text:
    Sarah A. O’Byrne, Plaintiff in Error, v. DeWitt C. Cregier and Eugene N. Merton, Defendants in Error.
    Gen. No. 17,685.
    1. Judgments—res judicata. Recovery in an attachment suit in which plaintiff confined her claim to diamonds and other jewelry which defendant had converted into money does not bar recovery in an action of replevin with a count in trover added for a diamond not at the time of attachment suit in possession of defendant but in the hands of an officer of the law.
    2. Attachment—splitting cause of action. One suing in attachment for value of jewelry which defendant converted to his use is not obliged to include in his claim the value of a diamond so as to preclude recovery of the diamond itself in a subsequent action of replevin.
    Baker, J., dissenting.
    Error to the Municipal Court of Chicago; the Hon. Max Eberhart, Judge, presiding.
    Heard in this court at the October Term, 1911.
    Reversed and remanded.
    Opinion filed June 30, 1913.
    Statement by the Court. The plaintiff and plaintiff in error herein, Sarah A. 0 ’Byrne, in December, 1910, accused the defendant, Eugene 1ST. Merton; the defendant and defendant in error, of stealing certain jewelry from her. He was arrested for larceny but subsequently acquitted. But meanwhile Sarah A. O’Byrne had brought an attachment suit against him in the Municipal Court of Chicago, making affidavit that he was indebted to her in the sum of $275 “for diamonds and other jewelry which he has unlawfully taken from her possession and which he has converted into money,” and that he was ‘ ‘ about fraudulently to conceal, assign or otherwise dispose of his property or effects, so as to hinder and delay his creditors.” This attachment was served by garnishment of the North Side State Savings Bank and the defendant Merton was summoned. On January 27,1911, there was a trial by the court, without a jury, of this attachment suit, and the issues were found against the defendant as to the merits and as to the attachment and judgments for $275 entered in favor of the plaintiff against the defendant and against the garnishee on its answer.
    The acquittal of Merton on the larceny charge was on January 17, 1911. On January 18, 1911, Sarah A. O’Byrne brought in the Municipal Court of Chicago the suit at bar in replevin against “D. C. Cregier, custodian of the Police Department,” in her affidavit for the replevin writ alleging that she was the owner and was lawfully entitled to the possession of “one diamond which is now in the custody of DeWitt C. Cregier, Custodian of the Police Department, and held by him for one Eugene N. Merton, who claims to be the owner thereof.”
    March 28, 1911, Cregier appeared and filed a plea, alleging that the diamond ring in the writ mentioned was in his possession as city custodian; that it was taken by the police of Chicago and held as evidence in a suit wherein the People of the State of Illinois was plaintiff and one Eugene 1ST. Merton was defendant; that the said property was and is claimed to be the property of the plaintiff and also the property of the said Merton, and that the title and right of possession of the said property is in the said Merton.
    On the same day on motion of the plaintiff, Sarah A. O’Byrne, it was ordered that all the records, papers and proceedings in the cause be amended by making Eugene N. Merton codefendant. Thereupon Merton appeared and in answer to interrogatories filed by the plaintiff claimed that he had purchased the ring about two years before in Pittsburgh. On the 28th of April, 1911, an alias replevin writ was issued for the diamond against “D. C. Cregier, Custodian of Police Department, and Eugene N. Merton,” which described the goods and chattels detained as “One Diamond, which is now in the possession and custody and held by the said Cregier for one Eugene 1ST. Merton, who claims to be the owner thereof, but is the property of said affiant. ’ ’
    May 22, 1911, Merton filed a written plea calling it “an additional and special plea,” in which he set out that the plaintiff brought on December 6, 1910, and prosecuted to final judgment in case No. 154,237 in the Municipal Court her alleged cause of action against him, which said action included the diamond for the recovery of which this action was brought, and that “by splitting her alleged cause of action against the defendant Merton she elected to abide by the amount in her said former action claimed and is precluded from maintaining the present action.”
    The 23d day of May, 1911, the plaintiff filed in the cause, what is denominated in the transcript a “count in trover,” being a statement of claim as follows:
    “Plaintiff's claim is for one diamond of the value of $350, the property of the plaintiff herein, now in the possession of D. C. Cregier, City Custodian, being the same diamond taken from E. N. Merton, defendant herein, which said D. C. Cregier has refused to surrender to the bailiff of this Court under the replevin writ in this case, and which he has converted to his own use. ’ ’
    When the cause came to trial before a judge of the Municipal Court sitting without a jury, it was stipulated that the property sought to be recovered in the suit was taken from' the possession of the defendant Merton at the time of his arrest and prior to the commencement of the suit No. 154,257 by the .police officers of the city of Chicago and turned over to the defendant, D. C. Cregier, as city custodian, to be held as evidence in the criminal case then pending against the defendant Merton in the Criminal Court of Cook county, for the larceny of said property and other property; that said Merton demanded this ring from the defendant Cregier on acquittal and it was refused; that the diamond was and is claimed by the plaintiff to be part of the property taken from her possession by the defendant Merton and that the judgment in case No. 154,237 of the Municipal Court of Chicago for the recovery of the value of the property, which had been converted into money, • did not include the value of the diamond in controversy in this case, but “that the property recovered for in case No. 154,237 and the diamond sought to be recovered in this action were taken at the same time from the possession of said plaintiff in this suit and constituted one and the same act.”
    The ‘ ‘ Statement of Facts ’ ’ by the judge of the Municipal Court, after reciting the preceding stipulation, proceeds:
    “The plaintiff herein does not claim the gold ring now held by the defendant, D. C. Cregier, but she does claim title to the diamond stone in said setting. The Court heard arguments of counsel * * * and de-
    cided as a matter of law that the plaintiff herein was barred from maintaining this action because she recovered a judgment in case No. 154,237 of the Municipal Court of Chicago, and that the plaintiff by proceeding now in the present action of replevin to recover the diamond stone now held by the defendant Cregier has split her cause of action and is barred from maintaining this suit.”
    The court therefore entered final judgment against the plaintiff and in favor of defendants Merton and Cregier for the costs of suit, to reverse which judgment the plaintiff sued out the present writ of error.
    Clyde C. Fisher and Abraham Privat, for plaintiff in error.
    William H. Sexton, for defendant in error; DeWitt C. Cregier, Harry J. Caney, of counsel; Harry L. Strohm, "for defendant in error Eugene N. Merton.
   Mr. Justice Brown

delivered the opinion of tne court.

The defendant relies to sustain his judgment in this case on the fact that by stipulation it appears that “the property recovered for” (not, as the abstract says, “the property recovered”) “in the attachment suit, and the diamond sought to be recovered in this action were taken at the same time from the possession of. the plaintiff in this suit and constitute one and the same act. ’ ’

This is very had English. Various pieces of jewelry “cannot constitute one and the same act.” The statement of the alias replevin writ that Merton is the property of affiant is also subject to verbal criticism.

However, we suppose we know what is meant, although it seems strange that there should be an admission by-stipulation that the diamond in question was taken at any time from the plaintiff’s possession, since the defendant Merton, on oath, as the record shows, asserts that he bought it in Pittsburgh in the same setting in which it now is.

But in the difference between an admission that the “property recovered” and one that the “property recovered for” in the attachment suit was taken from the plaintiff, lies a suggestion of the difficulty in this case, which we find, as Judge Dillon found Sweeny v. Daugherty, 23 Iowa, 291, not entirely easy to decide on authority.

If the “attachment suit” against Merton had been a replevin suit, and if other diamonds of articles of jewelry had been recovered, and this diamond being still in Merton’s possession had not been claimed by the plaintiff in that replevin suit, there would be no difficulty whatever in the present case.

Merton having by a single tortious act taken several articles, could stand, as the Supreme Judicial Court of Massachusetts in Bennett v. Hood, 1 Allen 47, said the defendants in that case could, on the maxim “Nemo debet bis vexari pro una et eadem causa,” and say that he could not be a second time sued for a single and indivisible act.

But this is by no means such a simple case.

Suppose Merton had stolen from the plaintiff four diamonds and given one to A., one to B. and one to C. and retained the fourth. Could not the plaintiff have brought four replevin suits, one against Merton, one against A., one against B. and one against C., and recovered in each case the diamond itself, if she had proved property? And if Merton had sold the fourth diamond to a person unknown, so that it could not be traced, could she not in addition to, and without endangering the three replevin suits against A., B. and C., and instead of a replevin suit against Merton, bring a suit in trover against him and secure a money judgment for the value of the diamond he had so converted? And would it make any difference if she brought this trover suit against Merton for the value of the fourth diamond before she brought the replevin suits for the others which she could locate? And if the suit in replevin against A. failed because it was proved that before it was brought A. had, without the knowledge of the plaintiff, returned to Merton the diamond given to him, could not the plaintiff seek that diamond by a replevin suit against Merton, notwithstanding she had already sued him in trover for the value of one? And if he would not give it up on the writ, could she not add a trover count to the declaration in replevin and recover on that?

