text:
    John B. Gerard v. Antoine Gateau.
    1. Dissolution oe injunction—Suggestion oe damages.—Where permission to file the suggestion of damages in case of the dissolution of an injunction at a subsequent day of the same term was reserved in the decree, and the complainant raised no objection but waived the irregularity, if it was one, by subsequently entering into stipulations for the continuance of the proceedings and by finally appearing without objection and resisting the assessment of damages on the merits, it is now too late to raise any question as to the time of filing the suggestion. The fact that the suggestion was not heard and disposed of until a subsequent term is not material.
    2. Waived oe demanding odder.—-If it be true that the appeal to the Supreme Court in such case superseded the jurisdiction of the circuit court so as to require a remanding order from the former court before the latter could proceed further in the assessment of damages, the court is of opinion that the voluntary appearance of complainant in the circuit court after the decision of the appeal, without waiting for or requiring the formality of a remanding order, and litigating the matter of the assessment of damages without objection, amounted to a waiver of a remanding order and authorized the court to proceed to assess the damages.
    3. When the suggestion oe damages must be filed.—In case of a proceeding for the recovery of damages upon the dissolution of an injunction, the suggestion of damages must be filed before the final disposition of the case, that is, before the entry of the final decree. If filed at a subsequent term it comes too late, and confers no authority on the court to assess damages.
    4. Same—What damages recoverable.—The damages recoverable are limited to such as may have then accrued. Such proceeding can not apply to damages resulting from a subsequent revival of the injunction pending an appeal.
    5. Partnership—Salary.—One partner can not charge the other partners or the firm for services rendered in the business of the copartnership, unless there is an express agreement to that effect. Where partners stipulated that they should respectively, during the first five years of the co-partnership, draw no more money out of their business for their own personal use than should be absolutely necessary for the support of their families, not to exceed $100 per month, the residue of the profits to be applied to the business of the firm. Held, not an agreement for the payment of a compensation or salary, but a limitation for the period of five years upon the division of the profits. It was therefore error to award defendant damages for the loss of salary.

      6. Costs and expenses incurred, when allowable as part op the damages.—Costs and expenses, reasonable in amount, incurred for the single object of obtaining a discharge of the injunction, are allowable as part of the damages sustained by reason of the injunction. But where counsel fees and expenses are incurred in defeating the action, and the dissolution of the injunction is only incidental to that result, such fees and expenses are not allowable.
    7. Damages to business.—Damages to the defendant’s business, and a consequent loss of profits, if any such resulted from tiie injunction, are allowable as damages, “by reason of the injunction.” The court is of opinion that no damages under this specification were proved in this case, and also that there is no foundation for the claim of interest on defendant’s capital embraced in the business.
    Error to the Circuit Court of Cook county; the Hon. Thomas A. Moran, Judge, presiding.
    Opinion filed November 11, 1884.
    This was a decree in chancery, for damages assessed in pursuance of the statute, upon the dissolution of an injunction. It appears that on the first day of January, 1872, the complainant, John B. Gerard, and the defendant, Antoine Gateau, entered into a copartnership, for the purpose of manufacturing and selling zinc roofing, cornices, architectural ornaments, etc., such copartnership to continue for the term often years, the complainant to contribute $12,000 to its capital, and the defendant to contribute certain dies which he then had, valued at $3,500, and the complainant to be paid interest on the excess of his contribution, at the rate of ten per cent, per annum. It was provided in the articles of copartnership that the defendant should give his entire time and skill to the business of the firm, but that the services to he rendered by the complainant should be left to his discretion. It was further provided that, for the first five years said parties should draw no more money out of the business for their own personal use than should be absolutely necessary for the support of their families, which should not exceed $100 per month for each, the residue of the profits to be used in the prosecution of the business. Among the causes which it was provided should work a dissolution of the .copartnership, were the incapacity, embezzlement, or gross neglect or misconduct of either party.

      On the 23d day of April, 1874, the complainant filed his bill against the defendant, charging him with incapacity and mismanagement of the affairs of the copartnership, and praying for a dissolution of the copartnership, and a distribution of the copartnership assets, and for an injunction restraining the defendant “ from employing or paying any help, collecting any debts, selling, assigning or disposing of any property, or doing any business whatever for the firm.” On the same day a preliminary injunction was issued in accordance with the prayer of the bill, an injunction bond being required in the penal sum of $3,000. On the 29th day of October; 1874, the cause came on to be heard on the pleadings and proofs, and thereupon a final decree was rendered, dismissing the bill for want of equity. From this decree the complainant prayed an appeal to the Supreme Court, which was allowed on condition that he file a certain appeal bond within twenty days, and in the same order leave was granted the defendant to file, by the Monday morning following, which was during the same term of court, a suggestion of damages by reason of the injunction.
    The complainant having perfected his appeal, applied to one of the justices of the Supreme Court for an order directing that the appeal should have the effect to continue the injunction in force, which order was granted on the complainant’s filing a further injunction bond in the penal sum o 1 $4,000. At the September term, 1876, of the Supreme Court the decree appealed from was affirmed. Gerard v. Gateau, 84 Ill. 121.
    The matter of the defendant’s suggestion of damages was continued by the court from time to time, down to the date of the revival of the injunction in the Supreme Court, when an order was entered continuing the same during the time the injunction should remain in force, with leave to either party to call the same up for further action in case the in-, junction should be finally dissolved. On the 9th day of February, 1877, the matter of said suggestion of damages was re-docketed, and at the same time an amended suggestion was filed covering also the damages alleged to have accrued during the pendency of the appeal. Thereafter the matter was continued from term to term, sometimes on motion of the defendant, and sometimes by stipulation of the parties, down to July 11, 1883, when the matter was finally heard and the defendant’s damages assessed.
    At the time of said assessment of damages, both the original and amended suggestion seem to have been lost from the files, and thereupon copies of the same were substituted therefor. The items of the original suggestion are thus shown to be as follows:
    For solicitors and counsel fees in attempting to have the injunction
    dissolved,................................................. $ 750
    For defendant’s share in the profits of the business, which were lost
    by the injunction............................................. 6,000
    For the salary to which defendant was entitled during the six months immediately following the injunction, during which time
    the defendant was unable to secure work,...................... 600
    For the use of and interest on the money invested by defendant in . the business of Gerard & Gateau, and retained by plaintiff by reason of said injunction,..................................... 700
    Total charges claimed,......................................... $8,050
    The items of the amended suggestion were as follows:
    For solicitor’s fees expended by the defendant in attempting to dissolve the injunction in this cause, from April 23d to October 29,
    1874........................................................ $ 750
    Same from October 29, 1874. to January 31, 1877................. 1,500
    For defendant’s share of the profits which would have accrued to the business of Gerard & Gateau, if the injunction had not been issued and defendant had continued to manage the business, from
    April 23d to October 29, 1874,................................. 6,000
    Same from October 29, 1874, to January 31, 1877,................. 14,000
    For other expenses in obtaining a dissolution of the injunction, besides solicitor’s fees, from April 23d to October 29,1874,......... 300
    Same from October 29, 1874, to January 31, 1877,................. 500
    For defendant’s salary under the partnership agreement, of which he was deprived during the continuance of the injunction, during all of which time defendant was out of and unable to obtain employment in his line of business, from April 23d to October 29,
    1874,....................................................... 700
    Same from October 29, 1874, to January 31, 1877,................. 2,700
    For interest on defendant’s capital invested in said business from
    April 23d to October 29, 1874................................. 700
    Same from October 29, 1874, to January 31, 1877,................ 2,500
    Total damages claimed,....................................$30,000

