text:
    William E. Montague et al. v. Seth F. Hanchett et al.
    1. Vendor and vendee—Fraud.— Where goods are fraudulently obtained and subsequently sold to an innocent third party, who has no notice of the fraud, and he sells them to another party w ho has actual notice aliunde of the original fraud, the latter will get a good title to the goods.
    2. Practice—Amendment instanter, must be made at farthest within twenty-four hours.—Leave to amend instanter expires at farthest at the end of twenty-four hours after it is granted, and any amendment filed after that time without any further leave of court, or the attention of the court being in any way called to it, will properly be ignored by the court, and the case will be disposed of as if such amendment had not been filed.
    Error to the Circuit Court of Cook county; the Hon. Lorin C. Collins, Judge, presiding.
    Opinion filed October 27, 1886.
    Mr. I. K. Boyesen, for plaintiffs in error;
    that where a note has been obtained from the maker by fraud, a person claiming to be the owner and holder of such note for value, must show affirmatively that he has paid value and has no notice of the fraud, cited Wright v. Brosseau, 73 Ill. 381.
    The above doctrine is equally applicable to chattels: Easter v. Allen, 8 Allen, 9; Stevens v. Brennan, 75 N. Y., 254; Pringel v. Phillips, 5 Sandford, 157 ; Neff v. Landis, 1 Central Law Reporter, 133.
    A demand is not necessary where it appears that a demand would have been unavailing: Cranz v. Kroger, 22 Ill. 80 ; Johnson v. Howe, 2 Gilm. 344.
    Messrs. Miller, Leman & Chase and Messrs. Kraus, Mayer & Brackett, for defendants in error;
    that the sale of the goods by Strauss to Emil Freise, in payment of a pre-existing debt, was a sale upon a valuable consideration, and is entitled to the same protection as if upon a new consideration paid on the sale, cited Butters v. Haughwout, 42 Ill. 18; Manning v. McClure, 36 Ill. 490 ; Kranert v. Simon, 65 Ill. 344; Van Duzor v. Allen, 90 Ill. 499; Hanchett v. Kimbark, (Ill. Sup. Ct.) 18 Chicago Legal News, 45.
    A debtor, in the sale of his property, has a right to prefer one creditor over all others ; and he may sell his property to one of his creditors in payment of his debt to him, to the exclusion of other fereditors, and the consideration will be sufficient to support the transfer: Hessing v. McCloskey, 37 Ill. 341; Morris v. Tillson, 81 Ill. 607; Goembel v. Arnett, 100 Ill. 34.

      Where a sale is made to a party guilty of a fraud, and possession is delivered by the vendor to the vendee in execution of the contract or sale, then the title passes and the sale is not void, but merely voidable. And if the vendee transfer the goods to an innocent third person for a valuable consideration, before the sale is avoided, the rights of such original vendor will be subordinate to those of such third person : Benjamin on Sales, Sec. 433 (3rd Am. Ed.); Brundage v. Camp, 21 Ill. 329; Mich. C. R. R. Co. v. Phillips, 60 Ill. 190, 197; Jennings v. Gage, 13 Ill. 610; Chi. Dock Co. v. Foster, 48 Ill. 507.
   Moran, J.

This was an action in replevin brought by the plaintiffs in error to recover possession of a lot of knitting yarns which were obtained from plaintiffs by fraud.

The evidence tends to show that Strauss and Gruner, who purchased the goods from plaintiffs, entered into a conspiracy with one Simon Wolff in pursuance of which said Strauss and Gruner were to obtain a large amount of goods on credit and then fail. The yarns in question were purchased in May, 1884, with intention on the part of Strauss and Gruner not to pay for them, and when they knew themselves to be insolvent. The goods were not taken to the store of Strauss and Gruner when they arrived in Chicago, but were stored in a boot and shoe house on Lake street. About July 21, 1884, the failure took place, and Strauss and Gruner having confessed a judgment in favor of a Buffalo bank, the sheriff took possession of their stock and place of business under an execution issued on the judgment. A few days afterward the yarns in question in the suit were turned over by Strauss and Gruner to the defendant, Emil Freise, in payment of a debt of six or seven hundred dollars, which the firm were owing him, and were by him sold to the defendant Wieboldt for the sum of $750.

Much evidence tending very clearly to establish that a fraud was perpetrated by Strauss and Gruner upon the plaintiffs in the purchase of the goods, was introduced upon the trial in the court below, a statement of which evidence here would serve no useful purpose.

The court, at the conclusion of the plaintiffs’ case, gave the jury the following instruction:

“ The court instructs the jury that plaintiffs’ evidence is not sufficient in law to sustain a recovery, and the court instructs the jury to find the issues for the defendants, and find the right of property replevied in William R. Wieboldt, one of said defendants.”

The giving of such instruction is assigned for error, and it is contended by counsel for jfiaintiffs that there was evidence tending to charge Freise and Wieboldt with knowledge of tlie fraud of Strauss and Gruner in obtaining the goods.

The material inquiry in the case is, whether there is evidence to charge Freise with knowledge of the fraud or with facts: and circumstances sufficient to put him on inquiry. If Freiso was a bona fide purchaser of the goods for value, then his, vendee, Wieboldt, would get a good title to the goods even though said Wieboldt had actual notice of the fraud by which the goods were obtained from plaintiffs.

There is no pretense that Freise is proven to have had actual knowledge of the fraud of Strauss and Gruner in purchasing the goods, but it is said that he knew that the goods were not in the store of Strauss and Gruner, but were stored in an unusual place; that the goods were turned out to him in payment of a pre-existing debt for a little more than half their value and that without taking the goods to his own place of business he sold them to Wieboldt for less than they were worth. We are wholly unable to conclude that these facts, when considered as they must he, in connection with the other evidence, form any basis for holding that Freise was placed upon inquiry as to the manner in which Strauss and Gruner obtained the goods. There is no evidence tending to show that Freise knew anything about the goods before they were turned out to him by Strauss in payment of the debt due to him by the firm, and the proof shows that they were not txirned oixtto him until after the failure and after the sheriff was in possession of the stock of Strauss and Gruner, at their place of business under the execution. The yarns were xxndoubtedly subject to the lien of the execution, and having thus stored them at the out of the way place, would Indicate to Freise and put him on notice that they were so stored to keep them out of the sheriff’s possession, but would furnish no grounds for suspicion that there was fraud in their purchase. The fact that Freise took the goods for less than they were worth and without examining them, and, when his debtors were known to be insolvent, would only show that he was willing to obtain any advantage he could through the preference of his debtors. The fact that they were willing to let him have such preference under the circumstances then existing, could in no way lead him to suspect that the goods were obtained by fraud.

We have examined the record in vain for any evidence tending to charge Freise with notice or even suspicion of the fraud by which the goods were purchased. There was no evidence which the court would be justified in submitting to the jury upon that question, and so far as the defendants, Freise and Wieboldt are concerned, the instruction given by the court was proper.

It is contended, however, that there was error in giving the instruction, because there was a count in trover against all the defendants on file, and the evidence clearly entitled the plaintiffs to a verdict on that count against the defendants Strauss and Gruner. The difficulty with the contention is, that there was no count in trover on file which the court was bound to regard. The first declaration filed was the common declaration in replevin. The record shows that on June 2, 1885, the plaintiffs took leave to amend their declaration instanter. It does not appear that any amendment was made under such leave, and such leave expired at the farthest, at the end of twenty-four hours after it was granted. On December 4, 1885, the count in trover was filed without any leave of court, and so far as appears from the record, without the attention of the court being in any manner called to it. Under such circumstances the court could give such count no attention or consideration, and properly disposed of the case without reference to it. It was irregularly and improperly on the files of the court, and though not stricken out, it had no bearing on the case. There was no error in ignoring it in instructing the jury: Flanders et al. v. Whittaker, 13 Ill. 707; Bently v. Dixon, 1 Ark. 165.