It is not necessary to answer these questions, but they suggest other questions that must be answered in this case.

When the plaintiff sued Merton in the attachment suit for money damages, she confined her claim to diamonds and other jewelry “which he had converted into money,” as well as “taken unlawfully from her possession. ’ ’ At that time the diamond which she is now: suing for was not in Merton’s possession, but in that of Cregier as an officer of the law. Was she obliged to include its value in her claim against Merton and then on recovery pass the title to him and foreclose herself from recovery of the diamond itself? She thought not evidently, for she did not include its value in her claim. Nor do we think so. The diamond might have had a sentimental value for her. She may have preferred it very much to its money value.

When the custody of Cregier of the diamond ceased to he the custody of the law, she sued him in replevin. We think she had that right. When he came in and plead in the informal way provided for in the practice of the Municipal Court, that he was a stakeholder and Merton claimed the property, she added Merton as a codefendant. We think she had that right also, and that her former suit in trover against him for other property was no bar. When the property was withheld on the writ, she filed what takes the place in the Municipal Court of a count in trover against both defendants, and we. think this foreclosed her prosecuting the suit no more than did her former steps in it. We find nothing in serious contradiction in the cases cited to us to this conclusion which justice and right reason seem to demand. On the contrary, however, the whole tenor of the reasoning of Judge Dillon in Sweeny v. Daugherty, supra, is in favor of it. As he said in that case, we can say in this:

“In reaching this conclusion the consideration has had weight with us that it is especially found that the former recovery relied on as a bar ‘did not include the property herein sued for,’ so that the defense is more technical than meritorious. And the further consideration has influenced us, that the tendency of modern decisions is strongly, and we think wisely, in the direction of holding nothing to be barred except the precise matters which were involved and adjudicated in the first action.”

Although not deciding the question, the opinion in Bennett v. Hood, supra, intimates strongly that in a supposititious case, which we think is analogous to the one actually at bar, the plaintiff might maintain two separate actions.

The judgment of the Municipal Court is reversed and the cause remanded to that court for adjudication on the merits.

Reversed and remcmded.

Mr. Justice Baker dissents.


source: Caselaw Access Project

author: Mb. Justice Beown

license: Public Domain

text:
    Jonathan G. Ade, Defendant in Error, v. Bertha Ade, Plaintiff in Error.
    Gen. No. 17,732.
    1. Negotiable instruments—form. An instrument dated and signed by husband and wife which declares: “We owe our son Jonathan G. Ade the sum of $116.36, which sum he may either draw in small amounts from our business, or after the death of the father demand it from the mother, Bertha Ade, or from the administrator of the estate, if there should be any. However, the interest at six per cent, on the same shall be paid out yearly, ’ ’ will be construed as a promissory note due at death of the father and the statute of limitations does not begin to run until then.
    2. Interest—limitations. When a note provides that interest shall be paid annually, the annual instalments of interest not paid before the debt becomes due are regarded as an incident of the debt, recoverable with it, and not barred by statute of limitations until the debt is barred and it is only when detachable coupons evidence the interest that the interest is barred before the principal.
    3. Limitations—tills and notes. Limitations begin to run on a demand promissory note from its date.
    4. Interest—compound. When interest is payable annually before note becomes due but not paid before suit on note, such interest cannot lawfully be compounded in judgment.
    Error to the Municipal Court of Chicago; the Hon. John J. Rooney, Judge, presiding.
    Heard in this court at the October term, 1911.
    Affirmed.
    Opinion filed June 30, 1913.
    Rehearing denied and additional
    opinion filed July 14, 1913.

      Albebt H. Fby, for plaintiff in error.
    Bitheb, Goff & Fbancis, for defendant in error.
   Mb. Justice Beown

delivered the opinion of the court.

John G. Ade and Bertha Ade, his wife, gave to Jonathan G. Ade (son of John and stepson of Bertha), presumably on the day of its date, a document in the German language, the correct translation of which it was agreed at the trial is as follows:

‘ ‘ Chicago, March 1,1895.

Herewith we, John G. Ade and Bertha Ade, declare that we owe our son, Jonathan G. Ade, the sum of $116.36, which is due him from the estate of his deceased brother, Emanuel G. Ade, which sum he may either draw in small amounts from our business or after the death of the father demand it from the mother, Bertha Ade, or from the Administrator of the Estate, if there should be any. However, the interests at six per cent, on ‘the same shall be paid out yearly.

John G. Abe,

Bebtha Ade.”

John G. Ade died February 22, 1910, and Jonathan on April 5, 1911, sued Bertha Ade for the face of the instrument and interest, denominating it in his statement and in his affidavit of claim “a promissory note.”

The defendant, Bertha Ade, contended that the suit was barred by the statute of limitations.

The Municipal Court, sitting without a jury, negatived this defense and gave judgment for $229.78, being a little less than the amount of $116.36 with interest (uncompounded) at six per cent for sixteen years. Thereupon Bertha Ade sued out this writ of error. Her contention is that the instrument in question “if it is a note at all is a note due on demand;” that being a demand note it became due after a reasonable time, and that more than ten years have passed, since a reasonable time after date.

“Or,” the plaintiff in error says, “it is a note due at one of three times, either on demand or after Bertha Ade became administratrix or from her personally.” In that case plaintiff in error contends, “the statute begins to run from the time when the right to pursue the earlier remedy accrues.”.

We see no merit in these propositions. The instrument in question is undoubtedly a promissory note under the statute. No question of its negotiability arises. It is in the hands of the original holder. If it Avere a demand note, the statute of limitations would have begun to run from its date, not from “a reasonable time after date.” But we see no reason for holding it a demand note. It certainly is inartificial in form and subject to construction, but it seems very plain that it could not be enforced until the death of John Gr. Ade. If it was at the option of the holder, Jonathan, to require it or any part of it before that event, who could settle what “a small amount” would be? In our opinion the provision, “which sum he may draw in small amounts from our business,” was either non-effective and non-enforceable because depending on the agreement of the parties, or gave the option to the makers to pay in small amounts and thus stop interest. It matters not which is the correct view, because there is no contention that any sum was paid.

On the other hand, that after the death of John Gr. Ade, Jonathan was entitled to his money and could enforce the contract by suit against Bertha, seems equally clear.

We think the note became due at the death of John GK Ade, and that the statute of limitations did not begin to run until then.

The interest, which was not, and, although made payable annually, could not lawfully be compounded in the judgment (Bowman v. Neely, 137 Ill. 443), was a mere incident to the debt and followed the principal

at the rate specified in the contract. Chicago Title & Trust Co. v. McGlew, 90 Ill. App. 58.

The judgment of the Municipal Court is affirmed.

Affirmed.

Upon consideration of a petition by plaintiff in error for a rehearing herein the following additional opinion was filed on July 14, 1913.

Per Curiam : The petition for rehearing filed by the plaintiff in error in this cause shows that counsel supposes that we overlooked the proposition raised and argued by the plaintiff in error that certain instalments of interest on the note involved were barred by the statute of limitations, whatever might be the law concerning the principal.

In filing the original opinion we thought that its last paragraph would be understood, as we intended it should be, as our decision upon this very point, with the grounds of it. As it has not been so understood, a fuller statement of our view may not be superfluous.

We hold, in the language of Chief Justice Shaw in Ferry v. Ferry, 2 Cush. (Mass.) 92: “The interest stipulated to be paid is regarded as incident to the debt and recoverable with it; and although the creditor may recover for the interest which accrues before the principal becomes due, yet if he forbear to bring his action for that purpose, as he may, the interest remains incident to the debt and may be recovered with it.’’

In consequence of this view the Supreme Judicial Court of Massachusetts held in Ferry v. Ferry, supra, that although the interest was, by the terms of the note sued upon, payable annually, and more than twenty years had passed since the first two instalments óf interest became due, they were not barred by the statute of limitations. To the same effect is the decision of the Supreme Court of Vermont in Grafton Bank v. Doe, 19 Vt. 463, in which the court says, concerning interest which became due a longer time before the action was brought than the statute of limitations provided:

“It is true that the orators might have instituted their suit for the recovery of the year’s interest, but they were not bound to do so. The statute does not begin to run upon the demand until the principal, or at least some separate and distinct portion of the principal, becomes due and payable, and then only upon such distinct and separate portion. The accruing interest from year to year is not thus separated from the principal demand and consequently the statute of limitations does not run upon it until the principal is barred by the statute. ’ ’

This doctrine is laid down in the text books also.