      In the assessment ■ of damages, the court awarded to the defendant the following items, to wit:
    For solicitors and counsel fees from April 23, 1874, to October 29,
    1874........................................................ $ 509
    For loss of salary during the same time,.......................... 600
    For solicitor’s fees from October 29, 1874, to January 31, 1877,..... 800
    For loss of salary during the same time.......................... 2,700
    $4,600
    A decree was thereupon entered in favor of the defendant and against the complainant for said sum of $4,600 and costs. The allowance of each of said items 'is assigned for error by the complainant, and the defendant has filed cross-errors upon the refusal of the court, to award him the remaining items contained in the suggestions.
    Messrs. Grant & Brady, for plaintiff in error;
    that the circuit court had no jurisdiction to assess damages which accrued to defendant while the suit was pending in the Supreme Oourt, and did not, after the perfecting of the appeal, have jurisdiction for any purpose except to execute its own final decree, cited Albright v. Smith, 68 Ill. 181; Galloway v. Mayor, 3 De G. J. & S. 59; 2 High on Injunctions, § 1701.
    As to the damages which may be recovered: 2 High on Injunctions, § 1663; Collins v. Sinclair, 51 Ill. 328; Brown v. Jones, 5 Nev. 374; 2 Sutherland on Damages, 69; Bullock v. Ferguson, 30 Ala. 227; Uhrig v. St. Louis, 47 Mo. 528; Chicago City Ry. v. Howison, 86 Ill. 215.
    Where the injunction is only incidental and not the principal object of the suit wherein it is granted and counsel fees are paid generally, such fees can not be recovered, because they are not damages sustained by reason of the injunction: Boole v. Arnold, 23 Ohio, 264; Riddle v. Cheadle, 25 Ohio, 278; 2 High on Injunctions, § 1686; Wilson v. Haecker, 85 Ill. 349; Longworthy v. McKelvey, 25 Ia. 48; Disbrow v. Garcia, 52 N. Y. 654; Elder v. Sabin, 66 Ill. 126; Jevue v. Osgood, 57 Ill. 340; Alexander v. Colcord, 85 Ill. 323.
    Mr. M. Salomon, for defendant in error:
    that the order of the Supreme Oourt suspended the operation of the decree and dissolution of injunction, which, when affirmed by the Supreme Court, again became operative, cited R. S. Ch. 69, §21; R. S. Practice Act, Ch. 110, §83; Bressler v. McCune, 56 Ill. 475.
    The court had the-power to continue from term to term the hearing of evidence, to assess damages, and even to allow suggestion to be filed after decree: McWilliams v. Morgan, 70 Ill. 551; Wing v. Dodge, 80 Ill. 565.
    As to damages for loss of profits: Hotchkiss v. Platt, 8 Hun, 48; I. & St. L. R. R. & Coal Co. v. Decker, 3 Bradwell, 135; Chapman v. Kirby, 49 Ill. 212; 2 Sedgwick on the Measure of Damages, 7; Lawrence v. Hagerman, 56 Ill. 70.
    As to the allowance of interest: Corcoran v. Judson, 24 N. Y. 107; Aldrich v. Reynolds, 1 Barb. 615.
   Bailey, J.

The point is raised that the circuit court, at the time the damages were assessed, had no jurisdiction to make the assessment, because, 1, the suit had been disposed of by a final decree before the suggestion of damages was filed; and, 2, because, by the appeal, the suit was removed to the Supreme Court, and the jurisdiction of the circuit court superseded, and there was no remanding order restoring jurisdiction to that court.

It is not clearly shown when the suggestion of damages was first filed, as the original paper seems to have been lost, but enough appears to warrant the presumption that it was filed within the time limited in the order of the court. It doubtless would have been more strictly in accordance with the terms of the statute to file the suggestion before the final disposition of the case by the entry of a decree, and had the point been raised in the court below, we will not say that it might not have been the duty of the court to refuse to assess the damages. But permission to file the suggestion at a subsequent day of the same term having been reserved in the decree, and the complainant having raised no objection as to the time of filing it,- but having waived the irregularity, if it was one, by subsequently entering into stipulations, on one or more occasions, for the continuance of the proceeding and by finally appearing without objection and contesting the assessment of damages on the merits, we think it now too late to raise any question as to the time of filing the suggestion. It can scarcely be doubted that if the parties had, prior to the entry of the decree, stipulated to extend the time for filing the suggestion to some day in the term, subsequent to the decree, that a suggestion filed in pursuance of the stipulation would have entitled the defendant to an assessment of his damages. We are unable to perceive why the subsequent acts of the complainant in the course of the proceeding, as shown in this case, may not be held to have an effect equivalent to such stipulation.

The fact that the suggestion was not heard and disposed of until a subsequent term, does not seem to be material. This appears to be the view taken in Wing v. Dodge, 80 Ill. 564, where the court, in discussing the proper practice in such cases, say: “ After the dissolution of the injunction the defendant may file his suggestions at any time before the decree is filed. The filing of the decree is the final disposition of the ease in the circuit court, and the complainant could not appeal until the cause had progressed to that stage, and suggestions might be filed up to the time when the decree is filed, and if need be the court should hear and dispose of them afterward.”

Furthermore, if it be true that the appeal superseded the jurisdiction of the circuit court so as to require a remanding order before that court could proceed further in the assessment of damages—a question we do not feel called upon to decide—we are of the opinion that the voluntary appearance of the complainant in the circuit court, after the decision of the appeal, without waiting for or requiring the formality of a remanding order, and litigating the matter of the assessment of damages without objection, amounted to a waiver of a remanding order, and authorized the court to proceed to assess the damages.

It appears from the record that $3,500 of the damages assessed accrued after the final disposition of the case in the circuit court, and during the pending of the appeal, and the allowance of these damages is assigned for error.

The authority of a court of chancery to assess damages upon a dissolution of an injunction is purely statutory. The extent of the power, then, and the limitations, if any, under which it must be exercised, are to be ascertained from the statute itself. The language of the statute is as follows: “In all cases where an injunction is dissolved by any court of chancery in this State, the court, after dissolving such injunction, and before finally disposing of the suit, upon the party claiming damages by reason of such injunction suggesting, in -writing, the nature and amount thereof, shall hear evidence and assess such damages as the nature of the case may require and to equity appertain, to the party damnified by such injunction, and may award execution to collect the same.”

The plain and manifest meaning of the statute is, that the suggestion of damages must be filed before the final disposition of the case, which is held to mean, before the entry of the final decree. Albright v. Smith, 68 Ill. 181; McWilliams v. Morgan, 70 Id. 551; Wing v. Dodge, supra. If filed at a subsequent term, it comes too late, and confers no authority on the court to assess damages. Albright v. Smith, supra. The institution of the proceeding, then, being limited in point of time to a period prior to the final decree, the damages recoverable are, as a necessary consequence, limited to such as may have then accrued. Like other proceedings for the recovery of damages, it can apply to such damages only as are recoverable at the date of its institution. It can not be commenced subsequent to the decree, and so can not apply to damages resulting from a subsequent revival of the injunction pending an appeal.

Furthermore, it can not be said that damages sustained by reason of the injunction being continued in force by an appeal are the proximate result of the issuing or pendency of the injunction in the court from which the appeal is taken. A somewhat similar question arose in Mix v. Singleton, 86 Ill. 194. That was a suit upon a bond conditioned, among other things, for the payment of “ all damages caused by wrongfully suing out the injunction,” and it was held that damages sustained by reason of the injunction being kept in force by the appeal were not embraced within the condition of the bond. See also Rees v. Peltzer, 1 Bradwell, 315.

The amended suggestion, then, so far as it imported into the case a claim for damages pending the appeal, gave the court no authority to assess such damages against the complainant, because, 1, the suggestion of those damages was filed at a term subsequent to the one at which the suit was finally disposed of; and, 2, because such damages, being subsequent to the final disposition of the suit, were not such damages as could be recovered in this proceeding.

It appears that of the damages awarded the defendant $600 was “for loss of salary” during the time the bill was pending in the circuit court, and $2,700 was “for loss of salary” pending the appeal. Unless the defendant was entitled to receive a salary during the period of this litigation and was wrongfully deprived of it by the injunction, the award of damages on account of salary was erroneous. The rule is well settled that one partner can not charge the other partners or the firm for services rendered in the business of- the copartnership unless there is an express agreement to that effect. As there is an implied obligation upon every partner to exercise due diligence and skill and to devote his services and labor for the promotion of the common benefit of the concern, it follows that he must do it without any reward or compensation unless it be expressly stipulated for between the partners. Lewis v. Moffett, 11 Ill. 392; Roach v. Perry, 16 Id. 37; King v. Hamilton, Id. 190; Story on Part. §§ 182-185; Pars, on Part. 229, and authorities there cited.

In this case the defendant expressly stipulated in the articles of copartnership to devote his entire time, skill and attention to the prosecution of the firm business, but there was no agreement for the payment to him of any compensation or salary therefor. The only stipulation upon which he relies in his claim for salary is one which provided that said partners should respectively, during the first five years of the copartnership, draw no more money out of their business for their own personal use than should be absolutely necessary for the support of their families, which should not exceed the sum of $100 per month for each, the residue of the profits to be applied to the business of the firm. This is in no sense an agreement for the payment of a compensation or salary to the defendant. The money was not to be drawn as compensation but as a division between the partners, fro tanto, of the partnership assets. The provision constituted a mere limitation upon the amount which the partners should respectively be at liberty to draw out of the partnership funds for their private use, or, in other words, a limitation for the period of five years upon their division of the profits. It follows that the allowance of damages for loss of salary was wholly unwarranted.

