text:
    Herman H. Krueger, Receiver, Appellant, v. First National Bank of Chicago, Appellee.
    Gen. No. 25,787.
    1. Banks and banking, § 155

      —what is liability of bank forwarding draft for collection. Where a draft is deposited with a bank for collection, and it transmits it to another bank for collection, the forwarding bank fully discharges its duty by transmitting the draft in due season to a suitable agent with necessary instructions, and such collecting bank becomes the agent of the holder of the draft and not of the forwarding bank with which it is first deposited for collection.
    2. Banks and banking, § 155*—when forwarding bank not liable for acts of collecting bank. A forwarding bank is not liable for any neglect or default of a collecting bank, to the holder of a draft.
    3. Banks and banking, § 154*—when forwarding bank cannot hold funds of insolvent collecting bank. Where a holder of a draft deposited it with a bank for collection, and such bank forwarded the draft for collection to another bank which was closed by the auditor for insolvency about a month after the draft had been collected, the collecting bank having falsely stated that it was not collected, the holder of the draft would have to proceed against the collecting bank by filing its claim, and when the forwarding bank sought to hold other money of the collecting bank, claiming a lien upon the same, the receiver of the collecting bank could recover such money, as the creditor could not indirectly obtain an advantage over other creditors.
    4. Banks and banking, § 152*—-nature of fund created by collection of draft forwarded for collection. Where a draft is forwarded for collection and such collection is made, the proceeds become a trust fund for the benefit of the drawer of the draft, and' where the fund can be identified he will be given a preference. ’
    Appeal from the Circuit Court of Cook county; the Hon. Thomas G. Windes, Judge, presiding. Heard in this court at the October term, 1919.
    Reversed and judgment in this court.
    Opinion filed March 8, 1920.
    Rathje, Wesemann, Hinckley & Barnard for appellant.

      Miller, Starr, Brown, Packard & Peckham, for appellee; Charles L. Cobb, of counsel.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Presiding Justice McSurely

delivered the opinion of the court.

By this appeal plaintiff seeks the reversal of a judgment of nil capiat in a suit tried by the court upon the common counts and plea of general issue. Plaintiff sought to recover $1,930.77.

The facts are stipulated. On April 11,1917, Bozarth & Carter of Hebron, Nebraska, drew a draft for $1,930.77 on the Acme Milling Company of Chicago, payable to the order of Thayer County Bank on arrival of a carload of grain. The Thayer County Bank indorsed the draft' generally, “Pay to any bank or banker” and forwarded it to the First National Bank of Chicago, the defendant, for collection and credit. The defendant received it on April 16, 1917, and in turn indorsed it to the order of the Auburn State Bank of Chicago and transmitted it to that bank with instructions to collect and remit to the defendant. At that time the Auburn State Bank was in good standing, its solvency not having been questioned, and was a customer of the defendant, maintaining an average deposit in excess of the draft in question.

The draft was duly received by the Auburn State Bank and presented to the Acme Milling Company, drawee, which accepted it, payable upon the arrival of the car. On April 26 the defendant inquired of the Auburn State Bank whether the draft had been paid and was told that the car had not yet arrived. On April 27 the draft was paid by the Acme Milling Company to the Auburn State Bank, which retained the money but did not report the collection to the defendant and never remitted the proeeds to it. On May 2 the defendant again inquired about the draft and the Auburn State Bank falsely reported that it was still unpaid, although it had in fact been paid 5 days before.

On the 21st day of May the Auburn State Bank was closed by the Auditor of Public Accounts of the State of Illinois on account of insolvency. On May 23 the defendant learned indirectly that the draft in question had been collected and thereupon on that day the defendant charged the amount of said collection, $1,930.77, against the deposit of the Auburn State Bank, the amount to its credit "with the defendant then being in excess of the amount of the draft.

On May 28 a receiver for the Auburn State Bank was appointed by the circuit court; subsequently the defendant paid over to the receiver the balance to the credit of the Auburn State Bank but refused to pay the amount which it had charged to the Auburn State Bank on account of said collection, claiming it had a lien for this amount and that it had a right to set off this against the deposit of the Auburn State Bank. The receiver demanded payment of this sum but defendant still holds it in a special deposit.

The plaintiff denies the right of the defendant to retain the amount of this draft- and brought this suit to recover the same, but upon trial the court found with the defendant. We are of the opinion that in so holding the court was in error.

