author: Mr. Presiding Justice Matchett Mr. Justice Barnes.

text:
    R. W. Hartwig, Appellee, v. Al. V. Booth, trading as Al. V. Booth and Company, Appellant.
    Gen. No. 24,694.
    1. Gaming, § 9

      —what necessary to avoid contract. To invalidate a contract as being a gaming transaction, within the prohibition of Criminal Code, sec. 130 (Call. 1916 Stat. If 3733), it must be proved that neither of the parties intended to deliver the goods and that both had the intention at the time of making the contract that it would be settled on differences.
    2. Gaming, § 9*—contracts for future delivery not prohibited. Criminal Code, sec. 130 (Call. 1916 Stat. If 3733), does not prohibit nor render invalid contracts for the future delivery of goods.
    3. Gaming, § 41*—-what to be considered on question whether contract was a gaming transaction. In determining whether a contract of sale is a gaming transaction within the prohibition of Criminal Code, sec. 130 (Call. 1916 Stat. If 3733), the court should, in considering the financial ability of the purchaser to take and pay for the goods, take into consideration the value of the goods bought and delivered.
    4. Boards, of trade and exchange, § 46*—validity of settlements. Settlements made on the Board of Trade by set-off and by ringing off are valid and have the effect in law ,of a delivery, in so far as actual transactions are there represented.
    5. Gaming, § 13*—what is test in determining whether contract is a gaming transaction. In determining whether a transaction is a gaming transaction within the prohibition óf Criminal Code, sec. 130 (Call. 1916 Stat. If 3733), the real question is the intention of the parties.
    6. Gaming, § 9*—what may be considered in passing on nature of contract. In ascertaining the intention of the parties to a contract, for the purpose of determining whether the contract is a gaming transaction within the prohibition of Criminal Code, sec. 130 (Call. 1916 Stat. 1f 3733), the court is not limited to the assertion of the parties, but may also consider the nature of the transaction, the method of carrying on the business,' the previous and subsequent dealings of the parties, their nature and the manner in which they were conducted, and all the attending circumstances.
    7. Gaming, § 10*—what constitutes a gaming contract. If a contract for the sale of a commodity is jvith the understanding, express or implied, that the transaction shall he settled by the payment of differences, it is a gambling contract and void.
    8. Gaming, § 9

      —when parties to a gaming transaction particeps criminis. If it is the purpose and intent of one of the parties to a contract for the sale of a commodity to use the legitimate forms of trading on the Board of Trade for the purpose of effecting an illegal transaction and the other party, knowing this, lends his assistance in carrying out this purpose, the parties.are accomplices in crime.
    9. Gaming, § 43*—sufficiency of evidence. In a suit to set aside a judgment on the ground that the indebtedness for which it was entered grew out of gambling transactions in grain contrary to Criminal Code, sec. 130 (Call. 1916 Stat. jf 3733); circumstances tending to show intentions and positive testimony to that effect are not negatived by evidence of the defendant to the effect that he entered into valid contracts with fellow members on the Board of Trade for the amounts of complainant’s purchases and relying on complainant’s orders, such contracts not being produced at the trial, however, and defendant admitting that he did not receive any grain upon them and that they were closed at maturity, and there being no evidence as to the intention of the parties to these contracts and the course of dealing showing that defendant was to be protected by margins put up by complainant from time to time.
    Barnes, J., dissenting.
    Appeal from the Superior Court of Cook county; the Hon. Denis E. Sullivan, Judge, presiding. Heard in the Branch Appellate Court at the October term, 1918.

      Certiorari denied by Supreme Court (making opinion final).
    Affirmed.
    Opinion filed March 9, 1920.
    Rehearing denied April 1, 1920.
    Fyffe, Ryner & Dale, for appellant.
    Trainor & Trainor, for appellee.

       See Illinois Notes Digest, Vois. 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 Matchett

delivered the opinion of the court.

This is an appeal by defendant from a decree which set aside as void a judgment obtained by the defendant in the circuit court of Cook county for the sum of $1,319.35 on the 25th of October, 1915. The appellee alleged and the decree finds that the indebtedness for which said judgment was entered grew put of gambling transactions in grain contrary to the Criminal Code and was therefore void. Section 130 of that Code (Hurd’s Rev. St. 1917, p. 979, Call. 1916 Stat. ¶ 3733) provides:

“"Whoever contracts to have or give to himself or another the option to sell or buy, at a future time, any grain or other commodity, * * * where it is at the time of making such contract intended by both parties thereto that the option, whenever exercised, or the contract resulting therefrom, shall be settled, not; by the receipt or delivery of such property, but by the payment only of differences in prices thereof * * * shall be fined * * *, or confined in the county jail * * *, or both; and all contracts made in violation of this section shall be considered gambling contracts, and shall be void.”

Other sections provide that judgments entered upon such consideration shall be void and may be set aside by a court of equity.

The decree finds in this case, as the bill alleged, that in November, 1912, the defendant was a commission broker in Chicago dealing in grains, that the complainant about that time purchased from him 10,000 bushels of wheat, paying a margin of $250 and that after the market price of wheat fell below that margin the complainant paid an additional margin of $250; that at the time of purchase nothing was said between the parties concerning the delivery of said wheat or about the financial ability of complainant or his ability to store or use that amount of wheat; that at that time the complainant was worth not to exceed $5,000; was engaged in the drug business; had no use for that quantity of wheat or any wheat and had no means of handling it if the same was received by him; that he afterwards advanced a further margin of $250 on said wheat and gave a further sum of $250 for further margins on November 21, 1912, and on February 27, 1913, complainant advanced a further margin of $300, making a total of $1,350 paid by complainant as margins, and that when the market still further declined, complainant refused to pay further margins, and the defendant closed out said transactions; that from on or about November, 1912, until February, 1913, complainant purchased wheat from the defendant on "at least five different occasions, and on each occasion paid a margin of two or three cents a bushel, and on each occasion said transaction was closed by settling-in differences, and that in no ease did the complainant purchase or the defendant sell with the expectation of making delivery of such grain at the time purchased or at any other time, but solely with the expectation of settling in differences upon the market price upon the day of purchase and the day of sale; that in the fore part of 1914 the complainant purchased 40,000 bushels of wheat and paid as a margin $300; that said transaction was conducted like the former transactions and no conversation was had between the parties as to delivery; that the complainant owned no real estate, and was worth between $4,000 and $5,000 over and above his debts, and that consisted of his business as a druggist; that neither the defendant nor any one representing him made any inquiry as to the ability of the complainant to pay for 40,000 bushels of wheat, and defendant made no inquiry as to the complainant’s financial responsibility, except that upon one occasion he made inquiry of a commission broker with whom the complainant had previously traded and was informed by said broker that the complainant always paid his losses. That the defendant testified that he understood from such information that the complainant always paid the difference between what he paid for wheat and what he could get for the wheat at the time it was sold if the market went against him, and that he did not know whether or not plaintiff had access to any warehouse or elevators for storage purposes and that he was not interested in that matter; that the said last-mentioned transaction was settled upon differences, and thereby the defendant became indebted to the complainant in approximately $1,319.39, which represented the loss incurred by the complainant and for which the judgment described was entered against him.

As conclusion from this evidence the court found that at the time of making this transaction “neither party had any intention that delivery of the grain should be made, but it was the intention of both parties that the transaction would be settled on differences alone,” and further found as a conclusion therefrom that the transaction out of which the- indebtedness arose was a gambling transaction and void.

The rules of law to be applied in such cases are well settled. In order to invalidate a contract under the statute it must be proved that neither of the parties intended to deliver the goods, and that both had the intention, at the time of making the contract that it would be settled on differences. Cutler v. Pardridge, 182 Ill. App. 350. Contracts for the future delivery of goods are valid and not prohibited by the statute. Clews v. Jamieson, 182 U. S. 461. In considering the financial ability of the purchaser to take and pay for the goods, the value of the goods bought and delivered should be taken into consideration. Pelouze v. Slaughter, 241 Ill. 215. Settlements made on the Board of Trade by set-off and by ringing off, in so far as actual transactions are there represented, are valid and have the effect in law of a delivery. Cutler v. Pardridge, supra; Board of Trade of Chicago v. Christie Grain & Stock Co., 198 U. S. 236; Nash-Wright Co. v. Wright, 156 Ill. App. 246.