No error appearing, the judgment of the circuit court must be affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Moran, J.

license: Public Domain

text:
    Daniel Robertson et al. v. Nicolaus Noeninger.
    1. Corporations—Stockholders—Garnishment.—Under § 8 of the chapter on Corporations in the statutes, by the proceeding in garnishment, stockholders may be compelled to pay to the garnishing creditor any balance unpaid upon stock owned by them respectively, whether such stock is called in or not.
    2. Same—Liability in equity.—But under §25, when the proceeding must be by suit in equity, the stockholders’ liability to pay anything on his unpaid stock is deferred until the assets of the corporation are exhausted.
    Error to the Circuit Court of Cook county; the Hon. Murray F. Tuley, Judge, presiding.
    Opinion filed October 27, 1886.
    On January 5, 1886, in the Circuit Court of Cook county a bill was filed by the defendant in error against the Texas Continental Transportation Company, the plaintiffs in error and others, alleging that complainant had recovered a judgment in the Superior Court of Cook county against the said Texas Continental Transportation Company for upward of thirteen thousand dollars; that an execution on said judgment was duly issued, and was returned by the sheriff on December 12, 1885, no property found and no part satisfied ; that more than ten days have elapsed since the demand of payment on said execution; that said corporation was engaged in business in divers places in 1882, and that divers persons became indebted to it to a large amount which is still due ; that said corporation holds securities to a large amount and other personal property which ought to be applied in payment of said judgment; that complainant has reason to believe and does believe that said corporation has property or effects of the value of more than §15,000, which complainant has been unable to reach by said execution. The bill prays for a discovery as to amount and nature of corporation’s assets; alleges that corporation has a capital stock of §500,000 in shares of §100 each, which was subscribed for and held by defendants thereinaiter named, but can not state how many shares each defendant held; states that none of the shares so held were paid for in full, but each of said defendants is largely indebted for amount of stock so held by him; claims that the amount due for shares of stock are assets and should be applied to pay judgment; alleges that M. R. Wood, Daniel Robertson, E. E. Wood (and upwards of thirty others who are named in the bill,) “ were stockholders and owners of stock in the Texas Continental Transportation Company at the time of the rendition of the judgment aforesaid, and that none of said stockholders held or owned paid-up stock at the time of the rendition of the judgment, and prays that said persons so named as stockholders may be made defendants in the suit and that each may be required to pay his pro rata share of said debt or liability to the extent of his unpaid portion of his stock toward satisfying the judgment and costs of complainant aforesaid,” and if any stockholders aforesaid shall not have property enough to satisfy his portion of said judgment aforesaid, then the amount so due and owing by said stockholders shall be divided equally among solvent stockholders aforesaid. Prayer for general relief.
    On Jan. 15, 1886, on motion of complainant’s solicitor, a receiver of all the assets of the corporation was appointed. Answers were filed by some of the defendants named in the bill, but the plaintiffs in error failing to answer, their default was duly entered.
    April 21, 1886, there was a reference to a master to take testimony, and on July 3, 1886, decree was entered against the plaintiffs in error, upon the bill taken as confessed and upon the proofs heard, from which the court found that complainant was a creditor of the defendant corporation, which was incorporated under the laws of Illinois; that he recovered judgment and had execution as alleged in the bill; finds capital stock of corporation was $500,000; that the plaintiffs in error were stockholders; that E. E. Wood held and owned twenty-five shares, M. R. Wood twenty-five shares and Daniel Robertson seventy-five shares of said stock at the time of the rendition of said judgment, which had never been fully paid for to said corporation; that there was due said corporation on stock of E. E. Wood the sum of $1,250, on stock of M. R. Wood $1,250 and on stock of Daniel Robertson $3,750.
    “ Thereupon this court doth adjudge, order and decree that said sums of money so due and owing as aforesaid, are assets of said corporation, and that complainant has an equitable lien thereon by virtue of said judgment. Thereupon the court doth order, adjudge and decree that said E. E. Wood pay the complainant the sum of $1,250 within ten days from date; that said M. R. Wood pay the complainant the sum" of $1,250 within ten days from date; that said Daniel Robertson pay the complainant the sum of $3,750 within ten days from date, and that in default thereof the complainant have execution as upon a judgment at law against each of said defendants severally, who make default to collect the amount due and owing by them respectively.”
    The record is brought to this court by a writ of error and numerous errors are assigned against the decree.
    Messrs. Campbell Hamilton & Custer, and Messrs. Cook & Lawrence, for plaintiffs in error;
    as to the nature of the proceeding in garnishment under § 8 of the statute, cited Pease v. Underwriters Union, 1 Bradwell, 290 ; Peck v. Coalfield Coal Co., 3 Bradwell, 622; Un. Mut. Life Ins. Co. v. Slee, 110 Ill. 35.
    The decree is not in accordance with the prayer of the bill: Heath v. Hurless, 73 Ill. 323: Dodge v. Wright, 48 Ill. 382; Hall v. Lowrie, 45 Ill. 493; Ward v. Enders, 29 Ill. 519.
    Sec. 25 of the General Incorporation Law, limits and fixes the liability of stockholders for the payment of the debts of the corporation. It is a part of the contract each stockholder made when he subscribed for, or took stock, and therefore in no event could this decree be for more than'a pro rata share of the complainant’s indebtedness, as suclryw rata share had been determined by proper evidence in the case: Wincock v. Turpin, 96 Ill. 144; Hickling v. Wilson, 104 Ill. 54; Richard.son v. Akin, 87 Ill. 138; 1 Pomeroy’s Equity Jur. §§ 406, 407; Pollard v. Bailey, 20 Wall. 376.
    Mr. J. R. Anderson, for defendant in error;
    that by commencing the suit by creditor’s bill, an equitable lien was at once acquired upon all the equitable assets of the company, cited Storms v. Waddell, 2 Sand. Ch. R. 494; First Nat. Bk. v. Gage, 93 Ill. 172; Lynch v. Johnson, 48 N. Y. (3 Sick.) 27, 33; Roberts v. Albany R. R. Co., 25 Barb. 662.
    By the act of 1872, stockholders are jointly and severally liable for the amount equal to their unpaid stock: Thompson v. Meisser, 108 Ill. 358 ; Coalfield Co. v. Peck, 98 Ill. 139.
   Moran, J.

It does not appear from the record that the Texas Continental Transportation Company was organized under the General Incorporation Act of the State of Illinois, in force July 1, 1872, but the counsel for both parties in their arguments in the briefs on file in this court, discuss the question presented, on the theory that the corporation was formed under said general act. In deciding the case we shall therefore assume that the corporation in question was organized under the General Incorporation Act. Section 25 of said act is as follows: “If any corporation or its authorized agents shall do or refrain from doing any act which shall subject it to a forfeiture of its charter or corporate powers, or shall allow any execution, or decree of any court of record for a payment of money, after demand made by the officer, to be returned ‘ no property found ’ or to remain unsatisfied for not Jess than ten days after such demand, or shall dissolve or cease doing business, leaving debts unpaid, suits in equity may be brought against all persons who were stockholders at the time or liable in any way for the debts of the corporation by joining the corporation in such suit; and each stockholder may be required to pay his pro rata share of such debts or liabilities to the extent of the unpaid portion of his stock, after exhausting the assets of such corporation. And if any stockholder shall not have property enough to satisfy his portion of such debts or liabilities, then the amount shall be divided equally among all the remaining solvent stockholders. And courts of equity shall have full power on good cause shown, to dissolve or close up the business of a corporation or appoint a receiver, ” etc.

It will be seen that the section limits the liability of stockholders, when suits in equity are brought against them, jointly with the corporation, to paying their pro rata share of the debts of the corporation, after the assets of the corporation are exhausted. It is plain from the allegations of the bill, that it was framed to reach the remedy provided in the 25th section of the law, and the special prayer for relief is in the words of the act. It is true the bill has a general prayer for relief, and it is also true that under such general prayer any appropriate relief might be granted to which the complainant, by the allegations in his bill and the evidence adduced, shows himself equitably entitled. The relief must be relief which the court has the legal power to grant, however, and the court has no power under such general prayer for relief, to enter a decree subjecting a stockholder in a corporation formed under the General Incorporation Act, to a liability different from or greater than that imposed upon him by the provisions of that act.

By sections 8 and 25 of that act, the liability of stockholders in corporations formed under it are defined and limited. Under section 8, by the proceeding in garnishment, stockholders may be compelled to pay to. the garnishing creditor any balance unpaid upon stock owned by them respectively, whether such balance is called in or not. Coalfield Co. v. Peck, 98 Ill. 139.

But under section 25, when the proceeding must be by suit in equity, the stockholder’s liability to pay anything on his unpaid stock is deferred until the assets of the corporation are exhausted. It would be inequitable to require the individual stockholders to pay any portion of the liability of the corporation debts nntil the assets of the corporation are ascertained and fully applied, or their insufficiency clearly shown. Harper v. Union Manufacturing Co., 100 Ill. 225.

The proceeding involves equities between the stockholders who are defendants, and who have not paid the amount of their subscriptions, and contemplates not merely payment of the debt of one corporation creditor, but the ascertaining the debts and the liabilities of the corporation and the dissolution and closing up of the company. There is a clear distinctii n between the rights of a creditor as against a stockholder in a corporation organized under this general law, and one created by special charter. The cases cited by.counsel for defendant in error, in which creditors of the corporations were permitted to reach, through a creditor’s bill, the balance unpaid on stock of individual stockholders, are in all cases under special charters, where there was a general liability for unpaid stock. Such are the cases of Hickling v. Wilson, 104 Ill. 54, and Hatch v. Dana, 101 U. S. 205.

