises might be erected thereon;” that “all of the aforesaid property had been acquired by the plaintiff in the manner above stated for the purpose of carrying on the business for which it was corporated;” that on April 17, 1906, the defendant desired to acquire a lease of the property owned by the plaintiff in fee for a term of years expiring April 30, 2004, and assignments or subleases of the other property covering the same period “and thereupon executed with the plaintiff a written contract as follows:
    Memorandum.
    1. This memorandum relates to the several holdings of property of the Illinois Life Insurance Company, situated at the Northwest corner of Madison and LaSalle streets, Chicago, extending 178 feet on LaSalle street by 162 feet' on Madison street, and comprising (1) Oriental or Coleman property, fee, (2) Jared Bassett leasehold, (3) University of Chicago leasehold, (4) John D. Jennings and wife leasehold, (5) Lambert Tree leasehold, and (6) Bichard High Carleton and Everett H. Noyes, trustees, leasehold.
    2. Mr. Beifeld agrees to take lease of Oriental property and assignments or sub-leases of other property (as soon as the same can be conveniently prepared), beginning October 1, 1906, subject to existing leases, and running for 97 years and 7 months. Annual ground rental to be $50,000 for first year, $56,000 for seven months, October 1, 1.907, to May 1, 1908; $96,000 per year from May 1, 1908, to May 1, 1910; $98,000 per year from May 1, 1910. to May 1, 1915; and $100,000 a year from May 1, 1915, to the end of the lease. Bent payable in twelve equal installments, monthly, in advance. Lessee to pay all taxes, assessments, charges, etc., levied or assessed for the year 1907, and thereafter during the term of said lease.
    3. Lessee to build and complete by May 1, 1908, unless prevented by existing leases, and in any event not later than May 1, 1909, a modern fireproof building, built according to the city ordinances, not less than twelve stories high, and costing not less than $2,000,000. Architect’s fees, ground rental for first year, and cost of cancellation of present leases of tenants in possession, to be considered as part of cost of said building. Architect to be Holabird & Boche, or some other architect approved by lessor. Plans and specifications to be submitted to and approved by lessor.
    4. Concurrently with the execution and delivery of the lease of the Oriental property, as aforesaid, and the assignment of the other leases as above provided, Mr. Beifeld to deposit with the First Trust & Savings Bank, or such other trustee as may be mutually agreed upon, as security for the performance of the covenants and agreements in said leases and assignments, $530,-000 of White City stock; and when Mr. Beifeld takes possession of the properties so leased and assigned, but in no event later than October 1, 1906, he shall also deposit with said trustee, as further security for the.performance of the covenants and agreements in said leases and assignments, $500,000 of acceptable securities at the bid cash market value, including not to exceed $250,000 of White City bonds at par. The $530,000 of White City stock to be held until the building is completed, furnished and equipped and the ground floor leases thereof assigned, and the securities now held by the University of Chicago and Bassett and Tree are released,—the other $500,000 of securities to be released in sums of $5,000, or multiples thereof, as the amounts so released have first been actually expended in the construction of the building, as shown by architect’s certificates.
    5. When not less than $1,000,000 has been expended in the construction of the building, and it has so far advanced that $1,000,000 will be sufficient to complete it, including all unpaid bills, the Illinois Life Insurance Company agrees to buy, at par, the entire issue of $1,000,000 of 5 per cent, gold bonds (interest payable quarterly; bonds to be personally endorsed by Mr. Beifeld and of form acceptable to the purchaser) to be secured by a first mortgage on leasehold and building, furniture, fixtures and equipment, and assignment of ground floor leases; said bonds being payable, $50,000, January 1, 1913, and thereafter, serially, not less than $50,000 annually and in increasing amounts until 1930, when the last bond shall be due and payable. Said bonds are also to