The real question to be determined is the intention of the parties, which intention may be established not only by the assertion of the parties to the transaction, but from the nature of the transaction itself, the method of carrying on the business and by all the attending circumstances. First Nat. Bank of El Paso v. Miller, 235 Ill. 135, p. 140. In Jamieson v. Wallace, 167 Ill. 388, p. 397, it is said:

“Among these circumstances, besides the mode of dealing between the parties, is the pecuniary ability of the party purchasing. If the purchases of a party, as ordered through a broker, are larger in amount than he is able to pay for, it is a strong circumstance indicating that there was no intention of receiving the property, but rather an intention to settle the differr ence between the market price and the contract price. ’ ’

And in the Miller case, supra, it is said:

“The question of intention is a question for the jury or the court, on a consideration of all the evidence.”

And it is competent, in determining such transactions, to take into consideration the previous and subsequent dealings of the parties, the nature of them, and the manner in which they were conducted. Gardner v. Meeker, 169 Ill. 40. If the understanding, express or implied, is that the transaction shall be settled by the payment of differences, it is a gambling contract and void. Pope v. Hanke, 155 Ill. 617; Pratt & Co. v. Ashmore, 224 Ill. 587, p. 591; Stewart v. Dodson, 282 Ill. 192, p. 196. In Pratt & Co. v. Ashmore, supra, p. 594, it is said:

“That the grain was in the City of Chicago, and that warehouse receipts were held by plaintiffs in error, or that the rules of the Board of Trade required the actual delivery of grain, is immaterial. If it was the understanding between the seller and purchaser that the final settlement should be made between them upon differences, the transaction was a gambling one, within the meaning of section 130, supra, and was absolutely void.”

If it is the purpose and the intent of one party to ■ use the legitimate forms of trading on the Board of Trade for the purpose of putting over an illegal transaction, and the other party knowing this lends his assistance in carrying out the purpose, the parties are accomplices in crime. Weare Commission Co. v. People, 209 Ill. 528, p. 542; Lamson v. West, 201 Ill. App. 251, p. 255; Pope v. Hanke, supra, p. 623; Irwin v. Williar, 110 U. S. 499.

It is suggested that the court failed to give due weight to certain evidence of defendant Booth which appears in the record, to the effect that he entered into valid contracts with fellow members on the Board of Trade for the amounts of complainant’s purchases, and relying on the orders of the complainant. These contracts were not produced upon the trial, but Booth testified that his books would show them and the parties to them. He admitted that he did not receive any grain on these contracts and they were closed before maturity.

It is urged that it is unbelievable that a broker would consent to enter into contracts with other members of exchanges which required delivery and receipts of commodities dealt in, and at the same time agree with the customer that as between him and the customer he should not be required to receive the commodities purchased on his order or to deliver what was sold by him. In this case the defendant’s commission on the transaction was only $60. That was all the profit he could make out of, it and i.t is claimed that it is very improbable that for such a small profit he would enter into valid contracts for large amounts enforceable by third parties against him. There are, we think, two answers to this contention. In the first place there is no evidence in the record as to what the intentions of these third parties with whom Booth contracted were nor whether the contracts entered into with them were valid or invalid. In the second place the course of dealing shows conclusively that the plan was that Booth should be protected fully by the margins which complainant was to advance from time to time. Booth’s principal duties apparently were to watch the markets and call for margins in time to make himself safe. If we are to hold that proof of outstanding contracts of this kind negatives circumstances tending to show illegal intentions and positive testimony to that effect, the statute would be practically unenforceable. While it is true in its finding of fact the decree ignores this evidence, we do not think the evidence of sufficient weight to enable us to say that the finding of the chancellor is clearly and manifestly against the weight of it.

The decree will be affirmed.

Affirmed.

Mr. Justice Gridley concurs and Me. Justice Babees dissents.

Dissenting opinion by

Mr. Justice Barnes.

The only question involved is whether there was a mutual intent not to deliver the grain bought and sold for appellee’s account but to settle on “differences.” That a mutual intent must be established is not questioned. The majority opinion also recognizes that contracts for the future delivery of grain, such as were made here on the Board of Trade, are valid (Wolcott v. Heath, 78 Ill. 433; Logan v. Brown, 81 Ill. 415), and that settlement by the so-called method of “ringing up” trades made between brokers thereon has the legal effect of delivery (Board of Trade of Chicago v. Christie Grain & Stock Co., 198 U. S. 236, Cleage v. Laidley, 79 C. C. A. 284, 149 Fed. 346; Nash-Wright Co. v. Wright, 156 Ill. App. 246; Cutler v. Pardridge, 182 Ill. App. 350), and the evidence shows that the contracts in question were of that character and were executed by such deliveries. But while the opinion recognizes the validity of contracts such as the evidence shows Booth made, and that the methods of closing them had the legal effect of delivery, yet it holds that Booth nevertheless did not intend to make deliveries but to settle on “differences.” This seems much like admitting the premises and denying the conclusion. Appellee himself did not contend that there was any express understanding that there would be no deliveries or that the settlements were to be made on “differences,” and testified to no facts from which alone such an understanding can .be inferred. On the contrary, he expressly testified that nothing was said about it, and Booth expressly .testified that there was no such understanding and that he intended and stood ready to make deliveries on his contracts. In this he was corroborated by proof of .his entering into contracts for appellee’s benefit with other members of the Board of Trade,—the validity of which is not impeached or even questioned,—and by executing them in a manner conceded in said opinion to be legal and by showing his obligations thereunder and .his financial ability to carry them out regardless of whether appellee secured him with “margins,” thus clearly demonstrating his intention to make deliveries and not settle on the mere “differences” of market prices.

But it is said in the opinion that Booth admitted that he did not receive any grain on these contracts and that they were closed before maturity. If they Were “rung up,” thus making a legal delivery, no grain had to be actually received, and the fact that they were closed out before maturity did not make them illegal transactions in the absence of any understanding that they should be so closed. There was no proof of any such understanding. As was said in the Nash-Wright case, supra:

“The mere fact that the client had bought with the expectation, in case the market were favorable, of reselling before the time of delivery should arrive and that the broker knew this, would not render their transaction illegal. The law does not prohibit a. man from entering into a contract for the purchase of property to be delivered to him in the future or from ordering an agent to enter into such a contract, even though he may expect under certain contingencies, to sell his rights before maturity and to take his profit or suffer Ms loss. Such a transaction is legitimate business speculation.” (p. 252.)

On a very similar state of facts in Johnson v. Milmine, 150 Ill. App. 208, the court said that it ivas unbelievable that the broker in that case would have consented to enter into contracts with other members of exchanges which required deliveries and receipts of commodities dealt in (as was shown by the evidence to be the facts in the case at bar), and at the same time agree with the customer that as between him and the broker he should not be required to receive commodities purchased on his order or to deliver what' was sold by him. Repudiating the reasoning in that case, the foregoing opinion says: “In the first place there is no evidence in the record as to what the intentions of these third parties with wiiom Booth contracted were, nor whether the contracts entered into with them were valid or invalid; the second place, the course of dealing shows conclusively that the plan was that Booth should be protected fully by the margins which complainant was to advance from time to time.” Not only were the intentions of the “third parties ’ ’ not involved in the issues, and the validity of their contracts in no manner impeached in the record, but, in the absence of any evidence on either, the law-will not presume their intentions were unlawful or their contracts invalid. Besides complainant made no such contention and the pleadings raised no such issue, and the contracts made with them are such as the majority opirnon concedes are legal.