The liability of the stockholder is upon his subscription, and when the incorporation act fixes the measure of that liability and prescribes the method and conditions of its enforcement, the conditions must be observed and the method prescribed must be pursued ; and where vhe law requires the stockholder to pay only his pro rata share of the debts after the assets of the corporation shall have been exhausted, it is error to decree to a creditor, to be applied in satisfaction of his debt, the whole amount that any stockholder may owe upon his stock, without finding that the assets have been exhausted, and that all other stockholders with whom he should pro rate are insolvent. Patterson v. Lynde et al. 112 Ill. 196.

The decree of the circuit court in ordering as it did, that the plaintiffs in error should pay to the complainant in the bill the whole amount found due on the stock held by them respectively, without ascertaining under the conditions of section 25 the pro rata that might be required of them, was unauthorized, and must therefore be reversed and the ease remanded.

Beversed and remanded.


author: Bailey, J.

text:
    Reinhold Goetz et al. v. Jacob Koehler.
    1. Supplying lost record.—Every court of general jurisdiction has inherent power to supply its own lost or defaced records.
    2. Same—What necessary to snow.—Upon a motion to restore to the files a portion of the record which has been lost, all that is necessary to entitle the party to the relief asked for, is proof that such record once existed and that it has disappeared and can not be produced. The evidence in this case justified the court below in granting leave to plaintiff to restore the record by filing a copy of the entry of appearance.
    Error to the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed October 27, 1886.
    Mr. Clarence F. Dore, for plaintiffs in error.
    Mr. Lawrence M. Ennis, for defendant in error.
   Bailey, J.

In this case Jacob Koehler brought suit against Beinliold Goetz and Gustav Stade, before a justice of the peace, where a trial was had and a judgment rendered in favor of the plaintiff for $200 and costs. The defendants thereupon took an appeal to the superior court by filing their appeal bond in the office of the clerk of that court. Afterward, at the June term, 1886, of said court, said cause was called for trial, and neither party appearing, the appeal was dismissed at the defendants’ costs for want of prosecution, with ten per cent, damages for delay, and a procedendo was awarded to the justice.

The appeal was taken December 11,1885, and the transcript from the justice ivas filed in the superior court the same day, but the record originally filed in this court failed to show any service of summons on the plaintiff, or any entry of appearance by him, more than. ten days before the first day of said June term. A supplemental record has now been filed, from which it appears that since the filing of the original record, an order has been entered in the court below, on motion of the plaintiff, giving him leave to restore to the files a copy of a written appearance filed by him, as he claims, on the 28th day of May, 1886, that being ten days before the first day of said term.

If it be true that the plaintiff’s appearance was entered in writing ten days before the June term, the court had jurisdiction to dismiss the appeal, and there was no error in its so doing. The supplemental record shows such entry of appearance, and the only question to be considered is, whether any error was committed by the court in granting leave to the plaintiff to restore to the files a copy of the entry of appearance claimed to have been filed May 28, 1886.

It can not be doubted that every court of general jurisdiction has inherent power to supply its own lost or defaced records. Douglass v. Yallop, 2 Burrow, 722; Jackson v. Hammond, 1 Caines’ Cas., 496 ; Deshong v. Cain, 1 Duvall, 309; McLendon v. Jones, 8 Ala. 298; Doswell v. Stewart, 11 Id. 629; Adkinson v. Keel, 25 Id. 551; Pruitt v. Pruitt, 43 Id. 73; Pierce v. Thackery, 13 Fla. 574; Fisher v. Sievres, 65 Ill. 99; Freeman on Judgments, Sec. 89.

The affidavit of the plaintiff’s attorney filed in support of his motion to restore to the files the lost entry of appearance states in substance, that on the 28tli day of May, 1886, hefiled in the office of the clerk of the superior court, the plaintiff’s entry of appearance in this case in writing, and at the same time paid to said clerk $1.50 as an appearance fee; that at the time the appeal was dismissed, the plaintiff and his counsel were present and ready for trial, and that said entry of appearance was then on file. In opposition to said motion the defendants filed three affidavits, of which one was by an employe in the office of the defendants’ attorney, stating that on the 28th day of May, 1886, in the fore part of the" day and again at about three o’clock in the afternoon, he examined the files in the cause at the request of said attorney, and found no entry of appearance on file, and that on the latter occasion he inquired of the clerk in charge and was informed that no appearance had been filed. The second affidavit was hy another attorney who says that on the 30th day of June, 1886, the day the appeal was dismissed, at about a quarter before ten o’clock in the forenoon, he examined said files at the request of the defendants’ attorney, and that at that time no entry of appearance was on file among the papers; that not being able to remain in court, he called the attention of the clerk of the court to the want of an appearance and asked him to have the cause continued should it be reached, to which the clerk responded, “ All right,” whereupon the affiant went away. The third affidavit is by the defendants’ attorney, who states that about one week before the appeal was dismissed, he examined said files and found no appearance of the plaintiff on file, and that to the best of his knowledge and belief no such appearance was ever filed.

It is very possible that the foregoing affidavits, if they had been filed by the defendants in support of a motion to set aside the default, might have been sufficient to warrant the court in granting them that relief. Such motion would have been addressed to the sound discretion of the court, or, in other words, to that equitable jurisdiction which courts of law exercise over their own judgments. But this is not a motion of that character. It is a motion to restore to the files a portion of the record which has been lost, and all that is necessary to entitle the party to the relief asked for is proof that such record once existed, and that it has disappeared and can not be produced.

It is not disputed that the plaintiff’s original entry of appearance is not now among the files and can not be found. The only question, then, for the court below to determine from the evidence was, whether it was in fact filed May 28, 1886, as claimed by the plaintiff. On that question the affidavit of the plaintiff’s attorney is positive and explicit, and his testimony is not directly disputed by any of the affidavits filed by the defendants.

The affidavit of their first witness merely shows the absence of the entry of appearance from the files as late as three o’clock p. m. of May 28th, but as the affidavit of the plaintiff’s attorney does not attempt to fix the hour of the day at which it was filed, there is no real contradiction between the two witnesses. The entry of appearance may have been filed after three o’clock p. m., and so the statements of both affiants may be true. Of the other affidavits for the defendants, one shows that the files were examined the morning of the day on which the appeal was dismissed, and the other that' they were examined about a week before that time, and that the entry of appearance was not found among the papers on either occasion. While these affidavits standing alone would doubtless tend to show that the paper had not been filed, yet they do not furnish such clear contradiction of the evidence furnished by the affidavit of the plaintiff’s attorney as would warrant us in holding that the court below,, in passing upon this issue of fact, decided contrary to the preponderance of the evidence. The fact that the paper was not among the files on either of these two occasions may be explained upon various theories consistent with the truthfulness of the testimony of the plaintiff’s attorney that he filed it May 28th.

We are of the opinion that the decision of the court finding that an entry of appearance had been filed as claimed by the plaintiff, and giving him leave to restore the record by filing a copy of such entry of appearance, was justified by the evidence. It follows from this conclusion that all the other errors assigned by the defendants must be overruled. The judgment will therefore be affirmed.

Judgment affirmed.


text:
    Andrew Prins v. South Branch Lumber Co.
    1. Negotiable instbuments—Notice.—Where a party is about to receive a bill or note, if there are any such suspicious circumstances accompanying the transaction or within the knowledge of the party as would induce a prudent man to inquire into the title of the bolder or the consideration of the paper, he shall be bound to make such inquiry, or if he neglects to do so, he shall hold the bill or note subject to any equities which may exist between the previous parties to it.

      2. Writing on noté putting indorsee on inquiry.—Where a line was drawn over the words “ order of ” in the printed blank form on which a note was written and on the margin of the note in red ink was written “ This note is not negotiable,” held, that the words written on the margin are to be taken as a part of the note, and that they were sufficient to put the indorsee on inquiry so as to charge him with equities between the original parties to the note.
    3. Notice.—Where the matter of which express notice is proved is merely a circumstance collateral to the main fact with notice of which it is sought to charge the party, the collateral circumstance, if sufficient to put him upon inquiry leading to the truth, will, in general, be regarded as good notice of the ultimate fact to be established.
    Error to the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed October 27, 1886.
    Messrs. Kraus, Mayer & Brackett, for plaintiff in error;
    that one who purchases a negotiable instrument innocently, is yet put upon inquiry where an inspection of the instrument itself points directly to a defect which requires explanation, cited 1 Daniel on Negotiable Instruments, 3d Ed., § 795; Wade on Notice, 2d Ed., § 90 ; Story on Promissory Notes, § 197 ; Eagle v. Northwestern Mutual Life Ins. Co., 92 U. S. Supreme Ct. 330, 342; Sturges v. Metropolitan Nat. Bank, 49 Ill. 220 ; Flint v. Lewis, 61 Ill. 299; Frink v. Ryan, 3 Scam. 322.
    Any memorandum written under or in the margin, or indorsed upon a note, constitutes an essential part of the contract, when such is the intent of the parties : Jones v. Fales, 4 Mass. 254; Gibson v. Hawkins, 69 Ga. 354; Wait v. Pomeroy, 25 Mich. 25 ; Grimison v. Russell, 14 Neb. 521; Fletcher v. Blodgett, 16 Vermont, 26; Johnson v. Heagan, 23 Maine, 329 ; Franklin Saving Institution v. Reed, 135 Mass. 365 ; Costello v. Crowell, 127 Mass. 293; Blake v. Coleman, 22 Wis. 416 ; Hartley v. Wilkinson, 4 Camp. 127 ; Lusk v. Lancashire, 2 Camp. 205 ; Chalmely v. Darley, 14 Meeson & W. 344 ; 2 Parsons’ Bills, 539 el seq.; 1 Daniel on Negotiable Instruments, 3d Ed., § 149.
    Whatever puts one upon inquiry amounts in judgment of law to notice : Henneberry v. Morse, 56 Ill. 394; Harper v. Ely, 56 Ill. 179 ; McLaurie v. Thomas, 39 Ill. 291.