be further secured by insurance procured at expense of lessee on the building for an amount not exceeding $1,000,000 as may be required by the purchaser of said bonds, said insurance to be payable to the trustee, in addition to other insurance required by present leases; also by insurance on furniture and fixtures, all equipment not part of real estate, and rents of first floor to an amount equal to 80 per cent, of the value of said rents; such policies to be deposited with the trustee. Said bonds are to be purchased and paid for from time to time as satisfactory showing is made that the cost of completing the building, including unpaid bills, is within the amount of bonds still unpaid for.
    6. Assignments or sub-leases, above referred to, to be subject to, and conform in all respects with, original leases now existing upon said land. Said leases to be reassigned to Illinois Life Insurance Company as additional security for the covenants made by the lessee in contract of assignment and in lease on Oriental property,-—such reassignment to be made subject to the rights of the mortgagee.
    7. Illinois Life Insurance Company agrees to secure Mr. Beifeld - that it will purchase the above $1,000,000 of bonds at par.
    8. Forfeiture of one lease to forfeit all.
    9. Lessor to use every possible effort in assisting Mr. Beifeld to secure the consent of University of Chicago to the erection of a hotel building.
    10. In case lessee desires any part of the premises covered by the various leases hereinbefore referred to at a time earlier than October 1, 1906, he shall be permitted to have the same, subject to any and all existing leases thereon, upon payment to the Illinois Life Insurance Company of the same rental paid by the tenant in possession up to October 1, 1906.
    Witness the execution hereof by the undersigned, this sixteenth day of April, A. D. 1906.
    Illinois Life Insurance Company,
    By James W. Stevens,
    President.
    (Seal)
    Attest:
    Oswald J. Arnold,
    Secretary.
    Joseph Beifeld.”
    The declaration then avers that after the execution
    of said contract the plaintiff “began and duly prosecuted the preparation of all things required of it under said contract,” and was ready and willing and offered to fully perform the same on its part, and to prepare and execute all documents and do all things required of it by the terms of the contract; but that the defendant refused to perform the contract, and on June 25, 1906, notified the plaintiff that he would neither perform the contract nor accept performance thereof on the part of the plaintiff, “no matter in what form the various contracts, papers and instruments referred to in said contract should be executed or caused to be executed by said plaintiff.” It is then averred that by reason of such refusal of the defendant the plaintiff was put to great cost and expense and lost divers large gains and profits, etc., to the damage of the plaintiff of $200,000.
    After a demurrer to the declaration had been filed and overruled and nearly a year’s time had been consumed in filing pleas and additional pleas, demurrers thereto, replications and rejoinders, a stipulation was filed wherein it was agreed that “for the purpose of permitting the defendant to take and have all lawful advantage of the judgment of the court on the question whether the declaration states any cause of action against the defendant which would sustain a verdict and judgment in favor of the plaintiff, ’ ’ all of the pleadings subsequent to the declaration should be withdrawn and that a general demurrer to the declaration should be filed “limited to the question of whether the declaration states any cause of action which would sustain a verdict and judgment in favor of the plaintiff, but shall not present the question of ultra vires, upon which the court has heretofore ruled in favor of the plaintiff.” An order was entered in accordance with the stipulation, the general demurrer was filed and, after argument of counsel, was sustained. The plaintiff elected to stand by its declaration and a judgment for costs was thereupon entered against it, from which the plaintiff appeals.
    Tenney, Coffeen, Harding & Sherman, for appellant; Horace Kent Tenney and Harry A. Parkin, of counsel.
    Felsenthal & Beckwith, for appellee; Eli B. Felsenthal and Walter J. Spengler, of counsel.