Nor is the second conclusion tenable. The mere fact that in the course of trade complainant put up a part of the purchase price by advances called “margins,” a customary method of dealing not only on the Board of Trade, but in other lines of business where the full purchase price is not due until the time of delivery, does not of itself render the transaction illegal, and no court has, to the writer’s knowledge, ever so held. As a circumstance it is perfectly consistent with a legal purchase.

The writer regards the decision in this case as out of harmony with a long line of previous decisions of this court upon a similar state of facts, including the Johnson, Culver, Wright, cases, supra, and Kerting v. Sturtevant, 181 Ill. App. 517, in all of which due regard was had for the applicability of the Supremo Court decisions on this subject. What was said by the court in the last cited case is particularly applicable here, namely:

“There is no evidence of any understanding and agreement between plaintiff and defendants that mere differences shall be paid per se without anything further being done, but each transaction was begun by an order from the plaintiff to buy or sell grain at a fixed price, and the evidence shows that actual purchases and sales were made by defendants in obedience to such orders. The plaintiff disclosed no desire or intention to gamble in grain with defendants, and it is clear from the evidence that defendants had no purpose or intention to gamble in grain with him, and that they in good faith made actual purchases and sales for him by his order.” (p. 519.)

Also, pertinent to the facts is the language of Mr. Justice Holmes of the United States Supreme Court, in the case of Board of Trade of Chicago v. Christie Grain & Stock Co., supra:

“It seems to us an extraordinary and unlikely proposition that the dealings which give its character to the great market for future sales in this country are to be regarded as mere wagers or as ‘pretended’ buying or selling, without any intention of receiving and paying for the property bought, or of delivering the property sold, within the meaning of the Illinois act. ’ ’

The burden of proof was on appellee to prove by a preponderance of evidence that the indebtedness for which judgment against him was obtained grew out of gambling transactions. To hold that the burden was met by such meager evidence and circumstances as were relied on in the case at bar, is to place upon methods of doing a legitimate business through a commercial institution dealing, as is well known, not only with customers from all over this country but outside of it, such restraint as, in the language of our Supreme Court in Wolcott v. Heath, 78 Ill. 433, “would limit commercial transactions to such a degree as could not but be prejudicial to the best interests of trade.”


source: Caselaw Access Project

author: Mr. Presiding Justice Matchett

license: Public Domain

text:
    State Bank of Chicago, Appellee, v. Mid-City Trust & Savings Bank, Appellant.
    Gen. No. 24,979.
    1. Banks and banking, § 126

      —what is effect of Act on rule that Chech operates as an assignment. Section 188 of the Negotiable Instruments Act (J. & A. 1f 7828) has changed the rule formerly obtaining in this State under which the making and delivery of a check operated as an assignment pro tanto of the funds against which it was drawn.
    2. Banks and banking, § 149*—what is not an acceptance of a cheeh. The payment of a check by the drawee bank on a forged indorsement is not equivalent to a valid acceptance of the check.
    3. Banks and banking, § 149*—when indorsement ly one having same name as payee is a forgery. Even though one who indorses a check sent to him through a mistake of the maker hears the same name as the payee, such indorsement is a forgery.
    4. Banks and banking, § 129*—what xoarranted hy person presenting chech for payment. Under sections-23, 65 and 66 of the Negotiable Instruments Act (J. & A. 1f1i 7662, 7704, 7705), one who presents an indorsed check to the drawee for payment warrants that the check is genuine and in all respects what it purports to be and that he has title to it, and where the indorsement is forged, he becomes liable to the bank on his warranty.

      5. Banks and banking, § 149

      —when negligence of drawer of chech does not relieve banh paying it. The fact that the drawer of a check negligently mailed it to another person having the same name as the payee who thereupon indorsed the check and secured its payment by the defendant bank who in turn received payment thereon from plaintiff, the drawee bank does not relieve defendant from liability on the principle that as between two innocent persons the one whose negligence first made the injury possible must suffer the loss, wher'e plaintiff’s action is| based on defendant’s liability by reason of its warranty of title to the check under the Negotiable Instruments Act.
    6. Banks and banking^ § 149*—when banh paying Chech on forged indorsement liable in tort for conversion. Irrespective of whether a bank is liable in assumpsit to the payee of a check which had, by the drawer’s negligence, been mailed to a third person bearing the same name and had been negotiated by him with a forged indorsement, the bank is liable to the payee in tort for the conversion of tbk check, and consequently the drawee bank may recover from the bank by which the check, bearing the forged indorsement, was presented for payment.
    Appeal from the Circuit Court of Cook, county; the Hon. Frank Johnston, Jr., Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed March 9, 1920.
    Gustav E. Beerly, for appellant; Ellis S. Chesbrough, of counsel.
    Thomas F. Monahan and George E. Fink, 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. Presiding Justice Matchett

delivered the opinion of the court.

Plaintiff below, appellee here, State Bank of Chicago, sued the defendant, Mid-City. Trust & Savings. Bank, to recover the sum of $2,060, which it paid to said Mid-City Trust & Savings Bank, through the Chicago Clearing House, August 15, 1916.

The essential facts are not in dispute. Plaintiff and defendant are engaged in the business of banking in the City of Chicago. On August 10, 1916, the plaintiff had as a depositor one Samuel J. Lumbard, an attorney at law. On that day he drew his check to the order of' one James Glen, for the sum of $2,060 directed to the plaintiff State Bank of Chicago. On August 12,1916, this check was presented to the State Bank without authority from the payee, which stamped across the face of the check “Accepted for $2,060, Aug. 12th, 1916. Payable through Chicago Clearing House when properly endorsed.”

On August 14, 1916, this check was deposited with the defendant, Mid-City Trust & Savings Bank, by one James Glen, who was a depositor in that bank, and who indorsed the check in blank upon the back of it. On the loth of August, 1916, the said check was indorsed in writing on the back thereof by defendant, “Mid-City Trust & Savings Bank. Pay through Chicago Clearing House, Aug. 15, 1916, to the First National Bank of Chicago,” and the check was duly paid on that date by the plaintiff, through the clearing house.

The James Glen who was a depositor in the defendant bank and who indorsed this check was not the payee named in the check. He was the son of the payee, and lived in the City of Chicago, but not at the same address as his father, the payee. The James Glen for whom the check was intended lived at No. 4027 Gladys avenue. The son, James Glen, lived at 2214 West Van Burén street, and apparently, through a mistake, the check was mailed to his address.

Lumbard next saw the check on the 3rd or 4th of September, when he received his August statement of account from the plaintiff bank, but did not discover that the indorsement thereon was forged until inquiry was made on behalf of the payee of the check at his, Lumbard’s, office, when he was informed that the indorsement was a forgery. This was op the 9th day of September, 1916. He immediately notified the State Bank of Chicago and the cashier of that bank at once telephoned to the defendant bank and notified it thereof, and stated that it would be expected to make the loss good. On the 11th of September the payee, James Glen, according to the custom, made an affidavit in writing, stating that he was the real payee and rightful owner of the check; that the indorsement of James Glen which appeared thereon was not his signature, but was a forgery, etc. This affidavit was delivered to the plaintiff State Bank "with the check attached thereto, and was by it delivered to the defendant bank, which, after investigating on September 23, 1916, returned it to the plaintiff bank, refusing the request for a remittance to cover the item, but with the assurance that in the event any action was brought against the State Bank by the maker of the check “this bank will interpose the necessary and proper defense in the case.”

On December 19, 1916, at the State Bank, James Glen, the real payee, indorsed the check of August 10, 1916, asked payment and was paid, the amount thereof in current funds by plaintiff.

The evidence showed that when the check of August 10, 1916, was drawn by Lumbard he handed it to his stenographer and told her to send it to James Glen. She had before'this written several letters to James Glen and Lumbard did not tell her the address of James Glen, the payee, at this time.

The declaration was in two counts, each of which alleged that the indorsement of James Glen was forged, and that the defendant gained no title to the check. Both alleged the acceptance of the check by plaintiff upon its face. The second count alleged that defendant guaranteed the genuineness of the prior indorsement of James Glen, and both counts set up the presentation and payment by the plaintiff through the dealing house, and the demand upon the defendant for repayment.

