author: Mr. Justice Brown

text:
    Hunter W. Finch & Company, Appellee, v. Zenith Furnace Company, Appellant.
    Gen. No. 14,110.
    1. Appeals and ebbobs—effect of failure to assign cross-errors. A motion to strike a portion of a bill of exceptions, which motion has been presented to and been denied by the trial judge, is not preserved for review in the absence of an assignment of cross-error.
    2. Bum op exceptions—when motion sought to he preserved for

      review not shown to have been overruled prior to term of presentment of bill of exceptions. Upon a motion to strike that matter contained in a bill of exceptions which refers to the action of the court in overruling a motion to dismiss made prior to the trial upon the ground that such motion was determined at a term prior to the term at which the bill of exceptions was presented and that no extension of time beyond such term had been provided for, it must clearly appear that such motion was in fact finally disposed of during the term preceding the presentment of the bill of exceptions, otherwise the motion to strike will be denied.
    3. Corporations—act regulating admission of foreign corporations to do business in Illinois, construed. A foreign corporation which has not complied with the act of May 18, 1905, entitled “An act to regulate the admission of foreign corporations for profit to do business in the State of Illinois,” while incapable of maintaining actions in this state may none the less be lawfully sued in this state.
    4. Corporations—right of domestic to sue foreign corporation in this state notwithstanding such domestic corporation has not complied with the laws of the state of the organisation of such foreign corporation. The principle of comity in Illinois does not go so far as to preclude domestic corporations from maintaining in this state a suit against a foreign corporation of another state in which other state such domestic corporation has done business without complying with the laws relating to foreign corporations. Inability of such domestic corporation to sue in such foreign state, does not affect the status thereof so to maintain actions in this state.
    5. Corporations—when contract not void for failure of foreign corporation to comply with state regulations. A contract made in good faith and partly executed which is not in its nature immoral is not void because of the failure of one of the parties (an Illinois corporation) to comply with the statutes of the state where such contract was made and to be performed which pertain to foreign corporations doing business in such state of performance. (So held with respect to the statutes of Minnesota.)
    6. Contracts—what not ultra vires. A corporation organized for the purposes of “mining smelting, reducing, refining and working of iron ores and other minerals and the manufacture of iron, steel, copper and other metals,” has necessarily implied power to purchase coal for such purposes and likewise has the power to contract to sell and deliver coal acquired by it.
    7. Contracts—rule of construction with respect to validity. Where two constructions may be given to a contract one of which will give it validity and the other of which will render it invalid, the former will be adopted.

      Hunter W. Finch & Co. v. Zenith Furnace Co., 146 App. 257.
    8. Contracts—when pro rata delivery of merchandise not justified. If one agrees to sell and (subject to intervening causes beyond his control) to deliver a commodity, it is not the law that upon a showing of such intervening causes preventing full delivery, a pro rata delivery may be made to the vendee, and others with whom contracts have been contemporaneously and subsequently made for like deliveries of such commodity. Neither is it competent to prove a custom entitling such vendor so to do.
    9. Sales—what contract of. Held, that the contract set forth in this opinion although ambiguous in form, was one of purchase and sale.
    10. Definitions—“estimated.” “Estimated” held the equivalent of “more or less.”
    11. Measure of damages—in action for failure to deliver commodity as per contract. In an action by a vendee against a vendor for failure to make deliveries of coal pursuant to contract, the following instruction is held correctly to state the measure of damages:
    “The court instructs the jury that the measure of damages in this case, if you shall find that the plaintiff is entitled to recover damages, is the difference, if any, between the market price of the coal mentioned in the contract offered in evidence herein and the contract price at the time or times the same should have been delivered.”
    Actual resales not being essential to recovery for coal not delivered.
    Assumpsit. Appeal from the Superior Court of Cook county; the Hon. Samuel C. Stough, Judge, presiding.
    Heard in this court at the October term, 1907.
    Affirmed.
    Opinion filed January 18, 1909.
    Knapp, Haynie & Campbell and Mark Breeden, Jr., for appellant.
    Nicholas W. Hacker, for appellee.
   Mr. Justice Brown

delivered the opinion of the court.

This is an appeal from a judgment of the Superior Court of Cook county for $10,200, in favor of the plaintiff corporation, Hunter W. Finch & Company (which is appellant here), against the defendant corporation, the Zenith Furnace Company (which is the appellee in this court). It was entered on the verdict of a jury in an action in assumpsit for the breach of a contract hereinafter set out. The suit was begun by attachment,. certain debtors of the defendant corporation being garnisheed. A bond and recognizance entered into thereafter by the defendant under the statutory provisions released the garnishees.

The declaration on which the case was tried set up in one'of its three counts, in haec verba, and in the others, the effect and purport of, the following contract in writing:

“Goal Contract, made this 2nd day of May, 1905, Between:

The Zenith Furnace Company of Duluth, Minnesota, party of the first part, and Hunter W. Finch & Company of Chicago, Illinois, party of the second part.

First party agrees to sell to the second party, who agrees to buy from the first party, estimated tonnage of Fifty Thousand (50,000) tons Ella Coal to be loaded at First Party’s docks, this coal to be taken through the year ending March 31st, 1906, in as near monthly instalments as market conditions will permit, at the following prices: When the agreed selling price of Youghiogheny Lump Coal at the docks is Three Dollars ($3.00) a commission of ten cents (10c.) per ton is to be paid to second party and thereafter any premium obtained above three dollars ($3.00) for the coal is to be divided, three-fifths to the First Party and two-fifths to the Second Party. The coal is to be paid for at Western Weighing Association weights, not later than the-20th of the month following shipments.

Party of the first part is to screen this coal and prepare it in a good merchantable manner, suitable for the commercial trade, to make shipments promptly, and in every reasonable way to assist the Second Party in disposing of the above estimated tonnage.

This contract to be made subject to strikes, shortage of cars and other conditions beyond • the control of parties hereto, it being understood that the cars are to be supplied by the First Party.

In witness whereof, the Parties hereto have hereunto set their hands and seals the day and year first above mentioned.

Signed, sealed and delivered in the presence of

L. Q. Fisher.

By Zenith Furnace Company,

By A. B. Wolvin, President.

By Hunter W. Finch & Company,

By H. W. Finch, President.”

Each count then alleged that although the said time for the said delivery of the coal in said contract mentioned had long since elapsed, and the plaintiff had always been ready, able and willing to accept and receive the said coal and to pay for the same “at the price aforesaid”; yet the defendant had not nor would within the time aforesaid, or afterward, deliver said coal or any part thereof to the plaintiff at the time and place aforesaid, or elsewhere, but had refused so to do. All of which it was alleged was of great damage to the plaintiff.

The defendant filed a plea of the general issue to the declaration and three special pleas, which we will name as Pleas 2, 3 and 4.

Plea 2 set up a failure on the part of the plaintiff, an Illinois corporation, to comply with the statutes of Minnesota requiring certain matters from foreign corporations doing business in Minnesota, on penalty of their being barred from maintaining in the courts of Minnesota any action for the enforcement of any contract, right, obligation or duty arising out of said business. It also set up the failure of the defendant, a corporation foreign to Illinois, to comply with the provisions of the statute of Illinois in regard to foreign corporations.

This plea was generally and'specially demurred to by the plaintiff. The defendant confessed the demurrer.

Plea No. 3 was substantially the same as Plea No. 2 in its intendments. It also was demurred to generally and specially, and the demurrer was sustained by the court.

Plea No. 4 set up the same contract averred in the declaration as the only one made by the parties, and averred performance of the same by delivery to the plaintiff of “all the coal that it was under obligation under its said contract with the plaintiff to deliver to the plaintiff.” The plea further averred in detail that at the time of the making of the said contract and for a long time prior thereto it was engaged in buying and selling Ella coal at Duluth, Minnesota, and had a large number of contracts with divers persons, including the plaintiff, “for the sale and delivery of said coal at Duluth”; that at no time during the period covered by' the contract with the plaintiff did the amount or aggregate of all said contracts equal or exceed the capacity of defendant’s equipment to fill said contracts ; that on the contrary at all times the defendant was, so far as the capacity of its works and equipment was concerned, amply provided with funds and facilities to fill all said contracts, and had made contracts for the delivery to it at Duluth of an ample supply of Ella coal for the purpose of filling said contracts, and that the said contract of May 2, 1905, was entered into between the parties with the understanding and agreement that the same was made subject to the duty of the defendant to make the deliveries called for by the other of said contracts; that it was agreed in and by said contract between the parties that should there be any delay or deficiency in the supply of said coal by reason of a shortage of cars to transport it occurring at the mines in Pennsylvania, or at Duluth, or elsewhere, the defendant should be excused from the performance of said contract so far as a failure to so perform should be brought about or caused by a shortage of cars; that such a shortage of cars occurred and “that if the defendant failed to deliver to the plaintiff any of the coal called for by said contract, it was solely and only by reason of said ear shortage”; that “the defendant failed to receive at its docks at Duluth, by reason of said car shortages, the full supply for which it had contracted as aforesaid during the term aforesaid, but that of the supply which it did receive, it distributed and apportioned the same, as it was its duty to do, to the plaintiff and to the other persons, firms and corporations with whom the defendant had contracts as aforesaid,” delivering to “each its fair and proper proportion according to their said contracts, so that each and all of said persons, firms and corporations, including the plaintiff, received the amount and apportionment which each and all were entitled to receive under and by virtue of said contracts.”