In Waterloo Milling Co. v. Kuenster, 158 Ill. 259, it was held as the law in this State that where a draft upon a nonresident drawee is deposited with a bank for collection, which transmits it to another bank for collection, the forwarding bank fully discharges its duty by transmitting the draft in due season to a suitable agent with necessary instructions, and that- such collecting bank becomes the agent of the holder of the draft and not of the forwarding bank with which it is first deposited for collection. In Wilson v. Carlinville Nat. Bank, 187 Ill. 222, it was said that it is the “long established and well settled rule of law in this State” that the forwarding bank is not liable to the holder of a draft for any neglect or default of the collecting bank. Under the rule in this State the relation between the drawer of the draft and the collecting bank is that of creditor and debtor.

Applying this rule, if Bozarth & Carter, the drawer of the draft, wished to recover the amount of the draft it must proceed against the Auburn State Bank by filing its claim, which would be allowed, and the receiver ordered to pay it prorated with other creditors. Clearly the receiver would then be entitled to recover from the defendant the amount retained by it representing the collection of the draft. Why may not the receiver proceed now against the defendant to recover this fund so as to have assets with which to meet the claims of the creditors, including Bozarth & Carter? To deny this is to make possible a double deduction from the assets of the Auburn State Bank on account of the Bozarth & Carter claim.

Bozarth & Carter as a creditor of the Auburn State Bank is entitled only to prorate with other creditors. This action seeks indirectly to substitute the defendant as a creditor in its place, attempting thus to obtain payment of its claim in full, to the disadvantage of other creditors. In the Waterloo Milling case, supra, the drawer of the drafts deposited a series of drafts with the local bank. These were forwarded to a bank in another State for collection. Subsequently the collecting bank remitted to the forwarding bank its draft representing collections of some of the drafts which had been forwarded. The forwarding bank paid this amount to. the drawer not knowing the collecting bank had failed in the meantime and that its draft was not good. The forwarding bank filed its claim for the amount of this draft against the bankrupt collecting bank, which was allowed and paid in an amount about $300 less than the full amount. In the suit brought by the drawer of the series of drafts against the forwarding bank to recover for the entire series, the court not only denied plaintiff’s right of action against that bank but allowed the bank, on its plea of set-off, to recover from, the drawer the difference between the dividend received from the bankrupt collecting bank and the amount paid by the forwarding bank to the drawer. This was upon the theory that under such circumstances the drawer is entitled only to prorate in the assets of the bankrupt and to no more. Pursuing this rule, we cannot hold that the drawer of the draft in the instant case may by indirection obtain an advantage which the law does not favor.

Furthermore, if Bozarth & Carter can by means of this action obtain payment of its claim in full, it will rest solély upon the irrelevant fact that the Auburn State Bank had an account with the defendant bank and the fortuitous circumstance that its credit balance was in excess of the amount of the draft. These casual circumstances cannot be sufficient reasons in law why Bozarth & Carter should be a preferred creditor.

Where a draft is forwarded for collection and remittance and-the collection is made, the proceeds become a.trust fund for the benefit of the drawer of the draft, and where the fund can be identified he will be given a preference. People ex rel. Russell v. Auburn State Bank, 215 Ill. App. 133, certiorari denied by Supreme Court. We find no precedent for the proceeding attempted in the instant case.

For the reasons above indicated, we hold that the judgment of the circuit court should be reversed and, as there is no dispute as to the facts, judgment will be entered in this court for the plaintiff and against the defendant for $1,930.77.

Reversed and judgment in this court.

Mr. Justices Holdom and Dever concur.


source: Caselaw Access Project

author: Mr. Justice Dever

license: Public Domain

text:
    Mutual Orange Distributors, Appellee, v. Atchison, Topeka and Santa Fe Railway Company, Appellant.
    Gen. No. 25,516.
    1. Careiebs, § 52

      —when liability presents federal question. In an action for damages to a carload of lemons which were allowed to freeze after arrival at their destination, where the evidence presented a question as to liability of the delivering carrier to furnish heat, a federal question was presented, as the question of responsibility under a bill of lading may be none the less a federal one although it must be resolved by application of general principles of the common law.
    „ 2. Cabbiebs, § 138*—when exclusion of evidence that heater service was furnished under rule of Interstate Commerce Commission erroneous. In an action for damages to a carload of lemons which froze after arrival at their destination, where the plaintiff was allowed to prove the existence of a custom prevailing at other cities whereby heater service was provided by carriers, the refusal to allow the defendant to prove that such service was performed under a rule of the Interstate Commerce Commission permitting a charge of ?2 per car while such cars were on the tracks, was error.
    3. Cabbiebs, § 138*—when evidence that heater service was customarily performed by shippers and consignees improperly excluded. In an action for damages to a carload of lemons which froze after arrival at their destination, where the plaintiff was allowed to prove the existence of a custom prevailing at other cities whereby heater service was provided by carriers, evidence of the defendant that such heater service was not provided at the destination in question and that the service was customarily performed by consignors and consignees, was erroneously excluded.
    4. Cabbiebs, § 138*—when evidence that heater service was furnished in other cities improperly admitted. In an action for damages to a carload of lemons which were allowed to freeze after arrival at their destination, evidence of the plaintiff that heater service for cars containing perishable products was provided by carriers at other cities was erroneously admitted, especially where the defendant was not permitted to prove that such service was furnished under a rule of the Interstate Commerce Commission aUowing an extra charge therefor.