The defendant pleaded nonassumpsit and gave notice of special defenses. It alleged negligence of Lumbard in mailing the check to James Glen at 2214 West Van Burén street, Chicago, Illinois, which was the proper address of the James Glen who was the defendant’s depositor, that defendant credited the check to the account of said James Glen, and the amount thereof was withdrawn by him, and that if Lumbard intended to issue said check to any other James Glen, the address of said intended recipient was well known to Lumbard, or could have been known by the use of ordinary diligence. That defendant had no knowledge or notice of the existence of any James Glen other than its depositor and customer.

The further special defense was set up that the acceptance of the check by plaintiff on August 12, 1916, was not procured by the James Glen alleged by plaintiff to be the payee of the check, either directly or by any one who was his agent or in privity with him, and so, as between the plaintiff bank and the said payee, James Glen, the aforesaid acceptance was a nullity, and that under the facts set forth the plaintiff is es-topped from claiming any liability against the defendant on account of the payment of the aforesaid check.

At the close of the evidence the defendant moved to instruct the jury to find the issues for the defendant and this motion was renewed at the close of all the testimony. Both motions were denied. The defendant offered to prove that the check on which plaintiff sued was mailed by Lumbard to James Glen at 2214 West Van Burén street, Chicago, Illinois, postage prepaid, and that this was the proper and correct address of James Glen, Jr., but the court refused to receive this and similar evidence.

The case was submitted to the jury and at the request of the defendant an instruction was given to the effect that it was the duty of the maker of the check upon the discovery that the indorsement thereon was forged to give immediate notice to the plaintiff bank; that if such, notice was not given and by reason thereof “the plaintiff bank and the defendant bank both’ lost an opportunity to protect themselves from loss, then the plaintiff bank was relieved from liability for, paying the check on a forged endorsement, and, not being liable, cannot recover against the defendant bank.” The jury brought in a verdict for the plaintiff for the amount of the check with interest, and motions for new trial and in arrest of judgment being overruled, a judgment for the plaintiff was entered.

The defendant here contends that the court erred in refusing to instruct the jury to find for the defendant. It argues that since the passage of the Negotiable Instruments Act of 1907 (J. & A. ¶ 7618 et seq.), a bank is not liable to the payee of a check unless it has accepted it; that plaintiff did not in fact acc.ept the check; that the certification stamp having been procured by an unauthorized person was, in fact, a nullity, and that plaintiff bank was therefore not liable to the payee thereon. Further, that there can be no liability of plaintiff to its depositor, Lumbard, because Lumbard is estopped by his negligence in sending the check in question to the wrong J ames Glen at the wrong address. It says, as the plaintiff bank was liable neither to the payee, James Glen, nor to its depositor, Lumbard, it was not injured through the payment of the amount of this check on the forged indorsement, and there being no injury to plaintiff, plaintiff cannot recover.

Section 188 of the Negotiable Instruments Act, Hurd’s Rev. St. 1917, ch. 98, p. 2018 (J. & A. ¶ 7828), provides: “A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the banker is not liable to the holder, unless and until it' accepts or certifies the check.” This section has undoubtedly changed the rule of law as formerly laid down in Munn v. Burch, 25 Ill. 35, which held that the making a delivery of a check operated as an assignment pro tanto of the funds deposited with the bank against which the check was drawn.

There are (authorities to the effect that a bank is not liable to the payee of the check on an acceptance made upon the request of an unauthorized person. Myers v. Union Nat. Bank, 27 Ill. App. 261; Thomson v. Bank of British North America, 82 N. Y. 1; Goshen Nat. Bank v. Bingham, 118 N. Y. 349. Nor do we think the payment of the check was equivalent to a valid acceptance of it as appellee contends. Rauch v. Bankers Nat. Bank of Chicago, 143 Ill. App. 625.

Nevertheless we are not convinced by the defendant’s arguments. The indorsement of James Glen upon the check was a forgery. Mead v. Young, 4 T. R. 28; Beattie v. National Bank of Illinois, 174 Ill. 571. Section 23 of the Negotiable Instruments Act, Hurd’s Rev. St. ch. 98, p. 2003 (J. & A. ¶ 7662) provides:

“Where a signature is forged or made without authority, it is wholly inoperative, and no right to retain the instrument or to give a discharge thereof, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.”

Sections 65 and 66 of the same act provides, in substance, that every indorser negotiating an instrument by delivery warrants that the instrument is genuine and in all respects what it purports to be, and that the indorser has a good title to it. The presentation of the check with indorsements thereon amounted to a representation to plaintiff that defendant had title to the check. The defendant thus became liable on its warranty.

It is urged by defendant that plaintiff bank was not liable to its depositor Lumbard, because of his negligenee in sending the check to the wrong address. Defendant cites Weisberger Co. v. Barberton Sav. Bank, 84 Ohio St. 21, where under similar circumstances a depositor brought suit against a drawee bank, and the decision was for the bank on the theory that as between two innocent parties, the one whose negligence first made the injury possible must suffer the loss. But we do not think that principle applicable in a case like this where the suit is based on the defendant’s liability by reason of its warranty of title to the check under the Negotiable Instruments Act.

We do not think defendant can be relieved from its statutory liability simply because as between the drawer and drawee of the check the latter might raise such a question.

Moreover, we think, irrespective of whether the plaintiff bank was liable to the payee of the check in assumpsit (which we do not think it necessary to decide), it was liable to him in tort for the conversion of the check, and plaintiff was, therefore, clearly entitled to recover from defendant in the action. Bentley, Murray & Co. v. LaSalle St. Trust & Savings Bank, 197 Ill. App. 322; Hassell v. Stale Bank of West Pullman, 210 Ill. App. 373; Rauch v. Fort Dearborn Nat. Bank, 223 Ill. 507.

Affirmed.

Mr. Justices Barnes and G-ridley concur.


text:
    Montgomery Ward & Company, Appellee, v. John Roeder et al., on appeal of J. Segal, Appellant.
    Gen. No. 25,074.
    1. Appeal and ebbob, § 482

      —necessity for propositions of law. Where no propositions of law are submitted to the trial court, the Appellate Court may not ascertain from the record the theory on which the case was decided.
    2. Sales, § 218*—when question for jury whether purchaser had notice of nature of seller's title. On replevin to recover possession of a piano sold to defendant by one who purchased of plaintiff under an agreement for the payment of monthly instalments, the question whether defendant purchased without notice of plaintiff’s rights, held, under the evidence, to be a question of fact.
    3. Replevin, § 41*—when demand unnecessary. Demand is not prerequisite to bringing an action of replevin against one claiming the property as a purchaser from the one to whom plaintiff had delivered the property with an option to purchase, where defendant was not an innocent purchaser for value without notice.
    4. Bailment, § 4*~—iohen holder of goods under option to purchase is a mere bailee. Semble, that one who orders goods of another with the provision that he shall not be under obligation to keep them, unless he is perfectly satisfied at the end of 30 days’ trial and that if he decides to buy at the end of 30 days’ trial specified payments will be made, is a mere bailee of the goods with an option to purchase on the terms stated.
    5. Sales, § 181*—effect of sale by holder of goods under option to purchase. One who receives goods from the owner as a mere bailee with an option to purchase upon certain terms and conditions stated in the written order given by him for the goods acquires no title where he never elects his option and consequently can convey no title to a third person, even though the latter be a purchaser for value without notice.
    6. Sales, § 180*—application of Uniform Sales Act in determining transfer of title. Where one orders goods of another with a provision in such written order that he shall not be under obligation to keep them unless he is perfectly satisfied at the end of 30 days’ trial, no time being fixed in the instrument for the return of the goods, such agreement is controlled by section 18 of the Uniform Sales Act [Call. 1916 Stat. ][ 10021(21)] and by the second part of the third rule for ascertaining the intent of the parties [Call. 1916 Stat. 1i 10021(22)].
    Appeal from the Municipal Court of Chicago; the Hon. Edmund K. Jarecki, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed March 9, 1920.
    B. M. Shaffner, for appellant.
    Winston, Strawn & Shaw, for appellee; John C. Slade, W. H. Chadwick and Raymond Southworth, of counsel.