This plea was successfully demurred to by the plaintiff, the demurrer being general and also on the special grounds that the evidence of the matters of defense therein pleaded if admissible at all, would be admissible under the general issue, and that the plea averred “an understanding between the plaintiff and the defendant contrary to the written contract sued on in this suit.” A motion of the defendant to carry back the demurrer to the declaration was denied.

At the trial, but before the jury were sworn, the defendant asked leave to file a fifth plea, which averred that the defendant was chartered under the laws of Minnesota for the sole object of mining and manufacturing certain metals and minerals, and had not and never had any power or legal authority to execute the cqntract sued on concerning coal not mined by the defendant. On the ground that the motion came too late, leave to file this plea was denied, the court also expressing doubt as to the sufficiency of it.

Before this application was made, but also immediately before the trial, a motion had been made by the defendant corporation, through its counsel, to dismiss the cause for want of jurisdiction. On this motion certain witnesses as well as arguments of counsel were heard by the court. The court denied the motion and the defendant excepted. The bill of exceptions in the transcript of the record contains the evidence alluded to as a part of “the evidence offered, considered, received or rejected, upon the trial of the above entitled cause,” and it is also separately certified to be all of the evidence received or considered upon the trial of the motion to dismiss for want of jurisdiction; but the appellee has Moved in this court to strike from the record that part of the bill of exceptions which contains the said evidence and the ruling on the motion to dismiss, also the proposed fifth plea and the order refusing leave to file it. This motion was reserved to the hearing. It is based on the ground that all these proceedings are shown by the record to have taken place on Friday, the 28th day of June, 1907, the last day but one of the June term of the Superior Court, and that although exceptions were noted by the appellee on each adverse ruling, no bill of exceptions was settled or allowed or signed at the said June term, nor any further time given at that term in which to present and have signed a bill of exceptions. The jury had been impaneled on the same day, June 28, 1907, and they and all parties after the hearing of the motion were excused until Monday morning, July 1st, when the trial proper began. The bill of exceptions, including the matter complained of and also all the proceedings at the trial proper, was signed, sealed and filed within the time allowed by an order at the July term. The common law record shows the motions in question and their denial on June* 28th, but the bill of exceptions, which governs, contains matter which makes it doubtful whether the motion to dismiss can be considered finally disposed of at the June term.

The trial judge declared that “without expressing any decided opinion about the matter, he would content himself with saying that his impression was against the motion.” Counsel for defendant then asking if he understood the court’s judgment was to be reserved, the judge replied: “I will overrule it for the present,” and counsel declared, “I will note an exception for the purpose of preserving our rights.”

The recital which follows, made in August, that “the above and foregoing was all of the evidence offered, received or considered upon the trial of the above motion to dismiss for want of jurisdiction, which motion was overruled by the court, to which ruling of the court the defendant by its counsel then and there duly excepted,” may refer the final overruling, of the motion and the final exception quite as well to a later period as to the one of the preceding colloquy.

If the motion to dismiss and the evidence which was offered in support of it, are to be considered finally disposed of at the June term, the question whether appellee has not a right to have the matter objected to stricken from the bill of exceptions, is, under the decisions of the Supreme Court cited to us, a serious one. We have, however, no disposition to apply harshly a doctrine so technical as the one invoked here. The appellee moved below (as the bill of exceptions itself shows) to have this matter stricken from the bill, and the trial judge refused to 'do it—to which ruling the appellee excepted. The appellee has assigned no cross-errors, and we think that independent of other considerations he is foreclosed by the acquiescence in the action of the trial judge, which we will presume from this fact. The motion of appellee reserved to the hearing is therefore now denied.

After the pleadings were thus settled, the cause was submitted to the jury on evidence and arguments presented on both sides. At the close of the plaintiff’s evidence and again at the close of all the evidence, the court denied a motion of the defendant for the exclusion of the evidence heard from the jury, and for a peremptory instruction.

The plaintiff tendered five instructions, all of which were given by the court. The defendant offered four which were given and eight which were refused, the latter including three each of which called for a peremptory instruction on one of the counts of the declaration.

The jury returned a verdict for $10,200, and the defendant moved in writing to set aside the verdict and grant a new trial, alleging thirty-four reasons therefor, covering rulings on evidence and on instructions, and asserting that the verdict was against the weight of the evidence and against the law. On the denial of this motion the defendant moved in writing to arrest the judgment and set forth as reason therefor, that the record and proofs showed want of jurisdiction over the person of the defendant and over the subject-matter of the suit; that the court erred in sustaining the respective demurrers to pleas 3 and 4, and that the declaration was insufficient to support the verdict and judgment.

This motion in arrest was also denied, and judgment on the verdict and this appeal followed. In this court the assignments of error attack the rulings on the demurrers to the pleas 3 and 4; the ruling on the motion to dismiss for want of jurisdiction; the ruling refusing to allow defendant to file its fifth plea; rulings on evidence and on instructions, including the peremptory ones offered; the rulings denying the motion for a new trial and in arrest of judgment.

It will be seen by the foregoing statement that great-stress was laid by the defendant below, and is here laid, on the theory that the court was without jurisdiction because the defendant was a Minnesota corporation that had never complied with the laws of Illinois in relation to foreign corporations. “To be sued” as well as “to sue,” it is urged, is a corporate franchise, and the courts of Illinois cannot entertain any suit against a foreign corporation in whose behalf they could not sustain a suit. This argument is fortified by the proposition that the commencement of the suit was by the garnishment of Illinois debtors of the defendant, which debtors the defendant would have been forbidden by the laws of Illinois to pursue in Illinois courts. No greater right belongs, it is said, to the plaintiff by virtue of its garnishment, than would have belonged to the defendant. Further, it is said that the foreign corporation Act of 1905 impliedly forbids the right to set-off in every suit where there has not been a compliance with its provisions. Therefore, to subject a foreign corporation to suit would be to do so without its having the right of set-off. This would be unconstitutional, because the Constitution requires all laws relating to the courts to be general and of uniform operation.

The arguments concerning the commencement of the suit by garnishment and concerning.the denial of the right of set-off are rather ingenious than sound. The defendant is in court by the general issue, duly pleaded, without limitation. It is in court also by a recognizance in open court, entered into for the purpose of releasing the garnishee. It matters not how the suit was begun, and we need not discuss the question raised about it. If it be true (concerning which we express no opinion) that no set-off could have been urged by the defendant in this suit, this would not be a fatal objection to a suit against it. If it could not avail itself by a plea of set-off in this jurisdiction of a claim against the plaintiff, that claim would be reserved for it unsatisfied and perhaps sustainable elsewhere. Unless “the right to be sued” is one of those “corporate powers,” the exercise of which is forbidden to a non-complying foreign corporation by the Act of May 18, 1905, entitled “An act to regulate the admission of foreign corporations for profit to do business in the State of Illinois,” there is no ground for denying the jurisdiction of the 'Superior Court over this defendant. We are not of the opinion that it is. It is not a sound proposition that because a corporation has not qualified itself by conforming to what are substantially the rules which domestic corporations have to live by to do business in this State and to pursue their remedies against citizens of this State, it can escape action against it in the courts of this State by citizens of this State when its property has been found here. Still less is it a sound proposition that it can claim such exemption from jurisdiction even after it has voluntarily appeared and pleaded and entered into a recognizance to abide the result of the suit and has thereby secured a release of its attached property.

It is true that “to sue and to be sued” is a common form of words in indicating powers included in charters of incorporation, but it does not follow from this that a corporation cannot “be sued” without reference to its charter powers.

Even the cases in New York and Massachusetts (Robinson v. Oceanic Navigation Co., 112 N. Y. 315, and Desper v. Continental Water Meter Co., 137 Mass. 252), mentioned in Barrow Steamship Company v. Kane, 170 U. S. 100, only to be held inapplicable to the jurisdictional questions in a Federal Court, are authority for no such claim as this.

In Barrow Steamship Company v. Kane, the contention of the defendant, which is recited in the opinion of the court, was that “being a foreign corporation, no suit could- be maintained against it in personam in this country without its consent, express or implied,” and this contention was negatived by the court. In Bobinson vs. Oceanic Steam Navigation Co. the Court of Appeals of New York simply decided that under jurisdictional statutes of New York in “a case where-the plaintiff is a non-resident, the defendant a foreign corporation, and the canse of action did not arise within this” (New York) “State,” “no court within this State” (New York) “has jurisdiction of the action,” nor would consent give it.

In Desper v. Continental Water Meter Co. the Supreme Judicial Court of Massachusetts decided that in that Commonwealth “a foreign corporation, unless jurisdiction over it is given by the statute, or unless it voluntarily appears, cannot be sued at law except by means of an attachment of its property.”

If it should be conceded that all that is said in these last two cases is the law of Illinois, it would not affect the present litigation. In this State, however, where a mere de facto corporation can be effectively sued by its assumed corporate name (Clarkson v. C. & N. S. Dispatch, 6 Ill. App. 284, and cases therein cited), these cases do not state the law.