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

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

   Mr. Presiding Justice Fitch

delivered the opinion of the court.

The only question raised upon this appeal is whether the declaration states a good cause of action. On behalf of appellee, it is contended (1) that the instrument set forth in the declaration is not a contract, but is a mere memorandum, intended to serve as a skele7 ton or outline for the preparation of contracts to be thereafter agreed upon and executed; (2) that if the instrument can be considered as a contract, it is void for uncertainty; (3) that, as so considered, it is void for want of mutuality; (4) that, in any view, it is ultra vires, and void for that reason.

First. As to the first of these contentions, the argument is, as we understand it, that because the memorandum, though signed by the parties, shows upon its face that a formal “contract of leasing” and formal assignments or subleases were to be subsequently prepared, and because it appears from the memorandum that but few of the usual covenants and conditions of ordinary leases are mentioned as having’ been agreed on, therefore it must be held that the memorandum was intended to be only an agreement to enter into another agreement, the precise terms and conditions of which were still undetermined at the time the memorandum was signed. We are unable to take this view of the matter. The memorandum shows that all the essential provisions of a valid lease and valid assignments had been in fact agreed on, and appellee therein “agrees to take” a lease containing those provisions ‘ ‘ as soon as the same can be conveniently prepared.” A lease for a term of years is a chattel real, and conveys an interest in the land demised. People v. Shedd, 241 Ill. 155, 165. So far as we are advised, it has never been held that a contract which provides for the conveyance of real estate by a warranty deed, or other specified instrument of conveyance, is an incomplete contract merely because it provides that such deed or instrument is to be subsequently prepared. Of course, if it is apparent from the language of the contract that some of the terms and conditions which are to be inserted in the instrument of conveyance are still unsettled and open for further negotiation, then the agreement to convey is incomplete because in such ease there is no agreement in fact. But we do not think there is any language in the document under consideration that can be so construed. It speaks of appellant as the “lessor” and of appellee as the “lessee.” It describes the property which is to be leased, the duration of the term, the rental, and the time and manner in which the rent shall be payable. It provides that the lessee shall pay “all taxes, assessments, charges, etc., levied or assessed'for the year 1907 and thereafter during the term of said lease.” The only “charges, etc.,” which can be “levied or assessed” against real estate are taxes and special assessments. It provides that the lessee shall build and complete within a fixed time, a building of a specified type, height and cost, and provides that architect’s fees and certain other expenses of building shall be included in the cost. It provides further that “concurrently with the execution and delivery of the lease,” appellee shall 'make certain deposits with a specified bank, “or such other trustee as may be mutually agreed upon,” as security for the performance of the covenants of the lessee. In this clause a way was left for a subsequent agreement as to some other trustee than the one specifically mentioned, but that fact does not make the contract incomplete, for the clear intention is that in the absence of any such subsequent agreement the trustee specified should act. Throughout the memorandum, the word “agrees” is used, indicating a present and not a future agreement. It is inconceivable that the parties would go to the trouble of preparing a document like this, and cause it to be formally signed, on the part of the appellant corporation, by its president and secretary, and attested with the corporate seal, and also to be signed in person by appellee, if they intended it to be a mere memorandum for future reference only, not binding upon either party except in the event of a subsequent further agreement. We think the memorandum thus prepared and signed must be construed as a complete agreement to convey a specified interest in the property described upon the terms therein set forth, as soon as a formal instrument to that effect could be conveniently prepared for the signature of the parties.

Second. As to the second contention above stated, what we have already said applies with equal force to the argument made upon this point. Appellee’s counsel have picked out sentences here and there, which they claim are hot sufficiently explicit to enable a lawyer to so prepare a lease as to definitely provide for all contingencies that might be suggested. It may be conceded that the memorandum does not provide in express terms for all possible contingencies, but that fact does not render the contract void for uncertainty. The document expresses the agreement of the parties in such form as to leave little room for doubt as to what was intended and what matters were in fact agreed upon; and that is enough to overcome the objection of uncertainty. The objection that it is uncertain whether assignments of existing leases, or subleases, should be prepared is immaterial, for as the whole term of existing leases was to be conveyed, subleases, if executed, would amount to the same thing in legal effect as assignments. Lyon v. Moore, 259 Ill. 23. It would unduly extend the limits of this opinion to take up and discuss each of the sentences objected to on this ground, and it will suffice to say that after due consideration of the arguments advanced we think the objections are not well taken.

Third. It is argued at great length, and with much force, that an agreement by one party to “take” a lease does not, as a matter of law, impose any obligation on the other party to “give” such a lease. It is conceded that the courts may construe an obligation from the words used by the parties in a contract, but it is insisted that the language used in the memorandum in question is too plain for construction, and that to construe an obligation upon appellant to give a lease from words which only require appellee to take one, would be to create an obligation by implication. Some words are often used in a double sense, and others have more than one meaning. In order to arrive at the meaning of words used in a contract, the whole contract must be considered; and if, when so considered, the words employed have a signification other and different from the meaning conveyed by the same words when standing alone, it is the duty of the court to interpret the words used so as to give effect to the intention of the parties, if such intention clearly appears from all the language of the contract. In the memorandum in question, appellee “agrees to take lease of Oriental property and assignments or subleases of other property (as soon 'as the same can be conveniently prepared), beginning" October 1, 1906, subject to existing leases, and running for 97 years and 7 months,” at a stipulated rental, and he also agrees to deposit a large amount of securities “concurrently with the execution and delivery” of the lease. One meaning of the word “take” is “to accept as something offered; to receive; not to refuse or reject.” (Webster’s Dict.) Giving the word “take” this meaning, and reading the phrase in which it is used in connection with the other clauses above quoted, the contract clearly imports a present agreement by Beifeld to accept an offer made by appellant to execute and deliver to him a lease of the Oriental property and assignments or subleases of the other property, as soon as the same can be conveniently prepared. This interpretation of the words used does not create an obligation by implication, but construes the contract so as to give effect to the intention of the parties, as shown by the language employed. It is impossible to read the memorandum in question without being impressed with the view that the parties thereby intended to state, not only in substance but in detail, the terms and conditions of a lease which they agreed should be at once prepared and executed by appellant, and accepted by appellee. In principle, the memorandum in this case is like the contracts construed in Minnesota Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85; Torrence v. Shedd, 156 Ill. 194, and Sanitary Dist. of Chicago v. McMahon & Montgomery Co., 110 Ill. App. 510. We are of the opinion that the contract imposed mutual obligations, in consideration of the mutual promises therein contained.