      See Illinois Notes Digest, Vola. XI to XV, and Cumulative Quarterly, saint-topic and section number.

   Mr. Presiding Justice Matchett

delivered the opinion of the court.

The plaintiff below brought suit in replevin to recover posession of one oak player piano, No. 23,624. The affidavit alleged that this piano player' was wrongfully taken and held by the defendants John Boeder and J. Segal. The piano player was taken from the possession of appellant Segal on the writ, and turned over to the plaintiff.

Boeder was served but did not appear or defend. The case was tried by the court without a jury, and the court found the right of possession in the plaintiff, and damag-es for detention at the sum of one cent, for which amount judgment was entered. This appeal followed.

On March 25, 1918, the defendant J. Boeder gave to Montgomery Ward & Company the following order: ,

“5310 418

“Montgomery Ward & Co. Chicago Chicago Avenue Bridge Satisfaction guaranteed or your money back New York Chicago Kansas City Fort Worth Portland

Try Our Piano 30 Days Before Sending Any Money

Please fill in all blank spaces on red lines

(Date) 3, 25, 1918.

Montgomery Ward & Co., Chicago.

“You may ship me the piano described below, freight paid by you, without obligation on my part to keep it unless I am perfectly satisfied at the end of 30 days’ trial.

“If, at the end of 30 days’ trial, I decide to buy the piano, I will send you the amount of the freight charges you paid to ship the piano to me, together with a first payment of $50.00, and I will pay you $10.00 on the 5 day of each month following until the piano is paid for, when you are to give me a receipt showing that it is my property.

“If, at the end of 30 days’ trial I decide that the piano is not satisfactory, I will notify you to send me shipping directions for returning the piano at your expense.

Wood desired

Number in Name of Walnut-Ma- Price of Catalogue Piano Selected hogany Oak Piano selected 267V6053 Windsor player Quartered Oak $469.00

If you are under legal age Sign

Please have your father or Here John Boeder G. E. some other responsible person 8519 Janssen Ave. guarantee the payments by signing under your signature.

B. B. Co. Post Office Chicago Belmont Station

I have lived here since B. F. D. No. State Ill. One year Box Street - and No. 3519

My occupation or Janssen Ave. business is Shipping Manufacturer Point County

Beferenees Name Address Business or Occupation M. Bosenthal 170 W. South Water Commissioner

Burbo King 6135 Vernon Ave Manufacturer

Nam:es Given as References Should Be of Banks or Business Houses.

“Montgomery Ward & Co.’s business has been built on a policy of entire satisfaction to the customer or money back without argument, and refund of transportation charges both ways.

‘ ‘ Our written Piano Guarantee- sent each purchaser provides absolute protection against defects in material and workmanship for twenty-five years.

(Stamped on face of order was this acceptance.)

O. K. to ship

Time Payment Division.

Received

Mar. 25, 1918

T. P. DIV.

We Guarantee to Satisfy ob Return Money.”

On April 10, 1918, thereafter, Montgomery Ward & Company directed that the piano player should be shipped to Boeder by the Chicago, Milwaukee & St. Paul -railroad, and to the address named in the order. It was received by him on April 20, 1918, and placed in a warehouse. The bill of lading was made out in his name. Later, he removed the instrument to a flat in which he resided at 3723 Waveland avenue. On the 12th of June thereafter, Boeder sold the instrument to appellant Jacob Segal for the sum of $100. $92 of this amount was paid by his check on that date, and $8.00 in cash upon Boeder’s request that he give bim currency to that amount. Thereupon Boeder gave to Segal the following receipt:

“June, 12, 1918.

“Received of Jacob 'Sargal, 924 South Halsted street, One hundred dollars for a Windsor, #23,624. Paid in full.

(signed) John Boeder.”

Defendant Segal at that time conducted a music store at 924 South Halsted street, under the name of “J. Segal Co., not inc.” His business card further stated "Music Store, Musical Instruments of every description, Phonographs and Pianos, Repairing of all Musical Instruments. 924 S. Halsted St. Music Furnished for all occasions, Chicago. ’ ’

He lived at 1608 South Sawyer avenue. His evidence, which is the only testimony in the record as to the circumstances of the sale, is to the effect that he knew Boeder through a society to which they both belonged; that Boeder called him up and asked if he wanted to buy a player piano; that his, Segal’s wife, did not play the piano, and wanted a player piano. “He showed me a paper from the factory; said he was making hardware for pianos; that the government was after him for being a German spy; and was down and out, and wanted to sell the piano. Didn’t understand much about the player piano; took my sister-in-law to test it; then he showed me a bill of sale from the factory. I took the number of the piano and went to the county recorder’s office downstairs, and we looked over five or six books, and could not find that John Boeder liad any mortgage on a piano; examined the record and found no mortgage. Told him I would let him know; next day I went over and told him what the piano was worth to me; paid him $100 in cash and $10 for moving the piano.”

The evidence shows that after signing the order of March 25, Boeder at no time communicated with Montgomery Ward & Company. He made no payment upon the contract. Neither before nor after the expiration of the 30 days’ trial did he notify the company he had decided to buy the piano or that it was not satisfactory. He did not at any time request shipping directions for returning it. The evidence shows that as secondhand goods the piano was worth about $300.

No propositions of law were submitted to the trial court and we are not able to determine from the record on what theory the trial court decided the case. Overland Motor Co. v. Tennant, 195 Ill. App. 6.

It is the contention of the appellant that the contract in evidence indicates a conditional sale; that appellant 'Segal was an innocent purchaser for value without notice of plaintiff’s right, and that plaintiff could, therefore, not maintain his suit without a previous demand. Ohio & M. Ry. Co. v. Noe, 77 Ill. 513; and could not, even if a demand had been made, sustain the suit. Lyon & Healy v. Walldren, 201 Ill. App. 609; Gilbert v. National Cash Register Co., 176 Ill. 288.

We think, under the facts in this record, the question of whether appellant should be held to be a purchaser without notice of plaintiff’s rights is a- question of fact which, on the record, it must be presumed the court ’found against appellant. Appellant does not argue that the finding is against the weight of the evidence, but, on the contrary, contends that appellant was an innocent purchaser for value without notice, as a matter of law. We do not so view the record. If appellant was not such purchaser, then clearly the finding and judgment of the court were right, and no demand before bringing suit would be necessary. Schwamb Lumber Co. v. Schaar, 94 Ill. App. 544; Taylor v. Welsh, 138 Ill. App. 190.

Moreover, we are inclined to. think that there is merit to the contention of appellee that by the terms of the written order of Boeder, he, Boeder, was a mere bailee of the piano player with an option to purchase upon the terms and conditions stated therein. If so, no title passed to Boeder because he never elected to exercise his option, and having no title himself, he would not be able to convey a title, even to a purchaser in good faith and for value. There are authorities which sustain this view. Hunt v. Wyman, 100 Mass. 198; Colton v. Wise, 7 Ill. App. 395; Bauman Loan Co. v. Hatowsky, 107 Ill. App. 181; Hatowski v. Cassriel, 153 Ill. App. 239. As was said in Hunt v. Wyman, supra:

“An option to purchase if he liked is essentially different from an option to return a purchase if he should not like. In one ease the title will not pass until the option is determined; in the other, the property passes at once, subject to the right to rescind and return.”

It is not easy to collect from the decisions any general rule which will distinguish a contract of sale from one of bailment. See Williston on Sales, sec. 338. We think the Uniform Sales Act, which was in force in Illinois at the time of this transaction, states the law which must be held applicable thereto. By section 18 thereof, Hurd’s Rev. St. 1917, p. 2601 [Call. 1916 Stat. ¶ 10021(21)], it is provided: “Where there is a contract to sell specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.” And by the second part of rule No. 3 [Call. 1916 Stat. ¶ 10021(22)] for ascertaining the intention of the parties “unless a different intention appears,” it is provided: “When goods are delivered to the buyer on approval or on trial or on satisfaction or other similar terms, the property therein passes to the buyer (a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction: (b) if he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable' time. What is a reasonable time is a question of fact.” Here no time was fixed for the return of the goods.