It is also claimed, however, that the Superior Court had no jurisdiction in this case, or should have refused to take it, because the plaintiff under the laws of Minnesota could not have sued in Minnesota, not having complied with the law of Minnesota, and therefore, although an Illinois corporation, should not be allowed to sue a Minnesota corporation on a contract made and to be performed in Minnesota. This claim is based on the “comity” which it is said should exist between the States. There is no comity between States which has ever been responsible for such a rule. The courts of Illinois have a very tender regard, developed by local self-interest, for the pecuniary and personal rights of the citizens of Illinois (see e.g. Smith vs. Berz, 125 Ill. App. 122, and cases there cited), and have frequently enunciated rules which have given to such citizens broader rights than foreign litigants could have in this forum. There is no case, however, where they have closed their doors against a citizen or resident of Illinois simply because he or it was forbidden to use the tribunals of the State of the opposing party. Reciprocity of this kind between any two States, we think, will be looked for in vain.

It is further urged that the contract sued on in this case is void because it was made in Minnesota to be performed in Minnesota between an Illinois corporation (Hunter W. Finch & Company) and a Minnesota corporation (The Zenith Furnace Company), and that Hunter W. Finch & Company being a foreign corporation was doing an act in Minnesota which was therein forbidden to it by law and could furnish no basis for a valid claim. In other words, the contract was utterly void because illegal. The plaintiff contends that this question is foreclosed to the defendant by the state of the pleadings; that any error in sustaining demurrers to Plea No. 3, described in the statement prefixed hereto, was waived by the defendant’s pleading over, and that no competent evidence was offered under the general issue to sustain the contention that plaintiff was a corporation foreign to Minnesota and so transacting business there as to make its contract there illegal and void.

Considerations tending to sustain the rejection of the offers of counsel which are in this argument alluded to, are not altogether wanting, but we are not of the opinion that the filing of Plea 4 was any waiver of error in the disposition of Plea 3; and we prefer to treat this question, which is a serious and important one, on its merits and not with technicality. There is no doubt the defense was attempted in pleading and by the offered proof, that the contract was void and unenforceable anywhere, not only because the single act of making it was illegal, but also because it was connected with and followed by a series of sales of coal, which constituted a doing of business in Minnesota manifestly illegal.

The statutes of Minnesota the violation of which, it is claimed, makes this contract void, provide as follows:

First. That a domestic corporation in Minnesota is one organized in that State, and a foreign corporation, every other one.

Second. That “Every foreign corporation for pecuniary profit, before it shall be authorized or permitted to transact any business” in Minnesota, “or to continue business” therein if already established, or to acquire, hold or dispose of property within “Minnesota,” or to sue or maintain any action at law or otherwise in any of the courts of Minnesota, “shall have and maintain a public office or place in that State for the transaction of its business, and shall appoint an agent, who shall reside in the County in which said public office is located, duly authorized to accept service of process and upon whom service of process may be had in any action to which said corporation may be a party; and service upon such agent shall be due and personal service upon such corporation.”

Third. That every such foreign corporation “now or hereafter doing business within Minnesota, shall file with the Secretary of State” of Minnesota “a copy of its charter, or certificate or articles of incorporation, duly authenticated,” etc., and “a statement duly sworn, showing the proportion of the capital stock which is represented by its property located and business transacted” in Minnesota, and shall pay into the State Treasury a certain sum, proportioned to the amount of such capital stock so represented. “Upon compliance with that provision the Secretary of State shall issue” to the corporation a certificate “that it has complied with the laws of Minnesota and is authorized to do business” therein, which certificate “shall be prima facie evidence that the corporation is entitled to all rights and benefits thereof and of the valid creation and organization of such corporation, and such corporation shall enjoy those rights and benefits for the period of thirty years from and after the date of such certificate, and may renew them for like periods thereafter by refiling its articles of incorporation and repeating the payment of the required fees.”

Fourth. That every such foreign corporation for pecuniary profit now doing business in, or which may hereafter do business in Minnesota, which shall neglect or fail to comply with these conditions, “shall be subject to a fine of one thousand dollars, to be recovered before any court of competent jurisdiction”; that the Secretary of State, as often as he may be advised that corporations are doing business in contravention of the law, shall report the fact to the county attorney, etc., and the county attorney shall institute proceedings to recover the fine aforesaid, “and no corporation which shall fail to comply with the foregoing provisions shall maintain any suit or action, either legal or equitable, in any of the courts of this State, upon cmy demand, whether arising out of contract or tort.”

Various exceptions not necessary to notice here are made to the application of these statutes.

We do not find in these statutes, nor do we find in the decisions and opinions of the Supreme Court of Minnesota offered in evidence and cited to us, anything which compels us to regard the contract as void. It seems to have been made in good faith by both parties and partly executed. It certainly was not in its nature immoral, and mere prohibition of certain conduct does not always make an outlaw of the offending party. The Legislature of Minnesota in this case saw fit, in making a statute which is apparently principally a revenue law, to provide for the penalties of breaking or ignoring it. It might have declared its policy at least, if such was its policy, to consider any contract made while the law was ignored, void, but it contented itself with imposing a penalty, which, it is enjoined, should be sued for “as often” as the Secretary of State is advised of violation, etc., and in addition declaring that the Courts of Minnesota were closed to the offending corporation for the enforcement of contracts made by it or the vindication of torts suffered by it. It had no power to make a similar provision about the courts of any other State, and it did not attempt to deal with anything but penalties and remedies.

In the light of the reasoning and language used by the Supreme Court of Illinois in United Lead Co. vs. The Reedy Elevator Company, 222 Ill. 199, the question raised by the defendant here may not be free from difficulty. But the statutes of Illinois and Minnesota are not identical; the decisions of the Supreme Court of Minnesota go no farther than to say that, under the Minnesota statute an action cannot be maintained in Minnesota courts which was begun before the foreign corporation complied with the law, and we are not disposed to deny to an Illinois resident in an Illinois court the benefit of a contract which we cannot convince ourselves a Minnesota court would have refused to it if it should have complied with the law before bringing suit.

Should the Supreme Court view this point differently, it will be then necessary to decide—what we do not now decide—whether by the evidence which was admitted before the jury it could be said that this contract in question was an incident of a foreign corporation doing business in Minnesota, or whether by the exclusion- of evidence offered to prove this alleged fact, the court erred under the conditions surrounding the offer.

We place our decision on the broad ground-that the admission of the fact alleged would not have defeated this action.

Another line of attack on the validity of the contract is based on the theory that it was without the chartered or corporate powers of the defendant corporation to make, that evidence was offered and erroneously ruled out tending to show that the general nature of the business specified in the articles of incorporation of the defendant, being “mining, smelting, reducing, refining and working of iron ores and other minerals and the manufacture of iron, steel,, copper and other metals”—its president and agent contracted from the producers for 500,000 tons of coal for the season between May 2, 1905, and March 31, 1906, and of this 500,000 tons only 125,000 was to be used in mining, smelting, reducing, refining and working iron ores and other minerals, and manufacturing iron, steel, and copper and other metals, and that the remainder thereof was to be sold by him to the coal trade.

The argument is that this would have shown the contract made with the plaintiff ultra vires and therefore void, and that this was a valid defense which the defendant should have been allowed to make. We do not assent to this. The defense of ultra vires made by a corporation to avoid the effect of its own contracts is one to be allowed with caution at best, and we do not think it can be applied to a sale of coal by a company which, to carry out its express purposes, must secure from time to time a very great,quantity of coal from the mines, and provide facilities for handling and storing the same. It cannot be said by the courts in such a case that a part of what must necessarily be a vast amount in any event, is within its power to buy and at its option to sell again, and a part it is utterly unable to make a contract about.

By the elimination of these defenses extrinsic to the terms of the contract, we are brought to the merits of the cause which depend on those terms. The questions remaining are practically, what was the character or nature of the contract made; was it broken by the defendant without the fault of the plaintiff, and if so, was the correct measure of damages for its breach applied.

We set out the contract in beginning this opinion. It is true that it is something like a mermaid, or like the classical description of Scylla—11 prima hominis facies —postrema pristis

Its first words are those as clearly indicative of a contract of purchase and sale as the English language can furnish. The first party agrees “to sell”—the second party agrees “to buy”—a certain estimated amount of coal “at the following prices.”

But then the tone of the contract changes. Instead of stating definitely a price, it is provided that in case the selling point of Toughiogheny coal is three dollars, “a comission of 10(5 a ton” is to be paid to Finch & Co., and “thereafter any premium obtained above $3 for the coal is to be divided three-fifths to the Zenith Company and two-fifths to Finch & Co.” The Zenith Company binds itself “to make shipments promptly and in every reasonable way to assist Finch & Co. in disposing of” the coal. The last clauses look very much like a contract between principal and sales agent to sell coal for them on a commission and a share of the profits. The first part of the contract, however, is sufficiently explicit to show that this cannot be its only purport.

It is quite conceivable that what was in the minds of the parties when they executed the contract may have been something like this: “The Zenith Co. appoints the Finch Co. its selling agent for its coal. The Finch Co. accepts the appointment. The Zenith Company will allow 10(5 a ton to the Finch Company for coal sold at $3 a ton, and in addition 2/5 of any amount obtained over $3 a ton.” But in return for this appointment, compensation and profits, the Finch Company undertakes to dispose of 50,000 tons before April 1, 1906, and also guarantees, or rather takes upon itself, the payment for all the coal which it does dispose of by the 20th of the month following the shipment which the Zenith Company makes to the customer. If the Finch Company does not dispose to third parties of the 50,000 tons, it will nevertheless take and pay itself for enough to make up that amount. There is no provision made for the contingency of a price less than $3 a ton for the coal, because there is no reasonable probability of its existence at any time. On its part the Zenith Company agrees, subject to exceptions noted, to furnish this 50,00 tons when demanded in as near monthly instalments as market conditions will permit at its docks in Duluth.