Fourth. A more difficult question, in our opinion, is presented by the contention that the contract was ultra vires. No claim is made in this court that the term of the lease contracted for extends beyond the corporate life of appellant. Whether such is or is not the fact does not appear; and whether that fact, if true, would affect the question here presented is not discussed by counsel. The contention as made here is that the making of a lease, for ninety-seven years, of property which a life insurance corporation has lawfully acquired but which becomes unnecessary for the transaction of its business, is beyond the power of such a corporation to make, because of the language of the statute permitting such corporation to own only “so much real and personal estate as shall be necessary for the transaction of its business, and to sell and dispose of the same when deemed necessary.” (Hurd’s St. 1911, ch. 73, ¶ 182, J. & A. ¶ 6460.)

It is alleged in the declaration that all the property mentioned in the memorandum contract had been acquired by appellant “for the purpose of carrying on the business for which it was incorporated.” This allegation is admitted by the demurrer. Having lawfully acquired such property, if it may be held, as we think it may, that the execution of the memorandum contract is prima facie evidence of the fact that the property in question was deemed to be no longer necessary for the transaction of its business, then the only question as to the power of the corporation to make such a contract is whether the power given by the statute to “sell and dispose of” such real estate precludes appellant- from making a lease of the same for ninety-seven years and seven months.

It is contended by appellee’s counsel that the words “dispose of,” as used in the statute, must be construed to apply only to transactions that are in their nature equivalent to "sales; to which contention appellant’s counsel reply that to give those words the same meaning as the word “sell” would be to read the statute “to sell and to sell,” thereby giving to the words “dispose of” the effect of mere repetition. Appellant’s counsel contend that the making of such a lease as the contract provides for does, in effect, “dispose of” the property. We think that neither of these.contentions is entirely sound. The phrase “to dispose of” has two meanings; one is “to exercise the power of control over;” the other is “to exercise finally one’s power of control over; to alienate.” (Webster’s Dict.) Clearly, the latter of these meaning’s is the one in which the phrase is used in the statute. As thus construed, the statute gave to appellant the right to sell and alienate the property in question; or, in other words, to sell and convey the same by proper instruments of conveyance. But the statute does not require a corporation having property which is no longer required for the transaction of its business to immediately sell and convey the same. It' may, undoubtedly, hold such property a reasonable time, in order that the same may be sold to advantage. Under some statutes relating to corporations, a time limit of five years is fixed. As to life insurance companies, by an act passed after this contract was entered into, it was provided that such property shall be “sold and disposed of” within five years after the same shall have ceased to be necessary for the accommodation of the business of the corporation, unless a certificate is obtained from the insurance superintendent extending the time. Hurd’s Stat. 1909, p. 1312. (J. & A. ¶ 6507.) It is unnecessary to decide whether these statutes must be considered in determining the rights and powers of appellant. Assuming that to be true, it would be absurd to say that during the five years’ limitation, if an insurance company should be unable to find a buyer for such property, it must suffer its property to remain vacant and unoccupied, bringing no return and entailing constant expense in carrying the same. The fact that property is leased does not prevent a sale of it. On the contrary, it is a matter of common knowledge that property which is advantageously leased is frequently more salable because of that fact. So the mere making of a lease for ninety-seven years does not prevent a sale of the property. Such a lease might, and probably would, in many cases, give a value to the fee which it would not otherwise possess. If such a lease were to be made as a part of a plan adopted by a corporation for the purpose of effecting a more advantageous sale of its unnecessary real estate, there would seem to be no question of its right and power under the statute to do so. This being true, it follows that whether appellant had, or had not, such a plan and purpose in view, when it made the contract for such a lease, is not a question of power but a question of its intention, or good faith, in exercising a power which it had the right under some circumstances, to exercise. Where an alleged ultra vires contract is one which the corporation was not, under any circumstances, authorized to perform, it is void and may be attacked anywhere, by any one. National Home Building & Loan Ass’n v. Home Sav. Bank, 181 Ill. 35. But where the validity of the contract depends upon the question whether the corporation has abused, or unjustifiably used, a power which it had the right to exercise, if exercised in good faith, then only the 'State can attack it. Rector v. Hartford Deposit Co., 190 Ill. 380. In any view, however, the facts stated in the declaration do not raise the presumption that appellant intended to continue to hold its real estate in violation of the statute. We therefore conclude that the objection of ultra vires cannot prevail in this case.

