author: Mr. Justice Thomson

text:
    Edward A. Nixon, Appellee, v. City of Chicago, Appellant.
    Gen. No. 23,780.
    1. Municipal corporations, § 941

      —when settling of building shown to be due to construction of tunnel under public alley. In an action for damage to a building alleged to have been caused by settling, due to the construction of a tunnel under a public alley along one side of such building, evidence held to show that the settling of the building was caused by the construction of the tunnel.
    2. Municipal corporations, § 941

      —when liable to abutting owners for damages due to construction of tunnel under public alley. Where a tunnel is constructed under a public alley for a public use, pursuant to authority granted by the municipality and under its supervision and inspection, and such construction causes injury to abutting owners, the city will be liable for the damages sustained.
    3. Mortgages—what are rights of assignee of master’s certificate of sale as to recovery for injury to leasehold. The assignee of the master’s certificate of sale on foreclosure under a trust deed on a leasehold interest has such an interest in the leasehold as to entitle him to recover for damage to the property caused by the negligent construction of a tunnel in an alley alongside the premises, although the damage was inflicted prior to the receipt of the master’s deed.
    4. Evidence, § 134

      —when sufficient foundation laid for admission of certified copies of deeds and leases to show ownership. Certified copies of deeds and leases introduced to prove ownership, held not erroneously admitted on testimony of the plaintiff and others that the originals were not in his possession, power or control, and that none of them had been intentionally destroyed or disposed of by him, although a more accurate compliance with Rev. St. ch. 30, sec. 36 (J. & A. ¶ 2268), would require testimony that to the best of his knowledge the originals had not been intentionally destroyed or in any manner disposed of by him or by anybody else.
    5. Evidence, § 88

      —when admissible as to effect on buildings of construction at other places of tunnels in alleys. Where an alleged cause, such as the construction of a tunnel in an alley causing the settling of an abutting building, has operated elsewhere, under similar conditions, the results are- admissible in evidence, and the circumstances in the instances compared need not be precisely the same as those involved in the case in which such evidence is offered, but it is sufficient if they correspond in essential respects.
    6. Trial, § 46

      —what does not constitute expression of opinion on answer as evidence. Comments by the court, in overruling motions to strike, that “The answer amounts to an answer to the question,” and that “It is, in effect, an answer, as I get it,” do not constitute an expression of opinion by the court as to the truth of the answer or its weight or value as evidence, or as to any fact in issue.
    7. Trial, § 46

      —what latitude allowed trial court in giving reasons for rulings on evidence. While remarks of the trial court, made to the jury and having the force of an instruction, or made in the presence and within the hearing of the jury, and expressing an opinion as to the value of the evidence or in relation to some facts in evidence or at issue, may be ground for reversal, the trial court may properly give his reason for rulings upon evidence, and he should be accorded reasonable latitude in so doing.
    8. Municipal corporations, § 941

      —when instruction on right not to have property taken for public use without just compensation is proper. In an action against a city for damage to a building abutting on an alley, caused by the construction of a tunnel in the alley, for a public purpose, pursuant to authority granted by the city and under its supervision and inspection, an instruction on the constitutional protection of the owner of property from being damaged for a public use without just compensation is proper.
    9. Municipal corporations, § 942

      —when instruction not erroneous because ignoring question of due care by abutting owner of damaged building. An instruction upon the liability of a city for damage to a building abutting on an alley, caused by the construction of a tunnel in the alley for a public use, pursuant to authority granted by the city and under its supervision and inspection, is not erroneous because it ignored the question of due care on plaintiff’s part, where no issue of contributory negligence was presented in the trial court.
    10. Appeal and error, § 1236

      —what inconsistent position may \not be taken on appeal. Where, in an action against a city for damage to a building caused by the construction of a tunnel in an abutting alley, defendant tried the case upon the theory that the construction of the tunnel had nothing whatever to do with the damage to the building, it cannot on appeal take the inconsistent position that the judgment should be reversed for failure of the court to submit the question as to whether plaintiff, in the exercise of due care, could not have prevented the damage.

      11. Adjoining owners, § 1

      —when convmon-Xaw rule as to lateral support of building inapplicable. The common-law rule, that while an owner must support the soil of an adjoining owner in its natural state he is not bound to support buildings thereon, has no application under the Constitution of 1870 to operations conducted in a public street, under the authority, control and inspection of the city, causing damage to a building by the removal of lateral support.
    12. Municipal corporations, § 942

      —when instruction on contributory negligence of abutting owner constructing foundations of building in alley properly refused. In an action against a city for damage to a building caused by the removal of lateral support in the construction of a tunnel in an abutting alley, an instruction that the owner of the building had no right to locate and maintain its foundation in the alley, and if the damage would not have been caused except for that, such owner was guilty of contributory negligence barring recovery, was properly refused where there was no evidence that the city had not consented to the location of the foundations in the alley, but on the contrary indicated a license by the city.
    13. Release, § 22

      —when city not released from, liability for damage to building by removal of lateral support in alley. A covenant not to sue executed on settlement with the receivers of a contractor who constructed a tunnel in an alley causing damage to plaintiff’s building by the removal of lateral support was not a release or accord and satisfaction as to the city authorizing and supervising the construction of the tunnel, the covenant expressly reserving all rights against the city.
    14. Accord and satisfaction, § 8

      —what not competent evidence of as to another joint tort-feasor. The master’s report and the opinion of counsel representing the receivers in receivership proceedings involving the settlement of a claim against the receivers for the negligence of a joint tort-feasor and the execution to the receivers of a covenant not to sue are incompetent upon the question as to whether the transaction constituted an accord and satisfaction as to another joint tort-feasor.
    15. Release, § 21

      —when release of joint tort-feasor preventing action over does not release cojoint tort-feasor. Where pending the settlement of a claim against the receivers of a contractor whose negligence was alleged to have caused damage to plaintiff’s building by the removal of lateral support in the construction of a tunnel in an abutting alley, with the authority of the city and under its supervision, the court set aside a fund of $250,000 to protect the claimant and upon settlement with the receivers for the sum of $50,000 and the execution by claimant of a covenant not to sue, reserving all rights against the city, released the balance of the fund and discharged the receivers, the city could not contend that the settlement should be construed as a release as to it, as the release of the fund and the discharge of the receivers prevented an action over by it, since the acts complained of were not acts of the plaintiff but of the court.
    Appeal from the Circuit Court of Cook county; the Hon. Kick-ham Scamban, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1917. Certiorari denied by Supremo Court (making opinion final).
    Affirmed.
    Opinion filed October 16, 1918.
    Rehearing denied November 7, 1918.
    Samuel A. Ettelson, for appellant; Frank S. Bigheimeb and George A. Curran, of counsel.
    Tolman, Bedpield & Sexton, for appellee; Edgar Bronson Tolman, of counsel.

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

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

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

   Mr. Justice Thomson

delivered the opinion of the court.

This was an action wherein the appellee, Edward A. Nixon, hereinafter referred to as the plaintiff, sought to recover damages alleged to have been caused by the construction of a branch tunnel in the alley immediately south of the Unity Building in the City of Chicago, under a permit issued by the appellant, the said City of Chicago, hereinafter referred to as the defendant. A trial was had before a jury and the verdict returned, found the issues for the plaintiff and assessed his damages at the sum of $100,000. Judgment for that amount followed, from which the defendant has appealed.

One of the chief contentions of the defendant is that the verdict is against the weight of the evidence.

The Unity Building is located on Dearborn street in the City of Chicago. It has a frontage of 80 feet on that street and a depth of about 120 feet. The south wall of the building adjoins an 18-foot alley. There is a tunnel in Dearborn street approximately 45 feet below the center of the street, which is a part of the system of tunnels constructed by The Illinois Tunnel Company. The branch tunnel in question extends from this Dearborn street tunnel, in an easterly direction under the center of the alley adjoining the Unity Building, to a point 105 feet east of the «center line of Dearborn street where it curves to the south and passes under a building located immediately to the south of the alley. This tunnel then leads up into the basement of the latter building, known as the Chemical Bank Building, where it terminates. The permit for the construction of this branch tunnel was issued by the defendant on June 11, 1910. Work on the tunnel was begun June 21, 1910, and it was completed July 6, 1910. The work was done by gangs working in three shifts of 8 hours each. Except for a few feet immediately contiguous to the main tunnel in Dearborn street, the branch tunnel passed through a stratum of clay which was removed by means of drawknives. It has inside dimensions of 4%' by 6 feet. It is of concrete construction, the walls being approximately 15 inches thick at the bottom and 10 inches at the sides and top. In building the tunnel, the clay was excavated for a distance of about 3 feet at a time. After each 3 feet was excavated, a concrete floor slab was laid. Forms were then erected and steel laggings placed outside of these, giving the proper inside dimensions, leaving a space of approximately 10 inches between the laggings and the walls of the excavation. Concrete was shoveled in behind these laggings and tamped, laggings being added one above the other until they approached the key of the arch. Here a centerpiece was put in position on top of the forms and the excavation was carried forward at the top a sufficient distance to permit concrete to be shoveled in between the top form and the top of the excavation and tamped into place. The construction of each such 3-foot unit occupied about 8 hours. The bottom, top and sides of the excavation were unsupported except as the concrete was put in place and the face of the excavation was always without support. Compressed air was not employed.