It would therefore appear that the ultimate question on this phase of the case was also one of fact, which has been decided adversely to appellant by the trial court. On neither point does the appellant argue that the finding of the court is against the manifest weight of the evidence. It follows that the judgment must be affirmed.

Affirmed.

Mr. Justices Babetes and G-ridley concur.


author: Mr. Justice Barnes

text:
    James F. Bishop, Administrator, Defendant in Error, v. Chicago, Milwaukee & St. Paul Railway Company, Plaintiff in Error.
    Gen. No. 24,924.
    1. Workmen’s Compensation Act, § 5

      —what plaintiff must prove to maintain action at lañó. In an action against a master to recover for the death of a servant which is predicated on defendant’s election not to avail itself of the provisions of the Workmen’s Compensation Act, to establish a cause of action plaintiff' must prove that defendant gave notice of its election to its employees personally or by posting such notice as the Workmen’s Compensation Act requires.
    2. Commerce, § 2*—when engagement in interstate not shown in action under Federal Employers’ Liability Act. A cause of action under the Federal Employers’ Liability Act for the death of a car repairer caused by the falling over of the car on which he was working, which car belonged to another company owned and controlled by defendant, is not established by evidence which, while showing that the last commercial service in which the car was engaged before the accident and the first after the accident was in interstate commerce, does not disclose that during the interval between the two hauls or while it was thus undergoing repair it was designed or intended to be next used in interstate commerce or in any special service, but does tend to show that it might have been used in either interstate or intrastate commerce.
    3. Commerce, § 2*—what must be proved to show relation of car repairing to interstate Commerce. To establish a cause of action under the Federal Employers’ Liability Act for the death of a car repairer, killed while repairing a car which was not, at the time, engaged in either interstate or intrastate cpmmerce but subject to use in either, there must be proof, either express or implied, that the car was being repaired for the specific purpose of being next used in interstate commerce.
    4. Master and servant, § 41*—when employee not relieved of assumption of risk by statement of foreman as to safety. The statement of a foreman to a car repairer that it is all right to use a jack to support a car on which the repairer is working cannot be construed as an order to work on the car without further precautions, where the danger of using the jack for such purpose instead of a "horse,” which was the usual means, is obvious, and consequently, such statement does not relieve the repairer of the assumption of risk of injury from the falling of the car through failure to use the horse.
    Error to the Superior Court of Cook county; the Hon. Osoab Hebel, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Reversed.
    Opinion filed March 9, 1920.
    O. W. Dynes, Carl S. Jefferson and J. M. Lorenz, for plaintiff in error; H. H. Field, of counsel.
    Scott O. Cavette, Vincent G. Gallagher, and Ernest Messner, for defendant in error.

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

   Mr. Justice Barnes

delivered the opinion of the court.

This action was brought to recover under the statute compensation for the death of one Maniooha, a car repairer in defendant’s employ who was killed in the course of his work as such repairer. He and his helper had raised one end of a car by pumping jacks, placing one on each side of the car, to enable them and defendant’s carpenter to splice one of its sills. To support the car they placed a “horse” back of one of said jacks, and a, screw jack back of the other, as another horse could not be found. The supports of the car gave way during the work of splicing while Maniocha was using a sledge hammer, it toppling to the side where the screw jack was placed and falling on deceased, thus causing his death.

The case was submitted to the jury both upon the State law and the Federal Employers’ Liability Act. The verdict was for plaintiff, and the jury made a special finding that at the time of the injury the deceased was engaged in interstate commerce.

The counts of the declaration predicated on the State law alleged that defendant elected not to avail itself of the provisions of the Workmen’s Compensation Act. This plaintiff was required to prove to sustain a cause of action under said counts. He failed, however, to prove that defendant g*ave notice of such election to its employees personally or by posting such notice as the act requires, and, therefore, failed to prove a cause of action under the State law. (Beveridge v. Illinois Fuel Co., 283 Ill. 31,17 N. C. C. A. 463.)

And we think the evidence does not sustain a cause of action under the Federal Act. While the last commercial service before the accident, and the next after it, in which the car was engaged, was in interstate commerce, the evidence does not disclose that during the interval between the two interstate hauls, or while it was thus undergoing repair, it was designed or intended to be next used in interstate commerce or in any special service. On the contrary, the evidence tends to show that it might have been used in either interstate or intrastate commerce.

The car belonged to the C. M. & Puget Sound Ry. Co., whose line extends from the Pacific coast to Mobridge, South Dakota, but at the time in question said Puget Sound Railway was owned and controlled by defendant. The car was loaded at some point in South Dakota on defendant’s tracks with wheat for shipment to Chicago, where it arrived in one of defendant’s yards October 12, 1914. It was switched to the tracks of another line to be unloaded, and was returned empty to defendant’s yards October 23, 1914, when it was placed on defendant’s repair tracks for repair. The accident happened November 2, 1914. The car was next placed in commercial service November 13, 1914, when it was loaded with lumber transferred from a disabled car that arrived from without the State destined for Milwaukee, Wisconsin. The last record of the car is that it hauled such lumber to Milwaukee, arriving there November 14, 1914.

It is undisputed that the car remained empty in defendant’s yards from October 23 until it was so loaded November 13, and that it came into the State just before withdrawal from service for repair, and went out of the State, in its next commercial service, on defendant’s tracks in an interstate haul. There is no evidence, however, that the car was used exclusively in interstate commerce or that it was being repaired specially or solely for such service. On the contrary, the evidence imports it might have been next put to use in intrastate commerce.

While the chief clerk in defendant’s car accountant’s office testified that it was the prevailing custom in 1914 to keep “a foreign car” so routed that it would reach its own track, and that the Puget Sound car was going towards its own rails when so routed to Milwaukee, he added that no distinction was made between a St. Paul car and Puget Sound car so long as it was on the St. Paul track. Corroborating this last statement defendant’s general supervisor of transportation, who in 1914 had charge of routing freight cars on its lines, including the Puget Sound Railway, testified that there was an agreement between the different railroads operating in this country whereby they used each other’s cars, but that the Puget Sound cars were “treated as our own system cars,” and when delivered to defendant’s yards, were considered as delivered “home.” In other words, a Puget Sound car was not treated as a “foreign car” but as one of defendant’s cars, and therefore subject to demands for intrastate as well as interstate commerce.

There was no proof of any design or intention or purpose to put the car into interstate commerce as soon as it was repaired, or at any particular time. The mere fact that it was so used before the repair and next put to use in such service after repair is not controlling in determining the important question whether decedent was employed in interstate commerce when injured. In the line of his duty he would have been obliged to repair any car, whatever service it was to be put into, whether interstate or intrastate. The car was not engaged in either service at the time it was being repaired, and without proof, express or implied, that it was being repaired for the specific purpose of being next used in interstate commerce,* the deceased cannot be said to have been engaged in interstate commerce when he was injured.