See Angelí & Ames on Limitations, section 95, note 1.

It is only when detachable coupons evidence the interest that it may be barred before the principal.


author: Mr. Presiding Justice Duncan

text:
    Hibernian Banking Association, Trustee, Plaintiff in Error, v. Bell & Zoller Coal Company, Defendant in Error.
    Gen. No. 17,032.
    1. Appeals and errors—when judgment is contrary to evidence. In an action by a trustee in bankruptcy to recover damages for defendant’s failure to deliver coal to the bankrupt according to contract, a judgment for defendant is reversed, there being evidence that after defendant’s attempt to cancel the contract, the parties met and agreed to carry it out.
    2. Contracts—construction. A contract for the delivery of nine cars of coal a week is construed to mean an average of nine ears.
    3. Contracts—where strict performance is waived. Where strict performance of certain provisions of a contract has been waived for a portion of the time and performance according to a reasonable and liberal construction of the terms has been accepted by the parties, reasonable notice thereafter of an intention to return to the exact terms must be given before a forfeiture or rescission can be declared by either party.
    4. Contracts—forfeiture for delay in payments. Where there have been delayed payments on a contract and such payments have been accepted for a considerable portion of the time, reasonable notice of an intention to require prompt payments must be given before a forfeiture or rescission can be declared.
    5. Damages—for failure to deliver coal. In an action to recover damage for failure to deliver coal, where plaintiff did not insist on delivery when due and it is not shown that there was any damage through failure to deliver at such time, defendant cannot be compelled to pay damages for failure to deliver at a later time when prices are higher.
    6. Instructions—where strike is not proximate cause of failure to perform contract. In an action to recover damages for failure to deliver coal according to contract, the contract containing a provision making it subject to strikes, it is proper to instruct the .jury that a strike in mining another kind of coal which raises the price of the coal contracted for should not be considered as a proximate cause of failure to perform.
    7. Practice—where defendant is estopped to change his defense. In an action to recover damages for failure to deliver coal, where defendant places its refusal to deliver on the ground that the contract was rescinded it is estopped “to amend its hold” by insisting on other defenses.
    Error to the Municipal Court of Chicago; the Hon. Freeman K. Blake, Judge,' presiding.
    Heard in the branch Appellate Court at the March term, 1911.
    Reversed and remanded.
    Opinion filed June 30, 1913.
    Pope, Hoig & Fuller, for plaintiff in error.
    Ryan & Condon, for defendant in error; Irvin I. Livingston, of counsel.
   Mr. Presiding Justice Duncan

delivered the opinion of the court.

Hibernian Banking Association, trustee in bankruptcy of Cooke-Rutledge Coal Company, sought to recover damages in this suit from Bell & Zoller Coal Company for the latter’s failure to deliver a balance of 205 cars of coal according to contract. Verdict and judgment were rendered in favor of Bell & Zoller Coal Company and the trustee in bankruptcy sued out this writ of error.

The contract sued on bears date May 21,1902, and is an accepted proposition of defendant in error to plaintiff in error’s company in these terms:

“We agree to supply and you agree to take from us nine (9) cars per week of No. 2 Nut or Pea coal from date until April 1st, 1903, on the basis of $1.40 per ton, f. o. b. Illinois Central tracks, Chicago. Mine or Illinois Central Railroad weights at Chicago to govern settlements, which are to be made on or about the 15th of the month for previous month’s shipments. The above is subject to strikes or other contingencies beyond our control. Tour acceptance to the above to constitute a contract between us.”

The evidence for both parties shows that for the time mentioned in the contract only the following deliveries of No. 2 nut or pea coal were made by defendant in error to plaintiff in error’s company at the contract price, to wit: for the week ending May 27th, 15 ears; June 3rd, 10 cars; June 10th, 6 cars; June 17th, 28 cars; June 24th, none; July 1st, 16 cars; July 8th, 22 cars; July 15th, 5 cars; July 22nd, 4 cars; July 29th, none; Aug. 5th, 2 cars; Aug. 12th, none; Aug. 19th, 6 cars; Aug. 26th, 7 cars; Sept. 2nd, none; Sept. 9th, 2 cars; Sept. 16th, 15 cars; Sept. 23rd, 8 cars; Sept. 30th, 10 cars ;■ October 7th, 20 cars; October 14th, none; October 21st, 2 cars; from October 21st to October 23rd, 8 cars. Total delivered, 186 cars.

An inspection of the foregoing weekly deliveries of coal reveals the fact that for the time coal was delivered it was delivered irregularly. For some weeks no coal at all was delivered, for some of the weeks the deliveries were in excess of nine cars per week, while in others it was less than the contract rate of nine cars per week. Treating this contract as meaning that the deliveries should be made at an average of nine cars per week, the contract as to delivery was fully and exactly performed up to August 12, 1902, the end of the twelfth week, when exactly 108 cars had been delivered. Up to that date there were three weeks in which no deliveries were made, one each in the months of J une, July and August. There were five weeks in which more than nine cars per week were delivered, and four other weeks of those twelve weeks in which less than nine cars per week were delivered. From August 12, 1902, up to and including the week ending November 4, 1902, there were four weeks in which no coal at all was delivered, five other weeks in which the deliveries were less than nine cars per week and three weeks in which the deliveries exceeded nine cars per week.

With the same interpretation of the contract defendant in error owed the following deliveries of coal up to the time it ceased to deliver coal to wit: for the week ending August 19th, 3 cars; August 26th, 2 cars; September 2nd, 9 cars; September 9th, 7 ears; or a total of 21 ears. With the foregoing losses supplied the delivery of coal would be completely and exactly carried out up to October 28, 1902, the twenty-third week of the contract, with a total delivery of 207 cars of coal. For the remaining twenty-two weeks of the contract no coal at all was delivered under the contract in question, that is to say, 198 additional cars were never delivered on the contract. The first week of this delinquency ended Nov. 4, 1902, and the last week ended March 30,1903. Under the contract the end of the first week was May 28, 1902, and the end of the last week of the contract, April 1, 1903, and all the weeks intervening those dates ended one day later than the indications above which are given as the showing under the evidence. Three witnesses for plaintiff in error testified that the market price of No. 2 nut coal, f. o. b. cars Chicago, for week ending November 5, 1902, was from $2.15 to $2.60 per ton, while two witnesses for defendant in error testified that the market price was from $1.75 to $2.25 per ton. The evidence further showed that the market price for that coal so delivered continued to increase until the week ending February 28,1903, at which last date the market price per ton in Chicago, as testified to by plaintiff in error’s witnesses, was from $3.25 to $5.25 per ton, and by defendant in error’s witnesses at from $2.10 to $2.50 per ton; that-the price then began to gradually decline until March 31, 1903, at which date plaintiff in error’s witnesses testified that the market price was from about $1.70 to $2.25 per ton, while defendant in error’s witnesses testified that it slumped to as low as $1.40 per ton. The evidence of defendant in error’s witnesses also showed that the prices of that coal through September, 1902, ranged from $1.40 to $1.55, and through the next month of October, from $1.65 to $2.00 per ton. The only evidence in the record concerning the market for that coal in Chicago for the other months of the contract was given by Mr. Bell for defendant in error, in substance, that the market in May, 1902, was dull, duller in July, 1902, and dullest in the month of August, 1902.

The weight of the evidence in this record shows clearly that the parties to said contract by their conduct interpreted it to mean that defendant in error was required to deliver, and that plaintiff in error’s company was required to accept, nine cars of No. 2 nut coal on an average per week at the contract price; that the contract was recognized by both parties and treated by them as in full force until September 4, 1902, when defendant in error sought to have the contract rescinded and canceled as shown by its letter of that date to Cooke-Rutledge Coal Company, in which it said:

“We judge from the fact that what coal you have taken on your contracts with us for No. 2 nut and Carterville egg coal, that we have been obliged to call you up on the telephone and beg you to take it, that it is a hardship for you to handle this coal and as you are aware, you have not taken anywhere near the amount of coal provided for in the contracts, some weeks not taking any at all, and as we notice you are taking similar grades of coal from others, we wish to consider these contracts cancelled without a loss to either party.”