If this is what the parties meant, although they did not so state it, the effect would have been, if the contract had been properly drawn (since the price of neither Ella nor Youghiogheny coal did within the period involved go below $3 a ton), exactly what it is claimed by the plaintiff is now the effect of the purchase and sale contract which it is alleged was actually made, and we cannot see how the measure of damages for the alleged breach would have been different.

But notwithstanding what we may suspect would have beén a clearer and better expression of the real purpose or ideas of the parties before a difference arose between them, we cannot make a contract for them nor substitute one contract for another.

Our disposition should be, however, to give some effect—and that the one apparently its intention—to a contract freely entered into between competent parties. The parties here chose, in as strong language as possible, to call their contract an agreement of purchase and sale, and we must so consider it. The price, we think, was to be $2.90 if Youghiogheny coal was $3 a ton, but if Youghiogheny coal was over $3 a ton $2.90 plus three-fifths of any difference between $3 and such selling price. It is unnecessary for us to decide what would have been the effect of the contract had the price of Youghiogheny coal gone below $3, for no such condition happened.

The defendant claims that the contract, even in its first clause, was not a purchase and sale of 50,000 tons of coal, hut an executory contract that the second party would buy and the other party would sell in the future as much Ella coal as the first party might choose to take, up to 50,000 tons; that being the amount that the second party guessed or “estimated” that it might want. This construction is, as we understand it, the basis of the point in defendant’s argument, that the contract is wanting in mutuality and therefore void. Cases are cited to the doctrine that where the intending purchaser in an executory contract does not undertake to take a certain amount of merchandise, but only what he may require up to a certain amount, there is no mutuality and the contract is void. If the word “want” is equivalent to “require,” Bailey v. Austrian, 19 Minn. 465, is an authority for this proposition. This doctrine, however, has been repudiated by the Supreme Court of Illinois. National Furnace Co. v. Keystone Mfg. Co., 110 Ill. 427; Minnesota Lumber Company v. Whitebreast Coal Company, 160 Ill. 85.

But even were it the law of Illinois, it would not be applicable to this case. As we have said, we desire, if possible, to give operation to contracts freely entered into. As the Supreme Court in Minnesota Lumber Co. v. Whitebreast Coal Company (supra) says: “The rule is that when the terms of a contract are susceptible of two significations, that will be adopted which gives some operation to the contract, rather than that which renders it inoperative. A contract should be construed in such a way as to make the obligations imposed by its terms mutually binding upon the parties, unless such construction is wholly negatived by the language used.”

We do not consider the word.“estimated” as meaning anything more than “more o,r less”—“subject to slight variation from transportation accidents and the impossibility of exact measurements until actual delivery.” It is much the same in effect as the word “say” when used before a statement of quantity in business correspondence. Judge Richardson in the U. S. Court of Claims, said that the phrase “more or less” was equivalent to “about,” “say” and “by estimation,” and meant “a quantity approximate to that specificially named, allowing only such a slight variation therefrom as from the circumstances of the case or the nature of the articles may seem reasonable to the court. ’ ’ Brawley v. United States, 11 U. S. Court of Claims, 522—532.

If in deference to the rule that where there is something remaining to be done by the vendor—separation from a mass and delivery, etc.,—a sale is not executed, the contract of sale in this case must be considered in any sense executory rather than an actually consummated sale, passing the title (a result which the mere use of the words “agrees to buy” and “agrees to sell,” as distinguished from “buys” and “sells,” would not effect—Martin v. Adams, 104 Mass. 262), it is none the less a concluded agreement of sale for a sufficiently definite amount of merchandise to remove it from the claimed objection of want of mutuality.

We do not think there was anything in the contract that required or allowed the parol testimony concerning the alleged patent ambiguities of words used in the contract. Discussion of this would not be useful. It is a matter undoubtedly in which difference of opinion would not be helped by such discussion. We do not think the exclusion of the offered testimony was erroneous.

Our conclusion being that the contract was a valid one, capable of enforcement by either party against the other, the questions remaining are: Was it broken by the defendant without the fault of the plaintiff, and if so, what was the correct measure of damages Í It is not denied that the Zenith Company declined to furnish the coal specified in the contract, although it was demanded by the plaintiff company, but the Zenith Company claimed when it refused to furnish the coal, claimed before the jury and claims here, that in so refusing it was justified by the provision in the contract that it was made subject to strikes, shortage of cars, and other conditions beyond the control of the parties.

As expressed in the letter of the defendant to the plaintiff, of November 2, 1905, the contention of the defendant was: “There is a great shortage of cars for shipment of coal from the mines to Lake Brie and the receipts of coal by the Furnace Company are on that account certainly going to be reduced to a point that renders it necessary for us to notify you” that we must “exercise the privilege granted in the clause of your contract with the Zenith Furnace Company which provides that the contract be subject to strikes, shortage of cars, and other conditions beyond the control of the parties hereto.”

The jury found against this contention. It was. left to them, under an instruction of the court tendered by the defendant and given by the court, as follows:

‘ ‘ The jury are further instructed that if they believe from the evidence that the defendant failed to deliver to the plaintiff any of the coal called for in the contract involved in this case, and that the failure so to deliver was by reason of strikes, shortage of cars and other conditions beyond the control of the plaintiff and defendant in this case, then the jury should find the issues for the defendant as to such coal undelivered, if any.”

We do not hold that the decision of the jury was against the weight of the evidence. It seems to us that it was not. The evidence showed, without dispute, that the defendant had on its docks a sufficient amount of coal to carry out the terms of its contract with the plaintiff.

Much of it, the evidence tended to show, was sold or contracted for sale after the contract was made with the plaintiff.

The ground, however, for arguing that the failure to perform the contract was due to “shortage of'cars and other conditions beyond the control of parties thereto,” is that the mine did not produce on the dump as much coal as was expected; that there was a general shortage of cars on the railroad on which the mine was situated, which made it impossible for defendant to get all the coal it had ordered or required even had it been mined; that these conditions were not of its own making and were “beyond its control.” But in addition to this, inasmuch as the defendant did get many times as much coal as the plaintiff’s contract called for, counsel find it necessary to insist, and do insist, that the duty of the Zenith Company was only to make a pro rata distribution of all the coal it did receive between the plaintiff and the other persons who had bought prior to, contemporaneously with, or subsequent to the plaintiff. But this is not the law, nor was it competent to prove such a “custom” in the coal trade. It would be a simple abrogation of a contract of sale (as we have decided this was) to allow effect to such evidence. And it would be equally an abrogation of such a contract as we hypothetically set forth as conceivably the one it. was in the minds of the parties to make.

The truth appears to be that the ground on which the president of the Zenith Company in his own mind really placed his defense, as shown by that which the evidence discloses of his words and actions, was that he chose, against the plain meaning of the words that he had used in it, to consider the contract with the Pinch Company an appointment to sell coal on a profit commission, which appointment he could cancel at any time when it proved embarrassing or inconvenient. If it were such a contract, there would be no case here for the plaintiff, • but when it was made the parties negatived this theory of it by the language they used.

The question of the measure and amount of damages remains. Under the construction of the contract we are constrained to make—that it was one for purchase and sale—the instruction given at the instance of the plaintiff on this point was correct:

“The court instructs the jury that the measure of damages in this ease, if yon shall find that the plaintiff is entitled to recover damages, is the difference, if any, between the market price of the coal mentioned in the contract offered in evidence herein and the contract price at the time or times the same should have been delivered.”

The defendant, however, argues that the plaintiff is entitled to no damages that it did not prove by showing sales by it out of this expected coal—manifestly again a reference of this controversy to the theory on which it insists, that the contract was not for purchase and sale, but for an agency to sell for defendant.

The evidence showed the defendant definitely refused to carry out the contract in the sense which the plaintiff and the Superior Court and this court have put on it, and the buyer, as the jury were correctly instructed, was justified “in acting on the refusal at once and suing for damages,” although the contract was for the sale of a commodity to be delivered in installments.

The amount of the judgment does not exceed the amount which the evidence tends to show was justified under these rules.

The length of this opinion already, due to the number of questions raised, renders it inadvisable that we should take up in detail the rulings on instructions and evidence of which the appellant complains. They are numerous, but as appellant’s counsel imply in argument, they are largely due to the variance between the plaintiff’s and the defendant’s theory of the contract involved and consequently of the law suit which grew out of it. We have considered them all and cannot say that we find reversible error in the record.