This is not a case where an interstate haul was interrupted by the necessity of repairs to enable it to complete its journey, like the case of Walsh v. New York, N. H. & H. R. Co., 223 U. S. 5, 6, 32, 1 N. C. C. A. 875, where the plaintiff was at the time of his injury engaged in replacing a drawbar upon’ a ear in use in interstate commerce. Nor is it a case where there was a mere suspension in the use of a car continuously employed in interstate commerce, like a dining car in the case of Johnson v. Southern Pac. Co., 196 U. S. 7. Nor a case like Northern Pac. R. Co. v. Maerkl, 198 Fed. 1, 117 C. C. A. 237, where an employee was injured while making repairs upon a refrigerator car that had been used in interstate commerce and “was intended again to be so used when repaired.” Nor like Law v. Illinois Cent. R. Co., 208 Fed. 869, 126 C. C. A. 27, where a “boiler maker’s helper” was injured while repairing a “petticoat” for a freight engine regularly employed by defendant in interstate commerce. In each of the cases referred to the controlling fact was that the instrumentality of commerce under repair or temporarily withdrawn from service, was designed or intended, when so repaired or again put in service, to be put back into interstate commerce. But here no such intent or design was disclosed. The Puget Sound car was subject to the same treatment as defendant’s cars, and, therefore, in the absence of proof of any different design or purpose, might at. any time after the repair, have been put into intrastate commerce. In the case of Minneapolis & St. L. Ry. Co. v. Winters, 242 U. S. 353, 13 N C. C. A. 1127, the plaintiff was injured while repairing an engine that was used in both interstate and intrastate commerce. In determining whether he was then engaged in interstate business, Mr. Justice Holmes said:

“An engine as such is not permanently devoted to any kind of traffic and it does not appear that this engine was destined especially to anything more definite than such business as it might be needed for. It was not interrupted in an interstate haul to be repaired to go on. It simply had finished some interstate business and had not yet begun upon any other. Its next work, so far as appears, might be interstate or confined to Iowa, as it should happen. At the moment it was not engaged in either. Its character as an instrument of commerce depended on its employment at the time not upon remote probabilities or upon accidental later events.”

If we substitute the word “car” for “engine,” and “Illinois” for “Iowa,” the quoted language is applicable to the facts at bar, for here as there the instrumentality did not appear to have been “ destined espepecially to anything more definite than such business as it might be needed for,” and “at the moment” it was not engaged in either interstate or intrastate commerce. Had it been destined for interstate commerce, as might possibly be said had the car been destined to be next routed towards the Puget Sound Railway tracks, then repairs on the car for the purpose of so routing it might be said to be so related to interstate transportation as to be practically a part of it, thus meeting the test of interstate commerce recognized in Pedersen v. Delomare, L. & W. R. Co., 229 U. S. 146, 3 N. C. C. A. 779. But the evidence not disclosing that the car was so destined, we are of the opinion that deceased was not engaged in interstate commerce at the time of the injury.

In view of this conclusion, it is unnecessary to discuss other points raised by plaintiff in error. But we might add that even if decedent could be said to have been engaged in interstate commerce at the time of the injury, we think the evidence shows that he assumed the risk of injury from the manner in which the work was conducted.

The usual way of supporting the car when thus raised for making repairs was by the use of horses. In the instant case a screw jack was used on one side instead of a horse. It is conceded that it was dangerous to work on or about the car so supported, and that there was danger that the neck of the screw jack might bend or break or otherwise cause the car to topple. All the witnesses recognized that that was an unsafe way to support the car. But defendant in error justifies decedent’s continuing to work on it under such conditions because his helper testified to the effect that their foreman told them that it was all right to use the screw jack. The foreman, on the contrary, states that he did regard it all right to use it provided the truck of the car remained under it, and that it was under the car when the screw jack was put under it, and that he expressly cautioned the repairers to keep the truck under the car. But whichever version is correct, it must be conceded that the danger of working on the car while so supported was obvious to anyone, especially experienced men in the work like decedent. Stating that it was all right to use .the screw jack, cannot be construed as an order to work on the car without further precautions of safety. The character of the evidence is not such as to bring it within the cases where a servant is ordered to work in a dangerous place under circumstances that relieve him of the assumption of risk. Nor does the evidence clearly show that any such order was given or could be implied.

It follows, therefore, that the judgment cannot be sustained either under the State law or Federal Employers’ Liability Act. It must, therefore, be reversed with a finding of fact that at the time of the injury plaintiff was not engaged in interstate commerce.

Reversed.

Mr. Presiding Justice Matchett and Mr. Justice Gridley concur.


text:
    D. L. Green, Receiver, Appellant, v. John M. O’Day, Appellee.
    Gen. No. 25,044.
    1. Appeal and error, § 1000

      —when exclusion of document not reviewable. The propriety of the court’s, ruling in excluding a document cannot be determined on appeal where the document is not preserved in the record.
    2. Banks and banking, § 35*—stockholder's liability under foreign statute. In an action by the receiver of a State bank of -Florida against a stockholder, a resident of Illinois, to recover under the Florida statutes an amount equal to the par- value of such stock, it cannot be assumed that the mere appointment of the receiver rendered defendant liable for the par value of his stock, the statute holding the stockholders “responsible equally and ratably and not one for another,” where it does not appear on what ground the receiver was appointed, - or whether the bank’s liabilities exceeded its assets, or whether the stockholders’ liability was fixed by the comptroller, or whether, if fixed, it was fixed to the full amount of the par value of their stock, or that a different construction has been given the statute by the Florida courts.
    Appeal from the Municipal Court of Chicago; the Hon. Samuel H. Trude, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Affirmed.
    Opinion filed March 9, 1920.
    Adams, Childs, Bobb & Wescott, for appellant.
    Ulysses S. Schwartz, Charles P. Schwartz and C. K. Schwartz, for appellee.

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

   Mr. Justice Barnes

delivered the opinion of the court.

This is an action by the receiver of a State Bank of the State of Florida against one of its stockholders, a resident of this State, and owner of 10 shares of its capital stock, of the par value of $100 each, to recover under the statutes of the former State an amount equal to the par value of said stock.

The case was submitted to the court without a jury, and the finding and judgment were against the plaintiff upon his own evidence, defendant offering none.

The only pleading is the second amended statement of claim, all prior pleadings having been stricken and defendant having been excused under a rule of the court from filing an affidavit of merits. Plaintiff was thus required to prove the material averments in his statement of claim and contends on this appeal that the proof adduced entitled him to judgment, which is the main question before us. He also questions the court’s ruling in excluding his offer of a certified copy of the record of a “similar case” brought by the receiver in Florida against the president of said bank but to which defendant was not a party. It is enough to say as to such ruling that as the document offered is not preserved in the record its relevancy and the propriety of the court’s ruling cannot be determined.

Plaintiff’s case consisted merely of proof of defendant’s status as a stockholder as aforesaid, a certified copy of the order of a Florida court confirming, on the motion of the State comptroller, the latter’s appointment of said receiver, and section 1, ch. 6809 of the Acts of 1915 of the State of Florida, and section 20, ch. 3864 of the laws of that State, approved June 7, 1889, which relates respectively to the comptroller’s power to take possession of a State bank and appoint a receiver, and to the liability of its stockholders.

While there were averments in the statement of claim of the matters so proven, other averments were not proven, among them:

“That the contracts, debts, and engagements of the said bank * * * are in excess of the assets thereof, plus a sum of money equal to the amount of the capital stock of said bank at its par value; that the liability of the said stockholders of said bank has been fixed by the comptroller of currency in accordance with the method prescribed by the statutes of the State of Florida, above referred to, and that the said comptroller of currency has determined that each stockholder is liable for the full amount of the par value of the stock held by him. ’ ’

It was evidently plaintiff’s theory in making such allegations that proof of such matters was essential to the right of recovery, especially when taken in connection with said section 20, which provides:

“The shareholders of every banking association organized under this act shall be held individually responsible, equally and ratably and not one for another for all contracts, debts and engagements of such association to the extent of the amount of their stock therein at the par value thereof in addition to the amount invested in such shares.”