That on or about September 5, 1902, Mr. Cooke, the general manager of plaintiff in error’s company, visited Mr. Bell, the president of the defendant in error, and after protesting that his company had not violated any terms of the contract, secured an agreement from Mr. Bell for the defendant in error that it would resume the shipping of said coal under said contract on Monday, September 8, 1902, and would carry out the remainder of the contract until it was completed, according to the written terms thereof; that the defendant in error did resume the shipment of coal under said- contract as it agreed through Mr. Bell and continued to ship coal in accordance therewith until about October 23, 1902, when it ceased to ship coal thereon entirely and refused so to do on request of plaintiff in error’s company, basing its refusal on the sole grounds that the contract was canceled as per its said letter of September 4th. It is true that Mr. Cooke is the only witness that testified to the new agreement of September 5th, and that his testimony was positively denied by Mr. Bell, who was corroborated by Mr. Rundell, the clerk of the defendant in error, who testified that he was called as a witness to that new agreement, and that in the presence of Mr. Cooke, Mr. Bell stated the contract thus: “Mr. Cooke and I have been talking over this nut and pea question, and while the contract is can-celled, I want you to give them coal whenever you can, at the market price; favor them in any way you can,” and that Mr. Cooke then smiled and said nothing. While it may be said that in numbers the witnesses on this proposition are two to one in favor of defendant in error, the circumstances all corroborate Mr. Cooke and are absolutely inconsistent with Mr. Bell’s evidence, to wit, that during September defendant in error shipped to plaintiff in error’s company thirty-five ears of that coal at the contract price, when that coal was selling at Chicago on board cars at as high as $1.55 per ton, and thirty cars more in October at the contract price when the market price for the same delivery in Chicago was from 25 cents to 60 cents a ton higher than the contract price. It is also true that Mr. Bell testified that the coal shipped after September 5th to plaintiff in error’s company was shipped to it on special orders and at the market price in Chicago. He is again corroborated in a way by Mr. Rundell that the coal was shipped on special orders and at the market price after September 5th, but all the evidence in the record without exception shows that plaintiff in error’s company received and paid for coal at the contract price, while the Chicago market price for the same delivery was very much in excess of the contract price. Mr. Cooke admits making special orders for the same coal at the market price in addition to the coal received under the contract. He is fully corroborated by a letter written by defendant in error by Mr. Rundell under date of October 6, 1902, which reads thus:

“We are pleased to acknowledge your verbal order of even date given us by your Mr. Cooke for ten (10) additional cars nut and pea at $1.50 f. o. b., I. C. R. R., subject to the printed conditions on the margin of our letter head.”

How, on the same day the evidence shows without question that plaintiff in error’s company received from defendant in error nine other cars (on the contract as Mr. Cooke claimed) at the contract price of $1.40 per ton. These two different prices and the words in the letter of October 6th “additional cars nut and pea” are very forceful corroborations of Mr. Cooke’s evidence, and were not satisfactorily explained, so as to harmonize with Mr. Bell and Mr. Run-dell’s evidence. Plaintiff in error’s exhibit 125, which was made up and kept in defendant in error’s office for reference to the contract in question, corroborates the propositions that the parties interpreted the contract as aforesaid, and shipped coal under the contract after September 4th. This exhibit is headed with these words and figures:

“May 21/02. Cooke-Rutledge Coal Company.

9 cars nut & pea coal or No. 2 nut per week.

R/C Order Over Short.”

Then follows under the four heads four columns of figures, those under the first head, “R/C,” showing the number of cars received at the end of each week of the contract beginning with the week ending May 27th and the Exhibit stopping with the week ending September 16, 1902, the figures corresponding exactly to our figures above set forth as the receipts- of coal at the contract price. Under the head, “order,” is placed a column of figure nines, indicating simply that nine cars a week was the contract provision. Under the head, “Over,” for the 1st, 2nd, 4th, 6th and 7th weeks of contract appears the following figures for those weeks respectively, 6, 1, 10, 7 and 13, which simply notes the weeks in which over shipments on the contract number were made and the number of cars for those weeks over the contract requirement of nine cars per week. Under the column “short” is- found for each week the correct indication of the number of cars the shipments were short for the remaining weeks up to September 16, 1902. Now, if there were no cars shipped under the contract after September 4th, why is there found entered on this exhibit the showing that two cars were received for the week ending September 9th and fifteen cars as received for the week ending September 16th? The whole exhibit shows clearly too that defendant in error was at all the times therein noted posted on the shipments under this contract, and that it recognized that an average of nine cars per week was the requirement of the contract, and not nine cars for every week regardless of the over shipments of other weeks, as defendant in error now contends. Another incident corroborative of this interpretation and which shows defendant in error at that time very well contented therewith, although the coal trade was dull and the price low, is defendant in error’s letter of July 31, 1902, by Mr. Bell to plaintiff in error’s company, in which these words are used:

“If you could use to-morrow and Saturday eight cars of No. 2 nut on your contract or even a part of that amount it would be greatly appreciated by us, as we are paying car service at present on that class of coal.”

At that time there had been five weeks of the contract in which the deliveries were much less than nine cars per week and two of those five weeks in which none at all were delivered, the delivery for those five weeks only totaling fifteen cars altogether. Yet, there were more than an average of nine cars per week delivered up to July 31st. This letter recognized in spirit that plaintiff in error’s company was not bound to accept the eight cars offered it at that time and that the contract was in force and also strongly corroborates Mr. Cooke in his testimony that no complaint was ever made by defendant in error until coal began to rapidly advance in price by reason of the strike in the anthracite coal regions of Pennsylvania and West Virginia that followed shortly thereafter. A strict and literal interpretation of the contract in question might require the delivery and acceptance of nine cars of coal every week, regardless of the fact that for some weeks more than nine cars had been tendered and accepted at the contract price. The contract, however, was susceptible of the liberal interpretation that a delivery and acceptance of an average of nine cars of coal per week was the intended requirement thereof and without doing violence to the language of the contract. As the interpretation was a reasonable one, and as the contract was prepared by the defendant in error, and the language is its language, and the interpretation aforesaid was acquiesced in by it, it ought to be bound thereby. Where strict and exact performance of such provisions have been waived for a portion of the time of such a contract, and performance according- to a reasonable and liberal construction of the terms thereof have been accepted by the parties to a contract, reasonable notice thereafter of an intention to return to the strict and exact terms of the contract must be given before a forfeiture or rescission thereof can be declared in law by either party. The same is true in regard to delayed performance in the matter of payments on the contract, where such delayed payments have been accepted without complaint for a considerable portion of the time of the contract. Vider v. Ferguson, 88 Ill, App. 136; Palmer v. Ford, 70 Ill. 369; Finch & Co. v. New Ohio Washed Coal Co., 156 Ill. App. 589; Salt Fork Coal Co. v. Eldridge Coal Co., 170 Ill. App. 268. In view of those authorities the contentions herein that defendant in error under the contract was required to advance or pay the freight to the railroad company, or that plaintiff in error’s company failed to pay for the coal at the times required by the contract need not be specially considered, as they were waived by the acquiescing of each party in the conduct of the other in those particulars. As there was a positive refusal of the defendant in error to carry out its part of the contract after October 23rd and upon frequent requests of plaintiff in error’s company so to do, there was a positive breach on its part of the contract that was not waived, and as to the other 198 cars not delivered by defendant in error, the verdict and judgment of the court is against the manifest weight of the evidence. The judgment of the court must, therefore, be reversed. Donelson v. East St. Louis & S. Ry. Co., 235 Ill. 625. As to the other twenty-one cars not delivered in August and September, no damages are shown in regard thereto for failure to deliver them at the times they were due, and we do not think defendant in error should be compelled to pay damages therefor at the October or subsequent prices therefor, inasmuch as plaintiff in error’s company did not insist on delivery when they were due.

The contract in question did not require payments for the coal shipped thereunder on any certain day. The coal shipped was usually paid for about the last of the month following the month in which it was shipped, except four cars shipped about June, 1902, which were not páid for until the following February. Plaintiff in error’s company refused at first to pay for those cars, because they were “slack and buckwheat coal,” and not up to the-grade called for in the contract. It was clearly supported in its claim, by evidence which was unquestioned, and it could not have been considered in default had it refused altogether to pay for those four cars at the contract price. As they were paid for at the contract price, all contentions over those four cars- should now be regarded as settled and out of the case.

As the cause will have to be remanded for another trial, it will not be necessary to consider the errors assigned on the instructions, except in a general way. While the contract provided that it was subject to strikes- or other contingencies beyond the control of the defendant in error, it is nevertheless very clear that the anthracite strikes shown by the evidence were not the proximate cause of any delay or failure of defendant in error to comply with the contract. Evidence of that strike could only serve to explain the rapid advance of the price of coal should that explanation become proper. There was no evidence as to shortage of cars or other such contingencies that were the subjects of delay or hindrance. .In such a state of the evidence the jury should be plainly informed that such a strike could not be considered by them as a proximate cause for failure to perform the contract, if any instructions thereon be given at all. Consolidated Coal Co. v. Jones & Adams Co., 232 Ill. 326.

