author: Welch, J.

text:
    Alfred E. Mead and Rachel E. Mead v. Edward Stevens.

      Mortgages — Foreclosure — Substituted Collateral Security — Agency— Credit for Payments of Taxes and Expenses.

    ' Upon a bill of foreclosure, it is held: That the evidence shows that on the surrender by the mortgagee of certain notes and a mortgage securing them, held by him as collateral security, he accepted a conveyance of the premises covered by said surrendered mortgage as a substituted collateral and not as payment of his debt; that the agent, who made said arrangement acted as agent of both parties; and that the complainant is entitled to credit for the amount paid as taxes on said premises and for the amount paid the agent for services and expenses.
    [Opinion filed January 22, 1887.]
    Appeal from the Circuit Court of Mercer County; the Hon. John J. Glenn, Judge, presiding.
    Statement by Welch, J. On the 19th day of June, 1882, Alfred E. Mead, one of the appellants, negotiated a loan through L. I). Holmes, from the appellee, for the sum of ¿2,500, and executed to appellee his promissory note therefor, payable two years after the date thereof with interest thereon at the rate of 8 per cent, per annum. To secure the payment of said note the appellants executed a mortgage upon lot 3 in block 9 in the city of Hew Boston, and as a further security Alfred E. Mead assigned to the appellee two notes on Silas Tipton and Francis F. Tipton, together with other notes. The Tipton notes were executed on the 19th day of May, 1881; one for the sum of §600, payable four years after date; the other for the sum of §1,000, payable five years after date, each of said notes bearing interest at the rate of 8 per cent, per annum, payable annually. Silas Tipton and Aboline Tipton, his wife, and Francis F. Tipton, executed a mortgage on the southeast quarter of section 31, township 3 south, range 4, west of the 4th principal meridian, Pike County, Illinois, to secure the payment of said note. It was provided in said mortgage “that in case of default in the payment of the interest thereon at the time specified, or the non-payment of taxes, etc., then and in such case the whole of said principal sum and interest secured by .the said notes shall, at the option of the holder or his assigns, become immediately due and payable.”
    On the 17th day of May, 1883, Francis F. Tipton deeded his interest in said land to Silas Tipton, and on September 18, 1883, Silas Tipton and Aboline, his wife, conveyed said land by quit-claim deed to the appellee, the consideration for said conveyance being the surrender to Tipton of his two notes and mortgage executed to Mead, and by Mead assigned to the appellee as collateral security for his note to him. Appellee filed his hill in chancery to the March term, 1885, of the Mercer County Circuit Court, to foreclose the mortgage executed to him by the appellants on lot 3 in block 9 in the city of New Boston. He also filed his bill in chancery to the November term of the Bike County Circuit Court against the appellants for the purjaose of foreclosing on the deed executed to him by Tipton and wife, charging in said bill “ that said conveyance was made by the consent of said Mead to him as a mortgage, and that it is so held by him to secure the note aforesaid of said Mead to him, and is subject, however, to a condition of defeasance upon the payment of the principal sum and interest on the note aforesaid, according to the tenor and effect of said promissory note.” The venue in this suit was by consent changed to Mercer County, and was by an order of the Mercer County Circuit Court consolidated with the other suit of appellee against the appellants. The appellants filed their answer. They deny that they ever consented to the taking of the deed from Tipton and wife by the appellee, and the surrender by him of the Tipton notes and mortgage to Tipton; they deny that they have ratified said act since it was done. They insist that the amount of the Tipton notes, principal and interest thereon, due at the time of their surrender to Tipton by the appellee, should be credited upon the note of Mead to the appellee; they ask that an account be taken of all money collected by the appellee upon the collaterals placed in his hands by Mead, and claim that upon such accounting it will be found that there is nothing due the appellee upon the note of Mead to him; replication filed; cause referred to master to take proof, state the account, and report to the court his findings.
    On the 16th day of October, 1885, the master filed his report, showing a balance due the appellee upon his note and mortgage of the sum of §1,835.24. Exceptions were filed to said report which were overruled by the master, and the action of the master in overruling the exceptions was sustained by the court. Decree in favor of the appellee for the sum of §1,856.24 and costs of suit, including a solicitor’s fee of §50, from which decree this appeal is taken.

      Messrs. B. C. Taliaferro and James H. Connell, for appellants.
    Talcing of possession, paying taxes and disposing of the rents of the place, negative the idea that the deed was intended as a mortgage. And a deed absolute upon its face will never be held to be a mortgage unless the proof is clear and positive that it was so intended by the parties to the deed at the time of its execution. Workman v. Green, Legal News, February 6, 1886. '
    A party, alleging that a deed is a mortgage only, is required to make strict proof of the fact. Smith v. Cremer, 71 Ill. 185.
    The kind of parol evidence to show an absolute deed to be a mortgage is that of facts and circumstances of such a nature as to control the operation of the deed, and not loose declarations of parties touching the intention or understanding. Lindaur v. Cummings, 57 Ill. 195; Sutphen v. Cushman, 35 Ill. 186.
    It must be clearly shown that a deed absolute on its face was intended to be a mortgage by the parties at the júme of its execution. Sharp v. Smitherman, 85 Ill. 153; Remington v. Campbell, 60 Ill. 516.
    Slight indefinite statements are not sufficient to make a deed a mortgage. Dwen v. Blake, 44 Ill. 135; Low v. Graff, 80 Ill. 360.
    A deed can only operate as a mortgage if it appeared to be the intention of the-parties that it should be at the time of its execution. Shays v. Norton, 48 Ill. 100; Bentley v. O’Bryan, 111. Ill. 53 ; Frizell v. Cole, 29 Ill. 465; Straubher v. Moh'er, 80 Ill. 21; Hartley v. Lyburger, 3 Ill. App. 554.
    A purchase of the mortgaged property by the mortgagee is a payment of the debt. Massey v. Harden, 81 Ill. 330; Bodley v. Anderson, 2 Ill. App. 450.
    Absolute deed upon its face intended as a mortgage is so both under common law and statute as between the parties, and those who have notice, and not to others. Bullock v. Battenhausen, 108 Ill. 28.
    In this case Mead was not a party to the deed, but the evidence shows that at the time the deed was made by Tipton to Stevens that the Meads knew nothing about it, and were not parties to the deed and had nothing to do with it. Hancock v. Harper, 86 Ill. 445.

      A deed conveying absolute in form and contemporaneous with an agreement to re-convey, held, not to be a mortgage. Rue v. Dole, 107 Ill. 275; Carpenter v. Carpenter, 70 Ill. 457; Maxfield v. Patchen, 29 Ill. 39.
    The pledgee of commercial paper, bonds, mortgages, or promissory notes, held as collateral security for the payment of a debt, is bound to collect the same as they become due, and apply the net proceeds to the payment of the debt. Joliet Iron Co. v. Scioto Fire Brick Co., 82 Ill. 548; Union Trust Co. v. Rigdon, 93 Ill. 458.
    Parties holding collaterals are bound to account for the full value. Union Trust Co. v. Rigdon, 93 Ill. 458, 468; Loomis v. Stave, 72 Ill. 623; Aldrich v. Goodell, 75 Ill. 452; Jenkins v. International Bank, 111 Ill. 462; Wheeler v. Newbould, 16 N. Y. 392.
    The pledgee of commercial paper, in the absence of any power of sale by contract, can not sell such paper-, but it is his duty to collect the same and apply enough of the proceeds to pay his debt and return the balance to the pledgor. Zimpleman v. Veeder, 98 Ill. 613.
    The pledgee must account for the value of the pledge, as he purchased the land on his own account and gave up Mead’s securities without his consent. Massey v. Hardin, 81 Ill. 330; Bordley v. Anderson, 2 Ill. App. 450.
    Messrs. Bassett & Whabton, for appellee.
   Welch, J.