We are of the opinion that the amount of damages awarded the defendant on account of solicitor and counsel fees, is unsupported by the evidence. The main scope and object of the bill was to obtain a dissolution of the copartnership and a distribution of the copartnership assets, and the injunction restraining the defendant during the litigation from interfering in the copartnership affairs was merely incidental. There is considerable evidence of services by solicitors and counsel while the case was "pending in the Supreme Court, directed specifically to getting rid of the injunction or to obtaining some modification of its terms,, but as we have already held that damages resulting from the injunction being continued in force by the appeal were not proper matters for consideration in the assessment of damages-in the circuit court, it will be unnecessary for us to consider the evidence on that subject. It appears, however, that immediately after the injunction was first awarded by the circuit court, the defendant retained a solicitor and counsel to appear and defend the bill, who, after investigating the case, prepared an answer, and also drew a number of affidavits to be used on a motion for a dissolution of the injunction, and the evidence tends to show that he afterward made and argued such motion, basing the same upon said answer and affidavits and that the motion was overruled. Before performing further services, said solicitor and counsel withdrew from the case,. having charged his client $150 for all the services he had rendered. There is no evidence that any subsequent motion to dissolve the injunction was made while the case was pending in the circuit court, or any further services rendered having a specific reference to the injunction. The case was heard on pleadings and proofs, and a final decree rendered dismissing the bill for want of equity, which decree operated as a dissolution of the injunction. The damages awarded on account of solicitor and counsel fees for services rendered in the circuit court, were $500.

The rule undoubtedly is that costs and expenses, reasonable in amount, incurred for the single object of obtaining a discharge of the injunction, are allowable as part of the damages sustained by reason of the injunction. But where counsel fees and expenses are incurred in defeating the action, and the dissolution of the injunction is only incidental to that result, such fees and expenses are not allowable. 2 Sutherland on Dam. 65, 68.

This rule has been repeatedly laid down and enforced in this State. Thus in Jevne v. Osgood, 57 Ill. 340, it is said: “The design of the statute is not that the defendant shall, where the injunction is dissolved, recover his attorney’s fees for all that has been or may be done in the case. To give the statute such an unreasonable construction, would render it an instrument of great oppression. It was intended to reimburse the defendant for money which he paid, or for which he has become liable on the motion to dissolve." Again, in Elder v. Sabin, 66 Ill. 126, it is said: “The statute only allows the assessment of damages sustained by reason of improperly suing out the injunction, and the damages must be confined alone to that ground. The charge of lawyer’s fees could only extend'ft? the motion to dissolve the injunction.” To same effect are Blair v. Reading, 99 Ill. 600; Darst v. Gale, 83 Id. 136; Wilson v. Haecker, 85 Id. 349; Noble v. Arnold, 23 Ohio St. 264; Langworthy v. McKelvey, 25 Iowa, 48; Hovey v. Rubber-tip Pencil Co. 50 N. Y. 335; Disbrow v. Garcia, 52 Id. 654.

So much of the $150 charged by the counsel who prepared, made and argued the motion to dissolve the injunction as properly appertained to that motion, was doubtless allowable as damages, but beyond that we find no evidence warranting any allowance for counsel fees. So far as appears, all other services were rendered in endeavoring to defeat the suit, and would have been just as necessary if there had been no injunction.

The defendant has assigned for error, the refusal of the court to award him damages under the remaining items of his suggestion. The most important of these items is, for defendant’s share of the profits of the firm business, which would have accrued if the injunction had not been issued, and the defendant had continued to have charge of the business. Damages to the defendant’s business and a consequent loss of profits, if any such resulted from the injunction, are, we think, allowable as damages “by reason of the injunction.” But we are not satisfied that any such damages have been shoxvn. The effect of the injunction was to withdraxv the defendant from the management of the firm business, but the evidence is very conflicting as to whether that produced a depressing or salutary effect upon the business. There is very considerable evidence tending to show that the defendant was lacking in the qualifications necessary for the successful management of the copartnership affairs, and that the manager who was placed in charge of the business after the injunction was issued, was, to say the least, quite as competent to manage it successfully and profitably as the defendant.

Much reliance is placed by the defendant, so far as this question is concerned, upon the evidence tending to show that during the time he managed the business it yielded large profits, but that afterward the profits were greatly diminished. This state of things, hoxvever, seems to be explained by evidence tending to shoxv that, at about the time the injunction was issued, the general condition of the market for the class of products manufactured by the defendant’s firm had so changed and become so depressed as to make it difficult, by any management, to realize any profits from the business, and that as a result most of the other firms then engaged in the same business in Chicago became insolvent. Tiie court below seems to have reached the conclusion, in view of all the evidence, that no damages under this specification were proved, and we are inclined to the opinion that such conclusion was warranted by the evidence.

The only remaining item of damages claimed, is for interest on the defendant’s capital invested in the business. We see no foundation for this claim. There was no agreement between the copartners for the payment of interest to the defendant on his capital, the only agreement as to interest being to pay interest to the complainant on that portion of his contribution to the firm, which was in excess of the amount contributed by the defendant. But even if there had been such agreement, there is no reason for holding that such interest was lost by means of the injunction. The defendant’s claim for interest would remain a valid claim against the firm tobe allowed the defendant on the final accounting between the copartners at the dissolution of «the firm.

The cross-errors will be overruled and the errors assigned by the complainant sustained to the extent above indicated, and the decree will therefore be reversed and the cause remanded for further proceedings.

Decree reversed.


source: Caselaw Access Project

author: Bailey, J.

license: Public Domain

text:
    Richard T. Race v. Albert F. Chandler.
    1. Trover.—A conversion is a positive tortious act. Mere non-feasance, or neglect of some legal duty, will not suffice to support trover, although it may constitute a sufficient ground to maintain an action on the case.
    2. Conversion.—Where certain notes were delivered by plaintiff to defendant for him to collect or negotiate for plaintiff, and there was no restriction as to the mode in which it should be done. Held, that defendant must he deemed to have had authority, by implication, to make use of such instrumentalities and to adopt such mode as in the ordinary course of business were usually employed for such purpose, and the mere fact that the notes were left with defendant’s brother, in Aurora, can not be held to constitute a conversion, especially in view of the fact that the notes were secured by deeds of trust, and the evidence tends to show the brother was the trustee.
    8. Demand and refusal.—A demand and refusal do not of themselves constitute a conversion, but are only presumptive evidence of a conversion, capable of being rebutted by proof of any facts which constitute a legal justification or excuse for non-delivery.
    4. What the refusal must be—When inferred .—The refusal must be absolute, amounting- to a denial of the plaintiff’s title to the possession, and not'a mere excuse or apology for not delivering- the goods; but it need not be expressed—it may be inferred from non-compliance with a proper demand. Where defendant, upon demand, agreed to return plaintiff’s notes the next day, but was delayed by the serious illness of his father for three days, and then, not finding them at home, was obliged to go to Aurora to get them from his brother. Held, that any inference of a refusal to be derived from defendant’s delay in compliance with, the demand, is fully rebutted by the circumstances of the case.
    5. Breach of contract—Trover.—That which begins in contract, a non-performance of what the party so undertakes to do, or a hare non-delivery of what he undertakes to deliver, is not to be considered as of itself amounting to a tortious conversion. »
    Error to the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed November 11, 1884.
    This was an action of trover, brought by Albert F. Chandler against Richard T. Race, to recover damages for the conversion of three promissory notes, one for $1,410, dated May 19, 1876, and the other two for $200 each, dated August 2, 1876, all bearing interest at the rate of eight per cent, per annum. At the trial, without a jury, the court found the defendant guilty, and assessed the plaintiff’s damages at $1,810, the face of the notes, without interest.
    These notes originally belonged to the defendant and were drawn payable to his order, but were assigned and transferred by him to the plaintiff, together with certain deeds of trust securing the same, shortly after tlieir execution, in payment for. a bill of merchandise. Afterward, on the 16th day of August, 1877, the plaintiff delivered them hack to the defendant and took from him a receipt, acknowledging that he had received them from the plaintiff “ for collection, or transfer for his benefit.” Said notes were never collected or transferred by the defendant but were in his possession at the time of the commencement of the suit, and the principal question in the case was whether the evidence established a conversion.
    The only witnesses who testified were the plaintiff, the defendant and the plaintiff’s attorney. The plaintiff’s testimony on this point was as follows:
    “ I met the defendant in Coldwater and called on him for the notes; I think it was some time in 1879; he was there looking at some of his property and I told him I wanted to get this matter in line. He told me he thought he could make some disposition of them, and I told him I wished he would, because I would like to see it closed up, and lie said he would do it and let me know. He didn’t write to me and I heard nothing from him. The next time I met him in Chicago and he told me not to go to any expense, that he would get it foreclosed and give me a title, and I told him to do so if he would, and 1 would pay any expense he was put to. I met him next in October, 1882, in a building on Clark street, and spoke to him about it and told him that I wanted to get this in line. I says, ‘I have employed an attorney—Mr. Sprague.’ ‘Well,’ says he, ‘I will bring those papers to Mr. Sprague.’ I says, ‘ I wish you would, I have been here a long time now, trying to get this matter in line and I would like to have it drawn up to a focus and find out whether I have got anything there or not,’ and he said he would do so at once. The next time I said anything to him about it was February 26,1883. I was here four'days before I found him. ‘ Why, yes,’ he says, 11 will bring those papers down.’ I says, ‘ How go right over to my attorney with me and we will fix it up with him, as I want to go away and I can’t foreclose this trust deed without those notes,’ and he agreed to deliver the trust deed and notes the next morning at ten o’clock. He said he thought it was in his brother’s name but he could not tell then. In the presence of my attorney Mr. Hace said certainly, that the notes should be delivered there, and I might just as well have a title to that property as not, and he would attend to it the next morning at ten o’clock. I says, ‘Mr. Race, I have been here a good many days and I would like to have these papers brought up so my attorney can take charge of it’ and he says, ‘ They will be here.’ ”
    Sprague, the plaintiff’s attorney, testified: “About the 9th of October the plaintiff called at my office and gave me this receipt with an order on it for the notes, but Mr. Race did not come around. I waited some time and notified him by letter that I had the matter in charge, and requested him to call and see me; but I didn’t see him, so I notified Mr. Chandler and he came to my office on the 26th of February, 1883, in company with Mr. Race. He introduced Mr. Race to me and told me he had brought him there for the purpose of having me see him. He said to Mr. Race, in my presence, 1 Mow, Mr. Race I demand of you those notes referred to in that receipt. I want you to deliver those notes to me or to Mr. Sprague, my attorney here. I want him to take action in the matter as I have been delayed long enough.’ Mr. Race stated then and there, in substance, that he would surely bring up the notes and deliver them to me the next morning. I asked him who was the trustee named in the trust deed, and he says,
    1 It is either I or my brother, I am not certain which.’ ‘ What is your brother’s name?’ I asked, and he said ‘A. S. Race.’ Mr. Race did not call on me on the 27th nor the 2Sth, and I waited until the 3d of March, and not hearing from him I brought this suit. On the 5 th of March he came into my office and brought with him what purported to be the notes in question, and offered them to me but I declined to receive them. I told him that I had commenced suit and could not accept them, at least until I had heard from my client. He went away, however, leaving the notes upon my table, and I took them after he went away and put them into my drawer. Later in the day he called with his attorney to talk with me in regard to the notes, and I said, ‘Here are your notes; you can have them,’ and after some conversation he took them away. I told him in that conversation that I should have to insist upon our rights, as he had not brought them around as he agreed to and I had brought this suit.”