The record also clearly shows that defendant in error by its letter of September 4th and by its subsequent letters and communications up to the beginning of this suit placed its refusal to deliver any more coal under the contract and its right to have the contract rescinded upon the sole and distinct ground that Cooke-Rutledge Coal Company had refused to accept the amount of coal provided for by the contract and for that reason was in default on the contract. The right of plaintiff in error to maintain this suit clearly depends upon the truth of that claim, and by the settled principles of the law defendant in error is not permitted “to amend its hold” by insisting on other defenses, but is estopped from so doing. Gibson v. Brown, 214 Ill. 330; Ohio & M. Ry. Co. v. McCarthy, 96 U. S. 258.

This does not mean, however, that plaintiff in error was relieved from proving in the first instance performance of the contract on the part of Cooke-Rutledge Coal Company, or a legal excuse therefor and its ability, readiness and willingness to perform the contract on its part, and also the breach of the contract by the defendant in error.

The judgment of the court is reversed and the cause remanded.

Reversed and remanded.


text:
    Western Tube Company, Appellant, v. Aetna Indemnity Company, Appellee.
    Gen. No. 17,222.
    1. Insurance—construction of contracts. Insurance contracts must be strictly construed against the insurance company.
    2. Limitations—where bond places limit on time to sue. Where a bond given for the performance of a contract to erect a building contains a provision that any action thereon “must be instituted within six months after the completion of the work” such provision is binding.
    3. Bonds—when limitation clause applies to whole hond. Where a bond given for the performance of a contract to erect a building contains a provision that any action thereon ‘‘must be instituted within six months after the completion of the work” such limitation applies to the whole bond.
    4. Bonds—under section 35 of Practice Act. Under section 35 of the Practice Act an action on a bond containing a limitation clause should be brought before the limitation expires though the damages may not be fully accrued and determinable.
    5. Limitations—where evidence does not show waiver of right to set up defense. In an action on a bond containing a limitation clause evidence held insufficient to show that defendant held out hopes of settlement or induced plaintiff to delay the suit until the limitation expired.
    Appeal from the Superior Court of Cook county; the Hon. William H. McSubely, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1911.
    Affirmed.
    Opinion filed June 30, 1913.
    Knapp & Campbell and Charles P. Schwartz, for appellant.
    Fassett & Andrews, for appellee.
   Mr. Presiding Justice Duncan

delivered the opinion of the court.

Judgment was rendered on demurrers to two replications in this case in favor of the Aetna Indemnity Company against the Western Tube Company, and the latter elected to stand by its replications and prosecuted this appeal.

Appellant, in October, 1909, declared upon a bond signed by appellee as surety, the conditions of which were that Matthews & McMullen, principals in the bond, should faithfully perform a contract for the erection of an office building for appellant at Kewanee, Illinois, dated June 28,1905; and the contract provided that the building should be completed by December 1, 1905, under a per diem penalty for delay beyond that date. The bond provided that the obligee, as damages, “may include the claims of mechanics and material men arising out of the performance of the contract, and paid by him only when the same, by the statutes of the state where the contract is to be performed, are valid liens against the property.” And further provided: “If any suits at law or proceedings in equity are brought against said surety to recover any claim hereunder, the same must be instituted within six months after the completion of the work specified in said contract. ’ ’ The declaration alleged that the building was not completed by December 1, 1905, as contracted, but that it was completed and accepted April 16,1906; that the construction company then furnished appellant with a sworn statement of parties having furnished materials and labor for the construction of said building and that there was- a large amount due to such lien claimants from the contractors after appellant had paid on said claims all it owed the contractors; that said claims were litigated in the Circuit, Appellate and Supreme courts of this state by appellant and on July 30, 1909, 'final decrees were rendered against appellant and its building for sub-contractors’ liens and were paid by appellant in September, 1909, in the total sum of $2,757.04, of all of which appellee had due and timely notice with requests to defend said suits and to repay said sum to appellant, and yet it refused so to do.

Appellee pleaded in bar by its third plea that this suit was not brought within six months after the completion of the work specified in the contract. To this plea appellant filed the two replications to which the court sustained demurrers by appellee, the replications being, in substance, to wit: (1) that there were some suits for liens against the building pending at the time that the limitation expired which appellant was subsequently compelled to pay, and that appellant did not and could not know what damages could be assessed against the bond, until the amounts due in the lien suits had been established; (2) that certain subcontractors on the job had given an indemnity to appellee and that those parties were really defending this suit.

Appellant in its argument has abandoned its assignment of errors as to the sustaining of the demurrer to the second replication to said plea, and has, therefore, waived consideration thereof by this court. In its contention as to the other replication to the plea of the statute of limitations and as to said plea, it asserts that the limitation clause in question does not expressly bar the action upon the bond, and that as the bond is an insurance contract the limitation clause cannot be construed as barring any action on the bond. It is the law that insurance contracts must be strictly construed against the insurance company. The clause in question, however, plainly provides that, “If any suits at law or proceedings in equity are brought against said surety to recover any claim hereunder, the same must be instituted within six months,” etc. It was averred in the declaration and in the third plea that the building was not completed until April 16,1906, more than four months after the time limit, or more than four months after the breach of that covenant, when appellant’s cause of action accrued. There is no room for two interpretations to the limitation clause, and there is, therefore, no ambiguity. The plain meaning of that clause is that if appellant brought any suit whatever on the bond in question, it must do so within six months after the completion of the contract work. This provision cannot be construed as mere advice to appellant as to when it should sue, without doing violence to the plain meaning of the contract. It bound it to sue, if it sued at all, within the six months named in the provision. Johnson v. Humboldt Ins. Co., 91 Ill. 92; Hart v. Citizens’ Ins. Co., 86 Wis. 77, 21 L. R. A. 743.

It is also argued by appellant that the limitation clause barred a recovery on the bond before any breach thereof, and that, therefore, it is unreasonable and invalid. It is already shown that the pleadings disclosed that the first breach of the bond occurred when the building was not completed within the time limit of the contract, and the per diem penalty then began to accrue and continued to accrue up to April 16, 1906, and that suit was not begun until more than three years after the work was completed, or more than three years after the entire per diem penalty had fully accrued. Appellant’s cause of action, therefore, accrued for that breach long before the limitation clause had run, more than ten months, in fact.

It is also argued that upon a proper construction of the bond the limitation clause does not apply to the lien covenant in question, the one appellant says he is really suing on in this case. We cannot assent to this proposition. The six months’ limitation clause applies to the whole bond, and any suit on the bond for any breach thereof under that clause was barred unless brought within the six months specified, as a cause of action had accrued on the bond for the first breach before the limitation expired. The case of Lesher v. U. S. Fidelity Co., 239 Ill. 502, a case very similar to the one at bar, is decisive, as we regard it, of every question raised by appellant on this appeal. The Supreme Court in that case holds, in substance, that a cause of action on such a bond to secure performance . of a building contract, accrues when the first default of the principal in the bond occurs; that such a limitation bars a suit begun after the limitation expires to hold the surety for a default of the principal occurring before the limit fixed for beginning suit; and that under section 35 of our Practice Act a suit should be begun within the time fixed therefor for default occurring before the limitation expires, even for the first default, •although the damages for such default may not be fully accrued and determinable and are then merely nominal. Under said section 35 the first recovery of the full penalty on such a bond stands as a security for any substantial damages that may accrue to the plaintiff after the suit on the bond, and suggestions for the full damages by reason of the first default, and for all further defaults and substantial damages, may be filed by the plaintiff after the recovery of the penalty of the bond, until all damages suffered by plaintiff are recovered, not exceeding the full amount of the penalty recovered in the first instance. If no substantial damages have accrued by the first breach of the bond when suit is first brought, the damages in such suit assessed should be merely nominal.

There is nothing substantial in the claim that appellee had waived the right to defend against the lien clause of the bond. There is no evidence to support the contention that appellee held out hopes of amicable adjustment to appellant and thereby induced it to its prejudice to delay the suit until the limitation expired. Mere silence or refusal to. answer letters, or an answer that appellee will investigate the matter and inform appellee of its conclusions later, is not sufficient to establish such a waiver. Such acts should rather induce the belief that no suit or settlement would be availing if brought after the time the limitation should expire, and that the delay would be taken advantage of by the party so acting.

The judgment of the court is affirmed.

Judgment affirmed.