The plaintiff had no notice of the construction of the tunnel and of course took no steps to protect his foundations. He was the owner of a leasehold estate comprising the Unity Building and the ground it occupied. The nature of Ms estate will be referred to further in connection with another feature of the case. The contractor who built the branch tunnel put the Chemical Bank Building, or parts of it, on jacks at the time of the tunnel construction.

The Unity Building was built in 1891-1892 and rested on what is known as a “floating foundation.” Its foundation columns rested upon slabs made of concrete and steel bars. There were fifty such slabs located at about city datum and 16 feet apart, center to center.

The alleged damage to the building consisted in a material settlement along the south wall and particularly at the southwest comer, resulting in a tipping in that direction, which ultimately made it necessary to put the building up on jacks and build concrete caissons down to bedrock,- under the south wall.

It was the contention of the plaintiff at the trial, that the settlement and tipping of the building was the direct and immediate consequence of the construction of the tunnel in the alley. On the other hand, the defendant contended that it was caused by defective foundations and that the south row of footings was inadequate to bear the weights imposed upon them.

This was the issue of fact presented to the jury. By their verdict the jury found that the proximate cause of the injury complained of by the plaintiff was the construction of the tunnel in question. This finding cannot be set aside on this appeal unless it appears that it is contrary to the clear preponderance of the evidence.

It does not so appear to us. Testiniony was submitted tending to establish, and from it the jury would be warranted in believing and finding, the following facts:

At the time of. the construction of the Unity Building caisson foundations were unknown. The so-called “floating foundation” was a standard foundation for such a subsoil as is to be found under the Unity Building and which is practically the same under all the central part of the City of Chicago. A building such as the one in question, constructed on such a foundation, will necessarily settle to some extent and ultimately come to rest. The settling will be a gradually diminishing one. During its construction in 1891-1892, the Unity Building began to settle. The rate of settlement of the southwest comer of the building steadily diminished from .031 of an inch per day in the fall of 1891 to .0058 of an inch per day in the spring of 1892. The northwest corner of the building settled at the rate of .028 of an inch per day in the fall of 1891 and this had diminished to .0073 of an inch per day in the spring of 1892. At the southeast comer this settlement was .038 of an inch per day in the fall of 1891 and .0116 of an inch per day in the spring of 1892. In the fall of 1891 the northeast corner was settling at a rate of .0054 of an inch per day and in the spring of 1892 it was .0103 of an inch per day. It would seem from this that the building was gradually “finding itself.” In the fall of 1892, after the building was completed, the southwest comer leaned to the south 5 inches and the southeast comer 3% inches. The next survey of the building was made 8 years later, in July, 1900. At that time the building was found to be leaning to the south 6% inches at the southwest comer and 5 inches at the southeast comer. In that period of 8 years these comers had tipped 1% and V/2 inches respectively. This would involve a settlement of .84 of an inch at the southwest and .66 of an inch at the southeast comer. This would he at the rate of .000287 of an inch per day at the southwest comer and .000227 of an inch per day at the southeast comer.

In 1896 a Mr. Grower became the manager of the building. At that time he noticed that" the north wall of the Unity Building was about 2 or 3 inches from the top of the south wall of the McCormick Building located immediately to the north. This was at the eighth story of the Unity Building and the space was reduced to nothing at v about the third story of the Unity Building. This space had previously been filled with cement and showed a crack along the top which was filled with oakum, very soon after Mr. Grower became the manager. At the same time he had a copper flashing constructed to cover the junction of the two buildings. A sheet of copper was fastened on the top of the McCormick Building fire wall and carried over the edge of that wall and down along its north face. Another sheet of copper was fastened to the north wall of the Unity Building, was brought down to the fire wall of the McCoraaick Building and extended across the top of that wall, overlapping the sheet of copper first referred to, so that water coming down the Unity Building wall would run onto the roof of the McCormick Building and not between the walls of the two buildings. The overlapping was about 4 inches. In the spring of 1910 this copper flashing was observed and it appeared to be in the same condition as when it was put on.

The work of constructing the branch tunnel began June 21, 1910. On June 26th the excavation reached a point one foot east of the southwest comer of the Unity Building and on the following day it was extended some 10 feet further. On that day a metal door leading to the buffet in the Unity Building on the Dearborn street front was found to be binding, and also on the same day, and for several days following, complaints were received from tenants about their doors. It was found that a number of doors in walls running east and west had a tendency to swing open to the south, and those in walls running north and south were binding and sticking—a condition that had never been noticed before. The bowl of a washstand in the buffet, fastened to the wall and the floor, cracked. A belt which connected the steam engine with an electric generator, in the basement, repeatedly flew off. There had been no trouble of this sort previously. The engine was found to be tipping towards the south. It was jacked up and the belt ran all right. Cracks appeared in the mosaic floor of the safety deposit vaults, in the basement, and the large door leading to the vaults jammed. Cracks appeared in the partitions in many of the offices in the southwest part of the building. Mr. Grower, manager of the Unity Building, went into the Chemical Bank Building to see if he could find out what was the matter and he learned of the tunnel construction and found that building being partially supported on jacks. He endeavored to reach the contractor who was doing the tunnel work but did not succeed. About the time the tunnel work was completed it was found that the walls of the Unity Building and the McCormick Building had again separated, pulling the copper flashing apart and causing an opening of several inches at the top of the McCormick fire wall and on the north side of the old wedge which had filled the previous opening. This new opening was filled in with another wedge of brick and mortar or cement.

On July 9, 1910, another survey of the building was made and it was found to be leaning to the south 15% inches at the twelfth story, at the southwest corner, and 8% inches at the southeast comer. A number of surveys were made subsequent to this time. One made in the fall of 1911 showed that the building was leaning to the south 27% inches at the roof at the southwest comer and 14% inches at the southeast comer. In the fall of 1912 the building was put on jacks and caissons were constructed under four columns at and near the southwest comer of the building, mnning down to hard pan. After the jacks were removed and the building rested upon the caissons, that part of the building remained stationary, but the part to the east of the caissons continued to settle to some extent. It was the opinion of witnesses testifying on the subject that, in order to insure the safety of the building, it was necessary to put the entire south wall on caissons.

During the construction of the four caissons referred to, the clay under the Unity Building was found to be plastic. It moved after excavation. There was testimony to the effect that similar tunnels built in a similar manner, in the central part of Chicago through clay of this same general character, and contiguous to buildings constructed as the Unity Building was, resulted in a settlement in the foundations and walls and consequent damage to the buildings.

On many of these matters the testimony was conflicting. There was much further testimony which cannot be outlined or commented upon within the scope of this opinion. • In finding the facts as given above and coming to the conclusion that the material movement of the Unity Building in the summer of 1910 occurred after the building had reached practically a state of rest and was due directly to the construction of the branch tunnel within a few feet of and 28 feet under the foundations of the south wall of the building, the jury cannot be said to have returned a verdict based on a finding contrary to the clear preponderance of the evidence.

The issue of fact having been thus determined, the liability of the defendant under the law follows. The construction of the tunnel in question was possible under and by virtue of ordinances duly passed by the defendant city. The permit to do this particular work was issued by the city and recited that it was granted under the ordinances referred to and subject to all the conditions they contained. Among these conditions were provisions that all work done under the ordinance, and all methods of construction employed, were to be subject to the approval of the Commissioner of Public Works of the city and under his supervision, and that he should have power to stop the work whenever the method of construction or material used should not meet his approval, or whenever the work should endanger the property of any person or corporation. The city inspected the work throughout its progress. It controlled the location of all tunnels, under the provisions of the ordinances, and the permit for this particular tunnel specified its location. The tunnel was constructed for a public use and was used to connect the telephone cables of the automatic telephone system, operated by the Illinois Tunnel Company in doing a telephone business, with a general switchboard of the company located in the Chemical Bank Building.

Where a tunnel is constructed under a public street and for a public use, pursuant to authority granted by the municipality and under its supervision and inspection, and there is an injury caused to owners of adjoining property by such construction, the city will be liable for the damages sustained. Stack v. City of East St. Louis, 85 Ill. 377; Barnard v. City of Chicago, 270 Ill. 27.

In support of its appeal the defendant contended that the plaintiff had no right of action and was not the proper party to bring suit, assuming the damage and liability alleged.

The leasehold in question had been incumbered and a trust deed executed to secure the debt. Default having been made, foreclosure proceedings were instituted which resulted in a sale of the leasehold by a master in chancery. At that sale one McCormick was the purchaser and he received a master’s certificate of sale, on June 2, 1909. On June 2, 1910, Nixon, the plaintiff here, purchased the interest of McCormick and took an assignment of the certificate of sale. On September 3,1910, the plaintiff received a master’s deed for the premises. The plaintiff took the master’s certificate and later the master’s deed, conveying the legal title, as trustee for certain persons who furnished the purchase money for these transactions.