      The defendant testified as follows: “Iremember going to Mr. Sprague’s office with Mr. Chandler on the 26th of February, 1883. Just before I went there Mr. Chandler called "on me in reference to those notes, saying that he had made up his mind to have "his attorney foreclose, and asked for the notes. I said I hadn’t them there; I thought they were out at my house at Irving Park. I said I would get them and bring them in. lie asked me if I could get them that afternoon, and I said yes, we would go out on the 3:30 train, and he could return in about an hour afterward, and I could give them to him. He made an a¡opointment to meet me at three o’clock, which he did, and we started, as I supposed, for Irving Park to get the notes; and as we started he says, ‘Let us walk up La Salle street here and call on my attorney, Mr. Sprague, as I want to get some facts with reference to the lots and the foreclosure, and would like to have you meet him.’ I called up there with him. and he introduced me to Mr. Sprague, and while there he says, ‘It will not be necessary for me to go out with yon; you may go out and get them and bring them in.’ Isays, ‘Certainly, I will bring them in,’ and I told him that I would have them here the next day if I could. That was the conversation in substance. Ho demand was made more than they asked me to bring them in the next day from Irving Park. The word demand was not used. lie never asked me for them before. He talked once or twice of having the lots foreclosed. I expected to return the next morning, and I thought I would bring them. "When I arrived home that night I found my father dangerously ill, and the doctor there at the bedside. He had a congestive chill. We were up with him all that night, and attending to him all the next day and the next three or four days—myself and family and father’s brother—and for days we didn’t think he would live from hour to hour, but he recovered, and I think in about three or four days I came in. During that time of excitement I did not think to look for the notes; and then on the morning I came in, just before I got ready to start, I supposed I could put my hand on the notes, but I didn’t find them. I remembered, in the meantime, that I was out to Aurora where I had a store for two years, and left them there with my brother, and I thought probably they might be there among his papers. I went and found them there and brought them that morning on the first train I could, and tendered them, or gave them to Mr. Sprague, and he says, 11 don’t want them; ’ and 1 says, ‘Why, Mr. Chandler wanted me to leave them here you know;’ and he says, ‘ I have commenced suit on them;’ and I says, ‘That is a funny proceeding; ’ and I asked him what he meant by it, and he referred me to my own attorney. I left the notes on his desk, but he refused to take them. At that time I had 'not the slightest idea that he had commenced suit against me.”
    The foregoing is all the evidence in the record tending to prove a conversion of the notes in question by the defendant.
    Mr. David S. Pride, for plaintiff in error;
    as to conversion, cited 2 Greenleaf on Ev., 9th Ed., §§ 636, 642, 644; Manny v. Burley, 10 Johnson, 175; Bristol v. Burt, 7 John. 254; Addison on Torts, 4th Eng. Ed. 398.
    Mr. Levi Sprague, for defendant in error;
    as to evidence of a conversion, cited Durell v. Mosher, 8 Johnson, 347; Jones v. Sinclair, 2 N. H. 319; 3 Starkie on Ev., 1501; 1 Chitty on Pleading, 181, 184.
    As to demand: Cooley on Torts, 453; 1 Chitty on Pleading, 176; 6 "Wait’s Actions and Defenses, 174.
   Bailey, J.

We have carefully considered the evidence in this case, and are of the opinion that it fails to establish the conversion by the defendant of the promissory notes in question. “ A conversion,” says Mr. Greenleaf, “ in the sense of the law of trover, consists either in the appropriation of the thing to the party’s own use and beneficial enjoyment, or in its destruction, or in exercising dominion over it in exclusion or defiance of the plaintiff’s right, or in withholding the possession from the plaintiff under a claim of title inconsistent with liis own.” 2 Greenl. on Ev., § 642. And as said by the Supreme Court, a conversion is a positive tortious act. Mere non-feasance, or neglect of some legal duty, will not suffice to support trover, although it may constitute a sufficient ground to maintain an action on the case.” Sturges v. Keith, 57 Ill. 451.

We find no evidence tending to show an actual conversion. The defendant’s possession of the notes was originally rightful. They were put into his hands by the plaintiff to be bv him collected or negotiated for the plaintiff’s benefit, and nothing had occurred to change the character of his possession up to the time of the demand claimed to have been made in the office of the plaintiff’s attorney a few days before the commencement of the suit. It is not pretended that he ever appropriated them to his own use or destroyed them, and whether he performed his legal duty as bailee in endeavoring to collect or negotiate the note is immaterial, as no failure in that respect would lay any foundation for a recovery in this form of action.

It is said, however, that his leaving the notes with his brother at Aurora -was of itself a conversion. Cases are doubtless to be found which hold that a bailee of goods who delivers them to another, without authority, is guilty of a conversion. But it is to be observed that the circumstances under which the notes were left at Aurora are not shown, but only the mere fact that they were left there. Before such fact, then, can be held to constitute a conversion, it must appear that, by the contract of bailment, the defendant had no authority to place the notes in his brother’s custody under any circumstances or for any purpose. We are disinclined to adopt so restricted a construction of his authority. He was emplojmd to collect or negotiate the notes without any restriction as to the mode in which that should be done, and he must, therefore, be deemed to have had authority, by implication, to make use of such instrumentalities and to adopt such mode as, in the ordinary course of business, were usually employed for such purpose.

But it further appears that the notes were secured by deeds of trust, and the evidence tends to show that the defendant’s brother was the trustee. Hot only did the defendant’s authority to collect carry with it by implication the power to foreclose the security, but the defendant was afterward expressly directed by the plaintiff to procure such foreclosure. In order to foreclose the deeds of trust, it was not only proper but necessary for the defendant to place both the deeds of trust and notes in the hands of the trustee.

The question remains whether a conversion is shown by evidence of a demand and a refusal. A demand and refusal do not of themselves constitute a conversion, but are only evidence of a prior conversion. And it is well settled that they are only presumptive evidence, capable of being rebutted by proof of any facts which constitute a legal justification or excuse for non-delivery. Thompson v. Rose, 16 Conn. 71; Dietus v. Fuss, 8 Md. 148; Edwards v. Hooper, 11 Mees. & Wels. 363; Huxley v. Hartzell, 44 Mo. 370; Lockwood v. Bull, 1 Cow. 322; 2 Greenl. on Ev., § 644. In Lockwood v. Bull, supra, it is said: “A demand and non-compliance are prima facie evidence of a conversion, and will induce a jury to find it, unless the defendant adduces evidence to negative the presumption. But it is competent for the defendant to give in evidence everything which tends to prove that there was no conversion.”