Mb. Justice Gbaves took no part in the consideration or decision of said cause,


text:
    Louis Grollman, Trustee, Appellee, v. Montgomery Ward & Company, Appellant.
    Gen. No. 17,362.
    1. Appeals and errors—waiver of peremptory instruction. Where defendant in an action for goods sold introduces evidence after plaintiff's evidence in chief was taken, it waives its right to insist on its motion for peremptory instruction offered at the close of plaintiff’s evidence in chief.
    2. Appeals and errors—question to be determined. Where in an action for goods sold, defendant’s motion for a peremptory instruction at the close of plaintiff’s evidence in chief is denied, and plaintiff’s motion for a directed verdict at the close of all the evidence is granted, the question presented on appeal is on the whole record, does the whole of the evidence for both parties sustain plaintiff’s judgment?
    3. Trial—right to direct a verdict. A jury cannot be legally instructed peremptorily to return a verdict against a plaintiff when the evidence tends to prove every material part of the declaration; nor can the court direct a verdict against the defendant when the evidence tends to establish every material element of the defense.
    4. Principal and agent—presumption where agent is contracting in his own interest. When an agent is contracting in his own interest, and to the probable detriment of his principal; and by the contract he is agreeing to pay his own debt to the third party out of the money or property of his principal, it will not be presumed that the agent will transmit to his principal the full particulars of such transaction, or that the principal authorized such a transaction.
    5. Corporations—power to ratify acts of agents. Where a sales agent of a corporation sells goods to a third person and by the contract agrees to pay his own debt to the buyer out of the money or property of his principal, the contract is binding on the principal acquiescing or ratifying the same, unless the doctrine of ultra vires applies.
    6. Corporations—power to ratify contract of sales agent. Where a sales agent of a corporation organized to manufacture and sell farm implements, sells goods to a third person and by the contract agrees that the buyer need pay only a part of the purchase price and that the agent, as liquidating his own debt to the buyer, will pay the remainder, the corporation has the power to ratify such an arrangement, and its creditors cannot complain unless the arrangement is shown to be in fraud of their rights.
    7. Corporations—right of creditors to manage business. Creditors have no power to dictate or interfere in the management of a corporation’s business, and specially in business transacted long before their debts had an existence.
    8. Bankruptcy—rights acquired by trustee. Where a sales agent of a corporation contracts with a buyer that the buyer need pay only a certain part of the purchase price and that the agent, as liquidating his own debt to the buyer, will pay the remainder, and the arrangement is ratified by the corporation, in an action by its trustee in bankruptcy against the buyer, the trustee stands in no better position to attack the arrangement than would the bankrupt company.
    9. Interest—when no unreasonable and vexatious withholding of payment. Where a principal ratifies a contract with a buyer whereby the sales agent agrees to pay a part of the purchase price, mere delay in making payment of the purchase price that the agent assumed which the buyer honestly believes he does not owe and making a defense to a suit by the principal for such purchase price, does not amount to such an unreasonable and vexatious withholding of payment as to authorize the allowance of interest.
    Appeal from the Municipal Court of Chicago; the Hon. William N. Gemmill, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1911.
    Reversed and remanded.
    Opinion filed June 30, 1913.
    Rehearing denied July 24, 1913.
    George P. Merrick, for appellant.
    Helmer, Moulton, Whitman & Whitman, for appellee.
   Mr. Presiding Justice Duncan

delivered the opinion of the court.

Montgomery Ward & Company have appealed from a directed verdict and judgment by the court for $3,996.13 in favor of Louis Grollman, trustee in bankruptcy for Sycamore Foundry Company, for goods sold and delivered to appellant.

The verdict of the jury was directed on motion of appellee at the close of all of the evidence. Appellant moved the court at the close of appellee’s evidence, and again at the close of all the evidence, to direct a verdict in its favor. By introducing evidence after appellee’s evidence in chief was taken, appellant waived its right to insist on its motion for a peremptory instruction at the close of appellee’s evidence in chief. The question now is on the whole record, does the whole of the evidence for both parties sustain appellee’s judgment? Britton v. St. Louis Transfer Co., 155 Ill. App. 317, and cases therein cited.

The entire evidence in the record for both appellee- and appellant proved without question that Sycamore Foundry Company sold' and delivered goods to appellant from February 24, 1906, to June 4, 1906, for the agreed total invoice price of more than $21,000. It is admitted by appellant that fifteen per cent, of that agreed total price, $3,286, has never been paid by appellant. The judgment includes said balance, and five per cent, interest thereon from June 4, 1906, the date of the last purchase, to September 30,1910, the date of the trial, or $710.13. The judgment of the court is, therefore, sustained by the record, unless appellant’s claim that appellee was not entitled to interest, or that the evidence introduced tended to prove a complete defense to the whole of appellee’s demand, is also sustained by the record. Appellant’s defense in bar was that it had paid to the foundry company all that it ever agreed to pay for the goods, that is to say, that it paid by agreement eighty-five per cent, of the agreed price of all goods sold and delivered to it by the foundry company, and that that company by agreement was to look solely to Frank C. Patton and Frank C. Patton Company for the remaining fifteen per cent, of the purchase price of said goods-. The undisputed evidence in this record tending to establish that defense was given mainly by the witness, Frank C. Patton, who testified, in substance, that Frank C. Patton Company had been engaged at Sycamore, Illinois, for many years prior to February, 1906, in manufacturing and selling to the trade agricultural implements; that his company for years had sold from fifty to seventy-five per cent, of its output of farming implements to appellant, and that having become financially embarrassed he borrowed money from appellant from time to time for his own or his company’s benefit and repaid the same by allowing appellant to deduct fifteen per cent, from the purchase price of the goods sold to appellant for the Patton Company, and to apply the discount on his indebtedness to appellant, and that this course of dealing continued until February 9, 1906, when witness borrowed $7,500 of appellant to be paid in the same manner; that in November, 1905, Sycamore Foundry Company was organized and in February, 1906, bought out the business of the Frank C. Patton Company and leased its plant at an agreed rental of $10,000 a year, but the Frank C. Patton Company retained much of its stock of merchandise and continued to sell therefrom until in April, 1906, when it was adjudged a bankrupt; that all the loans he ever secured of Mr. Thorne (vice president and general manager of appellant) were secured by personal note, and that on February 9th either Mr. Thorne or he stated that “we would handle the $7,500 loan the same as we had previously,” and that neither of them on that date had any reason to believe that the Frank C. Patton Company would not continue in business; that when Sycamore Foundry Company began manufacturing and selling farming implements in February, 1906, he became their sales agent and when he next visited appellant (February 24th) he told Mr. Shaw, manager of its implement department, that the new foundry company did not assume any of the liabilities of the old concern; that it had to be a clean, new deal, but that he would switch fifteen per cent, of the sales to appellant by the Sycamore Foundry Company and arrange that the Frank C. Patton Company should pay that discount to Sycamore Foundry Company and that appellant would only have to pay the usual eighty-five per cent, of the invoice price and credit his account with the discount; that he did this as an individual and as a representa-

tive of the Sycamore Foundry Company and delivered goods to appellant under that arrangement until it was discontinued a short while after Frank C. Patton Company became a bankrupt; that he told Mr. Shaw that the Frank C. Patton Company was going to remain in business as a holding corporation and that it had other assets to liquidate and that it was going to put out a $75,000 bond issue, and with a $10,000 rental from the Sycamore Foundry Company it could take care of the fifteen per cent, discount; that for sixty days or more thereafter he sold appellant goods for Sycamore Foundry Company and collected eighty-five per cent, of the purchase price, and forwarded it by mail to Sycamore Foundry Company along with the Frank C. Patton Company’s- check for the fifteen per cent.; that immediately following the bankruptcy of the Frank C. Patton Company, April 18,1906, he told Mr. Shaw that inasmuch as the Frank C. Patton Company was in bankruptcy, and there was no one to charge it over to, as he did not know where the lease would land, that he could not longer allow that discount, and that unless they would discontinue the fifteen per cent, discount he would have to discontinue shipping the goods as the foundry company could not stand it; that when he got personally able to pay his debt he would pay it, but he could not take it out of the foundry company, and that the discount was shortly thereafter (June 4th) discontinued; that after that he continued to sell goods to appellant for Sycamore Foundry Company until the latter became a bankrupt, March 4,1908, and only made bills, and collected for the sales of goods delivered after June 4,1906, and “we never sued for or tried to collect, for the discounts- sued for in this case at any time, because we would have lost appellant’s trade if we had.” He also testified that “Mr. Hunt (secretary and treasurer of the foundry company) had charge of the sales, and from time to time made complaints that appellant, in making settlements, had taken out fifteen per cent., the same as they did under the arrangement with the Frank C. Patton Company. ’ ’ The evidence in the record further disclosed that Mr. Hunt was an employe of the Frank C. Patton Company before it ceased to conduct the implement business, and that Mr. Wheeler was vice president of the Frank C. Patton Company and president of the Sycamore Foundry Company.