The principal contention in this ease arises upon the disposition made of the Tipton notes and mortgage assigned to the appellee by the appellant Alfred E. Mead, as collateral security for his note of $2,500-to the appellee. It is insisted by the solicitor for the appellants that the “ pledgee of commercial paper, bonds, mortgages, or promissory notes held as collateral security for the payment of a debt, is bound to collect the same as they become due, and apply the net proceeds to the payment of the debt.” “ Parties holding collaterals are bound to account for the full value.” Cole v. Dalziel, 13 Ill. App. 23; Union Trust Co. v. Rigdon, 93 Ill. 458, 468; Jenkins et al. v. International Bank, 111 Ill. 462. Under the rule announced supra, it is. claimed that the appellee should account to Mead for the full amount of the principal and interest due on the Tipton notes at the time that the appellee took from Tipton the quitclaim deed, and surrendered to him his notes and mortgage. It is conceded by the solicitor for the appellee, that if the appellee had taken the deed and surrendered up to Tipton his notes and mortgage without authority or consent of Mead, appellee would be bound to account to Mead for the amount due on said notes at the time of their surrender to Tipton. The master in chancery, in his report, finds : “ That the said Silas Tipton and Francis F. Tipton having failed to pay the notes so secured or the interest thereon, that by a subsequent arrangement between the complainant, appellee and defendants, Alfred E. Mead and Bachel E. Mead, appellants, the notes were surrendered to the said Tiptons, and they conveyed the said real estate in Pike County to the complainant (appellee) by absolute deed, which was held by said Stevens as security only, for the note of A. E. Mead.” The finding of the master was approved by the court. It is insisted by the solicitor for the appellants that the evidence does not sustain . this finding. Lewis D. Holmes, who acted as the agent and attorney for the appellant Alfred E. Mead in negotiating and procuring the loan from the appellee of the §2,500, states in answer to the question “ whether he had anything to do in and about the collection of notes against Silas Tipton for either the complainant (appellee) or Alfred E. Mead,” “ I did ; acted as the attorney for both Stevens and Mead. About the 17th of May, 1883, the notes and mortgage against Silas Tipton held by Edward Stevens as collateral security were due ; by the directions of Mr. Stevens and I think, Mr. Mead, I went to Baylis and saw Mr. Tipton. The amount due on the notes and mortgage was about the same as the value of the land conveyed by the mortgage. I had discussed this question with both Mead and Stevens, and to save the expense and delay of a foreclosure in chancery, I secured from Mr. Tipton a contract. 'By said contract said Tipton, in consideration of the extension of time in the paying the interest upon Ms two notes until October 1st, agreed to execute a deed with Ms wife to Edward Stevens to the land described in his mortgage to Mead, within thirty days, and deliver the same to George W. Hooper in escrow. Said deed to be delivered by Hooper on the 1st day of October, if the interest was not paid, and if paid the deed was to be destroyed. If the deed was delivered to Stevens he was to deliver to Tipton Ms two notes and mortgage executed to Mead, and assigned to Stevens as collateral security. The contract was signed by Tipton and by Stevens per Holmes, the attorney for Stevens.”

Holmes, after making the contract, states: “ I returned home and saw Mr. Mead and Stevens both and told them what I had done; they both assented and agreed to the contract I had made. About Hovember the 10th, in the same year, at the request of Mr. Stevens and I think, Mr. Mead, I went to Pittsfield and examined the records to see if there were any judgments against Tipton, and returned to Baylis from Pitts-field; and while in Baylis received quit-claim deed from Silas Tipton and his wife to Edward Stevens, conveying all their interest in the land desenbed in their mortgage to Mead. At the same time I surrendered to Tipton his notes and mortgage, which Mr. Stevens had held. I then returned home and saw Mr. Mead and Mr. Stevens and told them what I had done, and said to them that the only title Mr. Stevens would have in the land, was to hold it as security for payment of Mead’s debt to Mm, to which they both agreed. While at Baylis I secured a man, Albert 0. Bently, to take charge of the farm for Stevens and try to sell it.” He also states that he informed Bach el E. Mead of the facts in the case, and said to her that as soon as the debt from Mr. Mead to fMr. Stevens was paid off, that he was to quit-claim, convey or release to her all his interest in the land; she expressed herself as very much pleased, and said they hoped to pay off the mortgage and save that piece of land to her, Mr. Mead having conveyed it to her before that conversation.

Stevens states, “ Holmes gave up the notes and mortgage as my attorney. -He was the only person I had anything to do with that I know of; Holmes did the business for me, and he thought that was the best way. I was to hold the land as collateral. I supposed the land belonged to Mead. It was my understanding. I did not buy the notes of Mead. I supposed the land belonged to Mead after I got the deed from Tipton because I had never paid anything for the land- * * * I had a conversation with Mead about ten months afterward, as near as I can remember. All that was said was that the land had been deeded to me by Tipton. There was nothing said about mortgage. I and Mead had but little talk about it. I did not make a statement to him why and how it came to be deeded to me and how I held it.”

Mead denies that he ever employed Holmes as his agent or attorney to collect the notes that he transferred to Stevens as collateral, and denies that he directed him to do anything toward fixing up the Tipton matter, and says: I do not remember that I ever agreed with Holmes or Stevens, after Holmes returned from Pike county, that Stevens should hold the Tipton land by deed as security for what I owed Stevens.” He denies that he authorized Holmes to make the written contract referred to swjora, and denies that he ever ratified said contract in any conversation with Holmes ; denies that he ever agreed to pay any of the expenses of Holmes, and denies that he ever expressed himself satisfied with the deeding of the Tipton land to Stevens after it was done. He says : “ I supposed he, Holmes, had taken the land in trust for Stevens.” Mrs. Mead admits that she bad a conversation with Holmes in regard to the Pike County land and the conveyance of it to Stevens, as stated by Holmes, except she denies that she expressed herself as satisfied with it.

At the time of the conveyance to Stevens-by Tipton, and the delivery to him of his notes and mortgage, there was due on the notes, principal and interest, the sum of §1,902.56. The master’s statement shows on that date, without giving any credit for the Tipton notes, that there was due Stevens on Mead’s note to him §1,745.07, after charging Mead with all taxes and expenses for collection. If Stevens is to be charged with the Tijfion notes he was at that time overpaid the sum of $156.89; yet we find that after that, on February 25, 1885, he collected on the note of Mr. Heff the sum of §121, making the over-payment to him,„if he is to be charged with the Tipton notes, the sum of §277.89.

Mead states that “just before or after the bill was filed in this case he applied to Stevens to know what amount was due him on his note to him, and that Stevens claimed that there was due him some §1,600 or $1,700, and that at that time Stevens presented a statement and account and that he looked over it, and that there was no credit given for the Tipton notes.”

lie also states in response to the question “ Did not you about or near that time make an arrangement with Willard Signor, of Hew Boston, to sell him a part of the Hew Boston property included in the mortgage for $750, and ask Mr. Stevens to take the $750 and release the mortgage on that property and credit the $750 on your note in controversy ?” “ I think I did.” He further states in response to the question “ Did you not afterward a short time, or about the same time, propose, 'in addition to the arrangementto sell Mr. Signor, to sell Mr. Stevens the balance of the Hew Boston property included in the mortgage for a sufficient sum, in all to make $1,400, and have the same credited on the note in controversy that Mr. Stevens holds against -you?” “There was an arrangement whereby Mr. Stevens was t-o deed the Pike County land to my wife, and we were to make him a deed to the Hew Boston property, and Signor was to take the brick house and pay $750 or $800. I think it was $800.” In this arrangement he says, “ there was nothing said about selling or buying the Pike County land between us.” The account furnished by Stevens also included the amount paid by him fur taxes, and the amount paid to Holmes for his two trips to Pike County. Mead says in relation to that, that he did not know he made two trips; he thought he only made one.

On September 2, 1884, Mrs. Mead writes to Mr. Bently, in whose charge the land in Pike County had been left by Mr. Holmes, in regard to the leasing of this farm by Hr. Tipton, giving specific directions as to the terms on which he could rent it, and the manner the fences and timber were to be taken care of. On November 1, 1884, Mr. A. E. Mead writes to Mr. Bently “to know whether the wheat has been threshed, and if so, to send the amount due us, and to let ns know if the place could be sold, and what he thought a fair price for it.” On December 27, 1884, he wrote again to Bently, in which he says:

“ I wrote you a letter some time ago in regard to the wheat raised on the place Tipton rented; would like to know how much wheat was raised and if our. share has been delivered yet; if not, please let me know at once ; also have the corn sold and pay taxes out of the money received for corn. Please send the money to my wife, P. E. Mead, that you receive on wheat sold, less your trouble. Please let me hear from you as soon as possible.” We have carefully examined the evidence, and in our opinion the finding of the master in chancery as to the Tipton notes and mortgage is sustained by the evidence. In our opinion- the evidence shows that Holmes, in the arrangement that he made with Tipton to surrender up the notes and mortgage and in taking the deed to Stevens» was acting as the agent of Mead and Stevens, and that it was understood - and agreed between them that Stevens should hold the Pike County land in trust and as a substituted collateral for the Tipton notes and mortgage. The subsequent conduct of Mead, as shown bv the evidence, can only be reconciled upon this theory. If the claim now asserted by him that the Tipton notes were surrendered and the deed taken by Stevens without his consent, why was it that he was undertaking to negotiate the sale of the New Boston property to pay to Stevens a balance claimed to be due on his note to Stevens?

If his claim was valid, he had then overpaid Stevens on his note 8156.89. Why did he write the letters of November 1, 1884, and of December 27, 1884, supra, to Bently, if he claimed to have no interest in the Pike County land ? Why did Mrs. Mead write the letter of September 2, 1884, supra, if she claimed to have no interest in the land ? The conduct of Mead and Mrs. Mead fully sustains the evidence of Holmes in relation to the matter, that the surrender of the notes to Tipton and deed to Stevens was intended as a substituted collateral, and was assented and agreed to by them, Stevens, thus holding the title as security for his debt, had the right to pay the taxes, and there was no error in allowing him credit therefor. And we think that the money paid to Holmes by Stevens also was a proper credit; he was acting for Mead and in his interest.

The evidence shows that the Tiptons were insolvent. One of them, Francis Tipton, had left the State. The land was poor and not good security for the debt. The delay in obtaining the possession of the land and expense incident to a foreclosure suit were sufficient inducements for the sending of Holmes to see Tipton and to make the arrangement that was made. By this arrangement the possession of the land was at once obtained, and the cost incident to a foreclosure avoided, provided Mead paid his debt to Stevens. Upon a careful consideration of this case we find no error in the decree.