Tiie evidence shows that the plaintiff demanded the notes in question of the defendant, but there is no evidence of a refusal by the defendant, or of any act or omission on his part which, in our opinion, is tantamount to a refusal. The notes were not present and so were not susceptible of immediate delivery. The defendant, instead of refusing to comply with the demand, assented to it, and proposed to bring the notes in from his residence at Irving Park the following day, and his proposal was assented to by the plaintiff. If it had appeared that this proposal of the defendant was made in bad faith and with no intention to perform, such conduct might perhaps have been held to be tantamount to a refusal; but the evidence is directly the other way.

There can be no doubt from the evidence that the defendant fully intended at the time of his interview with the plaintiff to bring in the notes the following day and deliver them to the plaintiff’s attorney, but on reaching his home he found that his father had been suddenly taken ill, and that his illness was of such a character as to require the defendant’s presence at his bedside night and day for a number of days. That anxiety on account of his father’s illness should for the time being drive from his mind all thought of the notes was not unnatural, nor does it furnish evidence of bad faith, or of an intention to commit a tort. It can hardly be said that, under the circumstances, it was his duty to leave his father’s bedside, where his attendance was imperatively required, and make a journey to Chicago to deliver the notes, in order to escape the imputation of having tortiously converted them to his own use. As soon as his father’s health admitted of his absence, he looked for the notes at his house, but failing to find them there he concluded that he must have left them at Aurora, where he himself had a store for two years, and where his brother was then living. ITe immediately went to Aurora and' found the notes and returned by the first train to Chicago and offered to deliver them to the plain tiff’s attorney. That was the seventh day after the demand, and two days after the commencement of the suit.

Mr. Greenleaf, in the section of his treatise on the law of evidence last above cited, says: “The refusal must be absolute, amounting to a denial of the plaintiff’s title to the possession, and not a mere excuse or apology for not delivering the goods at present; but it need not be expressed; it may be inferred from non-compliance with a proper demand.” Here any inference of a refusal, to be derived from the defendant’s delay in his compliance with the demand, is, we think, fully rebutted by the circumstances of the case.

But it is said that the defendant agreed to deliver the notes on the day following the demand, and that his failure to do so amounted to a refusal. It should be observed that this is not a suit to enforce a contract, or to recover damages for its breach. The action of trover can not rest upon a mere breach of contract. As said by Lord Ellenborough in Severin v. Keppel, 4 Esp. 156, “ That which begins in contract, a nonperformance of what the party so undertakes to do, or a bare non-delivery of what he undertakes to deliver, is not to be considered as of itself amounting to a tortious conversion.” Doubtless the defendant’s agreement to deliver the following day should be considered as a circumstance among all the others shown by the evidence, as bearing upon the effect to be given to his delay in complying with the demand. But we are satisfied, when that as well as all the other circumstances are considered, that there was. no such unreasonable delay as amounted in law to a refusal, and therefore, that no conversion of the notes is shown.

The finding of the court being unsupported by the evidence, the judgment will he reversed and the cause remanded.

Judgment reversed.


author: McAllister, J.

text:
    Max Eberhardt et al. v. The Pennsylvania Company.
    1. Chabceby jubisdiction—Justices’ coubts.—The court of chancery possesses no legal supremacy over .justices’ courts, and can award no writs in the nature of a writ of prohibition upon the actions of such courts. When a case is made, calling for the exercise of its equitable jurisdiction, the court of chancery may enjoin the action of the party to a suit at law, but not the court.
    2. GrBOUBt) BOB ItJTEBPEBENCE OP EQUITY COUBT.—Where the ground alleged in a bill to enjoin the justice and the party to the suit was that appellee had not been paid or tendered its statutory fee and mileage ($1.10) upon the service of the original attachment writ, although it had been paid the statutory fee and mileage upon the service of the garnishment summons. Held, that the bill is insufficient to warrant any interference by a court of equity with the party to the suit at law. It does not set forth any equitable circumstances or any injury, remediless at law. In the opinion of the court, the case is frivolous.
    Appeal from the Superior Court of Cook county; the Hon. Hjenby M. Shepabd, Judge, presiding.
    Opinion filed November 11, 1884.

      The appellant, Eberhardt, being a justice of the peace, duly issued, February 21, 1884, a writ of attachment in favor of Mary Casey, against the personal estate of John Casey, in the usual form, upon a debt of $38.83 for board, which writ was delivered to a constable to execute, and who, February 21, 1884, returned the same, that he found no property to attach; that he had served it upon John Casey by reading it to him, and that by order of plaintiff he had summoned The Pennsylvania Company as garnishee. February 26, 1884, the justice duly rendered a judgment against John Casey for the above sum; whereupon said justice, on the same day, issued a garnishee summons in favor of said Mary Casey, in due form, to said Pennsylvania Company, to appear before said justice March 3, 1884, at his otfice, at 9 o’clock, a. m., to answer upon oath, etc.; which summons was duly served on said company on the same day, and the statutory fee paid to it bjr the constable, and return thereof properly made. Before the return day and March 1, 1884, the Pennsylvania Company filed a bill in equity in the Superior Court, against said justice and Mary Casey, to enjoin the latter and the justice from taking any further steps upon said garnishee process, on the sole ground that the constable had not paid to said company the one dollar fee and mileage when he summoned it under the original attachment writ. No equitable circumstances were set out or anything beyond the mere fact of not paying said fee, to show that an unfair use of said justice’s court was being made or that said company would be prejudiced by a judgment against it. A temporary injunction was issued and served. The defendants answered the bill setting up want of equity, and that the court of equity liad no jurisdiction. The court upon the hearing rendered a decree making such temporary injunction perpetual, and the defendants appealed to this court.
    Messrs. Kraus & Matee, for appellants;
    that appellee having an ample remedy at law, equity will not interfere, cited 1 High on Injunctions, §230; 2 Story’s Equity Jurisprudence, § 898; Crandall v. Bacon, 20 Wis. 639; Stokes v. Knarr, 11 Wis. 389; Secor v. Woodward, 8 Ala. 500.

      Notwithstanding an alleged want of service, a court of equity will not interfere to set aside a judgment until it appears that the result will be other or different from that already reached: High on Injunctions, §§ 125, 126; Williams v. Hitzie, 83 Ind. 303; Stokes v. Knarr, 11 Wis. 389; Taggart v. Wood, 20 Ia. 236; Gregory v. Ford, 14 Cal. 138; Fowler v. Lee, 10 Gill & J. 363; Piggott v. Addicks, 3 G. Greene, 427; Secor v. Woodward, 8 Ala. 500.
    The jurisdiction of equity in restraint of actions at law is exercised, not over the courts of law, but only upon the parties litigant therein: Sanders v. Metcalf, 1 Cooper’s Term. Ch. 419; Jones v. Stallsworth, 55 Tex. 138; 1 High on Injunctions, § 46.
    Messrs. Willard & Driggs, for appellee;
    cited Grand Tower, etc., Co. v. Schirmer, 64 Ill. 106.
   McAllister, J.

The injunction, which by the decree below was made perpetual, is a direct prohibition upon the action of the justice’s court, a legal tribunal, and in a case where it had jurisdiction. That was error. If the bill had presented a case of equitable circumstances, and an abuse by the party of the jurisdiction of the justice’s court against equity and conscience, even then the injunction should not have been directed to the court, but to the party. The court of chancery possesses no legal supremacy over justices’ courts, and can award no writs in the nature of a writ of prohibition upon the actions of such courts. When a case is made calling for the exercise of its equitable jurisdiction, the court of chancery may enjoin the action of the party to a suit at law, but not the court. Such an injunction does not deny, but admits, the jurisdiction of the common law court. Hill v. Turner, 1 Atk. 516; Tyler v. Hammersley, 44 Conn. 419; High on Injunctions, 2d Ed. § 45.

But the bill in this case is insufficient to warrant any interference by a court of equity with the party to the suit at law. It sets forth no equitable circumstances, or any injury remediless at law. The ground on which equity interferes by injunction against the party in such case is concisely stated by Mr. High, thus: “It is granted on the ground that an unfair, use is being made of the legal forum, which, from circumstances of which equity alone can take cognizance, should be restrained lest an injury be committed wholly remediless at law.” § 45, sttpra.

The justice’s court was entirely competent to determine the question whether the statute required Mary Casey to furnish the constable, and the latter to pay to the Pennsylvania Company, the one dollar fee and the mileage, which would amount to but ten cents, when he summoned said company under the attachment writ, hut which was paid when the regular garnishee summons was served. The controversy in reality involved only the sum of $1.10, and the railway company had the right of appeal.

We regard the case as frivolous, as outside of equitable principles or precedents. The decree will, therefore, be reversed and the bill dismissed.