Mr. Thorne also testified that when Patton offered to sell appellant the goods in question that he said to him: “Mr. Patton, we insist upon having this fifteen per cent, discount or we cannot do business—we won’t do business; we will not place the orders or continue the business without the fifteen per cent.”

The evidence further disclosed that up to the bankruptcy of the Frank C. Patton Company no objection was made by any one to this discount and application thereof to Patton’s indebtedness to appellant; and that for almost three years thereafter appellant paid or remitted the exact amount due on every subsequent bill to appellee without payment or reference to the discount taken before June 4, 1906, and without any complaint whatever from the foundry company, and that the foundry company never did at any time send a statement for, or in any way demand, or sue for, said discounts now in suit previous to the present suit by its trustee in bankruptcy. The reason, perhaps, was that if the foundry company had not acquiesced in the discount already made, that it would have lost the trade of appellant. In other words, we think this1 uncontroverted evidence tended to show knowledge and acquiescence of Sycamore Foundry Company in the arrangement made for the sale of the goods in question, including also the agreement of Patton to allow the fifteen per cent, discount and for him to pay the same to the foundry company by his own or the Frank C. Patton Company’s check. This arrangement with appellant by Patton was not at all binding on Sycamore Foundry Company when made, because it was- not a party to it, and knew nothing about it until after it was made. When an agent is contracting in his own interest, and to the probable detriment of his principal, and by the contract he is agreeing to pay his own debt to the party with whom he is dealing-, out of the money or property of his principal, it will not be presumed that the agent will transmit to his principal full particulars of such a transaction, or that the principal authorized such a transaction. Leigh v. American Brake-Beam Co., 205 Ill. 147.

Where the evidence further tends to show, however, that the principal afterwards learned of such arrangement and acquiesced in or ratified the same, it is binding on the principal, though a corporation, unless the doctrine of ultra vires applies: Sycamore Foundry Company was a corporation organized to manufacture and sell farm implements. It undoubtedly had a right to sell and collect for the same, and, therefore, the right to extend credit and pass on security. It had the right in this case to accept the obligation of Frank C. Patton or the Frank C. Patton Company for fifteen per cent, of the goods that might be sold to appellant, and especially while the Frank C. Patton Company was not a bankrupt, and was renting Sycamore Foundry Company a plant at $10,000 per year, and it had such an opportunity to protect itself as to the fifteen per cent, of the goods so sold out of the rent. Why could it not do so? No good reason suggests itself, and none has been suggested to us, why we should say the foundry company had not the power to ratify that agreement. Its creditors could not complain or successfully attack the arrangement, unless shown to be done in fraud of their rights. Creditors have no right to dictate or interfere in the management of a corporation’s business, and especially in business transacted long before their debts had an existence. The discounts antedate the insolvency of appellee’s company by almost three years, and the trustee in bankruptcy stands in no better position as plaintiff in this suit than would his bankrupt company, had it sued appellant. We hold that the evidence tended to prove appellant’s defense in bar of the suit, The court cannot legally instruct a jury peremptorily to return a verdict against the plaintiff when the evidence tends to prove every material allegation of his declaration. It it is also the law that the court must not direct a verdict against the defendant when the evidence tends to establish every material element of his defense. Libby, McNeill & Libby v. Cook, 222 Ill. 206; Alton Mfg. Co. v. Garrett Biblical Institute, 243 Ill. 298.

The undisputed evidence now in the record fails to prove that appellant was guilty of any tort or conversion. Mere delay in making payment of money that the defendant honestly believes he does not owe and making a defense to a suit for the money in good faith do not amount to such an unreasonable and vexatious withholding of payment as to authorize the allowance of interest. If there are any grounds for allowing appellee interest, they do not appear in this record.

The judgment of the court is reversed and the cause is remanded.

Reversed and remanded.


author: Mr. Justice Duncan

text:
    Robinson & Company, Appellant, v. Andrew Marr et al., Trading as Clay, Robinson & Company, Appellees.
    Gen. No. 17,387.
    1. Judgment—former adjudication. Where a judgment is relied on as an answer and bar to the whole cause of action, or as a former adjudication of the entire cause of action, it must appear that the cause of action and the thing sought to be recovered are the same in both suits.
    2. Judgment—estoppel by judgment. Estoppel by judgment may be availed of as a defense to the whole cause of action without regard to whether or not the subject-matter of the suit and the cause of action are the same in both suits, provided the parties to the second suit were also parties or privies to the parties in the former suit.
    3. Judgment—when operating as an estoppel. For a judgment in a former suit to operate as an estoppel there must be no uncertainty as to the precise question raised and determined in such suit; and it must appear upon the record or by extrinsic evidence that that precise question is a controlling issue in the second suit.
    4. Judgment—extent of estoppel. The estoppel of a judgment extends only to the question directly in issue and not to any incidental or collateral matter, though it may have arisen and been passed upon.
    5. Judgment—estoppel. In estoppel by judgment it is not sufficient to show that the matter in question was pleaded or in issue in the former suit; it must also appear to be precisely determined and it must appear that the former judgment necessarily involved the determination of the same fact, to prove or disprove which it is offered in evidence.
    6. Judgment—estoppel must be mutual. In estoppel by judgment the estoppel must be mutual and binding upon both parties.
    7. Judgment—when collateral issue is not decided. Where a trustee in bankruptcy, in behalf of the sole creditor, seeks to recover property of a bankrupt on an issue whether it belonged to the bankrupt at the time he transferred it to his wife, and the answer averred that he had held the property as agent for his wife and had owned no property for five years prior thereto, such facts are but evidentiary of the real issue and are not determinative of the fact whether the bankrupt owned other property, and a judgment against the trustee will not operate as an estoppel against such creditor garnisheeing other property in another state.
    8. Appeals and errors—propriety of entering final judgment. Where the Appellate Court determines that evidence offered by the appellant was improperly excluded, but that the appellee had no occasion to offer certain evidence at its command until appellant’s evidence was admitted, such court cannot properly enter a final judgment for the appellant.
    Appeal from the Circuit Court of Cook county; the Hon. Thomas J. Windes, Judge, presiding.
    Heard in the Branch Appellate Court at the March term, 1911.
    Reversed and remanded.
    Opinion filed June 30, 1913.
    Rehearing denied July 24, 1913.

      At,den, Latham & Young, for appellant; Charles Martin, of counsel.
    George V. McIntyre, for appellees.
   Mr. Justice Duncan

delivered the opinion of the court.

July 14,1898, C. C. Binkley, for the use of Robinson & Company, appellant, a corporation, began a suit on a judgment against Andrew Marr and sued out a writ of attachment in aid, which on said date was served upon John Clay, Jr., Charles 0. Robinson and William H. Forrest, composing the firm of Clay, Robinson & Company, appellees, as garnishees. The death of C. C. Binkley was later suggested on the record and the suit thereafter proceeded in the name of the beneficial plaintiff, Robinson & Company. Two appeals have been prosecuted to the Appellate Court from judgments in favor of the garnishees. We refer to the two opinions of the court found in 112 Ill. App. 332 and 145 Ill. App. 178, where comprehensive statements of the cause may be found as it was then presented to the court. November 13, 1909, after the cause was redocketed the second time, a personal judgment was entered against the defendant, Andrew Marr, for $1,659.34. January 16, 1911, the date of the last trial, the garnishees had on file, first, their original answers to the interrogatories; second, their answer or plea filed May 14, 1904, in substance, that the cattle sold by them in the name of A. Marr were, in fact, the property of Mary E. Marr; third, a plea of res adjudicates filed September 28, 1910, in substance, that the issues in garnishment were litigated and settled in a suit at law begun in the United States District Court of Iowa, September 2, 1901, by one George F. Castle, as trustee in bankruptcy, in behalf of said C. C. Binkley against the First State Bank of Corwith, Andrew Marr and Mary E. Marr. Issues were formed on all these answers or pleas by replications filed by appellant. ■ In a trial without a jury the court entered a finding and judgment in favor of the garnishees, quashing the writ of attachment and discharging the garnishees, from which judgment this appeal is prosecuted.