Decree affirmed.


source: Caselaw Access Project

author: Baker, P. J.

license: Public Domain

text:
    The Chicago, Burlington & Quincy Railroad Company v. William A. Kennedy.

      Railroads — Cattle Guards — Maintenance of — Snoio—Negligence—Reasonable Time to Remove Snow — Evidence—Compromise Verdict.

    1. Neither the winter season nor times when there are great or unusual accumulations of snow are excepted from the- operation of the statute requiring railroad corporations to construct and maintain cattle guards at crossings of public highways.
    2. Where a sufficient cattle guard becomes insufficient because of a violent snow storm, the railroad company has a reasonable time within which to remove ice and snow accumulated therein.

      3. In an action for damages for the killing of two horses which had walked from the public highway over a cattle guard filled with snow it is, held: That the evidence does not support the verdict for the plaintiff; that the defendant company, by the use of reasonable diligence, could not have removed the snow from its cattle guards within forty-eight hours after a storm of unusual violence, which caused a general blockade of its road; that a certain statement of a section boss was not competent evidence to establish the negligence of the defendant; and that the verdict appears to have been the result of a compromise,
    [Opinion filed January 22, 1887.]
    Appeal from the Circuit Court of Knox County; the Hon. Arthur A. Smith, Judge, presiding.
    Messrs. Williams & Lawrence and O. F. Price, for appellant.
    It must be the rule in cases of-this class that actual notice of tiie, condition of the cattle guard, and to its being insufficient, must have been brought to the railway company before any negligence could have been imputed to it. This is the universal rule governing sidewalks in cities, and has prevailed, at least so far as fences áre concerned, in railway cases.
    When the fences, which are provided for and covered by the same sections of the statute under which this suit is brought, are once properly constructed, the railroad company must have notice of such defects with intervening reasonable time to enable them to repair, or else sufficient time must have elapsed after the defect occurs, to raise a presumption of notice as against the company and also reasonable time for repair. Aylesworth v. C., R. I. & P. R. R. Co., 30 Iowa, 459; Lemon v. C. & N. W. R. R. Co., 32 Iowa, 151; Poler v. N. Y. C. R. R. Co. 16 N. Y. 476; House v. Cayuga & S. R. R. Co., 26 N. Y. 428; I. C. R. R. Co. v. Dickerson, 27 Ill. 55; I. C. R. R. Co. v. Swearingen, 47 Ill. 206, 210.
    Messrs. Frederick & Willoughby, for appellee.
    This is a case in which the only question, that of the negligence of the defendant, was fairly submitted to the jury, who have found in favor of the plaintiif, and this court following the well settled rule that verdicts will not be disturbed unless so palpably contrary to evidence as to show that they are the result of prejudice or passion, will not reverse the judgment. The evidence shows, and so the jury found, that the company had reasonable time in which to clear out these cattle guards. The company ran the snow -plow, a freight train, and the regular passenger over these guards, and if it seems proper to commence the running of trains before the road is in condition to do so with safety to stock, it must do so at the risk of paying for stock, if any be injured.
   Baker, P. J.

This suit was brought before a Justice of the Peace under the provisions of section one of the act in relation to fencing and operating railroads, as amended in 1879, to recover the value of two horses of appellee killed on the railroad track of appellant, within its right of way. The horses had escaped from the stable where they were usually kept, and had walked from the public highway upon the track and right of way over a cattle guard which was filled with snow. The judgment before the Justice was for the corporation, bntupon appeal to the Circuit Court, the verdict and judgment were for appellee for $150 damages and $25 attorney’s fees and costs of suit.

The claim is made by appellant that the law does not require that a railroad company, unless. under exceptional and extraordinary circumstances, should clean out ice and snow from the cattle guards along its track; and the decision of the Supreme Court of Minnesota in M. & St. L. R. R. Co. v. Blais, 22 Am. & Eng. R. R. Cas. 571, is cited as authority for such doctrine. The conclusion reached in that case is put upon grounds that have local application to the State of Minnesota ; that it is not the custom “in that State to attempt to remove the accumulations of snow from railroad cattle guards in winter, and that the expense necessary in that climate to keep them clear is out of proportion to the danger in allowing them to remain filled with snow, and therefore it is not reasonable to require its removal. That the custom mentioned does not prevail in this State, is sufficiently indicated by the evidence in the case at bar of the division superintendent of the appellant company, who testified upon the trial it was usual for the company, in the event of a severe snow storm, to go to work clearing off the track and cleaning out fences and cattle guards.

The other reason given for the decision has but little force when applied to the climate of Illinois.

The statute of this State makes it the duty of railroad corporations to construct and maintain, at the crossings of public roads and highways, cattle guards suitable and sufficient to prevent cattle, horses, sheep, hogs and other stock from getting on such railroad. Neither the winter season, or times when there are great or unusual accumulations of snow, are excepted from the operation of the statute; and it is difficult to perceive the good that would be accomplished by having cattle guards, if they are not kept open but are permitted to remain filled up with snow so that horses and cattle can piass over them upon the right of way. It was held in Dunnigan v. C. & N. W. Ry. Co., 18 Wis. 28, under a statutory requirement similar to ours, that where a railroad company permits its cattle guards to remain filled with snow, so that cattle which have gotten upon the highway without any negligence on the part of the owner, pass over the guards, and in consequence of being thus upon the track are injured by a train, the company is liable for the damages. We are not inclined to hold as law in this State the rule announced in Minnesota.

At the same time, it is. to be borne in mind it is not any more obligatory upon railroad corporations to keep their cattle guards open, than it is for them to keep the fences on both sides of their roads in such condition as to be suitable and sufficient to prevent the animals specified in the statute and other stock, from getting on their railroads; the two duties are imposed by one and the same section of the statute and in the same language. In I. C. R. R. Co. v. Dickerson, 27 Ill. 55, it was held that a railroad company is not required to keep a patrol at night along the road, to see that the fence is not broken down ; and that if the fence is sufficient, and all reasonable diligence is used to keep it up, the company will not be guilty of negligence in that particular.

In I. C. R. R. Co. v. Swearingen, 33 Ill. 289, it was held that where a railroad fence has been sufficient, and from accident or wrong over which the company had no control, it becomes insufficient to turn stock, the company has a reasonable time within which to repair it; and that it will be held to a high degree of diligence, but not to an impossible or unreasonable extent.

In I. C. R. R. Co. v. Swearingen, 47 Ill. 206, one of the horses was killed on Saturday night and the others killed on Sunday night, and the court said: “ When the proper agent of the company, whose duty it was to look to and keep the fence in repair, is shown to have seen it in good repair on Saturday afternoon at four o’clock, and again on Monday morning, we are at a loss to understand how there was any neglect of duty on the part of appellants ; it would seem to be reasonable diligence.” To the same effect is I. C. R. R. Co. v. McKee, 43 Ill. 119. In this case the cattle guard in its normal condition was suitable and sufficient to turn stock, but it was temporarily impaired by the accumulation of snow. The material question that arises upon the record is whether, under the circumstances, appellant was guilty of a want of reasonable diligence in removing the snow from the cattle guard. In other words, was appellant guilty of culpable negligence.

A snow and wind storm commenced on Sunday, February 8, 1885, and continued all Sunday night, all day Monday and all Monday night. It stopped snowing Tuesday morning, but the wind blew hard that day and the snow drifted badly until noon. The weather was intensely cold, and some of the witnesses state it was the most severe weather they ever experienced. When appellee got up Monday morning a train was stuck in the snow at the highway crossing where the horses afterward entered on the right of way, and two engines were trying to get it out. That was the last locomotive or train that passed over that part of the road until Tuesday afternoon. All travel on the railroad was stopped and all movements of trains made impossible by the deep drifted snow. The employes of the company were busy day and night with engines, snow plows and gangs of men, attempting to relieve passenger and stock trains caught in the storm and to remove snow from the track. About three o’clock Tuesday afternoon a snow plow with two or three engines went over the part of the road in question, and that was the first movement on the tracks there since Monday morning. A freight train and a passenger train afterward passed there that evening.

The track between Galesburg and Knoxville was blocked up its whole length until the snow plow came along. Crimmens, the section foreman, testifies he only got about a mile and a half from Galesburg by Wednesday morning; that he worked all day Tuesday with his gang of men in the cut, about eighty rods long; that the snow kept drifting all the time and it took all day to shovel through the cut. He further states they ran the hand-car down as far as they could get it; that they could not have got it down to the cattle guard in question until after the snow plow had gone over the track; that there are seven cattle guards between Galesburg and the one in question, and he did not get any of them cleaned out that day, as they wanted first to get the snow off the track, so as to see if any rails were broken. In addition to what this witness says, the court will take notice the days were quite short at that season of the year, and that after three o’clock in the afternoon there were but few hours of daylight.

F. C. Hice, the division superintendent, testifies the storm was very severe, and the first care of the compatiy was to get the passengers out of the snow and relieve the stock in transit, then to clear the track for the running of trains, and then to clean out the fences and cattle guards.

The horses got on the railroad track on the night of Tuesday, the 10th of February, and were killed at about the hour of 11 that night. The only circumstances that are claimed as tending to prove negligence on the part of appellant are two, and they are both found in the testimony of appellee himself. He states with reference to the work done in the cut, that the snow was shoveled out between the rails, and that outside the rails it was shoveled away so you could see the ties and walk on them right along.