Decree reversed.


text:
    Potter Palmer v. Adolph Goldsmith.
    1. Action for a tort—Entries as evidence.—Appellee sued appellant in an action on the case to recover of the latter as bailee the value of a package of jewelry sent to the latter's hotel to be delivered to appellee’s traveling agent. For the purpose of proving the different articles, prices, etc., "appellee introduced in evidence what was said to be a copy of an original memorandum book kept by him. Held, that even if the original entries themselves, which were matters between appellee and his traveling agent, had been introduced, they would have been inadmissible, since this action was for a tort, and account books of a party are inadmissible to prove any matter collateral to the issue of debt and credit between the parties.
    2. Secondary evidence-Destroying the iiiqhbr evidence — Where a party deliberately and voluntarily destroys the higher written evidence he must give affirmative evidence affording an explanation of the act, showing that it was done with pure motives and repelling every suspicion of a fraudulent design, before he can have the benefit Of secondary evidence,

      Appeal from the Superior Court of Cook county; the Hon. Hollín S. Williamson, Judge, presiding.
    Opinion filed November 11, 1884.
    Hr. J. S. IIuey, for appellant.
    Messrs. Moses & Newman, for appellee.
   McAllister, J.

This was an action on the case by Goldsmith against Palmer to recover of the latter as bailee, the value of a package of jewelry, which, it was alleged, he had received of the plaintiff as such bailee, but had converted the same to his own use, or lost it through negligence. On the trial under the general issue, the plaintiff gave testimony tending to show that he, being a jeweler in the city of New York, and defendant the proprietor of a hotel in Chicago, March 24, 1881, sent from New York by express, a package of jewelry to-be carried to Chicago, and thereto be delivered into the keeping of defendant, at his hotel, for one A. Lilienthal, a traveling salesman of plaintiff; that said package was so delivered into defendant’s care March 26, 1881; that soon thereafter said Lilienthal became a guest at said hotel, but that the package was never delivered to him. The defendant introduced evidence tending to show that said package was, on said 26th of March, delivered to Lilienthal, that he paid the express charges, which defendant had paid, and gave his receipt for the package.

For the purpose of proving the different articles, quantity and price of each, comprising said package, the plaintiff offered in evidence what was said to be a copy of an original memorandum book kept by him, in wmch said several matters were set down, and to lay the foundation therefor, gave evidence tending to show that at the time of putting up said package he had a memorandum book in which was written a list of the articles, the quantity of each, the price and the running number of each article so packed; that at the time after the controversy had arisen between him and defendant about the alleged loss of said package, after Lilienthal had corresponded with said defendant about such loss and after Lilieuthal had returned to Hew York from the trip, for whose purposes said package had been sent to him at Chicago, the said copy of book offered in evidence was ¡prepared by a clerk in plaintiff’s store in Hew York, and by Li lien thal by copying, as they said, from such original memorandum book, and that being done, the original was voluntarily destroyed. Such being the foundation laid for the secondary evidence of the contents of said original book of entries, the court below, against objection of defendant, admitted said copy in evidence. To which exception was taken. There was a finding and judgment for plaintiff for four hundred and ninety-six dollars, to reverse which defendant brings the ease to this court.

Even if it be assumed that the original memorandum book would have been competent evidence as against this defendant, we are of opinion that there was no sufficient foundation shown for the admission of the copy as secondary evidence. Where a party has deliberately and voluntarily destroyed the higher written evidence, he must give affirmative evidence affording an explanation of the act, showing that it was done with pure motives, and repelling every suspicion of a fraudulent design, before he can have the benefit of secondary evidence. Blade v. Nolan, 12 Wend. 173; Tobin v. Shaw, 45 Maine, 331.

The circumstances under which the original book was destroyed, are sufficient, to create a well founded suspicion of a fraudulent design, for the alleged copy was evidently prepared with reference to the claim for the loss of the package in question.

The original entries were matters solely between the plaintiff and Lilienthal, with which the defendant had no connection or concern. There was no issue of debt or credit between the parties to this suit. The action was not upon an account, but for a tort. That being the case, the original book itself, if it had been offered, would have been inadmissible as evidence against the defendant. The rule seems to be well settled, that account books of a party are inadmissible to prove any matter collateral to the issue of debt and credit between the parties. Batchelder v. Sanborn, 22 New Hamp. 325; Gage v. McIlavain, 1 Strobh. 135; Lonergan v. Whitehead, 10 Watts. 240; Winsor v. Dillaway, 4 Met. (Mass.) 221; Bustin v. Rogers, 11 Cash. 346; Jones v. Brick, 3 Halsted, 332; Tenbroke v. Johnson,. Coxe, N. J. 334.

For the error in admitting the book in evidence, the judgment will be reversed and the cause remanded.

Judgment reversed.


text:
    George Kelly et al. v. The Kelly Scroll Mfg. Co.
    Jurisdiction—Infringement of patent.—Where neither the bill for an injunction, nor the decree granting it, sought to enforce rights or to redress wrongs dependent upon or growing out of a contract, but simply to restrain infringement of a patent. Held, that the State court had no jurisdiction. The exclusive jurisdiction of all suits brought to restrain infringement of patents is in the federal courts.
    Appeal from the Superior Court of Cook county; the Hon. Henry M. Shepard,-Judge, presiding.
    Opinion filed January 6, 1885.
    This was a bill in chancery, brought by the Kelly Scroll Section Manufacturing Company against George Kelly, Henry D. Smalley and the Kelly Covering Company, for an injunction. A preliminary injunction having been awarded, the defendants appeared and filed a demurrer to the bill, which being overruled, the defendants elected to abide by their demurrer, and a decree was thereupon rendered making the injunction perpetual.
    The bill alleges that the complainant is a corporation organized under the laws of this State, for the purpose of manufacturing and selling non-conducting and fire proof covering for steam boilers, drums and pipes; that the original subscribers for stock in said corporation were George Kelly, George H. Leonard, Loren Greene and Henry D. Smalley, Smalley and Greene being subscribers for 350 shares each, Kelly for 250 shares and Leonard for 50 shares; said shares being of the par value of $100 each; that at the first meeting of stockholders, said Kelly, Greene, Smalley and Leonard were elected directors for the term of one year from October 7,1882; that the goods proposed tobe manufactured and sold consisted of several kinds of pipe covering of a novel and peculiar design and construction, for which letters patent had been granted to said Kelly; that Kelly at the time was engaged in manufacturing and selling said patented articles in a small way, but was in a crippled financial condition; that he represented to the persons who proposed to organize said corporation, that if he had capital and credit sufficient to advertise said goods and keep a considerable stock on hand, there would be great profit in the business; that after considerable negotiation, the corporation was formed, it being agreed that Kelly should have 250 shares of stock and a considerable sum of money in notes and cash, which was paid him, and also that he should be appointed superintendent of the company’s factory, for one year, at a salary of one hundred dollars per month, in pursuance of which agreement he was so appointed and served for one year, and was paid for his services; that in consideration of said stock and money, and of the advantages to be gained by him from said corporation, said Kélly executed and delivered to the corporation the following agreement:
    “This agreement, made this 26th day of October, 1882, by and between George Kelly, of the city of Chicago, Cook county, in the State of Illinois, party of the first part, and the Kelly Scroll Section Manufacturing Company, of the same place, party of the second part, witnesseth:
    “That, whereas, the said George Kelly claims to be the owner and inventor of several valuable inventions of steam pipe covering, and of a fire proof window shutter, and improvements on said several articles, discovered and invented by him, and that he is also the owner of letters patent granted to him on one of such inventions of steam pipe covering by the commissioner of patents of the United States, numbered and heaving date as follows: Ho. — and bearing date, —, 1881, and the said second party, desiring to purchase all of said patents and all inventions, for the purpose of manufacturing said patented articles and inventions, and to control the same exclusively. How,' therefore, be it known that I, George Kelly, party of the first part, in consideration of the sum of one hundred thousand dollars to me in hand paid by the said party of the second part, the receipt whereof is hereby confessed and acknowledged, have sold, assigned, transferred and conveyed, and by these presents do hereby sell, assign, transfer and convey, unto the said Kelly Scroll Manufacturing Company, all my right, title and interest in and to all of said inventions and letters patent, except the patent granted to me February 25, 1879, number 212,607. And I do further agree to take all necessary action and use my best endeavors to procure the said several unpatented inventions to be patented by the commissioner of patents of the United States, and such other countries as said second party may require, for the use and benefit of the said Kelly Scroll Section Manufacturing Company exclusively, and any letters patent granted or allowed on either or any of such inventions, shall belong to and be the property of said second party, its successors and assigns, in whosesoever name the same may be allowed or issued.
    “And I further covenant and agree, that any and all inventions and improvements in steam pipe covering hereafter made and discovered by me, shall belong to and be the property of said second party, its successors and assigns, and I will use my best endeavors to procure the same to be patented for the use and benefit of said second party, the expense of all patents hereafter procured on any of such inventions to be procured at the expense of said company.
    “ In witness whereof I have hereunto set my hand and seal the day and year first above written.
    “ George Kelly.”
    Said agreement was dnly'aeknowledged by said Kelly, and on the 23d day of January, 1883, it was filed and recorded in the United States patent office.
    The bill further alleges that, in addition to sa'id general assignment of said patents, said Kelly made several assignments by which he assigned each of his patents to the complainant; that no goods have been manufactured under said patent number 212,607; that since the organization of said corporation, said Kelly and Smalley have disposed of all their stock for very considerable sums of money and are no longer stockholders.; that said Smalley was the secretary of the corporation and was fully aware of said agreement between it and said Kelly.
    The bill further alleges that Kelly and Smalley, on or about the first day of February, 1884, after they had ceased to be stockholders or interested in said corporation, combined and procured to be organized a corporation under the laws of this State, called the Kelly Covering Company, its object and purpose being to manufacture and sell covering for steam pipes, boilers, etc., being the same business as that for which the complainant was organized, and in which it was engaged; that the Kelly Covering Company advertises itself as manufacturing and dealing in non-conducting covering at 186 East Jackson street, Chicago, with said Kelly as general agent and said Smalley as manager; that the complainant, since its organization, has spent large sums of money in advertising its business and placing its goods before the public; that it has a very large and profitable business and is well known throughout the United States and Canadas as the manufacturers of a very superior article of steam pipe and non-conducting covering; that the said Kelly Covering Company is manufacturing the same goods as those manufactured by the complainant, and which the complainant has the exclusive right to manufacture and sell under the several patents so assigned to it by said Kelly.
    The bill charges that Kelly and Smalley adopted the name “ The Kelly Covering Company” for the purpose of deceiving the public and to injure and defraud the complainant; that the Kelly Covering Company is offering its goods at a very low price and below the price at which the business can be carried on with profit, and is doing so in order to enable itself to use the market which the comj:>lainant has established, and to injure and defraud the complainant, and that it is doing the complainant great and irreparable injury.
    The prayer of the bill is that Kelly, Smalley and the Kelly Covering Company may be enjoined from manufacturing, selling, applying or advertising iron pipe, steam pipe or nonconducting pipe covering, and also a general prayer for relief.
    The decree perpetually enjoins the defendants and each of them “from manufacturing or selling any non-conducting steam pipe or other covering, the patent right to manufacture which was ever owned by the defendant, George Kelly, and by him assigned or agreed to be assigned, either by general or special assignment, to the complainant. From this decree the defendants have appealed to this court.
    Mr. Mason B. Loomis, for appellants;
    as to jurisdiction, cited Curtis on Patents, 3d Ed. §§ 288, 496; High on Injunctions,"§ 602; Parkhurst v. Kinsman, 2 Halst. Ch. 600; Dudley v. Mayhey, 3 Comst. 14; Elmer v. Pennel, 40 Me. 434; Parsons v. Barnard, 7 Johns. 144.
    Mr. George H. Leonard, for appellee;
    that the State court has jurisdiction in this class of cases, cited Myers v. Turner, 17 Ill. 179; Hildreth v. Turner, 17 Ill. 184; Edmunds v. Myers, 16 Ill. 207; Miller v. Young, 33 Ill. 354; Linington v. Strong, 90 Ill. 556; Hollida v. Hunt, 70 Ill. 109.
   Bailey, J.