The acts complained of in the declaration, which are claimed to have resulted in the damage therein alleged, occurred after the plaintiff purchased the interest of McCormick in the premises and received the master’s certificate of sale from him and before the plaintiff had received his master’s deed. At the time the acts complained of were committed, the mortgagor had lost all right of redemption. The legal title to the leasehold, which was the subject-matter conveyed by the trust deed, was still in the trustee. But the plaintiff though not in possession, nor clothed with the legal title, had a substantial interest in the leasehold and such a right to the maintenance of its integrity as gave him a right of action against any one committing any acts resulting in its destruction or damage. If suit had been begun, based on such alleged acts, before the master’s deed had been issued to the plaintiff, it may be that it could not have been brought in the-plaintiff’s name, but that is not the situation presented by the facts of this case and is therefore not before us. When the declaration was filed in the case at bar, the plaintiff had received the master’s deed and was possessed of the legal title.

The acts of the defendant here complained of, if established as alleged, were in violation of substantial rights which the plaintiff had at the time the acts were alleged to have been committed, and gave rise to a right of action on his part to recover the damage resulting to him. Topping v. Evans, 58 Ill. 209; Yates v. Joyce, 11 Johns. (N. Y.) 136; Stout v. Keyes, 2 Doug. (Mich.) 184.

The case first cited was an action on the case brought to recover damages for removing a building from a lot, which premises, the plaintiffs, as judgment creditors of the defendant, had purchased under an execution which had been issued on a judgment. At the time of the removal of the building by the defendant, which was a day or two after the expiration of the time of redemption, the plaintiffs had received the usual certificate, but had not received a deed to the property and, therefore, did not possess the legal title. In that case the court said: “That the plaintiffs were entitled to an action for this wrong, there can be no doubt. They could not maintain trespass, as they were not in possession, nor had they any right of possession. They had, however, a substantial interest in the lot and building upon it, and that has been unlawfully prejudiced by the illegal act of the defendant. The remedy for such a wrong can only be, at the common law, by an action on the case.” The court cites as a case in point, Yates v. Joyce, supra. In that case the plaintiff did not have title to the property involved. He was not in possession nor did he have the right to present possession, but he had a lien on the property, by virtue of the assignment of a judgment to him by one who had recovered it in an action against the owners.

The declaration alleged that the defendant, with full knowledge of the plaintiffs’ rights in the premises, and with intent to deprive them of the benefit of their lien, did demolish and remove certain buildings from the judgment debtor’s premises. The court held that trespass would not lie for the plaintiffs were not in possession but that they had a right of recovery against the defendant in an action on the case.

In the case of Stout v. Keyes, supra, the plaintiff was assignee of a mortgage executed by the defendant. There was a default followed by a foreclosure and the plaintiff was the purchaser at the foreclosure sale. The declaration alleged that between the time of sale and the expiration of the time for redemption, the defendant, with knowledge of the plaintiff’s rights, and intent to injure and prejudice him in his estate, cut down and carried away a large amount of timber growing upon the premises. In holding that the plaintiff could recover, the court said: “It is a general principle of the common law, that whenever the law gives a right, or prohibits an injury, it also gives a remedy by action; and, where no specific remedy is given for an injury complained of, a remedy may be had by special action on the case. * * * In this case, the plaintiff, by his purchase, had acquired an inchoate right to the land, subject to be defeated by payment. * * * If not so redeemed, he had a right to have the estate which he purchased, his title to which would then be consummated.”

The principle involved in these cases has recently been approved by our Supreme Court. The case of Sutherland v. Long, 273 Ill. 309, was a bill in equity filed by the purchaser of property at a master’s foreclosure sale, and the holder of a master’s certificate of purchase, by which he sought to have the mortgagor required to repay him the money he had expended for the certificate of purchase and for redeeming a judgment and for taxes, or the master required to execute and deliver to him a master’s deed to the premises in question. The incumbrance involved in that ease was not a trust deed but a mortgage and the court held that the legal title to the premises remained in the mortgagor during the entire period of redemption, and that -by his purchase at the foreclosure sale the complainant had acquired no interest in the title to the land. But the court recognized that: “Pending redemption proceedings by a judgment creditor, the holder of the certificate of purchase is not stripped of his rights and his interest in the premises.”

On the principles laid down in these cases we hold that the plaintiff, under the facts involved here, was the proper person to bring this suit, and that he may recover for damage to the property in question, and it can • make no difference whether such damages are caused by a fraudulent act or a negligent act, or under such circumstances as are here involved.

The plaintiff’s ownership of the leasehold estate was proved by competent and sufficient documentary evidence. This evidence included certified copies of certain deeds and leases. The defendant objected to their introduction on the ground that proper preliminary proof had not been made. It appeared from the testimony of the plaintiff and others that the original documents were not in his possession, power or control, and that none of them had been intentionally destroyed or in any manner disposed of by him. If the testimony of the plaintiff had been to the effect that, to the best of his knowledge, the original documents had not been intentionally destroyed, or in any manner disposed of, either by him or by anybody else, there would have been a more accurate compliance with the provisions of section 36 of chapter 30 of our statutes (J. & A. ¶ 2268). But the testimony as it is in the record substantially complies with all the requirements of the statute, and the trial court did not err in admitting the certified copies of the documents in question.

The defendant contends that the court erred in admitting the testimony of one G-aiver, concerning movements of the soil caused by the construction of other tunnels in the central district of Chicago. The evidence in the record is to the effect that the clay is practically the same throughout the downtown district of Chicago. Where an alleged cause, such as the one in question, has operated elsewhere, under similar conditions, the results are admissible in evidence. In such cases, the circumstances in the instances compared need not be precisely the same as those involved in the ease in which such evidence is offered, but it is sufficient if they correspond in essential respects. The evidence in question was admissible. Cooper v. Randall, 59 Ill. 317. It involved results following the building of similar tunnels in a similar manner, in similar soil, contiguous to similar foundations.

The defendant complains of numerous other rulings of the trial court, relating to the admission and the exclusion of evidence. We have considered them all with great care, hut it would he impossible to refer to them in detail here. The record of this case is voluminous and the trial of the case was necessarily lengthy. In a long and intricate case it frequently happens that inaccuracies of this sort will occur somewhere in the course of the trial. But such errors should never be made the basis of a reversal of the judgment, unless they have been clearly prejudicial to defendant’s case. In our opinion this was not the situation in any of the instances to which our attention has been called. In most of the rulings referred to, the trial court was not in error, and, as to others, it seems to us counsel have been somewhat hypercritical.

Counsel have further strenuously complained of certain remarks made by the trial judge during the course of the trial. On several occasions the court overruled motions, made by the defendant, to strike out answers which the witness had made to questions that had been asked. On one occasion, in overruling such a motion, the court added, “The answer amounts to an answer to the question,” and on another, “It is, in effect, an answer, as I get it. ’ ’ Such remarks cannot reasonably be construed as any expression of opinion by the court as to the truth of the answer or its weight or value as evidence or as to any fact in issue. As was said by our Supreme Court in Chicago City Ry. Co. v. McLaughlin, 146 Ill. 353: “The sufficiency of the answer of a witness is a matter for the determination of the court and not the jury.” We shall not here refer to the numerous other objections that the defendant has urged upon us along this line. In our judgment none of them was prejudicial to the defendant. While it is true that remarks of the trial court, made to the jury and having the force of an instruction, or made in the presence and within the hearing of the jury, and expressing an opinion as to the value of evidence or in relation to some facts in evidence, or at issue in the case, may be ground for reversal, the trial court may properly give his reason for rulings upon evidence, and he should be accorded a reasonable latitude in so doing. Birmingham Fire Ins. Co. v. Pulver, 126 Ill. 329, 340; Peoria & F. Ry. Co. v. Barnum, 107 Ill. 160; Spohr v. City of Chicago, 206 Ill. 441, 449; Hughes v. Richter, 161 Ill. 409.

The defendant complains of a number of instructions given by the court. One of them reads as follows:

“The court instructs the jury that the Constitution of Illinois provides that private property shall not be damaged for public use without just compensation. The court further instructs the jury that the use to which the tunnel constructed in the alley adjacent to the Unity Building is devoted, namely, the operation of a telephone system in the City of Chicago, is a public use; that inasmuch as the construction of said tunnel in said alley for said public use was authorized by the City of Chicago, said City of Chicago would be liable for any damage to the Unity Building that was the direct and immediate result of the construction of said tunnel.
“The court by this or any other instruction expresses no opinion on any question of fact in the case.”

This instruction is based on the provision of the Constitution protecting the plaintiff from being damaged for a public use without just compensation. Thi4 principle applies to a public use which is required or compelled by a municipality, as in Barnard v. City of Chicago, 270 Ill. 27; and also to one which is merely permitted, as in City of Pekin v. Brereton, 67 Ill. 477; and Stack v. City of East St. Louis, 85 Ill. 377.

The defendant further complains of the following instruction:

“The court instructs the jury that whenever a city authorizes work to be done in a public street under the supervision and control of such city, such city becomes liable for any damage directly resulting to adjacent property from the negligent performance of such work in the same manner and under the same circumstances that it would be liable if it performed the work itself. The excavation of the alley and the construction of the tunnel adjacent to the Unity Building were authorized by an ordinance of the City of Chicago, which reserved to the city the right to supervise the work and to stop the work whenever the method of construction or material used should endanger public or private property. If you find from the evidence that such work of excavation and construction was performed under the inspection, supervision and control of the City of Chicago, and if you further find that such work was conducted in a negligent manner as charged in the second count of the declaration, and that damage to the Unity Building resulted directly from such negligence, then the defendant is liable for such damage.”