      Messrs. Frank J. Smith & Helmer, for defendant in error.
   Moran, J.

Appellee brought an action against appellant, and upon the trial in the court below, the following note was introduced in evidence by the plaintiff:

($862.78.) Chicago, August 1, 1886.
Two months after date, for value received, I promise to pay to the order of ETovy & Weindl the sum of eight hundred and sixty-two and 75-100 dollars, at the office of J. F. Stepinain, Chicago, Ill., without interest.
This note is not negotiable. (Written in red ink on margin of note.)
Andrew Prins.
Indorsed on the back as follows:
Novy & Weindl,
J. M. Rezny,
J. M. Rezny.

And thereupon plaintiff rested.

Defendants then made the following offers of proof:

First. The defendant offers to prove that the memorandum on the face of the note in evidence, “ This note is not negotiable,” appearing in red letters, was written before the note in evidence was executed, and before the note was delivered to the payees, ETovy & Weindl, and before it was delivered to the plaintiff in this case.

Second. Defendant offers further to prove that the memorandum, “ This note is not negotiable,” was written at the time of the execution of the note, in the presence of, and by the agreement and consent of the maker, Andrew Prins, and the payees, Eovy & Weindl, which agreement was as follows:

That inasmuch as the defendant, Prins, had theretofore, as an accommodation, and at the request of Hovy & Weindl, guaranteed a note of Eiovy & Weindl, given them for money which they actually owed to a lumber company, it was agreed that the note in evidence should not be negotiated, transferred or parted with by Hovy & Weindl.

Third. The defendant further offered to prove that the note so guaranteed by Prins as au accommodation for Eovy & Weindl, the payees of the note in suit, was for $1,003; that when that note so guaranteed became due, Bovy & Weindl did not pay the same, and the defendant, Prins, was compelled to and did pay it by virtue of his guaranty; and that at the time the memorandum was placed upon the note and the note delivered to the payees, it was agreed that in case Prins should be compelled to pay the note, which he had guaranteed as above, then the note in suit should be canceled and surrendered to Prins.

The court ruled out the offers and gave judgment against appellant for the amount of the note and interest, and the case comes to this court by appeal.

The only question involved is, whether striking out the words “ order of” in the printed blank form on which the note was written, and writing,-“This note is not negotiable” on the margin of the note, were sufficient to put the indorsee on inquiry and thus charge him with equities between the original parties to the note. The rule adopted by the Supreme Court of this State, at-an early day, as to the duty of the indorsee of a note or bill, and which has been adhered to without modification, is, that “ where a party is about to receive a bill or note, if there are any such suspicious circumstances accompanying the transaction or within the knowledge of the party as would induce a prudent man to inquire into the title of the holder or the consideration of the paper, he shall be bound to make such inquiry, or if he neglects to do so, he shall hold the bill or note subject to any equities which may exist between the previous parties to it.” Russell v. Hadduck, 3 Gilman, 233; Sturges’ Sons v. Met. Nat. Bank, 49 Ill. 220; Flint v. Lewis, 61 Ill. 299.

Even by courts where a rule more generally favorable to the dealer in negotiable paper is applied than obtains in this State, the doctrine of notice is rigidly applied when the marks or words from which notice is inferable appear on the face of the paper. Thus in Goodman v. Simonds, 20 Howard, 343, it is s^id by Mr. Justice Clifford, speaking for the court: “Where the supposed defect or infirmity in the title of the instrument appears on its face at the time of the transfer, the question whether a party who took had notice or not is in general a question of construction, and must be determined by the court as a matter of law; and so it was understood by this court in Andrews v. Pond, 13 Peters, 65, where it is said that a person who tabes a bill, which upon the face of it was dishonored, can not be allowed to claim the privileges which belong to a bona fide holder. If he chooses to receive it under such circumstances, he takes it with all the infirmities belonging to it, and is in no better condition than the person from whom he received it. And the same doctrine was adopted and enforced in Fowler v. Brantly, 14 Peters, 318, where, in speaking of a promissory note so marked as to show for whose benefit it was to be discounted, this court held that all those dealing in paper “ with such marks on its face must be presumed to have knowledge of what it imported.” But it is a very different matter when it is proposed to impeach the title of a holder for value, by proof of any facts and circumstances outside of the instrument itself.

The contract between the original parties to the paper is to be gathered from all that appears on it; or, as it is said, “the contract must be collected from the four corners of the document,” and any memorandum made by agreement of parties before signing will bind all parties to the instrument, and all who have or may be legally presumed to have notice thereof. 1 Dan. on Negotiable Instruments, Sec. 149 et seq., and authorities cited. In Jones v. Fales, 4 Mass. 245, the suit was brought upon a note on which, at the left side thereof, were written the words [Foreign Bills] included in brackets'. Chief Justice Parsons said: “It is a reasonable conclusion that they must be all taken to be the words of the maker of the note, written before it was delivered to the promisee, and not the words of the promisee. * * * If they are the words of the promisor they must be considered either as idle words, or as a part of the promise to which he gave his signature. * * * I am not authorized to consider them as words without meaning ; and I do not think it material whether they were part of the original contract, or added in explanation of it. For when the promisee took the note with these words on it, he was subject to the explanation in the memorandum, if it was one, as much as he would be bound by these words, if they were a part of the promise.”

What marks or words upon a note will be held sufficient to put a taker upon inquiry, so as to charge him with equities, has been illustrated in some of the cases. In Hall v. Hale, 8 Conn. 336, the defense was that the defendant was an accommodation indorser, and that the note was given in renewal of another note, but was fraudulently negotiated. It was shown that the word "renewal” had been written upon the paper near the bottom, and had been erased by a pen-knife, but by inspection and close examination, certain letters in that word might be seen and the word in part made out. The court reversed the case for a misdirection of the jury, and in the opinion say: “It is undoubtedly clear that if the word ‘ renewal ’ had been fairly written on the note in question and remained upon it at its negotiation to the plaintiff, or if it had been partially erased, leaving such appearances as would, in the ordinary course of business, have excited the suspicions of a careful and prudent man, the defendant would be authorized to defend himself on the ground assumed by him.”

In Wiggins v. Bush, 12 Jones’ Rep. 306, a note dated on the 24th of May, but made on the 22d of April, had entered upon it a memorandum of the day on which in fact it was executed and indorsed. The court held that by- the indorsement of the real date, the plaintiffs, who were indorsees, had such information as ought to have led to inquiry into the manner of obtaining it. Say the court: “The post-dating of the note which was indorsed was an extraordinary circumstance, and must have created suspicion. The neglect of the plaintiffs to make any inquiry ought to subject them to the consequences of the transaction between the original parties.” From the foregoing cases and others which we might cite, we are led to the conclusion that the words, “ This note is not negotiable,” plainly written, as they were, on the margin of the note in suit, are to be taken as part of the note : that these words are not to be regarded, as counsel for appellee contends they should be, as a statement of a legal opiinion that the note was not a negotiable one, but that the fair import of the words is, that it was agreed between the parties that the note was not to be negotiated.

That these words should be written on the note was a singular circumstance, and one that would naturally arrest the attention and arouse the suspicion of an ordinarily prudent man, and such a one would not be willing to rest upon the conclusion that the words were idly written, and were meant to express merely an unsound legal opinion. Nor does the fact that the agreement that the note should not be negotiable does not of itself show that there were in fact equities between the original parties, prevent the application of the principle.

The rule is, “where the matter of which express notice is proved is merely a circumstance collateral to the main fact with notice of which it is sought to charge the party, the collateral circumstance, if sufficient to put him upon inquiry leading to the truth, will, in general, be regarded as good notice of the ultimate fact to be established.” Wade on Notice, See. 10, and cases cited.