The judgment of the Superior Court is therefore affirmed.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Fred Heubner, Appellee, v. Metropolitan Life Insurance Company, Appellant.
    Gen. No. 14,118.
    1. Insurance—when right of action upon policy lies in personal representatives. A policy which names no specific beneficiary but which provides that the company may pay any relative who is “equitably entitled” etc. to the proceeds, cannot be recovered upon by the husband; the right of action on such a policy resides in the personal representative of the deceased insured.
    2. Insurance—what constitutes a warranty. If a policy provides that it shall be “void if the insured before its date had been * * * attended by a physician for any serious disease or ailment or had before said date any pulmonary disease,” a warranty is established and it is immaterial whether the insured knew at the date of such policy that he had such a disease.
    Action commenced before justice of the peace. Appeal from the Superior Court of Cook county; the Hon. Theodore Brentano, Judge, presiding.
    Heard in this court at the October term, 1907.
    Reversed and remanded.
    Opinion filed January 18, 1909.
    Statement by the Court. The plaintiff, Fred Heubner, recovered a judgment for $179.50 against the defendant, the Metropolitan Life Insurance Company, April 20, 1907, in the Superior Court. The judgment was rendered on the verdict of a jury. The cause in the Superior Court was an appeal from a judgment of a justice of the peace of Cook county for the same amount, rendered September 3, 1902. It was tried de novo in- the Superior Court, with the result noted.
    The suit was on two policies of life insurance on the life of Hannah Heubner, one for the maximum sum of $160 and one for the maximum sum of $78.
    Each policy, however, contained the provision that one-fourth only of the maximum sum should become due if death occurred within six months from its date, one-half only if it occurred after six months, and within one year, and the full amount only if death occurred after one year. The first policy was dated February 11, 1901, and the second December 16, 1901. Mrs. Heubner died May 12, 1902, so that the maximum amount of the first policy and one-fourth of the second, aggregating $179.50, was claimed.
    The policies contain on-their face a promise “to pay the amount stipulated upon receipt of proofs of the death of the insured made,” etc., without naming the payee. This clause follows:
    “The Company may pay the amount due under this policy to any relative by blood or connection by marriage of the insured, or to any other person appearing to said Company to be equitably entitled to the same by reason of having incurred expense on behalf of the insured, or for his or her burial, and the production of a receipt signed by either of said persons shall be conclusive evidence that all claims under this policy have been satisfied.”
    The policies on their face also contain the statement that the agreement to pay is “subject to the conditions below and on the reverse hereof, each of which is hereby made a part of this contract and contracted by the assured to be part hereof as fully as if herein recited.”
    On the reverse or back of each policy is printed a formula of which parts are as follows:
    “This policy is issued and accepted upon the following conditions, all of which are made a pant of this contract:
    Conditions.
    First : This policy is issued upon an application which omits the warranty usually contained in applications and contains the entire agreement between the Company and the insured and the holder and owner hereof. ******
    Second : Unless otherwise stated in the blank space below in a waiver signed by the Secretary, this Policy is void if the insured before its date has been rejected for insurance by this or any other Company, or has been attended by a physician for any serious disease or- complaint, or has had before said date any pulmonary disease or chronic bronchitis or cancer or disease of the heart, liver or kidneys, or if before said date any parent or brother or sister of insured has died of any pulmonary disease, or bronchitis or any scrofulous disease.”
    Neither upon the face or back of the first policy is there any naming of a beneficiary, but on the face of the second under the heading:
    “Name of Beneeiciaby and Relationship to the Instjked.” .
    appears: ‘ ‘ Fred Heubner, Husband. ’ ’
    It was admitted, however, that the application for the first policy mentioned the plaintiff as the person whom the appellant desired to make the beneficiary.
    When the first policy was offered in evidence the defendant’s counsel objected on the ground that it was immaterial. The objection was overruled and an exception taken. It was then that counsel for the plaintiff interjected the statement that it was “admitted by counsel for defendant that in the application for said policy the plaintiff is named as beneficiary.”
    The evidence introduced by the plaintiff consisted of the policies and proper proofs of death. The proofs showed that death resulted from pulmonary tuberculosis or consumption, as it is commonly called. The claimant certified that the duration of the last sickness had been about a year—the attendant physician that it had lasted 1% years. The defendant then introduced the testimony of two other physicians who swore that in June, 1900, almost two years before the death and more than seven months before the date of the first policy, they had been called to treat Mrs. Heubner professionally for a profuse hemorrhage of the lungs, and found that she had pulmonary tuberculosis. One of the physicians, Dr. Growen, testified that he informed her that “her lungs were affected,” and specifically informed her husband, the plaintiff, and Ms mother, that she had “phthisis” or consumption. He also told them that in his opinion she would not get well. There was no substantial contradiction or doubt about the character of the disease or that she suffered with it at the time the policies were issued, but the plaintiff did testify that he was not informed by Dr. Bowen that his wife had lung trouble. He was told by the doctor, he says, that she had a bad cold. Mrs. Heubner, the plaintiff’s mother, also denied that Dr. Bowen had informed her that her daughter-in-law had the consumption.
    A motion for a peremptory instruction was first denied by the court, and afterward the following instructions :
    “First: The court instructs the jury that if they believe from the evidence that Hannah Heubner, the insured, had prior to Feb. 11, 1902, any pulmonary disease, then in such case the jury should find the issues for the defendant.
    Second: The court instructs the jury that if they believe from the evidence that Hannah Heubner, the insured, was attended by a physician for a serious disease or complaint prior to Feb. 11, 1901, then in such case the jury should find the issues for the defendant.
    Third: The court instructs the jury that if they believe from the evidence that the insured, Hannah Heubner, was not in sound health on Feb. 11, 1901, then in such case there can be no recovery on the policy of insurance introduced in evidence herein and bearing that date.
    Fourth: The court instructs the jury that if they believe from the evidence that the insured, Hannah Heubner, was not in sound health on December 16, 1906, then in such case there can be no recovery on the policy of insurance introduced in evidence herein and bearing that date.”
    Marking all these tendered instructions “Refused,” the court gave to the jury, of its own motion, the following instruction:
    “The court instructs the jury that if they believe from the evidence that 'Hannah Heubner, the insured, had prior to Feh. 11, 1901, any pulmonary disease, then, in such case, the jury should find the issues for the defendant; of if the jury believe from the evidence that Hannah Heubner, the insured, was attended by a physician for any serious disease or complaint prior to February 11, 1901, then in such case there can be no recovery on the policy of insurance introduced in evidence herein and bearing that date; or if the jury believe from the evidence that the insured, Hannah Heubner, was not in sound health on December 16, 1901, then in such case there can be no recovery on the policy of insurance introduced in evidence herein, and bearing that date, unless you further believe from all the evidence that the deceased, Hannah Heubner, acted in good faith and honestly believed she was stating nothing but the truth when the insurance policies were issued by the defendant, and if you further believe, from the evidence, that if the said Hcmnah Heubner was suffering from any illness as mentioned in the contract, but if the said Hannah Heubner was not aware of her condition and had no notice that she was suffering with any such disease, and acted in entire good faith and honestly believed that she had stated the truth as to her physical condition, then you shall find the issues for the plaintiff.”

    After the verdict a motion for a new trial was made by the defendant and overruled by the court. The assignment of errors in this court covers the denial of this motion, and asserts that the instruction given was erroneous and those refused accurate, and that the verdict and judgment were against the law and the evidence.
    Hoyne, O’Connor & Irwin, for appellant.
    Edward E. Litzinger, for appellee.
   Mr. Justice Brown

délivered the opinion of the court.

The complaint made by defendant of the judgment appealed from in this cause is two-fold:

First: It is claimed that as to the first policy sued on, no right whatever was_shown in the plaintiff, and that therefore it should have been excluded from evidence as immaterial. Of course also, if the plaintiff had no right to recover on it because of a want of connection with it or title in it, the instruction given by the trial judge proprio motu was incorrect, for that instruction stated contingencies on which he was entitled to a verdict.

The other contention of the defendant is that the evidence showed that the policies had never become effective. By their terms (that is by the terms which are a part of the conditions endorsed on them, which the body or face of the policy above the signature provides are made part of the contract as fully as though on said face recited) they were to be “void if the insured, before its date, had been * * * attended by a physician for any serious disease or complaint, or had before said date any pulmonary disease,” and the evidence showed both these conditions. The instruction of the trial court was therefore erroneous.

We are constrained to hold both these contentions of the defendant well taken and to reverse this judgment.

The answer of the plaintiff to the first is, that it is conceded that the application for the first policy named the plaintiff as beneficiary, and that no objection having been made in the court below to the plaintiff’s right to sue on the policy, the defendant ought not to be allowed in this court to raise this objection to the judgment.

The plaintiff’s claim in this regard is broader, we think, than the record warrants. The objection made to the offer of the policy, that it was immaterial to the issues in the case, could hardly have referred to anything else than the claim that it was not a contract in favor of the plaintiff. At all events, we can see no other ground for it, and the argument that plaintiff’s counsel’s own statement, although apparently aequiesced in by defendant, that “in the application for said policy the plaintiff is named as beneficiary,” is not tantamount, as argued, to “an express and open admission that appellee was the beneficiary under the policy * * * and as such had the right to sue.”

It is quite conceivable that in many cases the relation between application and policy might be such that such a naming of a beneficiary in the application would be read into the policy and be sufficient to show a title in the person named to sue on said policy; but we have here no application in evidence—merely the statement that in “the application” for the policy (no further described) the plaintiff is named as beneficiary. Turning to the policy we find the only allusion to the application, on either face or back of the same, to be this, among the conditions: “This policy is issued upon an application which omits the warranty usually contained in applications and contains the entire agreement between the Company and the insured and the holder and owner thereof.” This appears to imply, at the very least, a repudiation of the application as affecting the policy. At all events, it emphatically declares the whole contract must be found between, the four corners of the paper constituting the policy.