We suppose the conclusion intended to be deduced from this statement is that the section hands had occupied more time in the cut than was necessary, and thereby delayed the opening of the cattle guard. The weight claimed for the fact mentioned is greatly weakened by several considerations.

The witness says that when he found Crimmens, he and his men had just come from dinner and were shoveling snow in the cut, and non constat but that the time alleged to have been misspent was wasted that Wednesday forenoon, many hours after the horses passed over the cattle guard and were struck by the train.

Its weight is' still less, especially in the light of the evidence of Crimmens, Rice and the other witnesses for appellant, by his own statements on cross-examination, that the snow was away so you could see the rail, and whether it was broken or not; that he does not know as he could have told that before the snow was removed, and that if the top of the rail was visible he could not tell if it could be known whether it was broken or not. It would seem, particularly in view of the extreme cold weather that prevailed and the severe and continued storm that had occurred, it was of primary importance that broken rails should be discovered and the safety of passengers and employes thereby assured, and that in comparison therewith the cleaning out of the cattle guard was of secondary moment. It is plainly deducible from the evidence it would have been utterly impossible on Tuesday to have attended to passengers, stock and trains; to have freed the tracks from obstructions, and also have dug out the snow from all the cattle guards on the 600 miles of road in this division; and we perceive no good ground for saying this particular cattle guard should have been attended to in preference to the other cattle guards. Whilst a high degree of diligence and responsibility is imposed upon railway corporations by the statutory requirements to erect and maintain fences and construct and maintain cattle guards, yet the law is not so unreasonable as to demand of them that which is reasonably impossible.

The other circumstance to prove negligence, is the claim that on Wednesday, Crimmens, the section boss, told appellee that the cattle guards ought to have been cleaned out the day before. So they ought, and ordinarily it would be required of appellant it should have been done, but here it is claimed it was not reasonably practicable to do so. Besides, what Crimmens said was merely the statement of his opinion, and probably those who directed his work thought otherwise and were of opinion the cle u-ing of the track was of more pressing importance. In any event the evidence was not competent to establish the negligence of appellant, as Crimmens could not make such statement to bind his employer; it was not a statement in regard to what he was at the time doing as servant and made dum opus fervet, but had reference wholly to the past.

Upon full consideration of the evidence our conclusion is, that it does not sustain the verdict, but on the contrary shows that the stock in controversy were injured and killed at a time so soon after the snow-fall and storm and consequent blockade, and under such circumstances that the appellant company, by the use of reasonable diligence, could not have had the accumulation of snow removed from the cattle guard. It appears from the record that the trial before the Justice resulted favorably to the company. It also appears that upon the trial in the Circuit Court there was no testimony whatever tending to prove the two horses were of less value than §200, or that the reasonable attorney fee was less than §50, and yet the verdict of the jury allowed only §150 for the horses and §25 for the fee. And upon the polling of the jury, one of the jurors answered: “It is my verdict, but under protest.”

These are plain indications it was a compromise verdict, and not the honest judgment of twelve men.

It was error to overrule the motion for a new trial. The judgment is reversed, and as appellee has no cause of action the cause will not be remanded.

Reversed.


text:
    George L. Clifford, Executor, etc., v. William Davis, Administrator, etc.

      Wills — Investment of Residuary Fund for Benefit of Life Tenants— Reasonable Time — Res Adjudieata — Interest on Assets — Estoppel.
    1. When a testator has directed the conversion of one species of property belonging to a residuary fund into another, or the residuary fund to be invested in a particular manner, and has given a life estate in the fund as thus converted or invested, such life interest will commence when the conversion takes place, or the investment .is made. But such conversion or investment must be within a reasonable time. In this State, in analogy to the time allowed for the settlement of the estate, two years are held to be a reasonable time.
    2. In the case presented, it is held : That the court below properly charged the executor with interest on his note due the estate; that the doctrine of res adjudieata does not apply to said interest, because of the approval by the County Court of the executor’s reports; that the executor was properly charged with 10 per cent, interest on the moneys in his hands after the expiration of two years and six months from the date of his letters testamentary and up to the time of his investment of the funds; that it is unreasonable to suppose that the testator intended no investment of money should he made by the executor until every article and parcel of property was disposed of and turned into money; that the executor is not estopped from contesting a claim for interest on uninvested assets prior to the expiration of the statutory period by reason of a report charging him with such interest, which he signed, but which was never acted on by the court; that the life tenants were not entitled to the net profits of the estate from the death of the testator to the time of re-investment; that said’ profits are to be considered as assets to increase the principal of the trust fund; and that the matter of a certain item having been ordered paid by a court of competent jurisdiction to the life tenants, is res adjudieata.

    [Opinion filed January 22, 1887.]
    Appeal from the Circuit Court of Knox County; the Hon. Johr J. Glerr, Judge, presiding.
    Statement by Baker,' P. J. William Hester died testate on the 23d of December, 1877. Letters testamentary were issued January 9, 1878, to appellant, George L. Clifford, the executor appointed in the will. The third clause of the will was as follows :
    “ 3. After the payment of the aforementioned charges, I will, devise and bequeath unto my beloved nephew, George L. Clifford, all the rest, residue and remainder of my estate, both real and personal, of every nature and kind whatsoever, to be held by him in trust for the following purposes: It is my wish that as soon after my death as the best interest of my estate will permit, he sell, either at public or private sale, all of my said property, real and personal, together with all claims of every or any kind I may have upon any person or thing, so that the whole of my assets shall be turned into money. It is further my desire that the whole of such proceeds shall then be invested by said Clifford in good and sufficient securities at such legal rates of interest as he may be able to obtain, which interest shall be collected by him and paid over by him, semi-annually, if practicable, to my daughter, Fanny Hester, and to my daughter-in-law, Jane Hester, now residing in East Shire, in the County of Surrey, England, for their undivided use and benefit, in equal shares, so long as they both shall live; and on the death of either of them the whole of said interest is to be paid to the surviving one so long as she shall live, and at her death it is my will that the whole remaining principal and interest, if any, that is to say, the whole assets remaining of my estate, shall be equally divided amongst the three surviving children of my dear sister, Elizabeth Clifford, share and share alike.”
    March 12,1879, the executor filed in the County Court of Knox County his first report or account current, showing, among other things, a balance then in his hands of §5,912.52; and this report was on the same day approved by the court.
    On the 8th day of August, 1879, the County Court made an order, based on a written motion of Jane Hester and Fanny Hester bearing date July 30, 1879, directing the executor, upon their filing a refunding bond, to pay to them the sum of §506.51, being the interest that accrued from the death of the .testate to the first day of March, 1879, on certain promissory notes made to the deceased in his lifetime, and which interest, as well as the principal sums mentioned in said notes, had been collected by the executor, as shown by his aforesaid report of March 12, 1879.
    The executor filed his second report or account current on the 31st day of August, 1881. showing a balance in his hands of §7,532.78, and that he had on the 19th of April, 1881, invested §7,500 of the money of the estate in a mortgage security bearing 7 per cent, interest, said interest payable annually, and said report was on that day approved by the court.
    On the same 31st of August, 1881, Fanny Hester and William Davis, administrator of Jane Hester, who had died on the 4th of February, 1880, entered their motion in the County Court that the executor be required to charge himself with interest on his §3,000 note in the inventory mentioned, at the rate therein specified, from the first of March, 1879, to the maturity of said note; also to charge himself with 10 percent. interest on all moneys in his hands after the expiration of two years and six months from the granting of letters testamentary to the time of making the investment; also to charge himself with six per cent, interest on the balance of all moneys in his hands from March 1,1879, up to the time of investment; also to pay to Fanny Hester and to William Davis, administrator of Jane Hester, the parts of said -interest belonging to them respectively; and also to pay to them in parts, as due to , them respectively, the sum of §559.70, being the net balance of rents of the farm mentioned in the inventory of the estate, from the death of the testator to March, 1881, the date the farm was sold by the executor.
    From the order and decree entered in the County Court upon the matters above mentioned, an appeal was taken to the Circuit Court, where there was a hearing de novo. Hpon this latter hearing considerable evidence was introduced; and among other things a third report made by the executor to the County Court, bearing date July 15, 1884, and showing a balancé of §6,906 in his hands, was given in testimony.
    The decree rendered by the Circuit Court allowed the two charges of 10 per cent, interest against the executor; refused to allow any claim for 6 per cent, interest on moneys in the hands of the executor between the dates of March 1, 1879, and July 9, 1880, the latter being the time of the expiration of two years and six months from the date of letters testamentary; ordered the allowances of 10 per cent, interest against the executor to go to the increase of the principal of the trust fund; ordained that Fanny Hester and the administrator of Jane Hester were entitled to interest at the rate of 5 per centum per annum on the clear residue of the estate as determined from the death of the testator to the date of the death of Jane Hester, less §506.51 received by them under the order of August 8, 1879; and that Fanny Hester was entitled to 5 per cent, interest on the clear residue of the estate from the death of Jane Hester, February 4, 1880, to April 19, 1881, the date of the investment by the executor; and ascertained these several amounts upon the basis indicated and made order for their payment.
    The executor, George L. Clifford, appealed the cause to this court, and since the appeal has been pending Fanny Hester has died, and William Davis, her administrator, has been substituted upon the record in her place and stead.
    Various errors and cross-errors have been assigned.
    Messrs. McKenzie & Calkins, for appellant.
    Mr. Geobge W. Thompson, for appellee.
    When a will is made directing a conversion of the whole estate and an investment to be made, and then the interest to be paid to tenants, and part of the estate at the time of the death is invested, the interest on that part already invested belongs to the life tenants. 2 Jarman on Wills, 196 ; 2 Redfield on Wills, 470 ; Sargent v. Sargent, 103 Mass. 297; Lovering v. Minot, 9 Cush. 370; Lamb v. Lamb, 11 Pick. 370, Eyre v. Golding, 5 Binney, 473; Hilyard’s Estate, 5 Watts & S. 30; Healey v. Toppon, 45 N. H. 267; Cooke v. Meeker 36 N. Y. 15; Williamson v. Williamson, 6 Paige, 298; McPherson v. McPherson, 1 Macq. 243, 249; Brown v. Gellatly, 2 Law Rep. Ch. 751.
   Baker, P. J.