The entire object and scope of the bill in this case, as we understand it, is to restrain the defendants from manufacturing, selling or dealing in certain goods which the complainant claims to hold the exclusive right to manufacture and sell, under letters patent from the Hnited States. These letters patent were originally issued to and owned by Kelly, one of the defendants, and were by him assigned to the complainant. The instrument by which the assignment was made, in addition to assigning to the complainant one or more patents then already in existence, contained an agreemen t on Kelly’s part to use" his best endeavors to procure letters patent for certain other inventions of like character, which he liad then made, the same when issued to belong to and become the property of the complainant; and also an agreement that his subsequent inventions and improvements in relation to the same class of manufactured articles, should belong to the complainant, and that he would use his best endeavors lo procure letters patent therefor for its use.

There is no complaint in the bill of any breach of any of the terms or conditions of the agreement. So far as appears, Kelly did all he undertook to do by way of procuring letters patent for his unpatented inventions, and turning the same over to the complainant. The complaint is, that Kelly and the other defendants are engaged in the business of nianufacturing and selling the goods which the complainant has the exclusive right to manufacture and sell, under the several patents assigned to it by Kelly, and the praj-er of the hill is that he may be restrained from so doing. The decree also is limited to merely enjoining the defendants from manufacturing or selling any of the patented articles covered by the letters patent assigned or agreed to be assigned by Kelly to the complainant.

It will thus be seen that the case presented by the record is one purely and simply of an alleged infringement of certain patent rights. Neither the hill nor the decree seeks to enforce rights or to redress wrongs dependent upon or growing out of a contract. No agreement is set up, either on the part of the defendants or of Kelly, not to engage in manufacturing and selling the articles in question, but the only ground upon which the complainant seeks to have the defendants debarred from engaging in that business is, the exclusive right or monopoly secured to it by its letters patent.

Section 629 of the Revised Statutes of the United States confers upon the United States Circuit Courts original jurisdiction, among other things, of all suits at law or in equity arising under the patent or copyrights laws of the United States; and again, by section'll!, it is provided that the jurisdiction of said courts in all cases arising under said laws shall be exclusive of the courts of the several States. Section 4921 further provides that the several courts vested with jurisdietion of eases arising under the patent laws, shall have power to grant injunctions to prevent the violation of any right secured by patent.

These statutes are too plain to require comment. The exclusive jurisdiction of all suits brought to restrain infringements of patents is in the federal courts. This doctrine is clearly announced in the decisions cited by counsel for the appellants. It follows that the superior court had no jurisdiction, and that the demurrer to the bill should have been sustained. The decree will be reversed with directions to the court below to sustain the demurrer, and for further proceedings not inconsistent with this opinion.

Decree reversed.


author: Winsorr, P. J.

text:
    Samuel C. Sargent v. Central Warehouse Company.
    1. Warehouse receipt—Right op action by indorsee.—Where certain flour was delivered by A to a warehouse company for storage, and A subsequently sold the same to B, and indorsed and delivered the warehouse receipt to B, and also the inspection certificate showing it to have been in good condition when inspected at the freight depot, and there was evidence tending to show that it was in like good condition when received by the warehouse company, and B, inspecting it six months later, found it in bad condition, and brought suit in his own name against the warehouse company. Held, that the indorsement and delivery of the warehouse receipt had the effect not only to transfer the title to the flour to B, but also to give him a right of action for any breach of duty of which the warehouse company was guilty in respect thereto at any time during the bailment.
    2. Practice—Withdrawing case prom jury.—Where a legal cause of action was stated in the second count of plaintiff’s amended declaration, and an issue was joined thereon, which a jury had been impaneled to try, and the plaintiff put in evidence which tended to prove the cause of action as alleged. Held, that the court erred in excluding the same and withdrawing the case from the jury, against plaintiff’s objection, and in rendering final judgment for the defendant.
    Appeal from the Circuit Cook of Cook county; the lion. Kirk Hawes, Judge, presiding.
    Opinion filed January 6, 1885.

      This was an action on the casé brought by Samuel C. Sargent against the Central Warehouse Company to recover damages to a car load of flour delivered, to the defendant by Montague and Tohnau, for storage in defendant’s warehouse in the city of Chicago. The flour was delivered to the warehouse company December 22, 1881, for which a receipt was given in the words and figures following: “ Chicago, Dec. £2, 1881. Received in warehouse from teams, car No. 534, one hundred and twenty-five barrels flour on account of Montague and Tolman, and subject only to their order hereon on payment of charges and cooperage. * * * William R. Mauniere, president.”
    About the 25th of January thereafter, Montague and Tolman sold the flour to the plaintiff, and indorsed and delivered to him the warehouse receipt, together with the inspection certificate, showing that the flour was in good condition when inspected at the freight depot of the Chicago & Northwestern Railway, from whence it was delivered to the defendant’s warehouse, and evidence was offered tending to show that it was in like good condition when received by the defendant.
    The plaintiff made the purchase in the usual course of business on the inspection certificate and warehouse receipt, and examined the flour for the first time in June following, when the barrels were found to be covered with dried mud, clay and cement, and the flour musty, soured and spoiled. The barrels, according to the testimony, appeared as if they had been rolled in a cellar where a floor was being cemented, and there was evidence tending to show that the damage to the flour was occasioned by moisture absorbed from the mortar or muddy substance on the outside of the barrels. No note was made either on the inspection certificate or on the warehouse receipt, that the flour or barrels were not in good condition at the time of their delivery to the defendant, nor did the warehouse company ever give any notice as to the condition of the same; and the plaintiff testified that had he been notified he might have saved the flour by changing it into other barrels. There was also evidence tending to prove that it was customary among warehousemen when flour, received for storage, was we.t or in bad order, to note it on the receipt, or to otherwise notify the owners. The court permitted the plaintiff to read to the jury the warehouse receipt for the flour, although at the same time stating that he sustained the defendant’s objection to it on the ground that it was incompetent. The defendant was an incorporated company, and operated a warehouse of class “ C.”
    At the close of the plaintiff’s evidence the court, on motion of the defendant, and against the objection of the plaintiff, excluded all the evidence, took the case from the jury, and rendered a final judgment for the defendant, to all which the plaintiff duly excepted, and appealed to this court.
    Among the errors assigned are the exclusion by the court of the plaintiff’s evidence, and the rendering'judgment for the defendant on its own finding without any verdict of the jury.
    Hr. E. A. Otis and Hr. D. S. Pride, for appellant;
    that the presumption is that the bailee receives the articles in good order when his receipt does not show the contrary, cited I. C. R. R. Co. v. Cobb, 72 Ill. 148; I. C. R. R. Co. v. Cowles, 32 Ill. 116; Kelson v. Woodruff, 1 Black, 156.
    The warehouse receipt stands in the place of the goods, and its indorsement and delivery gives the holder precisely the same rights as the original owner had: Canadian Bank v. McCrea, 106 Ill. 281; Shaw v. R. R. Co., 101 U. S. 557; Herman Nat. Bk. v. Headoweroft, 95 Ill. 124.
    Hessrs. Paddock & Addis, for appellee;
    that a bailee is not liable on the contract of bailment to the purchaser from his bailor, cited Willard v. Bridge, 4 Barb. 361; Suydam v. Smith, 7 Hill, 182.
   Winsorr, P. J.