Under all the facts as shown by the record and in view of the authorities cited in connection with the instruction previously referred to, it is our opinion that the giving of this instruction was not error.

The conditions of the ordinance referred to were not disputed. It was not necessary to include in the instruction the elements of the exercise of due care on the part of the plaintiff and his duty to minimize the damages'. No such issues were presented in the trial of the case. The defendant did not contend that the damaging effect of this tinmel construction which it had authorized might have been known by the plaintiff if he had exercised a proper degree of care, or that the taking of proper precautions on his part would have minimized his damages as a result of that construction. The theory on which the defendant tried this case was, that the tunnel construction had nothing whatever to do with the damage to the plaintiff’s building. The defendant cannot now take the inconsistent position that this judgment should be reversed because the trial court failed to submit to the jury the question as to whether the plaintiff might not by the exercise of due care have known of, guarded against and minimized the damage caused by the negligent construction of this tunnel—something which the defendant itself insists has no existence. If, as defendant’s witnesses swear, the tunnel was constructed properly, and had nothing at all to do with any damage suffered by the plaintiff’s property, how could the plaintiff, by any degree of care on his part, have known of it or guarded against it or prevented its results? United States Rolling Stock Co. v. Wilder, 116 Ill. 100, 108, 109.

The defendant also complains of an instruction concerning the failure of the defendant to give notice of the excavation to the plaintiff. This complaint is based on the common-law rule that one landowner owes a duty to his neighbor to support the soil in its natural state, but not to support buildings upon it, citing the case of City of Quincy v. Jones, 76 Ill. 231. That case is not in point. Since the adoption of the Constitution of 1870, where such an operation in a public street as is involved in the case at bar causes damage to adjoining private property, the city has been held to be liable in damages, the basis of the liability being the interference with the rights of the owner to the full use and enjoyment of his property, including the building. Barnard v. City of Chicago, supra. Where the city permits such a public use of a street, or any space beneath the surface of the street as results in damage to private property, it will be liable for such damage, notwithstanding it may be caused by the withdrawal of lateral support of the weight of a building or other structure on the private property involved.

The defendant has called our attention to a number of other given instructions, contending that the trial court erred in giving them over defendant’s objections. What we have said thus far disposes of a number of objections to these instructions, and there are others which are not well taken, but it would serve no purpose to discuss them here. The same thing applies to most of the points raised by the defendant, with reference to instructions submitted by it and modified or refused by the court. One of the instructions submitted by the defendant and refused by the court read as follows:

“The court instructs the jury that the alley south of the Unity Building is a public alley, the fee of which is in the city, and that the owners of the Unity Building had no right to locate or maintain its foundations in part in the alley, and if you find from all the evidence that the injuries complained of would not have been sustained except for the fact that said foundations were in part located in the alley, then you are instructed that the locating or maintaining of said foundations in said alley under such circumstances was such contributory negligence as would preclude the plaintiff from recovering damages against the defendant, providing that you further find from the evi-, dence that the injuries complained of were not in-* flicted wantonly, recklessly or wilfully.” ■'

The refusal of this instruction by the trial court was not error. The foundations of the Unity Building might extend out beneath the surface of the alley, if the city consented to it. There is no evidence in the record to the contrary, but, such evidence as there is, in any way bearing on the question, would warrant the conclusion that the footings under the south wall of the Unity Building extended out under the surface of the alley by license of the city, for the evidence shows that they had been there undisturbed by the city for a period of nearly 20 years, and in the nature of things they must have been placed there with the city’s knowledge and with its express consent, when its stamp of approval was placed on the plans which necessarily showed the precise location of all these footings. Our attention has not been called to any evidence showing or tending to show that the location of these footings beyond the building line affected the settlement, and, in the absence of any such evidence, the giving of the instruction in question would have been error.

It is further contended by the defendant that the trial court erred in excluding evidence relating to a defense of accord and satisfaction, which it sought to interpose, and in restricting counsel in his attempt to present this point to the jury in making his argument. It appears from the evidence that in January, 1912, the Unity Safe Deposit Company filed a petition in the United States District Court against the receivers of The Illinois Tunnel Company, asking the court to direct the receivers to strengthen the foundations of the Unity Building by the construction of caissons under the south wall, and to pay for the damages alleged to have resulted from the construction of the tunnel. The plaintiff in the case at bar, Nixon, and those for whom he was acting, were made defendants to that petition. Nixon filed a disclaimer, stating that at the time of the injury he held the title as a naked trustee for the Unity Safe Deposit Company. Certain cestuis que trust, who had furnished the money for the purchase of the property at the master’s sale, filed cross petitions. The city was not a party to these proceedings. While this litigation was pending, the receivers desired to sell certain real estate and were permitted to do so by the court upon condition that they deposit $250,000 to abide the result of the final order or decree to be rendered. This deposit was made and the petitioner’s claim and lien were transferred to that fund and removed from all the other property, in the receivership, including the real estate which the receivers desired to sell.

Negotiations for a settlement of the petitioner’s claim, so far as the receivers of the Illinois Tunnel Company were concerned, finally resulted in an agreement upon the amount to be paid, which was $50,000. Thereupon counsel representing the receivers asked counsel for the petitioner “about the release,” and the latter replied that he preferred giving a covenant not to sue, reserving expressly'any and all rights of action there might be against the City of Chicago, the defendant in the case at bar. This was agreeable to the receivers, who thereupon petitioned the United States Court for permission to pay the petitioner in that proceeding $50,000 for a covenant not to sue. The court granted the receiver’s petition and entered an order directing the receivers to pay the sum of $50,000 to the petitioner upon the Unity Safe Deposit Company and cross petitioners and Edward A. Nixon (plaintiff here), entering, executing and delivering to the receivers an instrument in writing covenanting and agreeing not to sue said receivers and reserving rights against the City of Chicago, as set forth in the receivers’ petition. The money was thereupon paid to the petitioner in that proceeding and a written instrument containing a covenant not to sue and expressly reserving any rights the signers might have against the City of Chicago or any other person or corporation, other than the receivers, signed, among others, by the plaintiff in the case at bar, was delivered to the receivers.

That this did not amount to a release and an accord and satisfaction so as to bar such an action as this, admits of no possible doubt. Parmelee v. Lawrence, 44 Ill. 405.

The court in the proceedings in the United States Court directed the receivers of the Illinois Tunnel Company to pay the petitioner in that proceeding $50,000 for a covenant not to sue, after which such a settlement was consummated.

The master’s report in that proceeding and the opinion or judgment of counsel representing the receivers there, who was called as a witness in the case at bar, were wholly immaterial and incompetent on the question of whether there had been an accord and satisfaction, and the trial court correctly sustained the plaintiff’s objections when such testimony was offered. Nor was the trial court in error in refusing to permit this question to be submitted to the jury. There was no evidence of a release, and none was offered, sufficient to present an issue of fact on this question for the jury, and the trial court could only hold, as he did, that the agreement was a covenant not to sue and did not bar the present action. The defendant urges that the agreement is shown to be a release by reason of the fact that after the $50,000 was paid to the petitioner in these proceedings and the instrument in question was given in consideration of that payment, the balance of the special fund of $250,000 was released and turned over to the Chicago Tunnel Company, which was the purchaser of the entire property from the receiver of the Illinois Tunnel Company, and the receivers were then discharged. It is the contention of the defendant that wherever a settlement is had by a claimant with one of several alleged joint tort-feasors, the others should have the right to maintain an action over against the one with whom such settlement has been made, in case they are sued- by the claimant and a recovery is had against them, and that wherever the settlement made by the claimant with the first joint tort-feasor is such as to take away or destroy the rights of the remaining joint tortfeasors to an action over, in case of an ultimate recovery by the claimant against them, the settlement by the claimant with the first joint tort-feasor should be construed not as a covenant not to sue, but as a release, releasing them all. Whatever may be said as to the soundness of this proposition, it is entirely beside the point involved here. The release of the balance of the fund of $250,000, after the payment of the $50,000 in the proceedings in the United States Court, and the discharge of the receivers there, were not acts of the petitioner in those proceedings nor of the plaintiff here, but of the United States District Court.

We have perhaps omitted to refer to some of the matters which have been urged upon our attention by the defendant in connection with this appeal, but, if so, it was because we deemed them either immaterial or untenable.