The third clause of the will of William Hester devised the residue of his estate, both real and personal, to appellant in trust, and stated it was the wish of the testator that as soon after his death as the best interest of his estate would permit, appellant should sell all of the property, so that the whole of the assets should be turned into money. It further directed that the whole of the proceeds should then be invested by appellant in securities drawing interest, which interest should be collected by him as it accrued and paid over to his daughter, Fanny Hester, and his daughter-in-law, Jane Hester, in equal shares, with right of survivorship in them in respect to such interest; and it provided that on the death of the survivor the whole remaining assets of the estate should be equally divided among the three surviving children of Elizabeth Clifford, sister of the testator.

1. The general rule is, that in case of the bequest of a life estate in a residuary fund, and where no time is prescribed in the will for the commencement of the interest or the enjoyment of the use or income of such residue, the legatee for life is entitled to the interest or income of the clear residue, as afterward ascertained, to be computed from the time of the • death of the. testator. When, however, the testator has directed one species of property to be converted into another, or the residuary fund to be invested in a particular manner, and has given a life estate in the fund as thus converted or invested, then, in such event, it is deemed to be consistent with the will of the testator to consider the life interest as commencing when the conversion takes place or the investment is made. This latter rule is subject to the qualification, in the absence of a specific time fixed by the will, that the conversion or investment must be made within a reasonable time; and the legatee for life can not be kept out of the interest or income beyond such reasonable time. Most, or many of the cases, seem to settle on one year as such reasonable time; but it appears to be so fixed in analogy to some statutory provision, such as one year being allowed for the payment of legacies, or the settlement of estates. See Williamson v. Williamson, 6 Paige Ch. 304, 305; Cogswell v. Cogswell, 2 Edwards, 236; Gibson v. Bott, 7 Vesey Ch. 89; 1 Roper on Legacies, 588; Valentine v. Ruste, 93 Ill. 585. Under the statutes of this State, two years are allowed for the settlement of the estates of deceased persons, and we are of opinion that in analogy two years should be deemed a reasonable time for the conversion and re-investment of devised property for the purpose of constituting a residuary fund.

2. It was not error to charge the executor with $75, it being 10 per cent, interest from March 1st to June 1st, 1879, on Ms promissory note for $3,000 bearing that rate of interest, executed to his testator in the lifetime of the latter. The note was not due until the last mentioned date, and it was for the interest of the trust fund the note and interest should run until maturity. The estate could not be settled before January 9,1880, when the two yearsjwould expire; the money was not needed to pay debts, or otherwise for present use, and it was not paid for the purpose of making a re-investment before the note was due. The only effect of the act of the executor was to deprive the trust fund of this $75, and enable himself to make that amount personally at the expense of the estate A trustee is not permitted to thus speculate in the trust fund and make a profit to its detriment.

The doctrine of res adjudicate/, does not apply to this item of charge, as is so strongly insisted by appellant. If the claim urged should prevail, the body of the fund would be diminished by the amount mentioned, and the loss would fall not only upon the legatees for life, but to a still greater extent upon the remaindermen, among whom, after the decease of those holding life interests, it was provided by the will the fund should be divided. Besides this, we do not understand the evidence in the record to sustain the defense of a former adjudication, even were the life tenants the only parties in interest. The plea must necessarily be predicated either upon the order of the County Court of March 12, 1879, or that of August 8, 1879, or that of August 31, 1881. The first mentioned order does not show the life tenants were'present either in person or by attorney, but on the contrary the record thereof does show it was merely an ex parte order approving the first report or account current of the executor. It is true that appellant says in his testimony that Davis & Thompson were present when the first account was filed; they were there resisting the report;” hut it does not appear from his evidence who they were there representing; and his statement seems to be in conflict with the recitals in the record. The order of August 8, 1879, was based upon the motion of July 30, 1879, and that only presented the question whether Fanny and Rachel Hester, who were poor and needy, should on that ground have the use of certain interest accruing from the death of the testator to March 1, 1879, that had been collected by appellant, and did not involve the question of the propriety of the items of account contained in the account current, approved by the court in the preceding March. Uor is there force in the point made with reference to the splitting of a claim, as the matter at issue was interest that had then been collected by the executor, and that of course did not include interest that had not been collected. The first item in the account current approved August 31, 1881, is a charge of the executor against himself of “Amt. on hand at approved account of March 12, 1879, §5,912.52.” • It seems this amount is the balance brought forward from the first account current, and that the executor had reported as collected, the principal of the §3,000 note, and it entered into and went to make up such balance. ' The fact the life tenants were present by counsel when this report of August 31st was approved, affords the only pretense for claiming res jtodicata by virtue of the order of approval then entered. The principal of the §3,000 note had been due by the terms of the contract more than two years prior to the entry of this order, and we deem it was not incumbent upon the life tenants to object to this last report merely because an account current presented nearly two years and a half prior thereto had given an improper date to an item. Besides, they did substantially and at once object to what the executor had done, by at once filing their motion to charge him with 10 per cent, interest on his note from March 1, to June 1, 1879; and the court disposed of the whole matter for the term and in the same order by approving the account current and con-tinning the motion, thereby reserving the real issue between the parties for future consideration. We are not inclined to extend the doctrine of former adjudication to so doubtful and flimsy a case, and especially so when the effect will be to enable the trustee to wrong the trust estate, placed in his hands, to his own gain and profit.

3. It was proper to charge the executor with 10 per cent, interest on the moneys in his hands after the expiration of two years and six months from the date of his letters testamentary and up to the time of his investment of the funds, that is to say, from July 9, 1880 to April 19, 1881. The last clause of Sec. 113 of Chap. 3, R. S., provides such change shall be made, “ unless good cause is shown to the court why such should not be taxed.” Estate of Schofield, 99 Ill. 513. We think no good cause is here shown why the penalty imposed by the statute should not be taxed. While it is true the will provides the executor should sell all the property, real and personal, so that the whole of the assets shall be turned into money, and follows this up by saying, “the whole of such proceeds shall then be invested in good and sufficient securities, yet we think the reasonable meaning of the will is that the word “ then ” refers to such times as any of the property shall be turned into money of a sufficient amount to afford full and ample opportunity for profitable investment in interest-paying securities. The evidence shows that the testator died seized of a farm containing 136J acres of land, of a block of ground in the city of Knoxville, of goods and chattels valued at $753.68, and of some $5,000 in collectible notes and accounts, principally notes drawing interest. It is unreasonable to suppose the testator intended no investment of money should be made by his executor until every article and parcel of property was disposed of and turned into money. It might require years to do this, and the delay would work a serious detriment to the trust fund and to the cestui que trust. The primary objects of his bounty were the widow of his son, who was supporting herself and her daughter by her labor, and his own daughter, who was in bad health and gaining a livelihood by needle-work. It is highly improbable he intended no investment should be made and no income realized for the benefit of this daughter and daughter-in-law until the whole of the property, no matter how unsalable some of it might be, was converted into money. The direction in his will the executor should “if practicable” get securities upon which the interest would be paid semi-annually, precludes such idea. Tor more than two years before he made any investment, the trustee had in his hands over $5,000, which was drawing no interest and was not required for present use. Ho reason appears why he might not readily, safely and profitably have invested it. It was his plain duty to the holders of the life interest to have procured, with the money, securities that would produce an income instead of keeping it idly on hand for so long a time. At the very least, he should have done this -within the two years allowed for administration; and it is no hardship he should be held to pay the statutory interest after the expiration of six months thereafter.

4. The first assignment of cross-error is not well made. It was properly adjudged the executor was notliable for interest upon the moneys in his hands, from March 1, 1879, to March 1,1880. It does not appear he ever received interest on these trust funds prior to the date of his investment in the mortgage. Under the statute he was responsible for no interest or penalty until more than four months after the date last mentioned. See, Estate of Schofield, sivpva. The fact his attorney at one time made out a report charging him with such interest, which appellant signed but which was never filed or acted upon by the court, and afterward withdrawn, would not estop him from contesting the claim for this interest. The law did not charge him with it, and the item was evidently put in the report through a misapprehension, and the fact it was so put there, worked no fraud or injury to any one.