It is true, as counsel argues, that the note was still assignable, so that the assignee could maintain a suit upon it in his own name, but that is by force of the statu I e, and does not relieve the assignee from the equities existing between the original parties to the note, of which he was put on inquiry by the words upon the note, and of which lie must therefore be held to have had notice.

What appellee could have learned by inquiry is of the same effect as if it was stipulated at large on the face of the note itself, and the case, therefore, falls directly within the rule in Frink v. Ryan, 3 Scam. 322.

The proof offered by appellant was competent and constituted a good defense to the note, whether appellee took it before or after maturity. It is unnecessary to notice other errors assigned. For the error indicated the judgment must be reversed and the cause remanded.

Reversed and remanded.


author: McAllister, P. J.

text:
    H. B. Wickersham, Assignee, etc., v. Charles H. Beers, Impl’d, etc.
    1. Instructions—Verbal admissiors.—An instruction that, “as a general rule, the statement of a witness as to the verbal admissions of a party should he received by the jury with caution, as that kind of evidence is subject to imperfection and mistake. The party himself may he misinEdrmed or may not have clearly expressed his meaning, or the witness may have misunderstood him," held, to be a violation of section fifty-one of the Practice Act that ‘‘ the court, in charging the jury, shall only instruct as to the law of the case."
    2. Negotiable instruments—Promissory rote—Corsideratior.— “ We promise to pay you out of the first receipts of this stock, which we control as trustees, $2,148.93, and interest from June 19, 1884. C. H. Beers and Wm, H. Coney, trustees. Dated Chicago, November 19, 1884,” not regarded as a promissory note, and therefore will not import a consideration.
    3. Eviderce—Burder of proof.—In a suit upon a promissory note, which imports a consideration, under the plea of want, of consideration, the burden of proof will be upon the defendant to support his plea.
    Appeal from the Superior Court of Cook county; the Hon. Rollin S. Williamson, Judge, presiding.
    Opinion filed October 27, 1886.
    This was an action brought by appellant Wickersham, as assignee, under the provision of the statute concerning voluntary assignments, etc., of Mark D. Shay, against appellee Beers and one Coney, Beers alone having been served with process.
    The declaration contained two special and the common counts. The first special count was upon a promissory note, alleged to have been made by Beers and Coney, bearing date June 19, 1884, whereby they, for value received, promised to pay to said Shay, thirty days after date, the sum of §2,148.93, with interest from date, which note had been destroyed by Beers or Shay, so that it could not be produced. The second special connt alleged the borrowing by defendants of said Shay said sum of money, for which the former gave said Shay an instrument in writing which has since been destroyed, bearing said date, whereby they promised to repay to said Shay said sum, with interest, out of the first moneys they received from the sale of a stock of goods formerly owned by said Shay.
    A plea of-the general issue in assumpsit was filed by Beers’ attorneys, by one of whom the plea was verified by affidavit. And on the trial, the court permitted the defendant to file a further plea of want of consideration.
    There was a trial resulting in a verdict and judgment for defendant, and the plaintiff prosecutes this appeal.
    It appeared on the trial that said Shay, being a wholesale dealer in boots and shoes, in Chicago, and in debt in about the sum of $80,000, became insolvent, and June 2, 1‘884, a judgment by confession was entered up by the National Bank of Illinois against him for the sum of $5,457.76, on which execution issued, and was, on that day, levied on his whole stock. He also confessed judgments on the same day in favor of appellee Beers, said Coney, one Dysart and H. B. Erskine, respectively, for sums aggregating about $25,000, on which executions were issued and levied on the same day, but after that of the bank, upon the same goods.
    It appeared that these several judgments were all for money borrowed by said Shay, and that he owed divers other creditors large sums for merchandise by them sold and delivered ; that the sheriff began selling the goods upon the execution in favor of said bank, when an arrangement to prevent sacrifice of them was entered into June 47, 4884, between all the judgment creditors, except said bank, by which said Beers and Coney were for themselves, and as trustees for Dysart and Erskine, to bid off at sheriff’s sale, all of said stock remaining unsold, at a price not to exceed the aggregate amount of all of said judgments, including that in favor of said bank, and that said Beers and Coney might take the title to the goods and property they might so purchase at said sale, in their own right, to the extent of their proportionate interests as such judgment creditors and as trustees for the other judgment creditors (Dysart and Erskine) in proportion to their respective interests; “it being understood that each of the judgment creditors shall acquire an equitable interest in the goods so purchased by the said trustees, in proportion to the amount of the actual and real claim of each of them respectively, against the said Shay, on account of which each of their respective judgments were entered up.” This agreement provided for the manner in which the said trustees, Beers and Coney, should dispose of the goods and apply the proceeds. It appeared that said bank, refusing to become a party to said arrangement, but having a first lien, insisted upon having its judgment immediately paid. June 21, 1884, the sheriff sold the whole stock, and Beers and Coney became the purchasers under said arrangement, at an aggregate sum of about §20,000, the precise sum being not very clearly shown. About the same time, or soon thereafter, they received from Shay the sum of §2,148.93, which he had collected upon outstanding accounts in his favor, and which he let Beers and Coney have, and they applied it on the judgment of the bank against him, as aforesaid. Whether that was a loan by Shay to Beers and Coney, or whether he paid the money, through their hands, on said judgment, were controverted questions on the trial, as to which the testimony was conflicting. It appears, however, without conflict, that Beers and Coney, upon receiving said money from Shay, gave him an instrument in writing respecting the repayment to him of that money. But the paper having been surrendered and destroyed, the evidence describing it was conflicting. There was evidence tending to show that it was an absolute promise to repay the money to Shay in thirty days, with interest. It appeared that July 9, 1884, Shay made an assignment in pursuance of the statute, for the benefit of his creditors; that afterward, Nov. 19, 1884, he surrendered up said instrument to Beers, and the latter and Coney made another in these words:
    “M. D. Shay: We promise to pay you out of the first receipts of this stock, which we control as trustees, §2,148.93 and interest from June 19th, 1884.
    C. H. Beers,
    Wm. M. Coney,
    Trustees.
    Dated Chicago November 19th, 1884.”

      There was evidence tending to show that this latter instrument was identically the same as the former one except as to date.
    The plaintiff testified to verbal admissions made to him by defendant, Beers, tending to establish an acknowledgment of liability on his part for said money received by him and Coney from Shay. Plaintiff also called as a witness the stenographer who took down the testimony of said Beers, taken in a proceeding in the county court, and who, refreshing his recollection by his notes, testified that Beers on that occasion testified that he and Coney borrowed the money in question of said Shay, and gave their promissory note therefor, payable in thirty days from the date of it, which was the note Shay surrendered to him.
    Beers did not offer himself as a witness on the trial of this present case, and introduced no evidence as to said admissions on his part.
    The court, at the instance of counsel for Beers, gave to the jury the following instructions :
    1. “ The court instructs the jury that although parol proof of the verbal admissions of a party to a suit, when it appears that the admissions were understandingly and deliberately made, often afford satisfactory evidence, yet as a general rule the statement of a witness as to the verbal admissions of a party should be received by the jury with caution, as that kind of evidence is subject to imperfection and mistake. The party himself may have been misinformed, or may not have clearly expressed his meaning, or the witness may have misunderstood him. But it is the province of the jury to weigh such evidence and give it the consideration to which it is entitled in view of all other evidence in the case.”
    2. “If the jury believe from the evidence that Ooney and Beers received the sum of money in question in this suit, as trustees under the terms of the trust introduced in evidence, and that they used said sum of money, as such trustees, in liquidation of the indebtedness of said Mark D. Shay, which they assumed by said trust, then they are not liable to the plaintiff in any sum, and your verdict should be for the defendant.”

      3. “ The court instructs the jury, as a matter of law, that the burden of proof is upon the plaintiff, and it is for him to prove his case by a preponderance of the evidence. If the jury find that the evidence bearing upon the plaintiff’s case is evenly balanced, or that it preponderates in favor of the defendant, then the plaintiff cannot recover, and the jury should find for the defendant,”
    Messrs. Trumbull, Washburns & Robbins, for appellant;
    that the sole issue upon which there was a trial was that raised by the plea of want of consideration and upon that issue the burden of proof was upon the defendant, cited Stacker v. Watson, 1 Scam. 209; Mitchell v. Deeds, 49 Ill. 420.
    Mr. Wm. J. Manning and Mr. P. V. Castle, for appellee ;
    that the filing the plea in question did not have the effect to change the burden of proof as claimed by appellant, cited Holmes v. Karsper, 5 Binney, 469; Thomas v. Newton, 2 Carrington & P. 606 ; Rogers v. Morton, 12 Wendell, 484.
   McAllister, P. J.

It is an express declaration of section 51 of our Practice Act, that “the court in charging the jury, shall only instruct as to the law of the case.”