For the reasons indicated, we think the demurrer to the declaration should have been overruled. The judgment of the Superior Court will, therefore, be reversed and remanded with directions to that court to overrule the demurrer.

Reversed and remanded with directions.


text:
    In the Matter of the Petition of John Jacob Meyer. On Appeal of John Jacob Meyer, Appellant, v. Bertha Kurz, Appellee.
    Gen. No. 18,813.
    (Not to be reported in full.)
    Abstract of the Decision.
    1. Execution, § 302

      —admissibility of evidence on petition under Insolvent Debtors’ Act for discharge from custody under a capias ad satisfaciendum. On petition to the County Court for a discharge under the Insolvent Debtors’ Act, J. & A. ¶ 6199, where petitioner had been arrested upon a capias ad satisfaciendum issued upon a judgment entered by default against him in an action for slander in which the words alleged to have been uttered were actionable per se, refusal of court to hear evidence dehors the records to prove that the words were not uttered maliciously, held proper for the reason that the question whether malice was the gist of the action must be determined solely from the record of the slander suit.
    Appeal from the County Court of Cook county; the Hon. John E. Owens, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Petition by John Jacob Meyer to the County Court under the Insolvent Debtors ’ Act, for a discharge from custody under a capias ad satisfaciendum issued upon a judgment recovered against him by Bertha Kurz in an action for slander. Prom a judgment denying the petition, the petitioner, John Jacob Meyer, appeals.
    George Remus, for appellant.
    Saltiel & Rossen, for appellee.

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

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

   Mr. Presiding Justice Fitch

delivered the opinion of the court.

2. Execution, § 295 —when record of action for slander conclusive on petition for discharge under Insolvent Debtors’ Act. Where a default judgment is entered against the defendant in an action for slander for words spoken which are actionable per se, the words spoken are admitted to be false by the default, and that they were maliciously uttered is conclusively presumed from the facts thus admitted and from the absence of any plea of justification or excuse.

3. Libel and slander, § 21 —when malice presumed. In an action for slander if the words charged to have been falsely uttered are not actionable per se, it is necessary to prove malice in fact; but if the words spoken are actionable per se then the law conclusively implies malice from the use of such words if false and uttered without legal justification or excuse.

4. Libel and slander, § 31 —when imputation of theft actionable per se. The words, “this woman has stolen the watch and chain belonging to my son,” are actionable per se.


author: Mr. Justice Gridley

text:
    Hattie Isabella McLaughlin, Defendant in Error, v. National Protective Legion, Plaintiff in Error.
    Gen. No. 18,563.
    (Not to be reported in full.)
    Error to the Municipal Court of Chicago; the Hon. Edwin K. Walker, Judge, presiding.
    Heard in the Branch Appellate Court at the October term, 1912.
    Affirmed.
    Opinion filed January 22, 1914.
    Statement of the Case.
    Action by Hattie Isabella McLaughlin against National Protective Legion to recover the sum of five hundred dollars claimed to be due her on a policy of insurance in which she had been named beneficiary and which had been issued by defendant upon the life of plaintiff’s husband, Patrick McLaughlin. From a judgment in favor of plaintiff for five hundred dollars, defendant brings error.
    Bertrand Lichtenberger, for plaintiff in error.
    Emil A. Meyer, for defendant in error.

      Abstract of the Decision.
    1. Insurance, § 664*—when evidence insufficient to show forfeiture for failure to pay assessments in time. In an action by a beneficiary on a policy of insurance where the defense is that the insured had been suspended for failure to pay certain monthly assessments in the time required by the provisions of the policy, a verdict in favor of plaintiff held to be sustained by the law and the evidence, it appearing that plaintiff had made payments to an agent of the defendant having apparent authority to make collections and that plaintiff had money to her credit in the hands of the defendant in excess of the amount necessary to pay all assessments for the months in question when they became due.
    2. Insurance, § 611*—burden of proving facts constituting a forfeiture. The burden of showing a failure to pay assessments from which a forfeiture is claimed to have arisen is upon the insurer.
    3. Payment, § 28*—when receipt admissible in evidence. In an action on an insurance policy, admission in evidence of receipts given by an agent having apparent authority to collect assessments held not error, for the reason that no reference to the policy sued on appears on their face where they are introduced in connection with plaintiff’s testimony explaining them.
   Mr. Justice Gridley

delivered the opinion of the court.