Within those four corners there is no right given to the plaintiff to recover on the policy in any event, and no protection secured to the Company in paying him unless he proves that he is “equitably entitled” to the proceeds, “by reason of having incurred expense on behalf of the insured or for her burial.” The right to sue on such a contract does not reside in the husband as husband. It belongs only to the personal representative of the deceased. Massachusetts M. L. Ins. Co. v. Robinson, 98 Ill. 324; U. S. Life Ins. Co. v. Ludwig, 103 Ill. 305; Bailey v. N. Eng. Mut. Life Ins. Co., 114 Mass. 177.

The answer of the plaintiff to the second contention of the defendant is that the doctrine of the court’s instruction is correct—that the question is merely whether the deceased committed fraud by a misrepresentation of her condition, made knowingly. If “she honestly believed she was stating nothing but the truth when the insurance policies were issued by the defendant,” then the plaintiff could recover, the court ruled. We are unable to agree with this. There is no application in evidence in this case, nor evidence of what the deceased claimed. It would be a serious question whether we could hold that the verdict was not against the clear weight of the evidence if the theory of the instruction of the court were correct. The certificates and testimony of the doctors make it hard to believe that in February, 1901, and in December, 1901, Mrs. Heubner did not know that she had been previously “attended for a serious disease,” or that in good faith she could have said that she had no pulmonary disease. But there is no evidence that she so represented. The contract merely declares itself nonreffective and void in certain contingencies, and these contingencies, the evidence strongly tended to show—indeed did show without serious question—existed.

Accepting the policy with these conditions was equivalent to a warranty that the conditions mentioned did not exist when the policy was issued. Stout v. City F. Ins. Co., 12 Iowa, 371.

If the deceased warranted that she had not been attended by a physician for a serious complaint, nor had suffered from a pulmonary disease, then her good faith in making the statement which constituted the warranty was of no importance. The only test of the effect was its accuracy. In this view the instruction of the court was erroneous.

The Supreme Court has in Spence v. The Central Accident Insurance Company, 236 Ill. 444, gone farther than ever before in declining to hold representations, warranties, if it could be avoided. In that case, however, the court thus defines a warranty, quoting approvingly from Mutual Benefit Life Ins. Co. v. Robertson, 59 Ill. 123: “A warranty is in the nature of a condition precedent. It must appear on the face of policy, or, if on another part of it or on a paper physically attached, it must appear that the statements were intended to form a part of the policy, or if on another paper, they must be so referred to in the policy as clearly to indicate that the parties intended them to form a part of it. ’ ’

There can be no doubt of the intention of the parties in this case to make “the conditions precedent” in the policy a part of it. They are manifestly so.

The opinion in Spence v. Insurance Co. also says of the- effect of a “warranty,” which as noted it says is “in the nature of a condition precedent”: “A warranty enters into and is a part of the contract and must be literally true in order to entitle a party to recover upon a policy of insurance.”

The plaintiff showed no right to sue on the first policy, and the instruction of the trial judge was erroneous. Therefore the judgment is reversed and the cause remanded to the Superior Court for further proceedings not inconsistent with this opinion.

Reversed and remanded.


text:
    James S. Gillespie et al., Appellee, v. Robert Patrick, Impleaded with Frances Patrick et al., Appellant.
    Gen. No. 14,125.
    1. Appeals and ebbobs—what questions cannot he urged in Appellate Court. The unconstitutionality of a law is not subject to review in the Appellate Court.
    2. Mastebs in chancery—when findings of fact not disturbed. The findings of fact by a master will not be disturbed on review unless clearly and manifestly against the weight of the evidence.
    3. Abchitects—when final certificate not void. Held, under the facts of this case, that the final architect’s certificate, given in this case was not void.

      4. Mechanic’s hen—when contractor’s statement of payment to subcontractor waived. The provisions of the Mechanic’s Lien Act requiring the contractor’s statement of payment to subcontractors or a waiver of lien from them as a prerequisite to a demand for payment, are for the benefit of the owner as well as for the subcontractors, but the fact that such statements or waivers are not made will not forbid a lien where no demand is made by the owner for them; the failure to make such a demand operates as a waiver.
    Mechanic’s lien. Appeal from the Superior Court of Cook county; the Hon. Geobge A. Dtjpuy, Judge, presiding.
    Heard in this court, at the October term, 1907.
    Affirmed upon remittitur.
    Opinion filed January 18, 1909.
    Lyman M. Paine, for appellant.
    Charles A. Phelps, for appellees.
   Mr. Justice Brown

delivered the opinion of the court.

This is an appeal from a decree of the Superior Court of Cook county, entered March 22, 1907, which declared and adjudged a lien to exist on lot six and the south half of lot five in block four in Walter S. Dray’s Addition to Park Manor, etc., otherwise described as 7108 Vernon avenue in the city of Chicago, in favor of the complainants, James S. Gillespie and John Sutherland, and declared the rights and interests of Robert Patrick and Frances Patrick, his wife, (made defendants to the bill) in said property to be subject to said lien and those of the two other defendants, John B. Robertson and Lyman M. Paine, to be both subsequent and subject thereto. It provided the usual and proper methods of enforcing the lien by judicial sale and conveyance in pursuance thereof, in default of payment within ten days of the sum found due and secured by the lien. That sum was $262.04, and in addition thereto $75 allowed to the complainant as a solicitor’s fee for the institution and prosecution of the lien proceeding, and certain other sums for master’s fees and costs. The decree was in accordance with the report of a master, to whom the cause had been referred, except that the court cut down the sum to be allowed for solicitor’s fee from $90 to $75. From this decree Eobert Patrick prayed the present appeal. The other defendants did not appeal. Eobert Patrick was, with his wife, the joint owner of the property described in the decree. In January, 1894, he, with the knowledge and assent of his wife, entered into a written contract with the complainants, Gillespie and Sutherland, carpenter contractors, for the erection of a two-story and. basement brick residence on the property. Gillespie and Sutherland were to provide all the material and do all the work except plumbing and heating and electric light wiring' and gas piping. Patrick was himself a plumbing contractor.

The contract price, $2,490, was to be paid by the owner to the contractors “only upon certificates of the Architect,” John D. Chubb (named in the contract); the entire amount, less 15 per cent., to be paid in three payments as work progressed, first payment when second floor joists were in place, second payment when building was plastered, third payment when work was completed; “said payments to be as per architect’s estimates.” “The balance of 15 per cent, of the entire contract being the final payment,” was to be made within 15 days after the completion of the work included in the contract. All payments were to be due when certificates for the same were issued.

Article X of the contract was: .

“It is further mutually agreed between the parties hereto that no certificate given or payment made under this contract, except the final payment shall be conclusive evidence of the performance of this contract either wholly or in part, and that.no payment shall be construed to be an acceptance of defective work or improper materials.”

About the first of May, 1904, the Patricks moved into the house. There remained unpaid of the contract price at that time $626. There was due also to the complainants some money for the building of a barn, not included in the contract. Complainants pressed for payment, and about June 1, 1904, were sent by appellant Patrick to the architect “to get the money from him on the loan money”—so Gillespie testifies at least. This referred to the fact that Lyman M. Paine as trustee and agent had in his hands a fund arising from a building loan, which he was paying for account of Patrick on the architect’s certificates when audited or endorsed by Patrick

The complainants procured a certificate from Chubb, dated June 2, 1904, that they were entitled to a final payment of $626 by the terms of the contract, but Patrick refused to endorse it because he said, “there were some things he didn’t think were finished up properly.” The evidence showed that Paine did not have in his hands.enough money to pay this certificate in full.

The next day Chubb wrote the complainants that on his visit that day to the building he found some items of the contract, which he listed, “unfinished,” “notwithstanding,” as the letter says, “that you informed me yesterday when I handed you certificate for balance of $626 that you had finished up everything in first-class shape, which I find is not so.” The communication proceeds:

“Now therefore, I must inform you that the said certificate is void and not payable until each and every one of said items are fixed and finished in workmanlike manner according to plans and specifications,' or satisfactory allowances made to said owner, Mr. Robert Patrick, for said unfinished portions of your contract. You are hereby notified that unless the list of unfinished work is attended to in five days, the owner will proceed to finish same and charge the cost of said work to your contract.”

July 1, 1904, the complainants filed their claim for a mechanic’s lien in the clerk’s office of the Circuit Court.

August 10,1904, Mr. Paine paid $400 of the amount in his hands to the complainants on account of their contract, leaving $226 unpaid.

December 20, 1904, the complainants filed their bill in the Superior Court to declare and enforce their claimed lien. Answers were filed by the defendants, raising contentions insisted on in this appeal and noted hereinafter. The cause was referred to a master to take evidence and report conclusions.

The master’s report was in favor of complainants, and found that from the evidence it appeared that the contract was made as charged; that complainants, in compliance with it, constructed a two-story and basement brick building and completed it about May 7, 1904; that on June 2,1904, the architect, Chubb, ordered and delivered to complainants a certificate in writing that the complainants were entitled to a final payment of $626 in full of said contract, and all extras; that the charge made by defendants that said architect’s certificate was delivered to the complainants only conditionally, was not sustained by a preponderance of the evidence, nor was the charge that it was obtained through fraud and false representations. It is pointed out in said report that the architect acted as superintendent of said work and was in as good a position when he gave the final certificate to know whether the contract had or had not been fully performed, as were the complainants. It is therefore held that while there was a conflict in the testimony as to whether the work was done in all respects according to the specifications, the complainant Gillespie was not chargeable with fraud in stating to the architect that the work was all right. It is also noted in said report that no complaints of or objections to the work done under said contract were made by the owners to the architect before the certificate was issued, although the said owners had been occupying said premises for the suace of one month before said certificate was issued. It is therefore found that the final certificate of the architect became, under the terms of the contract, conclusive that the work was performed in accordance with the terms of the said contract.