Finding no error in the record the judgment of the Circuit Court will be affirmed.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Eleanor Delany Chapman, Appellee, v. North American Life Insurance Company, Appellant.
    Gen. No. 23,903.
    1. Corporations, § 493

      —when, return of service of process upon vice president is prima facie sufficient. A return of service of process upon the vice president of a corporation, in the alleged absence of the president, which recited service of the “writ on the within named North American Life Insurance Company of Chicago, a corporation, by delivering a copy thereof to Thomas M. Knox, vice president and agent of said corporation, this 10th day of January, 1916, the president of said corporation not found in my county,” was prima facie sufficient, but its verity may be challenged.
    2. Process, § 82

      —how verity of return of service of process upon officer may he challenged before judgment. The verity of a return of service of process upon an officer of a corporation, in the alleged absence of the president, may be challenged before judgment by plea in abatement.
    3. Judgment, § 273

      —how verity of return of service of process upon officer of corporation may he challenged after judgment and term. The verity of the return of service of process upon an officer of a corporation, in the alleged absence of the president, may be challenged after judgment and after the expiration of the judgment term, by filing a motion in writing in the nature of a writ of error coram nohis, under section 89 of the Practice Act (J. & A. ¶ 8626), supported by proper and sufficient affidavits or other proof, provided the point thus attempted to be raised has not been raised.
    4. Judgment, § 274

      —when affidavits contradicting service of process are insufficient. After judgment by default and the passing of the judgment term, service of process cannot be successfully challenged when the affidavits supporting a motion in the nature of a writ of error coram nohis seek to controvert some fact involved in the officer’s return “upon information and belief.”
    5. Corporations, § 487

      —when service of process on vice president is sufficient. Service of process upon the vice president of a corporation, in the absence of the president, is valid where an officer calls at the office of the corporation during one of the president’s “temporary absences,” and, upon making inquiry for the president and being, advised that he is not in, asks to see the vice president or some other official, and, upon being directed to the vice president, delivers a copy of the summons to him.
    6. Judgment, § 274

      —When not shown that failure of corporation to interpose defense was caused by accident, mistake or excusable negligence. On a motion in the nature of writ of error coram nobis, made under section 89 of the Practice Act (J. & A. ¶ 8626), by which an insurance corporation sought to quash a summons served on its vice president and vacate an order of default after the entry of judgment and expiration of the term, evidence held insufficient to show that the failure of defendant to interpose a defense in the case was caused by accident, mistake or excusable negligence, and, on the contrary, to show inexcusable negligence.
    7. Judgment, § 273

      —what essential to warrant vacation of default after term. On a motion in the nature of a writ of error coram nobis, to set aside a judgment by default after term time, both diligence and merit must be shown in order to warrant relief.
    8. Judgment, § 274

      —when fraud warranting vacation of by default not shown by affidavits. Fraud warranting the vacation of a judgment by default, on motion in the nature of a writ of error coram nobis, is not made out by affidavits setting up facts constituting purely matters of defense, on the theory if they had been called to the attention of the court the judgment could not have been recovered, and that failure to inform the court thereof constituted fraud.
    9. Judgment, § 274

      —when affidavits insufficient to warrant vacation of by default. Proof of alleged fraud in the conduct of the case warranting the vacation of a judgment by default against an insurance company on a life insurance policy, after expiration of the term, on motion in the nature of a writ of error coram nobis, cannot be established by averments on information and belief on affidavits in support of such motion by officials who were not present at the hearing of the case.
    10. Judgment, § 125—presumption os to validity of by default. On a motion, in the nature of a writ of errbr coram nobis, after the expiration of the term, to set aside a default judgment, any presumptions that are to be indulged in must be in favor of the validity of the judgment rather than against it.
    11. Judgment, § 272

      —what fraud may be set up as basis for motion for writ of error coram nobis. The fraud which may be set up and urged as a basis for a motion for a writ of error coram nobis, to set aside a judgment by default after expiration of the term, is only fraud which has caused the defendant to omit entering an appearance or filing a plea or interposing a defense, or the like.
    Appeal from the Circuit Court of Cook county; the Hon. Victor P. Arnold, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1917.
    Affirmed.
    Opinion filed October 16, 1918.
    Rehearing denied October 28, 1918.
    Thomas E. Rooney and Ferdinand Goss, for appellant; Charles S. Deneen, of counsel.
    Winston, Strawn & Shaw and Montgomery, Hart & Smith, for appellee.

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

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

   Mr. Justice Thomson

delivered the opinion of the court.

This is an appeal from an order of the Circuit Court, denying the motion of the North American Life Insurance Company, appellant, hereinafter referred to as the defendant, made under the provisions of section 89 of the Practice Act (chapter 110, Rev. St., J. & A. ¶ 8626) in the nature of a writ of error coram nobis, by which the defendant sought to quash a summons in said case, vacate the order of default and set aside and vacate the verdict of the jury and the judgment which had been entered against it and in favor of Eleanor Delany Chapman, appellee, hereinafter referred to as the plaintiff, said judgment being for the sum of $20,600, and also to stay execution on said judgment. The original action was brought by the plaintiff on a policy of life insurance, issued by the defendant, upon the life of one Rudolph C. Keller.

The judgment in question was entered on March 17, 1916. The term of court at which this was done expired on March 18th. It appears from the record that the defendant came into court on March 22nd and orally moved the court to vacate and set aside the judgment generally. On March 24th, counsel for defendant served the plaintiff’s counsel with notice to the effect that on the following morning, March 25th, they would appear in the Circuit Court and ask the court to stay execution in said case for 30 days. While this notice was filed with the clerk, it does not appear from the record that the motion was presented to the court. Under that date, however, the defendant filed its general appearance in the case. On May 15th counsel for defendant served plaintiff’s counsel with another notice to the effect that they would appear in the Circuit Court on the following day and make the motion which is the subject of this appeal.

In contending that the order of the Circuit Court, denying this motion, should be reversed, the defendant first raises a question of jurisdiction. The defendant contends that the trial court was without jurisdiction to enter judgment by reason of defective service of process, inasmuch as the process was served upon the vice president of the defendant company at a time when its president is alleged to have been within the county and available for the service of process. The return upon the process in this suit was in the following words: ‘ ‘ Served this writ on the within named North American Life Insurance Company of Chicago, a corporation, by delivering a copy thereof to Thomas M. Knox, vice president and agent of said corporation, this 10th day of January, 1916, the president of said corporation not found in my county.”

It is apparent that this return is prima facie sufficient, but its verity may be challenged. Chicago Sectional Elec. Underground Co. v. Congdon Brake Shoe Mfg. Co., 111 Ill. 309. This may be accomplished before judgment by filing a plea in abatement. Alexander v. Alexander, 161 Ill. App. 614; Sibert v. Thorp, 77 Ill. 43. It may also be accomplished after judgment and after the expiration, of the judgment term, by filing a motion in writing in the nature of a writ of error coram nobis, under section 89 of the Practice Act (J. & A. ¶ 8626), supported by proper and sufficient affidavits or other proof, provided the point thus attempted to be raised has not been waived. Luckey v. Yeomen of America, 141 Ill. App. 332.

So far as the jurisdictional point is concerned, we are of the opinion that the trial court did not err in overruling the motion.

The affidavits presented by the defendant in support of this part of its motion were insufficient. These affidavits were executed by J. H. McNamara, the president of the defendant company, William O. Morris, its actuary, and' Thomas M. Knox, its vice president. In the first of these affidavits, Mr. McNamara said that on the day the alleged service was had on the defendant, he was the president of the company, publicly attending to his business as such and not in concealment or hiding but was in the office of the company during the entire day, “with the exception of occasional temporary absences.” The affidavit of Mr. Morris is to the same effect so far as this point is concerned, as is also that of Mr. Knox. The latter affidavit proceeds to say further that on the occasion in question the deputy came to him and inquired whether he was an officer of the company, and that affiant stated that he was the vice president, whereupon he handed the copy of the summons to affiant and left the office. The only other allegations in this affidavit applicable here are contained in a paragraph reading as follows: “Affiant further represents that he is informed and believes and upon such information states the truth and the fact to be that the sheriff or his deputy on said day made no inquiry or search for the president of said defendant company but merely inquired at the office of said defendant whether any officer of said defendant was present, and that affiant was then pointed out as being an officer.”

After judgment by default and the passing of the judgment term, service of process cannot be successfully challenged by means of such affidavits as these where they seek to controvert some fact involved in the deputy’s return, “upon information and belief.” From all that appears from the facts positively sworn to in these affidavits, the deputy called at the office of the defendant, upon the day in question during one of Mr. McNamara’s “temporary absences,” and upon making inquiry for that official and being advised that he was not in, asked to see the vice president or some other official, and upon being directed to Mr. Knox delivered a copy of the summons to him. If that was the situation the service was perfectly valid and in full compliance with both the letter and the spirit of the statute.

We are unable to find, as urged by the defendant, that its failure to interpose a defense in this case was caused by accident, mistake or excusable negligence. It appears from the record that at the time of the service of the summons on the vice president of the defendant company, all matters relating to lawsuits on policies of insurance were in charge of its secretary, and that it was the custom, in the event of the service of process on any other officer or agent of the company, that such process should immediately be turned over to the secretary, or in his absence to his assistant, and by him on the same day placed in the hands of the company’s attorneys.

It further appears that the vice president of the company, upon receiving the summons in the case at bar from the deputy, gave it to the actuary of the company for delivery to its secretary; that the latter official was absent from his office and the actuary left it on the secretary’s desk, according to custom, but that for some reason the secretary did not get it, and it was not brought to his attention by anybody.

It further appears that all the officers of the company were very busy on the day in question, and their minds were much occupied in preparation for the annual meeting of the company, which was to be held on the following day, and, further, that the assured in the policy in question was also the assured in a number of other policies, which had been issued by the defendant company and which were all in litigation at that time and had been for some weeks or months.

That it amounted to negligence on the part of the officers of the defendant, who had the summons in their possession and knew about it, to merely lay it on the secretary’s desk and fail to follow that up, and make sure that it had come to his actual personal attention, seems to us to admit of no question. In our opinion the facts alleged as an excuse for that failure cannot be held to have that effect. These very facts, namely, the rush of matters incident to the approaching annual meeting, and the fact that the assured in question was also the assured in other policies then in litigation, furnished additional reasons why those who knew of the summons in this case, in the exercise of a proper degree of care, should not merely •have left it where the secretary would be expected to find it, in due course, but should have seen the secretary personally and brought the summons and the fact of its service actually to his knowledge and attention.