We regard the first instruction on behalf of the defendant below, as violative of that provision. The court thereby told the jury that, as a general rule, the statement of a witness as to the verbal admissions of a party should be received by the jury with caution, as that kind of evidence is subject to imperfection and mistake. The party himself may be misinformed, or may not have clearly expressed his meaning, or the witness may have misunderstood him.”

While it is true that text writers upon the law of evidence and judges of courts may have indulged in such observations as to the quality, value and weight of that species of evidence called verbal admission, yet there is no such rule of law as that laid down by the court in this instance, which would warrant the court in so giving it to the jury as law.

The instruction, in this respect, trenched upon the province, of the jury as to vital points in the case. The jury would naturally understand the rule stated by the court to apply to the testimony of the stenographer, as well as to that of the plaintiff. Rafferty v. The People, 72 Ill. 45.

The second instruction for the defendant was, in our opinion, faulty and fatally defective. It told the jury that if they found from the evidence “that Ooney and Beers received the sum of money in question in this suit as trustees under the trust introduced in evidence, and that they used the said sum of money, as such trustees, in liquidation of the indebtedness of said Mark D. Shay, which,they assumed by said trust, then they are not liable to the plaintiff in any sum, and your verdict should be for the defendant.”

The theory of plaintiff’s case, and which his evidence tended to support, was that they borrowed that money of Shay for their own personal benefit, promising to repay it with interest, by giving their individual promissory note therefor, dated June 19, 1884, payable in thirty days from that date. The instruction contained no hypothesis excluding that theory. Coney and Beers were to, and did, under the trust agreement, with the other two creditors having executions junior to that of the bank, like their own, acquire individual interests in the goods sold under the execution in favor of the bank and bought by them, subject to the prior rights of the bank, and incurred individual liabilities in respect thereto. If, therefore, under these circumstances, they borrowed the money of Shay under an absolute promise, on their part, to repay it to him in thirty days, we can perceive no reason why the loan itself would not afford a good and valid legal consideration to support that promise. That instruction was also calculated to mislead the jury, by the rather imperative direction at the end of it, that the verdict of the jury should be for the defendant. Roach v. The People, 77 Ill. 25.

By the third instruction for the defendant, the court told the jury as matter of law, that the burden of proof was upon the plaintiff, and that it was for him to prove his ease by a preponderance of the evidence. “If the jury find that the evidence bearing upon the plaintiff’s case is evenly balanced, or that it preponderates in favor of the defendant, then the plaintiff can not recover, and the jury should find for the defendant.”

This instruction likewise ignores the plaintiff’s theory of Beers and Coney having borrowed the money - of Shay and given him their promissory note for the repayment of it in thirty days.

If, instead of that, the instrument which they gave Shay, June 19, 1884, was identical with that given November 19, 1884, except as to date, we are inclined to think that, under the rules stated in Turner v. Railroad Co., 95 Ill. 134, and cases there cited, such instrument could not be regarded as a promissory note, and would not, therefore, import a consideration. If that was the character of it, then under the plea of want of consideration, the plaintiff would be subject to the burden of proving one, in order to recover upon the instrument itself. But if, on the other hand, such instrument was in fact and in law a promissory note, it would import a consideration, and under the plea of want of consideration, the burden would be upon the defendant to support his plea. 1 Wait’s Actions and Defenses, 563, and cases there cited.

The instruction recognizes none of these distinctions, and was therefore misleading and erroneous.

For the errors indicated the judgment below must he reversed and the cause remanded.

Judgment reversed.


text:
    James A. Hearn v. City of Chicago.
    1. Negligence—Defective sidewalk.—An action on the case brought by plaintiff against the city to recover damages for a personal injury caused, as alleged, by the defective cover of a coal-hole on a sidewalk giving way and precipitating him into the cellar below. Plaintiff offered in evidence an ordinance of the city prescribing as to the structure and material of coal-holes, and malting them subject to the direction and supervision of the commissioner of public works or such other person as the city council might designate. Held, that such ordinance was admissible in evidence, and was proper to be considered by the jury upon the question of the negligence of the officers of the city.
    2. Offering ordinance in evidence.—It was not incumbent on the plaintiff to prove that the book of Revised Ordinances offered by him was the latest revision. It was sufficient for him to prove the existence of the ordinance which he desired to offer in evidence, and if it had been repealed or supers.ded by a later ordinance the burden was upon the city to show that fact.
    3. Implied notice of defect in sidewalk.—The court is of opinion that it is not necessary, in order to charge the city with implied notice of a defect in a sidewalk, that the circumstances should be such as to charge the particular person or persons having special supervision of the sidewalks with such notice. It is enough if the circumstances raise an implication of notice to any officer or agent of the city, whose duty it is to communicate to the city or its proper executive officers the existence of such defect.
    Error to the Superior Court of Cook county; the Hon. Hollín S. Williamson, Judge, presiding.
    Opinion filed November 8, 1886.
    Mr. John Gibbons, for plaintiff in error;
    cited City of Champaign v. Patterson, 50 Ill. 61; City of Chicago v. Brophy, 79 Ill. 277 ; City of Chicago v. Johnson, 53 Ill. 91; City of Chicago v. O’Brien, 111 Ill. 532; City of Bloomington v. Bay, 42 Ill. 503 ; Boucher v. City of New Haven, 40 Conn. 456.
    Mr. H. Washburn, and Mr. Clarence A. Knight, for defendant in error;
    that a city is not liable for a failure to enforce its by-laws or ordinances, cited Stillwell v. N. Y. 49 N. Y. 360; Dillon on Municipal Corporations, § 950, 3d Ed.; Faulkner v. City of Arnone, 65 Ind. 130 ; Kistner v. City of Indianapolis, 100 Ind. 210; City of Lafayette v. Finberlake, 88 Ind. 330.
    The city is not liable for the improper construction of a sidewalk: Urquohart v. Ogdensburg, 91 N. Y. 67 ; Cain v. Syracuse, 95 N. Y. 90; Saulsbury v. Village of Ithaca, 94 N. Y. 27.
   Bailey, J.

This was an action on the case, brought by James A. Hearn against the City of Chicago, to recover damages for a personal injury caused, as is alleged, by a defective sidewalk. The trial, before the court and a jury, resulted in a verdict and judgment for the defendant, and the plaintiff brings the record here by writ of error. The evidence tends to show that, on the 20tli day of June, 1884, while the plaintiff was walking upon the sidewalk on South Canal street in said city, the cover of a coal-hole or opening through the sidewalk gave way, precipitating him into the cellar or area beneath, thereby causing the i'njury complained of. Said cover appears to have been about two and one half feet wide and four feet long, and to have consisted of two or three two-inch plank, battened on the under side. One end of said cover rested on the curb wall and extended to the outside of said wall, and the other end rested on the first stringer or joist supporting the sidewalk, having a bearing on said joist of only about an inch. The evidence shows that, at the time of the injury, said cover was in no way hinged or fastened to the residue of the sidewalk, and that there was no cleat or other appliance to prevent its being moved in the direction of the curb wall, so as to lose its bearing on the joist and fall into the cellar. There was some evidence tending to show that said sidewalk had been in that condition for several months prior to the injury, and we think it may be fairly inferred from the evidence that such was its original construction.

The bill of exceptions does not purport to embody all the evidence adduced at the trial, but instead of so doing, it purports to recite all the facts which the evidence tended to prove. In his declaration the plaintiff set out, by proper averments, certain ordinances of the city of Chicago, to wit, an ordinance defining the duties of the superintendent of streets, among which was that of having charge of the construction and repair of all sidewalks, and also an ordinance requiring every opening in any vault or coal-hole, or aperture in the sidewalk over such coal-hole or vault, to be covered with a substantial iron plate with rough surface to prevent accidents, and providing that the entire construction of said coal-holes and vaults should be subject to the direction and supervision of the commissioner of public works, or such other person as the city council might designate. At the trial the plaintiff offered said ordinances in evidence, but on the defendant’s objection they were excluded by the court, and exception was duly taken by the plaintiff.

We are of the opinion that said ordinances were material, and that their exclusion was error. They tended to show that the city had taken under its cognizance and control the sidewalks within its limits, and especially the entire supervision of the construction of the covers of all coal-holes or apertures in its sidewalks. On this point the case of City of Champaign v. Patterson, 50 111. 61, is a direct authority. It would also seem that said ordinances were proper matter to be considered by the jury upon the question of the negligence of the officers of the city. While it is true that a failure by a city to enforce its own ordinances will not, of itself, render it liable to a private person who may be injured thereby, still, the fact that the city, for the express purpose of preventing accidents, has assumed the control of the construction of covers to coal-holes and apertures in its sidewalks, and required them to be made of a 'certain structure and material, and committed the entire matter of their construction to the direction and supervision of a particular officer, might, when taken in connection with other facts, have an important bearing upon the question of the negligence of such officer in relation to the original construction, or to the subsequent inspection of the cover which caused the injury to the plaintiff.