The defendants filed objections to the master’s report, which were afterwards ordered to stand as exceptions and were argued before the Superior Court, which, except as noted, in reducing the amount recommended' for the solicitor’s fee, overruled them and entered the decree appealed from.

The contentions of the appellant here are:

First, that the statute of 1903 allowing attorney’s fees in a lien case like this, is unconstitutional; and second, that a valid final certificate from the architect was necessary to the complainants’ case, and that the one relied on in this case was void, (a) because it was obtained by fraud, and (b) because the architect gave it “on the evidence of one party in the absence of the other.”

It is also said that the claim for lien filed in the clerk’s office was defective, and that because the appellees did not give the owners any statement in writing under oath or other evidence that all subcontractors were.paid, the decree cannot be sustained.

We do not think any extended discussion of these claims is necessary.

The unconstitutionality of the law allowing the attorney’s fees seems to be but half-heartedly urged. It is not so much for that reason as that the fees allowed are too large, it is said, that the objection to them is made. We do not see any justification for disturbing the decree on the latter ground, and the appeal to this court rather than to the Supreme Court has foreclosed the defendants from raising the question of constitutionality. Barnes v. Drainage Commissioners, 221 Ill. 627-629. But appellees, considering the decision of Manowsky v. Stephan et al., 233 Ill. 409, have made a motion for leave to remit the $75 included in the decree herein, for the reason that the law under which it was added to the decree as attorney’s fees, has been decided to be unconstitutional by the Supreme Court. That motion is allowed.

As to the contention that the architect’s certificate was obtained by fraud,—the master found against it, the court confirmed the master’s report, and we cannot overturn the finding unless we hold that it is clearly and manifestly against the weight of the evidence. We do not. For the reasons specified in the master’s report, our conclusions on this point are like his.

It is conceded that the attempt which Chubb made the next day to revoke the certificate is immaterial. Whether or not the architect in this case is properly to be termed an arbitrator, we do not think there is any rule of law in Illinois which makes void his certificate, given under circumstances like those in this case.

We think the “claim of lien” filed was sufficient. The provisions of the law requiring the contractor’s statement of payment to subcontractors, or a waiver of lien from them as a prerequisite to a demand for payment, are, it may be admitted, for the benefit of the owner as well as of the subcontractor, but the fact that such statements or waivers are not made will not forbid a lien where no demand is made by the owner for them, nor any claim even made that debts to subcontractors existed. In such a case these “prerequisites” will be considered waived. The demand for such a statement or waiver is not, as appellant claims, a part of architect’s certificate. The words referred to are simply a caution to the owner or loan agent (in this case Mr. Paine) to demand them if he wanted them.

The decree of the Superior Court is affirmed on the remittitur above alluded to, of $75, to be entered by the appellees within five days.

Affirmed upon remittitur.


text:
    Frank W. Bradley, Appellee, v. T. J. Brown et al., Appellant.
    Gen. No. 14,132.
    1. Bra 03? EX033PTI0NS—should show that it contains all the evidence. A bill of exceptions should certify that it contains all the evidence received in the trial court; the absence of such a showing raises a presumption of the existence of other evidence tending to sustain the judgment; to avail of the absence of such a showing the appellee should assert in his brief that there was other evidence than that shown in such bill of exceptions.
    2. Negotiable Instruments—what not competent to affect endorsement. While parol evidence may be competent to show that an endorsement was not intended as a contract of guaranty, yet such evidence is not competent to show that the contract in question was not absolute but conditional.
    Action commenced before justice of the peace. Appeal from the Superior Court of Cook county; the Hon. Arthur H. Chetlain, Judge, presiding.
    Heard in this court at the October term, 1907.
    Affirmed.
    Opinion filed January 18, 1909.
    F. S. Baird, for appellants.
    Arnott Stubblefield, for appellee.
   Mr. Justice Brown

delivered the opinion of the court.

The appellee in this case, Frank W. Bradley, plaintiff below, obtained a judgment against the defendants and appellants, Thomas J. Brown and F. S. Baird, before a justice of the peace, and afterward another by the consideration of the Superior Court of Cook county, on an appeal and trial de novo by the court without a jury, on the following note and indorsement :

“Chicago, March 14, 1904.

For value received after date I promise to pay to the order of F. W. Bradley ($300) Three Hundred Dollars at his office in Chicago, Illinois, with interest at 6 per cent per annum until paid. This note is payable in 12 instalments of $25 each, the first being due and payable April 14th, 1904, and one instalment on the 14th of each month thereafter.

John C. Satterlee. ’ ’

On the back of said note is indorsed:

“F. S. Baird,

T. J. Brown.

I hereby guarantee payment of within notes.

Frank W. Bradley.

Paid 125.00.

Paid 20.00.”

The judgment before the- justice was only $107, but the judgment of the Superior Court, from which this appeal was taken, was $165, that being the amount which the plaintiff swore was due on the note for principal and interest. No cross-examination of the plaintiff on this point of the amount of principal and interest due on the face of the note seems to have been made, but the defendants claim in their argument that the finding and judgment are excessive by $32.76, at the very least. But they further insist that even if there is any liability on their part, the policy and judgment are excessive to a greater extent than this, because they can be liable, they say, only for the instalments of the note which fell due while Satterlee, the maker of the note, remained the agent of the Northwestern Fire Insurance Company.

Their final contention is, however, that they are not liable at all on the note, because they endorsed their names on the back of it, on the condition and agreement, assented to by the payee and plaintiff Bradley, that Satterlee should remain the agent of the Northwestern Fire Insurance Company until ‘ ‘he could, by his earnings as such, pay this note.”

The first question that meets us in considering this appeal is involved in the point made by the appellee, that there is nothing in the bill of exceptions which declares, nor anything. which properly implies, that all the evidence which was heard by the trial judge appears in the bill. The appellants’ counsel says this is implied by the use of the words “thereupon” and “whereupon” in the bill of exceptions. And also says that this implication follows from the absence of a denial of the fact by appellee’s counsel in argument. To this is cited Hanrahan v. Ulrich, 107 Ill. App. 628.

Appellants’ counsel is mistaken in his statement that “appellee’s attorney does not deny that all the evidence is preserved in the bill.”

We quote from the argument of appellee:

“We think it is apparent from the bill that other evidence was introduced, and while we are aware that the court is bound by what appears before it in the record, and not by statements of counsel, still on the liberty indicated in Hanrahan v. Ulrich, 107 Ill. App. 626, appellant now here says that other evidence was introduced in this case.”

Were the ease to turn on this question, we should find it very difficult to escape the force of those decisions that hold that “the bill of exceptions must positively or by implication exclude the supposition that other evidence was introduced to support the judgment.” For we can find but doubtful implications in the bill of exceptions, and, unlike the argument of appellee in Hanrahan v. Ulrich, the argument of appellee in this case does deny the essential fact involved. But the case at bar is like Hanrahan v. Ulrich in this: ‘£ The result must be the same in either case, ’ ’ and so we will indicate our decision as the Branch Appellate Court did in Hanrahan v. Ulrich, “upon the theory that the evidence is all before us.”

There is no competent evidence in this case on that theory, we think, to counteract the effect of the note. The defendants were irregular endorsers of it. Under sections 63 and 64 of the Act of 1907, in regard to Negotiable Instruments, their liability as parties to the paper to the payee and subsequent parties would be definite, and not open to parol testimony. But as this Act does not apply to this note, which was “made and delivered prior to.the passage thereof,” we are thrown hack on the state of the law as it existed before 1907. Under numerous cases irregular endorsers of this kind were held in Illinois prima facie guarantors, and by other cases it was held that this presumption might be rebutted and another intended character, such as surety or mere endorser,' shown by parol evidence. But no case in Dlinois contradicts the implication in one of the earliest of these cases—Ward v. Stout, 32 Ill. 401,—that the parol evidence must not affect the terms of the contract, but “establish a collateral fact merely, and not rebut a presumption.”

Hence the attempt is .not to make the prima- facie contract of guaranty something else, but to take away from it practically all validity, to make it purely conditional on the execution by the payee or his principal or a third party of an entirely independent contract. The evidence was inadmissible and was probably heard by the trial judge only because the cause was heard without a jury, and he could reject all incompetent or immaterial testimony on making his findings. But even if he considered it admissible and competent and material, we should not feel at liberty to reverse his finding on the weight of the evidence. The plaintiff contradicted the defendant’s testimony about the alleged agreement, and had the corroboration of a promissory note on its face absolute and final.

There is no merit, in our opinion, in the contention that the judgment is excessive. The evidence is clear enough that Bradley took the note and sold it, as he had a right to do, and then, to protect his endorsement, took it up. The defendants were prima facie guarantors of it, liable to the payee. They have presented no evidence that the contract they made was any other than a guaranty. That indeed is the purport of the language used by Mr. Baird testifying as a witness for the defendants.

The judgment of the Superior Court is affirmed.