The defendant has urged upon us several further reasons upon which it bases its contention that this judgment should be reversed, all of which are substantially to the effect that it had a good defense to all or a part of the plaintiff’s demand. These matters we cannot consider and do not pass upon. It has frequently been held that where a motion is made within the term, to set aside a default judgment, the action of the trial court in denying the motion will not be reversed on appeal unless it appears that there has been an abuse of discretion, the rule being that both diligence and merit must be shown; and if the defendant has not used due diligence to protect his rights or has failed, through some negligence, to present a defense he had to the action, it is not an abuse of discretion to refuse to vacate the default and the judgment based thereon. Hartford Life & Annuity Ins. Co. v. Rossiter, 196 Ill. 277; Mutual Ins. Co. v. Carnahan, 122 Ill. App. 540; Leafgreen v. Bornstein, 174 Ill. App. 36; Kloepher v. Osborne, 177 Ill. App. 384; Simon v. Hengels, 107 Ill. App. 174; Schultz v. Meiselbar, 144 Ill. 26; Barrett v. Queen City Cycle Co., 179 Ill. 68. The same rule obtains where a motion in the nature of a writ of error coram nobis is made to set aside a judgment of default, after the judgment term. Where a valid defense exists in fact but it is not interposed and default and judgment follow, the motion substituted by the statute for the writ of error coram nobis may be invoked, provided the failure of the defendant to interpose his defense has not been due to any negligence on his part.

Diligence on the part of the party complaining is as essential to the right to relief by means of such motion as it is that a good defense to the action on its merits shall exist. W. A. Jones Foundry & Machinery Co. v. Aurora, E. & C. Ry. Co., 166 Ill. App. 166.

In the affidavits filed by the defendant in support of its motion, to set aside this judgment, it is alleged that the policy in question had lapsed by reason of the failure of the assured to pay a premium; that subsequently the latter had applied for a reinstatement of his policy and that the defendant had accepted a cash payment for part of the premium, and a note for the balance as a conditional payment, and that both the note executed by the assured and the receipt given fore it by the defendant, recited that the policy was to become void and all benefits under it forfeited to the company if the note was not paid at maturity, and further that the said note was not paid at maturity, and that the assured had later advised the defendant that he had been obliged to allow the policy to lapse by reason of financial embarrassment. It is further set up in these affidavits that the plaintiff’s husband and her counsel were advised of these facts, by one of the officers of the defendant company, when they called at its offices, after the death of the assured, and demanded payment on the policy here in suit. The defendant further represents in these affidavits that the note and receipt referred to above, as well as the original application for the insurance, were essential parts of the contract of insurance here involved, but that they were not set up by the plaintiff in her declaration, and the affiants, officers of the defendant company, allege upon information and belief that such application for insurance and the note and receipt referred to were not introduced in evidence, nor were their contents in any manner brought to the knowledge of the court and jury before whom the original suit was tried.

It is the contention of the defendant that this course of conduct, on the part of the plaintiff and her counsel, amounted to a fraud upon the court and such as should of itself, and aside from any other reason urged, be sufficient to warrant the granting of the motion to set aside this judgment. This contention is untenable for several-reasons. The proof that was before the court and jury in the original case, and which resulted in the judgment in question, is not before us here. It is of course not in this record and the affidavits of the officials of the defendant company who were not at the hearing of the case, making allegations on information and belief, are not sufficient to establish what the proof was. Further, even though the facts alleged in the affidavits be taken as true, as they must be under the demurrer to the motion, which was interposed by the plaintiff, it by no means follows that the course of the plaintiff and her counsel amounted to a fraud. These affidavits do not exclude the possibility of the presence of other facts, establisting a waiver on the part of the defendant of any defenses it had. Any presumptions that are to be indulged in must be in favor of the validity of the judgment rather than against it. The affidavits submitted by the defendant in support of its motion fail to show legal fraud, and in this respect the situation presented here is somewhat similar to that which was before the court in the case of Ward v. Durham, 134 Ill. 195, which was a bill in equity, by which it was sought to avoid a judgment, because of alleged fraud. The complaint upon which that bill was based was not that the defendant had done anything to mislead the complainant or her counsel, but that she had not informed the court of facts which the complainant alleged would have defeated her case, or, in other words, had not herself, as the original plaintiff, interposed the defenses which the original defendant and her attorneys had either seen fit to waive or through negligence had failed to make. The court there held that there was not sufficient allegation of fraud within the meaning of the law upon which to base a decree setting aside the judgment complained of. And so here the same might be said of the affidavits submitted by the defendant,—they fail to make a sufficient allegation of fraud to warrant the court in granting the defendant’s motion to set aside the judgment.

But if we assume not only that the facts are true but also that they establish fraud as the defendant contends, it does not follow that this judgment should be set aside in such a proceeding as the one at bar. It is not such fraud that may be made the basis of a motion to vacate a judgment, in the nature of a writ of error cor am nobis. The fraud which may be set up and urged as a basis for the granting of such a motion is fraud which has caused the defendant to omit entering an appearance or filing a plea or interposing a defense or the like. "Where one has not been negligent but, through some trick or fraud practiced by the plaintiff, he has been lulled into a feeling of security and led to forego taking steps to defend the action brought, and, as a result, the judgment has been entered, such fraud may be urged as the basis for a motion in the nature of a writ of error coram nobis, after the judgment term has expired, and in this way the judgment may be set aside. Pisa v. Rezek, 206 Ill. 344, 345; but the fraud alleged here had nothing whatever to do with the failure on the part of the defendant to interpose a defense to the suit. Such a case of fraud is not made out by the allegation in one of the affidavits filed by the defendant in which one of its officers asserts that he assumed that no further claim would be made under this policy after payment upon it had been refused, and the facts concerning the alleged default in the payment of a premium, and its subsequent conditional payment, and the alleged breach of the condition had been given by him to the plaintiff’s husband and her attorney.

For the reasons stated the judgment of the Circuit Court will be affirmed.

Affirmed.


author: Mr. Justice Matohett

text:
    William E. Dee Company et al., Appellees, v. Proviso Coal Company and Oliver J. Westcott et al., on appeal of Oliver J. Westcott, Appellant. William E. Dee Company et al., Appellees, v. Proviso Coal Company and James S. Stephens, on appeal of James S. Stephens, Appellant.
    Gen. No. 23,138.
    Gen. No. 23,139.
    1. Corporations, § 213

      —when necessary that property transferred by subscriber be equal to par value of capital stock. A subscription to the capital stock of a corporation may be paid for in property as well as in money, but where the owner of the property transferred also dominates and controls the corporation and it becomes insolvent, it must, in a suit under section 25 of the Corporation Act (J. & A. ¶ 2442) to collect the unpaid portion of the subscription for the benefit of creditors, be made to appear that the true value of the property so conveyed is equal to the par value of the capital stock for which it is transferred in payment.
    2. Corporations, § 213

      —what is extent of liability to creditors of directors purchasing property at excessive price in payment for capital stock. The capital stock of a corporation is a trust fund for the benefit of creditors, and the directors are trustees of that fund, and where they purchased property from themselves, in payment of their subscriptions to its capital stock at a price above the true market value thereof, although in good faith, they will, in case of the insolvency of the corporation, in a suit in equity by its creditors, be held liable to the creditors for the difference between the true value of the property at the time it was transferred and the amount of their subscriptions to such capital stock.
    3. Corporations, § 124

      —what is property for purpose of payment of subscription for capital stock. Good will of a going coal retail business is property of such a character as can be turned in to pay subscriptions to the capital stock of a corporation.
    4. Evidence, § 45

      —what is nature and scope of burden of proof. The term “burden of proof" has two distinct meanings, first, one referring to the quantum of evidence which the law demands to prove an issue in the case, and second, to the duty of producing evidence at any stage of the trial. The first is always upon the party asserting the affirmative of the issue; the latter passes from party to party as the case progresses.
    5. Corporations, § 231

      —when burden on defendants to show payment in full of subscriptions for capital stock. In a suit by creditors, under section 25 of the Corporation Act (J. & A. ¶ 2442), against stockholders of a corporation to collect the unpaid portion of the subscriptions of such stockholders to the capital stock of the corporation, after complainants have proved subscriptions by defendants to the capital stock of the corporation and the transfer of property owned by themselves to the corporation which they, as a majority of its directors, controlled in payment thereof, it is then for defendants to show that their subscriptions had been paid for in money or in money’s,worth.
    6. Corporations, § 231

      —when testimony of experts as to value of property and of going business is improperly excluded. Testimony of experts as to the value of property and of a going, profitable business turned over to a corporation in payment of subscriptions to capital stock of the corporation is improperly excluded in a suit by creditors under section 25 of the Corporation Act (J. & A. ¶ 2442), where there is no market value from which the value of the business upon the market can be determined.
    7. Corporations, § 213

      —what credit given to subscribers transferring going business in payment for capital stock. Subscribers to the capital stock of a corporation, who transfer to the corporation a live, going, profitable business in payment of subscriptions, are entitled to be credited upon their subscriptions with the amount for which the business and property would have sold on the day it was transferred to the corporation, assuming a seller willing but not compelled to sell, and a buyer willing, but not compelled to buy.
    Appeal from the Superior Court of Cook county; the Hon. Martin M. Gridley, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1917.
    Reversed in part and affirmed in part and remanded with directions.
    Opinion filed October 29, 1918.
    Butz, von Ammon & Johnston, for appellants.
    William S. Corbin, Frank Crozier and Albert N. Charles, for appellees; William S. Corbin, of counsel.