5. The second cross-error is not well assigned. The substance of the claim is, that the court should have ordered the net profits or increase of the estate from the death of the testator up to the time of the investment in the mortgage, to be paid to the life tenants. The holders of this life interest mast be willing to accept the bounty of the testator upon the terms upon which it was given. The will donated to them no interest whatever in the lands, or in the rents, issues and profits thereof, and it did not bestow upon them the chattel property or the dioses in action on hand at the time of the dsath, or any interest thereon or increase therein which might accrue; these things were all expressly devised and bequeathed to the executor, but upon the trusts declared in the will. That which was given to these donees was specifically the interest to accrue upon a fund yet to be created, and that only. The power and the duty to convert the assets of the estate into money, and then invest such money in interest-bearing securities, was a personal trust imposed by the testator upon appellant, and it was by the terms of the will left to him to determine when the best interest of the estate would permit the selling of the property. Ho specific time was fixed by the will when the property was to be converted or the proceeds invested. These matters were left by the testator to the sound discretion of the executor and trustee. But the rule of equity heretofore referred to, qualifies this otherwise unlimited power and discretion, and requires in the interest of the life tenants, that the conversion and investment should be made within a reasonable time; and, as we have also seen, such reasonable time in this State is two years from the date of the letters testamentary. In the case of People v. Jennings, 44 Ill. 488, where a testator directed his executors to sell his real estate and divide the proceeds equally among his children, it was held that the interests of the children did not vest until the real estate had been converted into money as directed by the will. See also, "Valentine v. Ruste, 93 Ill. 585. We think from the terms of the will and upon authority, that the net rents and interest accruing from the death of testator to the time of re-investment are to be considered as assets to increase the principal of the trust fund, and that the court properly incorporated them therewith and refused to decree that they should be paid to the legatees for life.

6. The holders of the life interest will suffer no hardship from their failure to get the rents of the farm and this interest which accrued upon the trust funds; these amounts go to swell the body of the estate, and the life tenants will have the income of the clear residue of the fund, as ascertained, to be computed from January 9, 1880, the date of the expiration of the reasonable time within which the executor should have made the conversion and investment. He having failed to do so, equity will regard that as done which should have been done, and enter decree in accordance therewith.

7. We hold,- the Circuit Court advisedly adjudged that the executor should account for the interest charges of $75 and $308.89, respectively; that these amounts and the net rents and income of the farm, $559.70, should go to increase the corpus of the trust fund; and that the executor was not chargeable with interest on moneys in his possession from March 1, 1879, to March 1, 1880; and these several portions of the decree are affirmed. We further hold it was error to order the legatees for life should be paid interest on the trust fund as ascertained from the date of the death of the testator, and for the reason the general rule as first stated by us does not apply to the will in question, because by its terms one species of property was to be converted into another and the residuary fund invested in a particular manner, and the life estates were in the funds as thus last constituted.

The amounts due the life tenants having been computed upon the theory, their interests in the fund commenced from the death of the testator, instead of from the 9th day of January, 1880, the money decree entered was erroneous. For the errors indicated, these two latter portions of the decree are reversed, and the cause is remanded for further proceedings in regard thereto in conformity with the views herein expressed.

The record shows in respect to the" item of $506.51, that it was expressly adjudicated in 1879 by a court of competent jurisdiction that it belonged to Jane Hester and Fanny Hester, the tenants for life, and was ordered to be paid by the executor to them by a certain day fixed by the court. This, as between the executor and the life tenants, renders the matter of this sum of $506.51 res judicata. Therefore in stating the account this item should not be taken into consideration, and no deduction should be made on account thereof in making computation of the amount due the life tenants.

It is further ordered that each party pay one-half the costs of this appeal, the costs taxed against William 'Davis, administrator, to be paid in due course of administration.

Affirmed in part, and reversed impart.


author: Lacey, J.

text:
    Germania Fire Insurance Company v. Walter S. Frazier.

      Fire Insurance — Policy—Arbitration and Appraisement Glauses — Strict Construction — Pleading—Instructions.
    1. A clause in an insurance policy which in effect restricts the liability of the company, excuses it from paying a bona fide loss, or which works a forfeiture, will be strictly construed against the insurer.
    2. In an action to recover for partial loss on a policy of fire insurance, containing arbitration and appraisal clauses, it is held: That said clauses should be construed in connection with each other; that the party desiring an appraisement should take the initiative; that the insurer, if it desired an appraisement, should take steps to secure it within a reasonable time, and at least within the time limited for the payment of the loss; that the plaintiff has not refused to arbitrate, but has at all times acquiesced in the efforts of the defendant to secure.an appraisement; that the mere failure of the plaintiff to choose a competent and unprejudiced appraiser would not of itself work a forfeiture of his demand, or excuse the defendant from taking steps to secure another set of appraisers; that no actual fraud' on the part of the plaintiff appears to have been shown, even if such defense was admis-' sible without a special plea; that certain pleas were not sustained by the evidence;, and that there was no error in the refusal to give certain instructions.
    [Opinion filed January 22, 1887.]
    Appeal from the Circuit Court of Kane County; the Hon. Isaac Gr. Wilson, Judge, presiding.

      Statement by Lacey, J. This was a suit commenced on the 21st day of April, 1884, in the Circuit Court by the appellee against the appellant based on an insurance policy against loss by fire, issued by the latter to the former in the sum of $1,000 for one year on vehicles manufactured and in process of manufacture and all material and stock for the manufacture and finish of the-same, contained in the four story building of and belonging to the appellee.
    The policy covered the time between the 22d day of Fql> ruary, 1883, at noon, and the 22d day of February, 1884, at noon. The loss, if any, was “ to be paid sixty days after due notice and proof of the same, by the assured, was received at the office of the general agenc\r of said company, in the city of New York, in accordance with the terms of the policy,” but provided, “ in case difference shall arise touching any loss or damage, after proof1 thereof has been received in due form, the matter shall, at the written request of either party, he submitted to arbitrators, indifferently chosen, whose award in writing shall be binding on the parties as to the amount of such loss or damage, but shall not decide the liabilities of the companies respectively.” The policy further provides that “ damages to property not totally destroyed shall be appraised by disinterested men mutually chosen by the assured and the companies, and sworn to decide impartially; and the companies reserve the right to take the articles damaged or any part thereof at their appraised value. When personal property is damaged the assured shall cause it to he put in the best order possible, properly arranged, and make an inventory thereof, naming the quantity and cost of each article; and upon each article the damage shall he separately appraised and the detailed report of the appraisers under oath, in writing, shall form a part of the proofs required, one-half of the appraisers’ fee to be paid by the company.” Further, “ the assured shall forthwith give notice of said loss to the companies through their general agents in the city of New York, and as soon thereafter as possible render a particular account of such loss, signed and sworn to by them, stating whether and what other insurance has been made on the property, etc., and the cash value of the property and their interest therein,” and the general requirements of such proof of loss.
    “In case of loss the assured shall only recover such proportion of the loss, not exceeding the sum insured, as the sum insured by this company bears to the total amount insured.”
    It is averred that the property insured was damaged by fire October 30, 1883, by accident and misfortune, in the sum of $6,000.
    The evidence shows that the appellee immediately gave notice in writing of the loss, and on November 27, 1883, delivered to appellant proof of loss required by the policy.
    And the declaration avers that “ he performed all the acts and things required of him by said policy, and the defendant then and there received and accepted the said proofs as satisfactory and waived any other acts on the part of plaintiff.”
    The appellant first pleaded the general issue, and then a special plea setting up the clause requiring the damaged property to be appraised by disinterested appraisers mutually chosen, etc., and averring that a difference arose between them touching the loss, and avers that appellant had always been willing that such difference should be submitted to the judgment of the arbitrators in the manner provided in the policy, whereof the appeljee had notice, but appellee refused, etc., to submit; and another plea of the same purport, averring that appellee refused to allow the appraisers to proceed after being chosen, and appellant has always been willing to proceed and so'notified appellee, but the latter refused.
    The appellee replied in several replications in due form to these pleas, that appellant had waived its right to have arbitrators appointed; that the loss had been adjusted according to the policy, and that he had never refused to have appraisers appointed, but had always been willing to have appraisers appointed and tó submit, etc., and appellant refused.
    Then appellee replied in two separate replications to the second and third pleas, that he had inquired of the appellant whether or not it admitted liability upon and under the policy, and appellant refused to admit liability.
    The two last replications were demurred to by appellant and demurrer sustained.