Affirmed.


text:
    People of the State of Illinois, for use, etc., Appellee, v. Albert Ackermann, Appellant.
    Gen. No. 14,143.
    1. Short cause calendar—when trial upon, not ground for reversal. The trial of a cause upon the short cause calendar where the same has been improperly placed, will not reverse unless by reason thereof the objecting party has been foreclosed of some substantial right and has made and continued to urge his objection to the cause being so tried.
    2. Short cause calendar—when cause “at issue." Held, that this case, tried upon the short cause calendar, was placed thereon at a time when the same was “at issue” within the meaning of the requirements of placing cases upon the short cause calendar.
    • 3. Bonds—what does not defeat recovery upon appeal bond. A judgment against the executor of the original defendant rendered upon appeal is a breach of the bond and the fact that a void judgment may have previously been taken against such defendant which has been reversed, does not affect the right to recover upon the bond.
    4. Practice—what essential to denial of execution of bond. The execution of a bond cannot be denied in the absence of a plea of non est factum verified.
    5. Judicial notice—of what talcen. Courts will take judicial notice of their own records. In this case judicial notice was taken of a bond on file in the court in which the action was being prosecuted.
    Action in debt. Appeal from the Circuit Court of Cook county; the Hon. Julian W. Mack, Judge, presiding.
    Heard in this court at the October term, 1907.
    Affirmed.
    Opinion filed January 18, 1909.
    Rehearing denied February 1, 1909.
    John M. Duffy, for appellant.
    D. J. Downey, for appellee.
   Mr. Justice Brown

delivered the opinion of the court.

This suit, which resulted in the judgment here appealed from, was brought in debt upon a bond in the Circuit Court of Cook county, February 6, 1906. The cause was submitted to the court without a jury on June 1, 1907, and the court found the issues “for the plaintiff Downey.” It found the debt to be $400 and assessed the plaintiff’s damages in the sum of $331. It is from this judgment this appeal is taken.

It is not considered by us necessary to discuss at any length the pleadings nor much of the proceedings which are the subject of argument in this cause.

The suit is upon an appeal bond given after a judgment in a justice court in Cook county on April 26, 1898. The justice was Cyrus Head, the plaintiff in the judgment was The People of the State of Illinois for the use of August Jennings and Mrs. August Jennings, the defendant Joseph Oswald, and the amount of the judgment $200. The appeal bond in question is signed by Joseph Oswald and Albert Ackermann.

As the contentions of the defendant are made largely on the language of the bond, it may shorten the discussion to recite the bond in full. It is as follows :

“Know all Men by these Presents, That we, Joseph Oswald and Albert Ackermann, are held and firmly bound unto the People of the State of Illinois for use of August Jennings and Mrs. August Jennings in the penal sum of four hundred dollars, lawful money of the United States, for the payment of which, well and truly to be made, we bind ourselves, our heirs and administrators, jointly, severally and firmly by these presents.

Witness our hands and seals this 16th day of May, A. D. 1898.

The Condition of the Above Obligation is Such, That whereas the said People of the State of Illinois for use of August Jennings and Mrs. August Jennings did, on the 26th day of April, A. D. 1898, before Cyrus Head, Esq., a Justice of the Peace for the County of Cook, recover a judgment against the above bounden Joseph Oswald for the sum of Two Hundred Dollars and ........ cents and costs of suit, from which said judgment the said Joseph Oswald has taken an appeal to the Circuit Court of Cook county and State of Illinois: Now, if the said Joseph Oswald shall prosecute his appeal with effect, and shall pay whatever judgment may be rendered against him by the court, upon the trial of said appeal, or by consent, or in case the appeal is dismissed, or in case the matter in controversy is settled between the parties to the suit without a trial by the court appealed to will pay the judgment rendered against him by said Justice and all costs that have been made before the Justice, and all costs occasioned by said appeal, then the above obligation to be void, otherwise to remain in full force and effect.”

The principal objections made to the present judgment against Albert Ackermann on this bond are: First, that the case was tried on the short cause calendar despite the objection of the defendant Ackermann and his motion to strike the same from that calendar ; second, that there has, been no breach of the condition of the bond: the judgment rendered in the Circuit Court on the trial de novo of the suit “The People for the use of Jennings, etc., against Joseph Oswald,” being not against Joseph Oswald, but against “Albert Ackermann as Executor of Joseph Oswald, deceased,” who had been made a party defendant to the suit by order of court on suggestion of the' death of Oswald; and third, that the evidence of the bond sued on was not competent or sufficient.

As to the first objection, we are indisposed at the best to consider it prejudicial error that a man, by virtue of Ms case being improperly placed on the short cause calendar, had it tried more promptly than would otherwise have happened. The injury would seem rather, in such case, to be done to other litigants whose cases are thus unwarrantably delayed. In cases, however, where the party who objects' to bemg brought to trial on the advanced calendar has shown the error in advancing the cause, and that he persisted in his objection, and was taken at a disadvantage or defaulted for want of an opportumty to present his case, the error has been deemed prejudicial and the judgment reversed. But no such condition is shown here, even if irregularity in placing the cause on the short cause calendar was assumed. There is nothing shown or indeed claimed in the way of any foreclosure of the defendant’s placing before the court his full defense—the complaint is only that the court decided against it when made. The defendant agreed indeed to submit the case to the court and try it without a jury, after making his motion to strike it from the calendar. But further than that we see nothing irregular or erroneous in the placing or in the trial of this cause on the short cause calendar. The issues were made by the declaration and the plea of non est factum. A similiter was filed on the same day the affidavits for the advancement were made. But the similiter was not necessary. It is assumed in such a case.

The demurrer to the “special matter” of defense under the general issue, as well as to the plea of nil debet had been sustained a week before the cause was actually tried. We do not understand that a demurrer was the proper way to reach this special matter, but the existence of the notice under the plea of non est factum did not prevent the cause being “at issue” when it was placed on the short cause calendar.

The second objection to the judgment is expressed in the motion of defendant and admission of plaintiff recited in the bill of exceptions as follows:

“Thereupon the defendant moved the court to dismiss this action upon the ground that there was not sufficient evidence offered to the court to sustain the finding or a recovery against the defendant herein; there being no evidence showing a breach of the said bond nor no evidence to sustain the allegations of the declaration that there was a judgment of record in said cause of the People v. Oswald, against said Osswald upon said bond or in the trial of said appeal, and for the further reason that said bond was given by said Oswald, his heirs and administrators, and that no mention in said bond of his executor appears and that therefore there was not before the court sufficient evidence upon which to show a breach of said appeal bond nor to sustain a finding by the court against said defendant; but the court denied said motion, holding that the word ‘Administrator’ in said bond was broad enough- to include ‘Executor’; to which ruling of the court the defendant, by his counsel, then and there excepted.

“Thereupon the attorney for the plaintiff admitted in open court that upon the actual appeal bond now sued upon that a judgment had been entered against said Joseph Oswald on April 26, 1899, after he was dead and a suggestion of his death being of record, that said judgment was reversed upon a writ of error sued out by the executor of said Joseph Oswald in the Appellate Court for the First District of Illinois (case No. 9972) on February 13, 1902, whereby by said court the judgment in said cause was reversed and remanded; thereupon said Oswald, upon the motion of said plaintiff, in the Circuit Court of Cook county, was dismissed from said cause and Albert Ackermann, his executor, substituted as party defendant; all other defendants in said cause being at the same time also dismissed; a judgment was then entered against said executor of said deceased and affirmed in the Appellate Court of the First District of Illinois, on June 17, 1904 (case No. 11238), which judgment is now, by the evidence offered in behalf of the plaintiff, held to be a breach of said bond.”

We think that this recital of the motion and its grounds and of the admission, shows in itself that the court below was right in its ruling. The questions presented were in the last analysis whether the judgment in the Circuit Court of Cook county against Albert Ackermann, as executor of Joseph Oswald, was in the same case as was the judgment against Oswald in the justice court, and whether, if so, it was, in view of the suggestion of Oswald’s death and the substitution of his executor in his place, tantamount to a judgment against him, the said Joseph Oswald, so as to come within the condition of the appeal bond. We tln'nk the answer must plainly he affirmative to both questions. It certainly is not the law that when an appeal bond sufficient under the statute has suspended the operation of a judgment, the bondsman necessarily escapes liability if the principal dies before the appeal is decided. Joseph Oswald did not “prosecute his appeal with effect” because his executor had a void judgment entered in the case against a dead man, vacated, which seems to be the contention of counsel.

The third objection is that there was no competent evidence of the bond sued on produced.

The manual execution of the bond by the defendant was not denied, for the plea of non est factum was not verified.

The bond was a part of the records of the Circuit Court, as its jurisdiction of the appeal depended on it. The court could take judicial notice of its own records and did so when a transcript of the bond, under the hand of its own clerk, was shown to it. The original bond itself, in the view of the law, lay before the court.

We think there is no sufficient objection made to the judgment appealed from, and it will be affirmed.

We should not be justified in passing unnoticed some language in the Brief and Argument of defendant in error filed in this court. That the jocular style assumed is at the expense of dignity and good taste does not trouble us and might be passed over, but expressions concerning the opposing counsel found in it are much more blameworthy. Counsel in this court are officers of the court and are entitled not only to the courtesy due to one gentleman from another, but also to that respectful treatment which that position demands.

The judgment of the Circuit Court is affirmed.

Affirmed.