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

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

   Mr. Justice Matohett

delivered the opinion of the court.

These are appeals separate (hut consolidated here) by certain defendants from a decree entered by the Superior Court of Cook county. Appellees, complainants, are creditors of the defendant Proviso Coal. Company, a corporation, and sued in equity to collect the unpaid portion of the subscription of appellants, James S. Stephens and Oliver J. Westcott, to the capital stock of said corporation. The action is brought under section 25 of the Corporation Act (J. & A. ¶ 2442).

The bill, in substance, charges that Stephens and Westcott, who organized the corporation, and at the time controlled it, caused to be transferred tó the corporation, in payment of their subscriptions to its capital stock, certain property owned by themselves which was of less value than the amounts of their subscriptions. It also alleges that this was done with a fraudulent intent on their part.

The corporation was organized under the laws of Illinois on the 11th day of February, 1903, with a capital stock of $25,000 divided into 250 shares. Its objects were to deal in wood, coal, etc. Appellants Stephens and Westcott each subscribed for 125 shares of said capital stock. The corporation carried on business from the time of its organization until on or about the 20th day of June, 1911, at which time it made a voluntary assignment for the benefit of its creditors. It is insolvent.

At the time the corporation was organized, appellants Stephens and Westcott, as copartners, were the owners of and conducting a coal business in Maywood under the name of the Proviso Coal Company, which together with certain property used in and about said business was transferred to the corporation in full payment of their subscriptions to its capital stock. At the time of said transfer appellants dominated and controlled the corporation through its board of directors and continued so to do for about 2 years, but at the end of that time sold and transferred the entire amount of their stock to defendant Greorge Bendixen. The sale was partly in cash and partly on credit and for the sum of $3,000, plus the price of coal then in the bins.

At the time of this transfer to Bendixen, the then existing debts of the corporation had been paid and appellees have acquired all their claims since that time. It affirmatively appears from the evidence that there was no intentional fraud on the part of appellants. While this is creditable to them, it does not change the rule of law which must be applied, nor will it release them from liability if any in fact exists. Moore v. United States One Stave Barrel Co., 238 Ill. 544.

The law on this subject is well settled. A subscription to the capital stock of the corporation may be paid for in property as well as money, but where the owner of the property transferred also dominates and controls the corporation and it becomes insolvent, it must in a suit of this kind brought by creditors be made to appear that the true value of the property so conveyed is equal to the par value of the capital stock for which it is transferred in payment. In other words, the subscriber must give either money or money’s worth.

The capital stock of the corporation is a trust fund for the benefit of creditors, and the directors are trustees of that fund, and where they purchase property from themselves, in payment of their subscriptions to its capital stock at a price above the true market value thereof, although in good faith, they will, in case of the insolvency of the corporation in a suit in equity by its creditors, be held liable to such creditors for the difference between the true value of the property at the time it was transferred and the amount of their subscriptions to such capital stock. Coleman v. Howe, 154 Ill. 458; Gillett v. Chicago Title & Trust Co., 230 Ill. 373; Cohen v. Toy Gun Mfg. Co., 172 Ill. App. 330; De Shelter v. American Spring Water Supply Co., 182 Ill. App. 403.

The master to whom the cause was referred found the property transferred by Stephens and Westcott to the corporation in payment of their subscriptions to its capital stock to be of the value of at least $25,000 on the date of the transfer. The decree of the court sustained exceptions to certain findings of the master as to some items and found the total value of said property on that date to be $12,600; that it was overvalued to the extent of $12,400 and that each of said appellants Stephens and Westcott were liable for the debts of the corporation to the amount of $6,200, if it should become necessary for them to pay that amount in order to liquidate the debts due.

The chancellor overruling the master found that the good will of the business had no market value. Appellees do not concede that good will is property of such a character as can be turned into a corporation in payment of subscriptions to its capital stock, and urge there are no Illinois decisions so holding. We think the decisions cited above in effect so hold. Good will was included in the value found in the DeShelter case, supra. The weight of authority in this country is to the effect that it may be included. Thompson on Corporations (2nd Ed.), sec. 3955. However, the decree in this case is not based on the theory that good will is not property which may be turned into a corporation as the equivalent of cash, but on the contrary the court finds that the good will transferred in this particular case was without value, and disregards the fact that the property transferred included a going business.

Much is said in the briefs of the parties as to the burden of proof. Appellants insist that it is for the complainant to' show that the property transferred by appellants was not of a value equal to the par value of their subscriptions, while appellees insist the burden was upon appellants. The term “burden of proof” has two distinct meanings, first, one referring to the quantum of evidence which the law demands to prove an issue in the case, and second, to the duty of producing evidence at any stage of the trial. The first is always upon the party asserting the affirmative of the issue ; the latter passes from party to party as the case progresses. Chicago Union Traction Co. v. Mee, 218 Ill. 9.

We think that when the complainants had proved the subscriptions by appellants to the capital stock of the corporation and the transfer of property owned by themselves to the corporation which they as a majority of its directors controlled in payment thereof, it was then for appellants to show that their subscriptions had been paid for in money or in money’s worth. In Union Ins. Co. v. Frear Stone Mfg. Co., 97 Ill. 547, the Supreme Court said: “* * * on the winding up of the corporation, such shareholders will be adjudged contributories, unless it shall appear they have given for such stock the equivalent in money or in money’s worth. ’ ’ In National Bank of America v. Pacific Ry. Co., 66 Ill. App. 330, the court said: “ * * * it follows that the burden is upon them of making the fact of ‘money or money’s worth’ appear.” That decision was rendered by a divided court, and the dissenting opinion argued at length that the burden of proof was upon the complainants, but the judgment of the Appellate Court was affirmed in Sprague v. National Bank of America, 172 Ill. 149. (See also Gilman, C. & S. R. Co. v. Kelly, 77 Ill. 426.) We think that applying the rules laid down in these decisions to the record before us, it "was for appellants to prove that the value of the property which they transferred to the corporation in payment of their subscriptions was equal to the amount of such subscriptions.

In determining the value of property of the kind here in controversy, it is difficult in the nature of things to obtain satisfactory evidence. Sales in a fair and open market where the seller is willing but not compelled to sell, and the buyer is willing but not compelled to buy, when available, furnish satisfactory evidence by which such value may be determined. Unfortunately such evidence is not to be found in this record and it is impossible to determine the true valuation of the total amount of property conveyed with mathematical accuracy. Experts called by appellants testified that the value of the property and business conveyed by appellants exceeded in value the amount of their subscriptions. Appellees did not contradict this by similar expert evidence, but relied upon the cross-examination to show the evidence to be of little value, and now argue upon the authority of Kirkman v. Kirkman, 26 N. Y. App. Div. 395, that such evidence is inadmissible. The decision in Kirkman v. Kirkman, supra, purports to follow the ruling of the Court of Appeals of New York in the cases of Wakeman v. Wheeler & W. Mfg. Co., 101 N. Y. 205, and Reed v. McConnell, 101 N. Y. 270. In those cases expert testimony was offered as to the amount of prospective damages sustained by reason of the breach of an executory .contract, and such evidence was held inadmissible.

We do not think that rule should be extended so as to exclude the testimony of experts as to the value of a going business where there is no market value from which its worth upon the market can be determined. Such evidence was received in the DeShelter case, supra, as well as others which have been cited. The weight which should be given to such testimony is, of course, quite another matter. While we think in the instant case the master gave too much weight to this evidence, we think the chancellor erred in wholly disregarding it.

The decree sets forth the separate items of property conveyed, such as coal in the bins, accounts receivable, cash on hand, etc., and having found the value of these items of property, gives to the whole property and business conveyed a valuation equal to the total amount of siich items. The evidence, however, affirmatively shows that the property transferred to the corporation was not only these separate items, but a business with which the property was associated and used. It was a going business; it had a business name; it had a list of customers, and it had, as the uncontradicted testimony showed, the best site for that business in the town where it was conducted, in that it was located immediately adjacent to switch tracks which were of great advantage in conducting the business.

The report of the master shows that, at the time of the incorporation, sales of coal were at the average rate of 7,500 tons per year, at a net profit of 80 cents per ton. On a basis of 5,000 tons per year, the profits of the business from sales of coal alone would amount to $4,000 per year, or 16 per cent -on the capitalization of $25,000. "While this business was to a great extent due to temporary causes and had not existed for such' time as would make possible a computation of the value of good will based upon so many years’ purchase of the profits of'the business (Austen v. Boys, 2 De Gex & J. 626; Mellersh v. Keen, 28 Beav. 453), yet we think it would have materially increased the price which a willing purchaser would have paid for the property and business as a whole.