The court apparently decided the case upon the issues on the said third plea of res adjudicata, holding that the Iowa judgment was- a bar to this action against the garnishees. The issues under that plea were heard upon an agreed state of facts with the right reserved to appellant to object to the competency and materiality of the facts on these issues, the agreed facts being, in substance, these: Andrew Marr was adjudged a bankrupt in said United States District Court in April, 1901, scheduling but one debt, the said debt owed C. C. Binkley who filed his claim in said bankruptcy court; that said Castle was elected trustee in bankruptcy and began suit as such trustee September 2, 1901, and averred in his petition, in substance, that as such trustee he was owner of the proceeds of a sale of personal property of Andrew Marr, at public auction in Hancock County, Iowa, amounting to $1,409.90, evidenced, in part, by five promissory notes, payable to said Marr at First State Bank of Corwith, Iowa, and indorsed by Marr to the order of M. E. Marr, April 15, 1901, and then in possession of said bank for safekeeping; that $359.90 cash of said proceeds of sale was paid to said bank on account of said Marr, and was in possession of the bank February 28, 1901; that when said petition in bankruptcy was filed there was to the credit of said Marr in said bank $546.33, for which sum, at the same time the notes were indorsed, Marr drew his check on said bank to order of M. E. Marr (Marr’s wife), and said cash sum was credited to her account, all of which was done for the purpose of placing said notes and money beyond the reach of Marr’s creditors, and were transfers- creating a preference in favor of Mrs. Marr over other creditors and within four months next preceding the filing of the petition in bankruptcy proceedings; that the bank claims to hold the same as custodian under direction of Marr and that Mrs. Marr has made no claim to the same to the said trustee. The trustee asked judgment for the property, or the value thereof, if not found; that answers were filed by Marr for himself and as administrator of Mrs. Marr, then deceased; admitting said transfers to his wife, but averring that none of said moneys and credits belonged to him on April 15, 1901, or within four months prior thereto, and that they were at those times the property of his wife, and in the third paragraph of said answers it was averred that for five years prior to said transfers he was acting as agent for his said wife, and at no time within said five years, or since, has said Marr owned or had any property, except as agent of Mary Marr, except a team of horses; that all of said time he had authority from her to conduct her business and handle her property in his name, and that the depositing and taking of goods and money in his name was for convenience; that said bank also filed an answer (the contents of which is not shown by any evidence in this record); that upon the trial of said cause in Iowa for the defense evidence was introduced that said Marr in the year 1905, in Illinois, by bill of sale transferred all his property to Mary Marr, his wife, and was then constituted by her her agent to thereafter act for her concerning said property, and had not owned any property since said transfer, and that all property in his name since said transfer and up to said trial was her property and held under said agency, and that said agency continued unrevoked until her death in 1901; that said trustee disputed said evidence and claimed the bill of sale fraudulent, and that said agency for five years had not existed and did not exist when said property was transferred; that at the conclusion of the evidence the District Court, as to said evidence and contentions, instructed the jury as follows :

“The question to be determined by you is whether or not the property described in plaintiff’s petition was in fact the property of Andrew Marr at the time same was transferred by him to M. E. Marr, on or about April 15,1901. If such property in fact belonged to Andrew Marr on or about April 15,1901, the transfer by him at that time to M. E. Marr was and is void and your verdict should be for the plaintiff, but, if in fact such property belonged at that time to M. E. Marr, your verdict should be for the defendant, Andrew Marr, administrator of the estate of M. E. Marr, deceased.”

“Evidence has been introduced upon the trial as to the sale of property to M. E. Marr by Andrew Marr in Illinois, and as to chattel mortgages made upon property by Andrew Marr since coming to Iowa. This evidence should be considered by you, if at all, only so far as same may aid you, if at all, in connection with all the other evidence in the case, in determining to whom the property in question in fact belonged on or about April 15, 1901.”

That upon the conclusion of the trial in the District Court the jury rendered the verdict, “We find for the defendant, Andrew Marr, administrator of the estate of M. E. Marr, deceased,” and that a judgment was entered on said verdict, which remains in full force and effect (but what the judgment was does not appear more definitely in the record as it is not in evidence).

Appellant objected to the competency and relevancy of the foregoing stipulations when offered as evidence, and also contended in the lower court, and now corn tends here particularly, that the evidence fails to prove that the said judgment of the United States District Court of Iowa was in any wise a bar to a recovery in this case. In this contention it is clear that the appellant must be sustained. Where a judgment is relied on as an answer and bar to the whole cause of action, or as a former adjudication of the entire cause of action, it must appear that the cause of action and the thing sought to be recovered are the same in both suits. Markley v. People, 171 Ill. 260; Hanna v. Read, 102 Ill. 596; Brack v. Boyd, 211 Ill. 290. It is clear that the cause of action and the thing sought to be recovered in this suit are not the same as the cause of action and the thing recovered in the District Court of Iowa, and the lower court so found and held in written propositions of law submitted by appellant. The real claim of appellees is that there were some specific facts put in issue, adjudicated and determined in the cause in the District Court of Iowa, that are now in issue in this case and controlling in the decision thereof. This species of estoppel is well recognized in the law, and while generally known as an estoppel by judgment, is sometimes technically called an “estoppel by verdict.” Such an estoppel may be availed of as a defense without regard to whether or not the subject-matter of the suit and the cause of action are the same in both suits, provided the parties to the second suit tried and sought to be concluded therein were also parties or privies to the parties in the former suit. In this character of estoppel the estopping force or power lies within the judgment itself. It is not the finding of the court or the verdict of the jury that binds ór precludes the parties. “In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matter is the judgment conclusive in another action.” “The burden of proof is always upon the defendant, who pleads res judicata because of a former judgment, to set up that judgment, and show what was determined by it, and what is common to the subsequent action. The proof must be clear, certain and convincing.” There must be no uncertainty as to the precise question raised and determined in the former suit, and it must appear upon the record or by extrinsic evidence that that precise question is a controlling issue in the second suit, or the judgment in the first suit will not operate as an estoppel. Theological Seminary v. People, 189 Ill. 439; Cromwell v. County of Sac, 94 U. S. 351; Denike v. Denike, 44 App. Div (N. Y.) 621.

It is claimed by appellees that the matters or facts litigated in the District Court that are controlling in this suit are the facts set forth in the third paragraph of the answers to the trustee in bankruptcy’s petition, that Marr conveyed all his property in 1895 to his wife, that he had been her agent from thence to the Iowa suit, and within those dates had owned and controlled no property except as her agent. Waiving the question as to whether or not the parties to this suit are in privity with the parties in the Iowa suit, and whether or not the matters relied on in the plea of estoppel are sufficiently pleaded, it is quite clear that it is not shown by the evidence that these facts were litigated and determined in the Iowa ease. The evidence seems to show rather conclusively that it was not determined in that suit that Marr had not owned property within that five years named, and that those facts were only treated by the court as evidentiary facts to be considered in the jury’s determination of the real question in issue in that suit, as to whether or not the property there in question was the property of Mrs. Marr. It was not necessary to determine the question as to whether Marr had owned any property at all within the five years- named in order to determine whether or not he owned the property in question at the time it was conveyed, and the court evidently did not do so. The estoppel of a judgment extends only to the question directly in the issue and not to any incidental or collateral matter, though it may have arisen and been passed upon. It is not sufficient to show that the matter in question was pleaded or in issue in the former suit. It must also appear to be precisely determined, and it must appear that the former judgment necessarily involved the determination of the same fact, to prove or disprove which it is offered in evidence. The estoppel must also be mutual and binding upon both parties. If it is not binding upon both parties, it binds neither. Althrop v. Beckwith, 14 Ill. App. 628; Lewis & Nelson’s Appeal, 67 Pa. St. 153.

It would seem to be a ridiculous proposition to say from this record that it was conclusively established and determined by the judgment of the District Court that Marr owned no property at. all within the five years preceding that suit, and that all parties to that suit and their privies are forever estopped to dispute that proposition in any subsequent or prior suit between them as to property not involved in that suit.

The foregoing stipulation of facts was all the evidence offered in this case, until after the court had made its finding for appellees. Appellant then offered its stipulation of facts to make out its case against appellees, the same facts that the Appellate Court held sufficient to entitle appellant to a judgment against appellees, as shown by the opinion of Mr. Justice Baker in 112 Ill. App. 332. Appellees objected to the evidence, because offered too late, and also because the same was incompetent and irrelevant to prove any liability against appellees. The court for' reasons not assigned and unlmown to this court sustained the objections that the evidence was incompetent and irrelevant, but overruled the other objection that the evidence was not offered in time. We are now asked to enter judgment here for appellant, and stop this litigation, etc. Counsel for appellees stated to the lower court they had other evidence and that the offered evidence was not the only evidence as to liability of appellees, but failed to introduce it. There was no occasion for appellees to introduce any further evidence until the appellant should be permitted to introduce his evidence in chief. Therefore, we cannot properly enter judgment here.

The holding of the Appellate Court, as disclosed in the said opinion by Judge Baker, with reference to the evidence excluded is sound in every particular, and it is still the law of the case until reversed by a higher court. The court erred in ruling that the evidence was incompetent and immaterial. The whole case should have been heard and not tried piecemeal:

The judgment is reversed and the cause remanded.

Reversed and remanded.