But it is urged that the plaintiff offered no proper proof of the ordinances of the city. The recital of the bill of exceptions is: “ And to further sustain the issues on his part, the plaintiff offered in evidence the following sections of the Revised Ordinances of the City of Chicago,” etc. Here the court certifies that the sections offered were portions of the Revised Ordinances of the city, and that fact can not now be controverted. But it is objected that the record fails to show which of the revisions of the ordinances was produced and offered. We do not judicially know that there ever was any other revision than the one produced and offered in evidence. But even if we could say that there had been several, it was not incumbent on the plaintiff to prove that the book of Be vised Ordinances offered by him was the latest revision. It was sufficient for him to prove the existence of the ordinance which he desired to offer in evidence, and if it had been repealed or superseded by a later ordinance, the burden was clearly upon the city to show that fact.

The court, at the instance of the city, gave to the jury the following instruction:

“ The jury are instructed that the city is not liable for latent or unseen defects in the sidewalks of the city, which are not discoverable by the exercise of reasonable care; and if you believe from the evidence in this case, that the cover to the coal-hole in question was in a reasonably safe condition, so far as discoverable by the exercise of reasonable care on the part of the officer of the city having charge of such matters at the time when the alleged injury to the plaintiff occurred, then you should find for the city, disregarding all other questions.”

This instruction seems to us to be erroneous for several reasons. The ordinances having been excluded, there was no evidence of the existence of any particular officer having special charge of such matters as the examination and inspection of the covers of coal-holes and apertures in sidewalks to ascertain whether they were reasonably safe or not. This element of the hypothesis submitted to the jury by the instruction, at least, was wholly destitute of evidence to support it. Furthermore, the instruction entirely withdraws from the jury the question of the responsibility of the city for the original construction of the cover of the coal-hole. It also limits them, or may have been understood by the jury to limit them, to a consideration of the apparent condition of the cover at the time of the injury, and the opportunities which the officer in charge of such matters had for discovering the defect at that • time, without regard to what should have been ascertained by such officer or his predecessors from previous examinations and inspections of its structure and condition, during the period it had been in existence.

We also think that the law was stated incorrectly by the modification made by the court to the instruction given at the instance of the plaintiff. As asked, it laid down the proposition that notice to the city of the unsafe and dangerous condition of said cover might be implied, if the defect had existed for such a length of time that the authorities of the city, by the exercise of reasonable care and diligence on their part, would have known of its existence. The modification limited the attention of the jury to the care and diligence of the authorities of the city having charge of such matters, and as to the probabilities of their ascertaining the existence of the defect. Apart from the fact that there was no evidence that the charge of matters in relation to defects of this character was committed by the city to any particular officer or class of officers, we do not think it necessary, in order to charge the city with implied notice of a defect in a sidewalk, that the circumstances should be such as to charge the particular person or persons having special supervision of the sidewalks, with such notice. It is enough, if the circumstances raise an implication of notice to any officer or agent of the city whose duty it is to communicate to the city, or its proper executive officers, the existence of such defect.

For the reasons above stated the judgment will be reversed and the cause remanded.

Reversed and remanded.