The situation is unlike that which has been called to our attention in Farwell v. Huling, 132 Ill. 112, where the court found that the good will was of no value, saying: “In short, if there is anything in this record, except the conclusion of the master, tending to show that any firm, at an entirely different locality, under an entirely different name, could not have commenced and carried on the same business with as much success as could be by the successors of this firm at the old stand, we have been unable to discover it.”

"We do not deem it necessary to attempt technical distinctions-as to definitions of good will, or lay down rules by which the value of that good will at any given date should be determined. The property which appellants transferred to the corporation was a going, profitable and live business and in fairness and justice they are entitled to be credited upon their subscriptions to stock with the amount for which that business and property would have sold on the day it was transferred to the corporation, assuming a seller willing but not compelled to sell, and a buyer willing but not compelled to buy.

Upon a rehearing granted, while we are not satisfied that the valuation as found by the master is correct, we think the method by which the chancellor arrived at the valuation found by the decree is erroneous.

We have carefully considered the evidence. The valuation for which appellants should be given credit cannot be determined therefrom with mathematical accuracy. It is conceded there was a mistake as to the amount allowed for cash on hand at the time the business was transferred to the corporation. Appellees state they are willing that an additional allowance of $140 should be made for that item. We think there should also be allowed to appellants an additional credit of $5,000 as representing the further sum that a willing purchaser would have paid over and above the value of the separate items of property as found by the decree for the business as a going one, including its good will. Appellants are, therefore, entitled to be credited on their subscriptions on account of the property conveyed by them to the corporation in payment thereof, the sum of $17,740, and for the balance due upon their subscriptions they are liable as found by the decree.

The decree is therefore reversed in part and affirmed in part, and the cause remanded with directions to the Superior Court to modify the decree in accordance with the views herein expressed.

Reversed in part cmd affirmed in part and remanded with directions.


author: Mr. Presiding Justice O’Connor

text:
    Niels P. Nielsen et al., Defendants in Error, v. Frank Enchius et al., Plaintiffs in Error.
    Gen. No. 23,540.
    1. Mechanics’ mens, § 61

      —when materialman entitled to lien. Where material is sold on 30 days’ credit by a materialman to a contractor and used by the contractor in the construction of a building, the materialman is entitled to a lien on the property for the unpaid purchase price of the materials.
    2. Mechanics’ liens, § 196

      —when value of materials furnished by materialman shown. Evidence sufficient to show the market value of materials sold by a materialman to a building contractor and used by the latter in the construction of a building is sufficient to establish the value of the materials.
    3. Mechanics’ liens, § 197

      —what constitutes prima facie case in suit by materialman to enforce lien. A prima facie case in favor of a materialman, complainant in a suit for the enforcement of a mechanic’s lien for materials furnished to a contractor and used in the construction of a building, is made out where complainant shows that he has complied with the provisions of the act and that his claim is still unpaid, and it is unnecessary that complainant show that there is something due from the owner to the contractor.
    4. Mechanics’ mens, § 197

      —presumption as to compliance with act by owner and contractor. In an action for the enforcement of a materialman’s lien against premises, it must be presumed that the owner and contractor have complied with the provisions of the act.
    5. Mechanics’ mens, § 197

      —when presumed that owner has not paid contractor. In an action for the enforcement of a material-man’s lien against premises for materials furnished to the contractor, it' must be presumed that the owner has not paid the contractor, since he could not pay the contractor rightfully until he had first paid subcontractors for materials furnished.
    6. Mechanics’ liens, § 197

      —when burden on owners to show that they have rightfully paid contractor. Where materialmen show, in proceedings against the owners of a building to enforce a mechanic’s lien for materials furnished to the contractor constructing the building, that they have complied with all the provisions of the act, and that their claim is unpaid, the burden is then on the owners to show that they have rightfully paid the contractor.

      7. Mechanics’ liens, § 202

      —when judgment against owners and contractor is defective. Section 28 of the Mechanics’ Liens Act (J. & A. ¶ 7166), providing that judgments against the owner of property and the contractor, where liens are established, shall recite the date from which the liens attached, is in derogation of the common law and must be strictly followed, and, hence, a judgment which does not recite anything about a lien is defective.
    8. Appeal and error, § 1802

      —when reversal and remandment proper. Where a judgment in mechanics’ liens proceedings is fatally defective because not reciting the date from which the lien attached, the judgment will be reversed and the cause remanded.
    Error to the Municipal Court of Chicago; the Hon. Nels Larson, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1917.
    Reversed and remanded.
    Opinion filed November 6, 1918.
    Jacob Levy and Josiah Burnham, for plaintiffs in error.
    Henry N. Stoltenberg, for defendants in error.

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

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

   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiffs brought suit in the Municipal Court of Chicago, claiming $144.75. There was a judgment against defendants for this amount, to reverse which this writ of error is prosecuted.

The record discloses that the defendants John Kulikausky and wife were the owners of real estate in Chicago, on which was located a store which they desired to have remodeled, and for that purpose they entered into a written contract with the defendant Frank Enchius. The contract provided that the latter should furnish at his own expense all labor and material for the completion of the work. The contractor entered upon the work and purchased material from the plaintiffs which was used in the building. Plaintiffs sold material to the contractor on 30 days ’ credit, and their claim not having been paid, they served notice for lien on the owners of the premises, and afterwards brought this suit. Judgment was entered against all the defendants, but the owners of the property only seek a reversal of the judgment.

It is contended that the judgment is erroneous for the reason that the evidence shows that the plaintiffs sold the goods on credit on an open account to the contractor, and that in such case there can be no lien on the property; and further that the evidence was not sufficient to establish the value of the materials, nor the date on which the last of them were delivered. The material was sold on 30 days ’ credit, was used by the contractor in the building, and the last delivery was made about May 15th. There was also evidence sufficient to show the market value of the material. We think this was all that was required in this regard.

It is further insisted that it was incumbent upon the plaintiffs to prove, as a part of their case, that at the time of the service of the notice for mechanic’s lien on the owners, there was then at least the amount of plaintiffs’ claim due from the owners to the contractor; that this burden was on the plaintiffs, and as there was no evidence offered on this point, plaintiffs failed to make out a case. In support of this, authorities are cited from this court and earlier cases from the Supreme Court. We think it would serve no useful purpose to analyze these authorities, for the statute on mechanics ’ liens has been changed from time to time. Section 28 of the Act (J. & A. ¶ 7166), under which this suit is brought, provides that a subcontractor may sue the contractor and owners and obtain a personal judgment. This section then provides: “In such actions at law # * * the owner shall be liable to the plaintiff for no more than the pro rata share that such person would be entitled to with other sub-contractors out of the funds due to the contractor from the owner under the contract between, them, * * * and such action at law shall be maintained against the owner only in case the plaintiff establishes his right to the lien. All suits and actions by sub-contractors shall be against both contractor and owner jointly. * * * All such judgments, where the lien is established shall be against both jointly, but shall be enforced against the owner only to the extent that he is liable under his contract as by this act provided, and shall recite the date from which the lien thereof attached according to the provisions of sections one (1) to twenty (20) of this act.” Section 5 (J. & A. ¶ 7143) provides that it shall be the duty of the contractor to give the owner and the duty of the owner to require of the contractor, before the owner shall pay to the contractor any moneys due or to become due, a statement in writing made under oath, or verified by affidavit, of the names of all parties furnishing material and labor, and the amounts due or to become due each. Section 27 (J. & A. ¶ 7165) provides that when the owner is notified of the names of the parties furnishing labor and materials and the amounts due, he shall retain from the money due or to become due the contractor an amount sufficient to pay all demands due persons furnishing material and labor, etc., and shall pay the same to the parties entitled thereto. Section 32 (J. & A. ¶ 7170) provides that no payment made by the owner to the contractor shall be regarded as rightfully made to the contractor as against a subcontractor, laborer, or party furnishing labor or material, without the provisions of section 5 having been complied with—without a written statement showing the names and the amounts due the several parties furnishing materials, etc.

If the defendants’ contention is sustained, i. e., that before the plaintiffs could recover they must show that there was something due from the owner to the contractor, the provisions of the act which seek to protect subcontractors and materialmen would be of no avail, for if the owner had paid the contractor in full, then there could be no recovery by a subcontractor. This construction is of course manifestly unsound. We think the true rule in such case is that where a subcontractor, who has furnished material which is used in the building, shows that he has complied with all of the provisions of the act, and that his claim is still unpaid, that he then makes out a prima facie case, for it must be presumed that the owner and contractor have complied with the act,' and if this has been done, the owner knows that the subcontractor has furnished material, and that the same is unpaid. And it must further be presumed that he has not paid the contractor, for under the act he could not pay the contractor rightfully until he had first paid the subcontractors for the materials furnished.

In the instant case, when the plaintiffs showed they had complied with all the provisions of the act and that their claim was unpaid, the burden was then upon the owners to show, if they could, that they had rightfully paid the contractor. This they failed to do. (See Verhoeven v. Ingebrutsen, 205 Ill. App. 317.)

There is, however, a fatal defect in the judgment which we cannot cure here. The statute says that “all such judgments * * * shall recite the date from which the lien thereof attached. * * *” The judgment in this case does not recite anything about a lien. The statute is in derogation of the common law and must be strictly followed, and as the judgment is defective, it is reversed and the cause remanded.

Reversed and remanded.