Said section 1, eh. 6809, provides that the State comptroller may when satisfied from evidence that among other things a bank “is in an unsound condition or threatened with insolvency * * * or that its liability exceeds its assets * * * appoint a receiver to take charge of the assets and affairs of such bank, ’ ’ who is empowered by the act to do certain things “under the direction and supervision of the comptroller,” among them, to “sue for and enforce the individual liability of the stockholders. ’ ’

One of the averments in the statement of claim is that pursuant to chapter 6809, the comptroller entered an order appointing plaintiff receiver as aforesaid and authorizing him to collect from the stockholders to the full extent of the amount of their stock, and plaintiff offered in evidence a document referred to as the original order of the comptroller appointing him receiver. The order as pleaded recites as facts many of the matters alleged as such in the above-quoted unproven averments. While the court reserved its ruling as to its admissibility, it did not in fact rule thereon and was not afterwards asked to make a ruling. Accordingly the document does not appear in the bill of exceptions either as evidence or in the form it was offered. While no error is urged with respect to this matter, it suggests an effort on plaintiff’s part to prove matters he deemed material to his cause of action and makes significant the absence of any proof of them. It does not appear upon what ground the comptroller appointed the receiver or whether the bank’s liabilities exceeded its assets or whether the liability of the stockholders was fixed by the comptroller or whether if fixed they were fixed to the full amount of the par value of their stock. Regardless of any other question argued on this appeal, we think it cannot be assumed that the mere appointment of the receiver without proof of some one or more of these matters rendered defendant liable for the par value of his stock when the statute holds the stockholders “responsible equally and ratably and not one for another. ” '

Under a similar federal statute containing the same language as quoted from said section 20 and conferring similar powers upon the comptroller of the currency, it was said in United States v. Knox, 102 U. S. 422:

“In the process to be pursued to fix the amount of the separate liability of each of the shareholders, it is necessary to ascertain (1) the whole amount of the pa,r value of all the stock held by all the shareholders; (2) the amount of the deficit to be paid after exhausting all the assets of the bank; (3) then to apply the rule that each shareholder shall contribute such sum as will bear the same proportion to the whole amount of the deficit as his stock bears to the whole amount of the capital stock of the bank a.t its par value. ’ ’

In Kennedy v. Gibson, 8 Wall. (U. S.) 498, it was said that under said federal statute the receiver is the instrument of the comptroller and that:

“It is for the comptroller to decide when it is necessary to institute proceedings against the stockholders to enforce their personal liability, and whether the whole or a part, and if only a part, how much, shall be collected. These questions' are referred to his judgment and discretion, and his determination is conclusive. * * * This action on his part is indispensable whenever the personal liability of the stockholders is sought to be enforced, and must precede the institution of suit by the receiver. The fact must be distinctly averred in all such cases, and if put in issue must be proved.”

Such a fact was put in issue here and we think proof thereof in some form was necessary to maintain the action. There is nothing in the record tending to show that the comptroller took any such action, or that the Florida courts have given a different construction to the act, whose language with respect to the matters discussed is almost identical with that of the federal statutes construed as aforesaid.

The judgment will, therefore, be affirmed.

Affirmed.

Mr. Presiding Justice Matchett and Mr. Justice G-ridley concur.


text:
    Ronald F. Brunswick, Appellee, v. Herman Grossman, Appellant.
    Gen. No. 25,147.
    1. Biles and notes, § 368

      —what question not relevant to issues in action on note. Where an agreement for the sale of corporate stock contains a covenant that plaintiff, the seller, will not engage in a similar line of business to that of said company for a period of years, and defendant, in an action against him to recover on the notes given by him for the purchase price of the stock, sets .up a breach of the covenant as a defense, plaintiff’s contentions that it does not appear that the business was one which the company was licensed to do and that the agreement was void as against public policy, are not relevant to the material issues raised in the action on the note.
    2. Contracts, § 190*—when single transaction shown. A contract for the sale of corporate stock and notes given in payment of the purchase price and delivered in escrow, “subject to the conditions'” of the contract, constitute a single transaction.
    3. Bills and notes, § 327*—when implied that breach of condition should prevent payment. Where a contract for the sale of corporate stock contains a condition that the seller will abstain from engaging in a business similar to the company’s and the notes are delivered in escrow “subject to the conditions” of the contract, it is implied that if the seller engaged in such a business before the notes matured, they were not to be paid.
    4. Contracts, § 154*—when agreement not to engage in business may be set up as defense to action on note. In an action by the seller of corporate stock to recover on notes given for the purchase price thereof, where the agreement for the sale of the stock contains a condition that the seller will not engage in a similar line of business to that of the company for a period of years, defendant may set up a breach of such condition, notwithstanding the agreement was one in unnecessary restraint of trade.
    5. Contracts, § 154*—when contract not to engage in business not invalid. An agreement by one selling corporate stock to another that he will not engage in a similar line of business to that of the company for a period of 3 years is not illegal or immoral.
    Appeal from the Municipal Court of Chicago; the Hon. Wells M. Cook, Judge, presiding. Heard in the Branch Appellate Court at the March term, 1919.
    Reversed and remanded.
    Opinion filed March 9, 1920.
    Albert J. Weisberg, for appellant; Lewis, Fox & Blumberg, of counsel.
    Rosenthal, Kurz & Houlihan, for appellee.

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

   Mr. Justice Barnes

delivered the opinion of the court.

Plaintiff (appellee) filed his statement of claim predicated on defendant’s (appellant’s) failure to pay on demand his promissory note, then past due, for $1,000, payable to plaintiff’s order.

The sole question raised is whether the last amended affidavit of merits stricken by the court stated a legal defense.

It set forth an agreement between the parties for the sale by plaintiff to defendant of 200 shares of the capital stock of the B. Francis Company, a corporation, part of the consideration of which was evidenced by five promissory notes of $1,000 each, the one in question maturing 5 months from the date of the sale, each to be delivered to one Harry J. Caney in escrow “subject to the conditions” of said agreement. One of said conditions was plaintiff’s covenant not to engage in a similar line of business to that of said company for a period of 3 years.

The agreement further provides that upon the maturity of each of said notes the said Harry J. Caney shall present such note upon the date of its maturity to defendant for payment, and upon the payment thereof shall deliver the proceeds to plaintiff “unless the latter shall have been guilty of a violation of this agreement,” and that if plaintiff has not been guilty of a violation of the agreement, and the notes shall not lie paid at maturity, then said escrow holder is to deliver them to plaintiff. On certain other contingencies he was to return them to defendant.

The affidavit further set forth the nature of said company’s business and that among other violations of the agreement plaintiff had before the maturity of said note engaged in a similar line of business with said company’s customers and patrons in Chicago and vicinity. An averment to the effect that plaintiff had replevined said note from said Caney we deem unnecessary to consider.

In support of his claim that no legal defense is stated in the affidavit, appellee argues (1) that it does hot appear therein that the business referred to was one which the company was licensed to do, and (2) that the agreement is void as against public policy in not limiting the territory in which appellee agreed not to do a similar business. Neither point is relevant to the material issues raised by the affidavit. As to the first, it is enough to say that this is not a contract with or a suit against the corporation; and as to the second, that the question is not one of enforcing plaintiff’s agreement not to enter into a similar business but whether he can recover payment of the note when its payment is conditional upon his voluntary agreement not to engage in said business.

The contract and notes constitute a single transaction. The latter were delivered in escrow “subject to the conditions” of the former. One of those conditions was that plaintiff would abstain from engaging in a business similar to said company’s, and it is a fair implication from the agreement that if he did engage in such business before the notes matured they were not to be paid, and the affidavit of merits pleads a breach of the agreement in this respect.

It is immaterial that plaintiff’s agreement was one in unnecessary restraint of trade. This is not a case of enforcing that clause of the agreement. Speaking of such a contract, Chief Baron Pollock in Green v. Price, 13 Mees & W. 695, said: “It is not like a contract to do an illegal act. It is merely a covenant, which the law will not enforce, but the party may perform if he choosesThe question here is whether plaintiff having made abstentation from such business a condition of the payment of the note, and not having abstained, defendant is precluded from so pleading. We think not. It is not illegal or even immoral that plaintiff should in fact abstain from engaging in such a business. He might or not, as he chose, and hence there is nothing illegal or immoral in his agreeing that the payment of his note should be conditional on what he might lawfully choose not to do. In respect of the averment of noncompliance with a condition of payment contained in the agreement, the affidavit set up a legal defense. Hence it was error to strike it.

Reversed and remanded.

Mr. Presiding Justice Matchett and Mr. Justice (xridley concur.