      Further replication to the third plea that appellee did not refuse or violently prevent the arbitrators from proceeding, but had always been willing they should, etc., and denied that appellant had always been willing and ready to complete the appraisement.
    There were general rejoinders.
    The cause was tried before a jury in October, 1884, and on the 24tli day of that month the jury found a verdict for appellee for §502.50, the amount he was entitled to on the policy. The whole amount of insurance in all companies on same property was §4,500.
    The jury must have found,- to arrive at this verdict, that the entire loss was at least §5,000.
    Appellant only made motions for new trial and in arrest, which were overruled by the court and appeal taken to the Appellate Court.
    Messrs. Charles Wheaton and Frank H. Collier, for appellant.
    The appraisal clause in a policy of insurance is a valid and binding one, and after an appraisal has been demanded by an insurance company no recovery can be had upon the policy unless such appraisal tabes place or is waived by the insurance company. The facts in this case show beyond peradventure that a deliberate attempt was made by the appellee to prevent an appraisal from the beginning. There is no doubt that he interfered unlawfully in the first appraisal, and there is no doubt that he so interfered because every valuation that the first appraisers made was less in a substantial degree than the amount he claimed in his proof of loss.
    The question that arises is, was an honest effort made on the part of W. S. Frazier, the assured in this case, to have an appraisal and an honest appraisal ? If he had desired an honest appraisal in the first place he would have appointed a competent person to make it. Neither Mr. .Coy nor Mr. Fisher were competent, as the evidence conclusively shows.
    The same ground that will induce a court to set aside a verdict of a jury and grant a new trial will induce them to vacate an award. Williams v. Craig, 1 Dallas, 313; Bassett’s Case, 2 Cow. 458; Van Cortland v. Underhill, 17 Johns. 405.
    All the arbitrators must act together. The parties are entitled to the arguments, experience and judgment of each at every stage of the proceedings, and their bearing and influence on the minds of the others ; and an award will be set aside for the intoxication of any one of them, rendering him incompetent. Smith v. Smith, 28 Ill. 56. The relations of jurors to litigants are like those of arbitrators, and the same duties are enjoined upon each of them, especially as to keeping their minds free from bias, prejudice, partiality and undue influence. Spurck v. Crook, 19 Ill. 415, 425; Stampofski v. Stoffens, 79 Ill. 303. Arbitrators should so conduct themselves as to prevent the possibility of improper bias or even suspicion. Morse on Arbitration, 537. Like a Judge or juror, though his judg-' ment of the pending controversy be altogether a just one, yet an arbitrator is false to his duty if he exposes his mind to the chance or danger of perversion. Strong v. Strong, 9 Cush. 570. There is nothing singular in the conclusion here suggested of influences' in themselves undue, but altogether short of corruption, being so applied to the mind of another as to impair the validity of an act otherwise lawful. Fox v. Hazelton, 10 Pick. 277; Morse on Arbitration, 106 ; Johnson v. Holyoke Water Power Co., 107 Mass. 473; Jones v. Miller, 1 Dall. 205.
    After a man is chosen arbitrator, he ought not to hear a word of private ex $ arte conversation on the subject with either of the parties. A court can not say it had no influence upon his mind. Graham v. Pence, 6 Randolph, 537; Morse on Arbitration, 106; Russell on Awards, 205.
    Mr. Elbebt H. Gaby, for appellee.
    The provisions of a policy requiring proofs of loss and appraisal are to be construed strictly against the insurer. Insurance Co. v. Robinson, 64 Ill. 265 ; Ins. Co. v. Walsh, 54 Ill. 164; Ins. Co. v. Eddy, 49 Ill. 106; Roper v. London, 1 E. & E. 825; Ins. Co. v. Sennett, 41 Pa. 161. All that can be required of the assured is a reasonable and substantial compliance with the conditions of the policy. Wood on Fire Ins., 727.

      The provisions of the policy requiring proof of loss and appraisal may be waived in express terms or by implication. Ins. Co. v. Kranich, 36 Mich. 293; Ins. Co. v. Fay, 22 Mich. 468; Ins. Co. v. Schueller, 60 Ill. 465; Pennell v. Ins. Co., 73 Ill. 303; Rokes v. Ins. Co., 51 Md. 512.
    The insurers are estopped to rely on any fault which they have contributed to produce. Cornell v. Leroy, 9 Wend. 163; Uhrig v. Ins. Co., (N. Y.) 15 Ins. L. Jour. 312.
    If there be any evidence from which a waiver of proof may be inferred, it should be left to the jury. Ins. Co. v. Taylor, 73 Pa. 342; Ins. Co. v. Lippold, 4 Ins. L. Jour. 430; Underwood v. Ins. Co., 57 N. Y. 500.
   Lacey, J.

The only defense made to the appellee’s suit and claim for damages was under the clause in the policy presented in special pleas that in case of loss by fire, “ damages to property not totally destroyed shall be appraised by disinterested men, mutually chosen by the assured and the companies and sworn to decide impartially, * * * and the assured shall cause to be appraised the damages on each article separately, and the detailed report of the appraisers, under oath, in writing, shall form a part of the proof hereby required.”

The averments of the plea in regard to the failure of appellee to comply with the provisions of the policy in that particular were that the alleged loss in respect whereof the action had been brought has not been adjusted according to the tenor and effect, true intent and meaning of the said article; that a difference arose between appellant and appellee touching the said loss, and the appellant had always been willing that such difference should be submitted to the judgment and determination of appraisers in the manner mentioned in the article, whereof the appell e had always had notice, but had wholly refused to have the same submitted to the judgment and determination of appraisers, etc., nor had the 'appellee made an inventory of the damaged property as provided in the article, etc.” In the third plea appellant avers that after the appraisers were appointed the appellee refused to continue such appraisal etc., and violently prevented the appraisers from examining the property.

The appellee rejoined a waiver by appellant of the requirements set up in these pleas and also took issue on the matters of fact averred in them. The jury having found in favor of appellee on these issues, it is insisted that such verdict was contrary to the weight of the evidence and that the court below erred in refusing some of its offered instructions. ■

In order to arrive at a proper conclusion in the case it will be necessary to consider at some length the evidence.

In the first place the fire, and loss to appellee in consequence, took place on the 30th day of October, 1883, and immediately appellee gave to the appellant notice of the loss, and on November 27, 1883, delivered to the appellant proofs of loss. There was no objection made at the time these notices and proofs were given of any want of formality or want of being delivered in apt time. The appellee’s manufacturing establishment was situated in Aurora, Kane County, and appellant’s agents did business in Chicago, where its office was, the main office being in New York City.

Immediately after the fire the appellant’s agents went to Aurora and visited the injured building, and determined to have an appraisement made under the terms of the policy. On the 6tli of November, Carson, agent of appellant, went to Aurora and took with him one Wm. Smith, and requested an appraisal, when appellee agreed to it and chose James O’Donnell, and requested him to be there and act.

Carson presented a form of agreement with a good many conditions in it not provided for in the policy which appellee objected to and refused to' sign, so the attempt at appraisal failed at that time. On December 20th another attempt was made by Carson, representing the appellant, and appellee, to appraise. Carson chose Wm. Smith and appellee George Smith, and these two were sworn in. After proceeding for some time, and the two appraisers wrangling over the amount at which some of the articles should be appraised, the effort to appraise was brought to a sudden termination by Wm. Smith refusing to proceed any further with the work, although appellee insisted he should stay and go on with the appraisal. The appellant complains that appellee was at fault for offering his opinion of the amount of the damages while the arbitrators were at work. But it'would appear from all the evidence that the jury had abundant grounds to find that Smith was a strong partisan in favor of appellant, bigoted, overbearing and ungentlemanly in his behavior toward the other arbitrator, and was unjustified in breaking up the arbitration. Whatever such finding by the jury might amount to in the final consideration in the case the appellee should have the benefit of it. On the 2d of January, 1884, another attempt was made to get an appraisement, and the samé Wm. Smith, unfit as he had shown himself to be, and who had broken up the former attempt, was presented by appellant’s agents for an arbitrator in another arbitration, and appellee objecting to him and appellant refusing to take any other, the attempt again failed.

The agent and Wm. Smith then went back to Chicago.

On January 21, 1884, still another and the last attempt, at appraisal was made. Carson, representing appellant, chose one Bohannon, whom all agree was a very fit and competent man, and appellee chose one Fisher, who had lately come from Wisconsin.

The two appraisers thus chosen proceeded to make the appraisement and when they had completed about three-fourths of the work, fixing the amount of the damages as far as they had proceeded at §4,000, the agent Carson, discovering a book in the hands of the appraiser Fisher, of what he supposed to be a list of the goods and prices set opposite each item, a copy of appellee’s proof of loss that appellee had handed the insurance company, and upon Fisher refusing to show it to the other appraiser, broke up the appraisement and went back to Chicago. This little memorandum book was in all probability what Carson supposed it to be, a copy of the proof of loss, or at least a book with a list of the items of property damaged to be appraised, with an estimate of damages of each item made by some one set opposite.

As shown by the testimony of Carson he refused to proceed on two alleged grounds, which he made known to appellee at the time. 1st. Because Fisher was using the book. 2d. He was wholly incompetent. Ho one, either the appellant or appellee, ever asked for or attempted to get another appraisement afterward. The appellee waited three months and then brought this suit to recover the amount of -his damages.

The question presented is, whether there was any evidence before the jury upon which the verdict can be sustained.

In determining this question it will be necessary to examine into the nature of the clause in the policy under which this defense is interposed, and also the state of the pleadings.

In the first place, we may observe that clauses of this character, the effect of which is to restrict the liability of the company and to excuse it from paying its iona fide honest losses and to work a forfeiture, are strictly construed against the insurer, and are allowed to be easily waived. Commercial Ins. Co. v. Robinson, 64 Ill. 265; Aurora Fire Ins. Co. v. Eddy, 49 Ill. 106; McBride v. Ins. Co., 30 Wis. 568; May on Ins., 2d Ed., Sec. 175.