After the plaintiff had introduced evidence tending to show a cause of action as set out in his declaration, the court, on motion of the defendant, and against the objection of the plaintiff, excluded all the evidence, took the case from the jury, found the issues for the defendant and rendered a final judgment in bar against the plaintiff, the court being of opinion, as is stated in the bill of exceptions, that the action could not be maintained for want of privity between the parties. The Supreme Court, as well as this court, has held that such a practice is not allowable in this State. Ware v. Nottinger, 35 Ill. 375; Bohman v. City of Chicago, decided by this court, and reported in Chicago Legal News of September 27, 1884. In the trial of suits at law when an issue of fact is joined it must be tried by a jury, unless the parties waive a jury and submit the trial of the case to the court; in other words, the right to a jury trial can not be taken from a party without his consent.

But while the correctness of the rule stated is assented to by appellee, it is contended that the present case does not come within its operation for the reason, as is claimed, that the plaintiff had stated no legal cause of action in his declaration, and hence there was nothing which a jury could properly be called upon to try. Instead of demurring to the declaration and standing by its demurrer, the defendant took issue upon the facts as alleged, and now claims that the court had the right to render a final judgment in bar upon some principle analagous to a judgment non obstante veredicto. Waiving for the present any question as to the applicability of such a principle to a case like the present, which we by no means concede, we proceed at once to inquire whether the declaration sets forth a cause of action.

The second count of the amended declaration alleges, in substance, that the defendant, on December 22, 1881, was a corporation engaged in the business of warehouseman, and that Montague and Tolrnan, at the instance and request of the defendant, caused to be delivered to the defendant for storage and safe keeping in defendant’s warehouse, the flour in question, to be safely stored and kept by the defendant for a certain reward in that behalf, etc.; that the defendant made and delivered to said Montague and Tolman its warehouse receipt (setting out the same as given in the statement of facts); that afterward, to wit, on the day last aforesaid, the said Montague and Tolman, by their indorsement on the bach of said receipt, sold, transferred and assigned the same to the plaintiff, “ by means of which said indorsement and delivery of said warehouse receipt to said olaintiff, and by force of the statute in such case made and provided, said plaintiff became the owner of said flour, and succeeded to all the rights, claims and demands and causes of action which said Montague and Tolman (written ‘ defendant ’ by an obvious clerical mistake) had under and by virtue of said warehouse receipt, at the time of the indorsement and transfer of said warehouse receipt as aforesaid.”

The count then avers that at tire time of the delivery of the flour to the defendant, the flour was in good merchantable condition and the barrels containing the same were dry and clean, and that it was the duty of the defendant to keep said flour in like good condition, but that the defendant took such poor and such little care of said flour that the barrels containing the same became and were wet and muddy, by means whereof the flour contained therein was greatly damaged and rendered unmerchantable.

The count contains, we think, substantially all the essential elements necessary toa legal cause of action, if by the assignment and transfer of the warehouse receipt to the plaintiff, he became thereby not only the owner of the flour, but was also invested with all the rights and remedies theretofore existing in Montague and Tolman by virtue of the receipt, since in such case it would be immaterial whether the damage to the flour occurred before or after the indorsement and transfer of the receipt to the plaintiff. That the title to the property passed to the plaintiff by the assignment and transfer of the receipt is not disputed, but it is denied by the defendant that the assignment and delivery of the receipt had the effect to transfer any cause of action existing in favor of the assignors prior to or at the.time of the transfer, and it is insisted that for any such cause of action, suit can only be brought in their names. In this view of the law, after such examination as we have been able to give the subject, we are unable to concur.

The defendant operates a public warehouse, and is subject to the provisions of the statute in relation to warehouses. Its receipts for property stored with it are governed by the statute, which in express words makes them transferable by the indorsément of the party to whom they are issued, either in blank orto another. Chap. 114, Rev. Stat., Sec. 42. By this statute warehouse receipts are made negotiable instruments, not, it is true, possessing all the qualities of bills of exchange and negotiable promissory notes which furnish protection to innocent holders, but nevertheless negotiable to the extent of transferring to the assignee all the interest, rights and remedies of the assignor therein. They are contracts, by which the warehouseman undertakes, for reward, to receive and safely keep the property described in them, and unless legally excused, to re-deliver the same to the depositor or to his indorsee. They are contracts for the breach of which only the parties to them could maintain an action at law in the absence of an enabling statute. The contract is an entirety. The statute having made the contract assignable, it is assignable in whole, with all its incidents, among which is the right of action in case of a breach of the contract.

Would it be a reasonable construction of a statute which makes a contract assignable, without any words of limitation to hold that anything less than the contract in its entirety was intended? Suppose the flour had been partially damaged through the defendant’s negligence prior to the transfer of the warehouse receipt, and had been still further damaged after such transfer by like negligence; would it be insisted that the contract could be split up so as to make the defendant liable in two actions and to two different parties on the same contract? Under the terms of the warehouse receipt it became the duty of the defendant to deliver to Montague and Tolman or to their indorsee, on presentation of the receipt and payment of storage charges, the flour named in it, in the same condition as when received, unless he excuse himself by showing that it was lost or destroyed without his fault. The statute having made the receipt .negotiable, by indorsement, and Montague and Tolman having indorsed and delivered it to the plaintiff, have divested themselves of all interest in, or rights under it. A judgment against the defendant, at the suit of their indorsee would be a bar to an action by them against the defendant.

It must be conceded that there is a dearth of authority bearing upon the precise question here involved. The general rule in relation to contracts of bailment undoubtedly is that for a breach of duty by the bailee, the action, independent of any statute, should be brought by the bailor; but the question before us is as to how far the rule is qualified or changed by the provision of the statute making the contract of bailment assignable.

In German National Bank v. Meadowcroft, 95 Ill. 124, which was an action of trover for the conversion of a quantity of barley, the Supreme Court seem to have taken it for granted that the bailee was liable to the holder of the receipt, whoever lie might be, for the entire value of the property, though that case turned upon other questions not involved in this suit. In Shaw v. Railroad Co., 101 U. S., the court, in discussing the effect of an indorsement of a bill of lading attached to a time draft, said in arguendo, “ the indorsement vested in the bank the title to the cotton as well as to the contract.” In Canadian Bank of Commerce v. McCrea, 106 Ill. 281, our own Supreme Court consider the subject of warehouse receipts, without, however, discussing the question as to who are entitled to sue in case of a transfer of such receipts; but we think all of those cases may be regarded as inferentiaily supporting the position that the indorsee of the receipt succeeds to all the remedies of the original bailor.

From the best consideration we have been able to give the subject, our conclusions are, first, that the indorsement and delivery of the warehouse receipt had the effect, not only to transfer the title to the Hour to the plaintiff, but also to give him a right of action for any breach of duty of which the defendant was guilty in respect thereto at any time during the bailment; second, that a legal cause of action is stated in the second count of the amended declaration; and third, an issue of fact having been joined thereon, which a jury had been impaneled to try, and the plaintiff having put in evidence which tended to prove the cause of action as alleged, the court erred in excluding the same, and withdrawing the case from the jury, and in rendering final judgment for the defendant.

The judgment will therefore be reversed, and the cause remanded for a new trial."

Reversed and remanded.