text:
    John G. Lobstein v. Andrew Lehn et al.
    1. Constructive fraud—Conveyance set aside.—In equity, when a security or conveyance is set aside as constructively fraudulent, it may be upheld, in favor of those not guilty of any actual fraud, to the extent of the actual consideration, and be vacated only as to the excess.
    2. Same.—Though A and B in taking an absolute deed which, by a secret agreement between them and the grantor was in fact but a mortgage, were guilty of what as to the creditors may have been a fraud in law, yet, as they were not guilty of any actual fraud, the decree of the court below that the amount found due A and B be paid to them in full, and out of the remainder complainant creditor be paid, and giving the usual time for redemption, was proper.
    Appeal from the Superior Court of Cook county; the Hon. Hehry M. Shepard, Judge, presiding.
    Opinion filed November 8, 1886.
    On August 27, 1885, appellee Lehn conveyed certain real estate to appellees, Helmont Kasch and Arie Yan Deursen, by absolute warranty deed, for the consideration, as stated in the deed, of 85,000.
    On the same day appellees Kasch and Yan Deursen executed to Lehn the following document:
    “ To all whom these presents shall come, we, Helmont Kasch and Arie Yan Deursen, both of the county of Cook and State of Illinois, send greeting :
    “ Whereas, Andrew Lehn and Caroline Lehn, his wife, of the city of Chicago, in the county and State aforesaid, did by their trust deed bearing date the 27th day of June, 1882, convey and warrant to John C. Schumacher (Andrew Kehm, successor in trust) the following described real estate, to wit:
    Lots one (1) and two (2) in block thirty-two (32), in the subdivision by the city of Chicago, of section nineteen (19), township thirty-nine (39), north, range fourteen (14), east of the third (3d) principal meridian, with the buildings and improvements thereon, in Cook county, Illinois, to hold in trust for the purpose of securing to the “Abe Lincoln Loan, Building and Homestead Association, oE Chicago, Blinois,” of the sum of two thousand (2,000) dollars, in weekly installments, with interest thereon at the rate of five (5) per cent, per annum, as will more fully appear by the said trust deed, which was on the 24th day of July, A. D. 1882, recorded in the recorder’s office of said Cook county, in book 1254 of records, on page 123.
    And, whereas, said Lehn and wife did afterward, by their trust deed, bearing date the 26th day of December, A. D. 1883, convey and warrant to John O. Schumacher (Andrew Lelm, successor in trust) said above described premises, to hold in trust for the purpose of securing the payment to said association of the sum of one thousand (1,000) dollars in weekly installments, with interest thereon at the rate of five (5) per cent, per annum, as will more fully appear by said deed, which was on the 27th day of December, A. D. 1883, rec n'ded in said recorder’s office, in' book 1432 of records, on page 191.
    And whereas, said Lehn and wife did afterward, by their trust deed bearing date January 12, A. D. 1884, convey and warrant to John C. Schumacher (John Webber, successor in trust) said above described premises, to hold in trust for the purpose of securing the payment of the said note of the said Andrew Lelm, hearing date last aforesaid, for the sum of five hundred (500) dollars, payable to the order of Henry Scherer, three (3) years after date, with interest thereon at the rate of seven (7) per cent, per annum, as will more fully appear hy said trust deed, which was, on the 16th day of January, A. B. 1884, recorded in said recorder’s office, in book 1417 of records, on page 255.
    And, whereas, said Lehn and wife did afterward, hy then-trust deed, bearing date the 20th day of August, A. D. 1884, convey and warrant to James H. Van Ylissingen (Arthur Van Ylissingen, successor in trust), said above described premises, to hold in trust for the purpose of securing the payment of the two (2) notes of the said Andrew Lehn, each for the sum of two hundred and fifty (250) dollars, both bearing the date last aforesaid and payable three (3) years thereafter, with interest thereon at the rate of six per cent, per annum, payable semi-annually, one payable to the order of said Helmont Kasch, and the other payable to the order of Helmont Kasch and ArieVan Deursen, all of which will more fully appear by said trust deed, which was on the 29th day of October, A. D. 1884 recorded in said recorder’s office, in book 1590, of records, on page 100.
    And, whereas, said Andrew Lehn was, on this 27th day of August, indebted as follows:
    Upon the §2,000 loan from the Abraham Lincoln Association: For dues unpaid, §20; for interest unpaid, §8.34; for fines unpaid, §3.
    Upon the §1,000 loan from the Abraham Lincoln Association : For dues unpaid, §12.74; for interest unpaid, §4.17 ; for fines unpaid, $2.62.
    Upon the §300 payable to Soberer: For interest due and unpaid, §52.50.
    Upon the two $250 notes payable to Kasch, and Kasch and Arie Tan Deursen: For interest due and unpaid, $30.49 ; to county treasurer for taxes and assessments on said premises for 1884, $49.43; to Helmont Kasch, for balance of old account, §475; total, §658.29,
    And, whereas, we have this day elected to declare the-whole of the principal and interest on said notes dne and unpaid, in accordance with the provisions of said trust deed contained ; and, whereas, said Andrew Lehn has this day made a proposition that we pay said several indebtednesses now dne and unpaid, and advance to him the further sum of two hundred and fifty (250) dollars, and take from himself and wife a 'warranty deed of said premises, and that we take possession of said premises and collect the rents and pay all the debts secured by said above described trust deeds as fast as they become due, with the agreement that in case we sell said premises, we shall render to said Andrew Lehn, or his heirs, administrators or legal representatives, the balance of the consideration money so received, after first deducting all sums paid or laid out by us, or either of us (over and above the amount received as rent for said premises), in the payment of said sums of money now dne and hereafter to become due, and in the payment of all necessary costs, commission for renting or selling, costs of repairs and other expenses, taxes and attorney’s fees, together with interest at the rate of 6 per cent, per annum on all sums of money so now or hereafter to be laid out by us, or either of us.
    ¡Now, therefore, said Lehn and wife have (in pursuance of said proposition) by their deed, bearing date this 27th day of August, A. D. 1885, for the express consideration of five thousand (5,000) dollars conveyed to us and the survivor of us (as joint tenants and not as tenants in common) in fee simple, all of said above described premises.
    And we do hereby admit the consideration actually paid to us by the said Lehn for said equity of redemption so conveyed to us, to be the amount following:
    Amount of principal of the §250 notes to-day declared due, §500; amount of sundry indebtednesses as above scheduled this day paid by us at his request, §658.29; cash this day in hand paid him, §250; amount allowed by him to cover attorney’s fees and the cost of this transfer, §50; total, §1,458.29'.
    And we, Belmont Kasch and Arie Van Deursen, do each of us hereby declare that it is mutually understood and agreed betw'een said Lehn and each of us, that we, Belmont Kasch and Arie Van Deursen and the survivor of us, shall enter into and take possession of said premises, and every part thereof, and that we shall place tenants thereon, and collect all rents and profits arising therefrom; that we shall make all necessary repairs and pay for the same; that we shall pay all taxes and assessments that shall be legally levied on or assessed against said premises; that we shall pay each and every installment of the indebtednesses secured by the trust deeds above described, as fast as the same shall become due, provided, however, if we shall sell said premises subject to said incumbrances, as hereinafter provided, we shall not, after said sale, be compelled to continue said payments; that we shall offer said premises for sale ; that if we secure a purchaser who shall offer such a price and upon such terms for the purchase of said premises as the said Andrew Lehn shall declare to us, in writing, to he satisfactory to him, we shall convey to such purchaser said premises by a good and sufficient warranty deed. And after first deducting the amount of rents received from the total sum of the moneys heretofore advanced to the said Andrew Lehn, or heretofore paid or laid out as above provided, together with costs for repairs, commission of agent selling or renting, and attorney’s fees, and the interest at the rate of six (6) per cent, per annum upon the sum so before that time advanced, paid, laid out by us, or either of us, the balance so obtained shall then be deducted from the consideration paid by said purchaser, and the remainder shall be paid to said Andrew Lehn, his heirs, administrators or legal representatives. '
    Provided, however, that if the said Andrew Lehn, his heirs, administrators or legal representatives, shall neither of them, within five years from the date hereof, consent in writing to any offer we, or the survivor of us, shall receive from any such purchaser, then we, or the survivor of us, shall, after the expiration of the said period of five years, have full power and authority to sell for such price and upon such terms as shall to us or to the survivor of us, seem advisable, rendering, however, the remainder of the purchase money, so as aforesaid ob" tained, to said Andrew Lehn, his heirs, administrators or legal representatives, the same as though they, or some of them, had consented in writing.
    It is understood that wherever the word a we,” is used in this instrument, it shall be taken to mean Helmont Ehsch and Arie Yan Deursen and the survivor of them.
    In witness whereof, we have hereunto set our hands and seals this 27th day of August, A. D. 1885.
    (Signed) Helmoht Kasch. [seal.]
    (Signed) Arie Van Deuksen. [seal.]
    Acknowledgment taken before J. H. Van Vlissingen, August 27, 1885.
    Appellan t filed his bill of complaint on September 25th, alleging that said Lehn became indebted to complainant in May, 1884, in the sum of §400 ; that a judgment had been recovered for said sum and interest on Sept. 9, 1885, and execution issued thereon and returned by the sheriff after proper demand being made thereon, no property found; that at the time of the making of the deed of the real estate above mentioned from Lehn toKasch and Yan Deursen, said Lehn was indebted to different parties in a large amount; that said deed was made without consideration and with intent to hinder, delay and defraud complainant and other creditors; that said deed of said real estate was made upon a secret trust and with the design that the same should be held, and that the grantees should assist him in delaying, defrauding and hindering complainant and other creditors. Complainant prays that the deed be declared null and void and be delivered up and canceled and the record thereof vacated, and the land ordered sold, and complainant’s judgment paid, etc.
    Kasch and Van Deursen answer, that they took the deed of the said real estate subject to the liens upon it, upon the trusts set forth in the agreement in writing executed by them to said Lehn, and set out in full heretofore. That they took in good faith under said agreement, and with no intent to hinder or delay creditors, but to assure to said Lehn the balance, if any, which might be realized after paying the liens upon the property and the indebtedness to them.
    The agreement in writing was never recorded, and it appears from the evidence that Lehn requested that it should not be-The court decreed that the property should be sold by the master, and the amount due Kasch and Van Deursen, as found under the terms of the written agreement, paid them in full, and out of the remainder complainant’s judgment should be paid, and the usual period of redemption was given. Complainant appeals to this court.
    Mr. Theodore H. Schintz, for appellant;
    that the court erred in treating the deed as merely constructively fraudulent, and allowing it to stand as security for the claim of the defendants provided for by the declaration of trust, cited Mackie v. Cavins, 15 Am. Dec. 489; McClurg v. Lecky, 23 Am. Cases, 64; Grover v. Wakeman, 11 Wendell, 187 ; Goodrich v. Downs, 6 Hill, 438 ; Barney v. Griffin, 2 Comst. 371; Hyslop v. Clarke, 14 Johns. 458; De Beerski v. Page, 36 N. Y. 537 ; Miller v. Tollison, 14 Am. Dec. 712.
    Ho matter what form the conveyance took, whether that of a mortgage, a sale with a right of redemption, or otherwise, “ if one of the purposes of making it was to put the property out of reach of the mortgagor’s (or grantor’s) creditors, although the principal purpose was to secure a Iona fide debt of the mortgagor (or grantor), it is nevertheless void as to his creditors: ” 1 Jones on Mortgages, 3d Ed. 627; Crowninshield v. Kitbridge, 7 Met. 520 ; Hansen v. Dennison, 7 Bradwell, 73 ; Boies v. Henney, 32 Ill. 131; Reed v. Noxon, 48 Ill. 323.
    Where an assignor prefers a creditor in such form that there issues out of the preference a benefit to himself, the assignment is void: Elias v. Farley, 3 Keyes (Ct. of Appeals N. Y.) 398 ; Tickner v. Wiswall, 9 Ala. 305 ; Mead v. Coombs, 19 N. J. Eq. 112; Moore v. Payne, Ala. 444.
    Mr. Hugh L. Burnham, for appellees;
    cited Flagg v. Foster, 2 Sumner, 533.
    A deed, though absolute on its face, given to secure a preexisting debt, will be considered a mortgage as to other creditors : DeWolf v. Strader, 26 Ill. 225; Taintorv. Keys, 43 Ill. 332; Sutphen v. Cushman, 35 Ill. 186.
    Malice, fraud, covin, collusion or guile are necessary elements to make up the intent or purpose to delay, hinder, or defraud creditors, and they must be entertained by both parties to the deed: Axtell v. Cullen, 3 Bradwell, 530 ; Sackett v. Mansfield, 26 Ill. 27; Myers v. Kinzie, 26 Ill. 39; Hessing v. McCloskey, 37 Ill. 352.
    A fraudulent intent on the part of the mortgagor alone will not vitiate the instrument: Herkelrath v. Stookey, 63 Ill. 486; Miller v. Kirby, 74 Ill. 242; Mathes v. Dobschuctz, 72 Ill. 440; Hatch v. Jordan, 74 Ill. 414.
   Moran, J.

We have examined the record with care, and while we are satisfied that there was Iona fide due to Kasch and Van Deursen the amount allowed to them by the written agreement, at the time the absolute deed was made, we are not able to conclude that they at that time knew or were informed or put on notice that Lehn owed any other debts. Lehn, it is true, said that he owed a little debt, and Kasch and Van Deursen gave him in cash some $233 to pay such debt; Kasch and Tan Deursen appear to have acted in good faith, with the honest intention of securing their claim, and so managing the real estate that Lehn might realize something out of it after the payment of the debts which were liens upon it, and with no intention to aid him to hinder or delay complainant or any other creditor. They were guilty of no actual fraud, though in taking an absolute deed, which, by a secret agreement be. tween them and the grantor, was in fact but a mortgage, they were guilty of what, as to the creditors, may have been a fraud in law—a constructive fraud.

But in such case the rule in equity is that when a security or conveyance is set aside as constructively fraudulent, it may be upheld, in favor of those not guilty of any actual fraud, to the extent of the actual consideration, and be vacated only as to the excess. Phelps et al. v. Curts et al., 80 Ill. 114, and cases there cited.

The decree of the court below was, in its result to the par. ties in interest, in accordance with this rule, and where justice is achieved by the decree, a mere technical error will not authorize a reversal.

Judgment affirmed.