The appellant seems to have tried this case on the theory that if the appellee failed for any reason, after he had been notified by appellant that an appraisal was demanded, to procure an appraisal, and present such proof to the latter with his other proof of loss, then he was barred from recovery. It is contended that if the appellee did not appoint a>,competent and unprejudiced person as appraiser to appraise said loss, and, on the contrary, appointed an incompetent and prejudiced person, by means of which the appraisement failed, then he could not recover. The appellant asked and the court gave instruction Ho. 4, based on this theory.

The same argument is contained in appellant’s briefs presented here.

The contention seems to be that the duty to bring about the appraisement rested wholly on the appellee, and that it was not necessary for appellant to take any steps or make any move in the matter whatever, further than to demand an appraisement in the beginning. This, it is claimed, was a condition precedent to the right of recovery. We think the law is not by any means as supposed.

The obligations of the agreement are mutual. The arbitration clause is put into the policy for the benefit of either party who may seek to avail himself of the privilege. The policy says “ in case difference shall arise touching any loss or damage after proof thereof has been received in due form, the matter shall, at the written request of either party, be submitted to arbitrators indifferently chosen, whose award in writing shall be binding on the parties as to the amount of such loss and damage, but shall not decide the liabilities of the companies respectively.”

This clause alone would cover the present difference, and the clause in reference to appraisal in case property is not totally destroyed but damaged, and which is set out in the plea, should not be construed independently from the above but in connection with it, and the terms of the first should be held to be modified only so far as something is added not contained in it. The second clause provides that the damage to the property shall be appraised by disinterested men mutually chosen by the assured and the companies sworn to decide impartially. This addition probably would be implied in the first, but if not it is made explicit and the appraisers are to be sworn and to be mutually chosen. And appellant reserved the right to take any article of the damaged property at its appraised value, and to enable it to do so the appraisers are to appraise each article separately and make a detailed report of the appraisers under oath in writing. These little additions do not change the main features of the first clause although in the one case they are termed arbitrators and in the other appraisers.

It appears from this citation that it was incumbent on either party that wanted an arbitration of damages to give the opposite party notice of such desire in writing, and as each party is to have a share in choosing the appraisers, some time and place should be fixed where the party desiring the appraisement would meet the opposite party to mutually ” choose such appraisers. Some one must make these advances or else the parties could never get together to accomplish the work, and the contract says that the party desiring the appraisement should give the written request. In other words he should take the initiative. The party receiving the notice simply acquiesces and meets the notifying party at his request, acts with him and seconds the effort. That is all the Jaw requires of him — all the contract requires. This would be no more than a fair construction of the second clause if it should be held to stand alone, except probably as to the written notice; for how otherwise could the appraisers be iC mutually ” chosen ?

It requires the presence of both parties, and this last appraisement clause is only inserted for the benefit of the insurance company, to enable it to take the appraised property if appraised under value. Therefore the company should be required to do everything necessary to facilitate the appraisement, if it desires one. The insured may have no interest to, nor is he required to force an appraisal on the insurer. The insurers should make these advances within a reasonable time, at least so as to enable them to fulfill their contract to pay the loss within sixty days as the policy requires, otherwise it should be held to have waived the privilege of demanding an appraisement. The principle to which we refer was held by the Supreme Court in the Com. Ins. Co. v. Robinson, 64 Ill. 265. In that case a similar point was made as in this, on almost an exact copy of the second clause in the policy sued on. The court, by Chief .Justice Lawrence, held as follows :

It is urged that the stipulations of the policy were not complied with in regard to an appraisement. An inventory of the goods burned or injured was furnished to the company. They expressed their dissatisfaction with it, and might have insisted on the appointment of appraisers. They made no offer to have them appointed and it was not incumbent on the appellee to move further in the matter. He did what the policy required him to do when he furnished the inventory.”

In this case the appellee also furnished the inventory, which was not objected to as not filling the requirements of a policy and proof of loss under the policy. It is only objected that there was no appraisement. In the case at bar the appellee at all times acquiesced in the efforts of appellant to get an appraisement. He made no objections to it and assisted in getting appraisers, and never denied the appellant’s right to have an appraisal.

He always responded to every effort that was made. He showed no captious disposition to thwart the effort to get an appraisement. When an effort to procure an appraisement' failed it was necessary for some one to take the first steps to get a new set of appraisers, and whose duty should it more properly be than the one who desired the appraisement ? From what we have already said this will be apparent, and it would be the duty of appellant after the second effort had failed to take steps to get another set of appraisers instead of waiting three months and assuming that it was the duty of the appellee to effect the appraisement himself.

Appellant, it appears from the defense set up here, has denied its liability on the policy from the date of the last attempt at appraisal, though it did not communicate that fact to appellee except by neglecting to pay the loss and taking no further steps in the matter and setting up such defense on the trial.

Under these circumstances it would have been useless for appellee to attempt any new appraisement and he was not required by law to do so. McBride v. Ins. Co., 30 Wis. 568.

The next point fairly presented is, was the conduct of the appellee such at the last attempted appraisal as to forfeit all right to the insurance money claimed by him, or rather were the jury justified in finding as a fact under the law that it was not % It is claimed as appears by appellant’s instructions to the jury and argument, that if appellee failed to choose a competent and unprejudiced appraiser in the person of Fisher, no matter how much he might have been mistaken in the man or how honestly he acted, yet he forfeited all right to collect his insurance money — gave the appellant the right to dissolve the body of appraisers, and repudiate the claim.

Such doctrine can not be sanctioned by this court. A number of cases are referred to by appellant to show that appellant was justified in refusing to complete the appraisal on the account of the misconduct of appellee, and Fisher, the arbitrator chosen by him, and among them Spurck v. Crook, 19 Ill. 415, and Moshier v. Shear, 102 Ill. 169. In those cases the award in each, was set aside on account of the misconduct of "the arbitrators and possibly of one of the parties, but was it supposed by the court that the party for whose benefit the misconduct was committed should forfeit his entire demand on that account ? Although the arbitration awards were set aside the claimant could still pursue his remedy in the usual way.

If there is any foundation for the claim that the appellee forfeited his entire insurance money on account of what took place before the last board of arbitrators, it must be under this clause in the policy: “All fraud or attempt at fraud, or false swearing, on the part of the assured, shall cause a forfeiture of all claim under this policy.” If this should be held to apply to the proceedings before appraisers it would have to be established that the appellee attempted fraud before the arbitrators.

It would be necessary to make out such defense under a proper special plea setting out the above clause in the policy and its breach, with proper specifications, as all such special matters must be pleaded as special defenses. They need not be set out and negatived in the declaration, but if relied on as a defense they must be specially pleaded.

Again, if such question were in issue we can not say from the evidence that the jury were not justified in finding that, while the action of the arbitrator and appellee may have justified appellant in breaking up the arbitration, yet no actual fraud was intended by appellee, and that he was not responsible for the incompetency of Fisher.

The third special plea, that apparently was intended to set up some defense in regard to the causing of the failure of arbitration by appellant, does not cover the case, and that plea was not sustained by the evidence. Appellee did not refuse to continue the appraisement, nor violently prevent the examination of the property, as the plea avers. It was the appellant’s agent, Carson, that broke it up, for justifiable cause it might have been, but that was not the plea; the plea was, appellee did so. The second plea was not sustained, for the evidence did not show that appellee wholly refused to have his claim submitted to the determination of arbitrators, but, on the contrary, he always manifested a willingness to have it done whenever he had been requested.

The second refused instruction for appellant was immaterial under any plea in the case. As it will be seen from what has been said, it was no defense that Fisher was not an unprejudiced person; at least it did not justify appellant in refusing to ask for a new appraisement, even if justified in breaking up the one then taking place. The same may be said of the third appellant’s refused instruction. The proof that appellee gave Fisher the book as supposed in the instruction, and Fisher refused to produce the hook and to submit it to Bohannon, and the appraisement failed for that reason, does not establish •the averments in the plea that appellee refused to continue the appraisal. It is the occasion of the act of Carson, coupled with his objection of the incompetency of Fisher, probably in dismissing the appraisers and refusing to continue. The fourth refused appellant’s instruction is bad for the same reason, and also for the reason that it was required for appellee to move to get another set of appraisers after the one in question was discharged, without notice that another was desired, as we have already held. Besides, the fourth, seventh and ninth given instructions for appellant, though erroneous, covered the entire ground in those above noted refused.

The evidence abundantly shows that the appellee sustained a loss of at least §5,000, a sum greater than the amount of his entire insurance, and is justly entitled to the amount he has recovered in this case, unless the special defense set up in the pleas, which we think the jury was justified in finding was not sustained.

FTo issue of fraud or attempted fraud was made or tendered as to whether Carson was justified in breaking up the last attempted appraisement on account of one of the appraisers’ incompetency or because appellee gave Fisher the book. The question was whether appellee had refused to arbitrate or had prevented the last arbitrators from continuing. On these issues we think the appellant was fairly beaten, as well as on the issue of waiver of the appraisal.

The judgment of the court below is therefore affirmed.

Judgment affirmed.