      Appeal from the County Court of Cook county; the Hon. S. L. Rathje, Judge, presiding. Heard in this court at the October term, 1919.
    Reversed and remanded.
    Opinion filed March 8, 1920.
    Homer W. Davis, John R. Ong and Sloane Turgeon, for appellant.
    Charles A. Butler, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Dever

delivered the opinion of the court.

This is an appeal by defendant from a judgment of the county court entered in favor of the plaintiff for the sum of $254.37.

Plaintiff brough suit to enforce an alleged liability of defendant under the Carmack Amendment to the Interstate Commerce Act for damages to a carload shipment of lemons which had been shipped by plaintiff at Pomona, • California, for transportation to Indianapolis, Indiana. The declaration charged that the defendant as common carrier had failed to safely carry and deliver the shipment and that as warehouseman it had failed to safely store the shipment at Indianapolis. The lemons were shipped under a standard form of bill of lading approved by the Interstate Commerce Commission.

It was stipulated on the trial that in compliance with section 6 of the Interstate Commerce Act, tariff schedules had been filed with the Interstate Commerce Commission establishing freight rates, between North Pomona, California,, and Indianapolis, Indiana; that said tariffs provided for the collection of a demurrage charge of $1 a day, exclusive of Sundays and holidays, commencing 48 hours after notice of arrival at destination “had been given,” but did not provide that shipments of perishable freight, such as lemons, would be furnished artificial heat by the defendant or its connecting carriers at Indianapolis, Indiana,, or otherwise protected during cold weather, nor did said schedules or tariffs “fix any charge for the performance of such service.” It was further stipulated that “no application had.been made to the Interstate Commerce Commission to compel carriers at Indianapolis, Indiana, to protect shipments from cold by furnishing artificial heat.” It was stipulated also that the shipment consisted of 319 boxes, weighing 26,796 pounds; that the lemons were loaded on a standard refrigerator car, the kind ordinarily used for the transportation of citrous fruit, on January 12, 1917, and that the car arrived in Indianapolis at 12:10 p. m. January 26, 1917; that the consignee of the lemons- was at once notified of the arrival of the shipment. •

There is some conflict in the evidence as to the condition of the vents on the car after the lemons had arrived at Indiana.. The freezing of the lemons occurred after they arrived at Indianapolis and after the consignees had been served with notice of their arrival. The freezing could have been prevented if heater stoves had been placed in the car during the time it remained on the tracks at Indianapolis.

A witness was permitted to testify, over the objection of defendant, that carriers at Chicago and Minneapolis furnished heater service for cars containing perishable freight.

Defendant’s counsel offered to prove that while heaters were customarily placed in cars containing fruit at Indianapolis, such heaters were at all times installed therein by the receivers or owners of the "shipments. An objection to this proof was sustained and "the evidence excluded on the ground, apparently," that it was immaterial and that it was the duty of the railroad company as a matter of law, by the furnishing of heaters or otherwise, to protect the shipment from freezing.

The main controversy between the parties involves a question as to whether the delivering carrier was required, as a matter of law, to furnish heater service at Indianapolis in the car which contained the lemons. No express provision for the furnishing of this service appears in the contract of shipment, nor is it expressly provided for in the tariff schedules filed in the qffice of the Interstate Commerce Commission. The bill of lading does contain a provision that the lemons were received “subject to a reasonable charge for storage and to carrier’s responsibility as warehouseman.” While the pleadings in the case on their face do not purport to present a federal question, such question does appear from the evidence admitted on the trial.

The United States Supreme Court, in the case of Southern Ry. Co. v. Prescott, 240 U. S., on page 640 said:

“And the question as to the responsibility under the bill of lading is none the less a federal one because it must be resolved by the application of general principles of the common law. Adams Exp. Co. v. Croninger, supra [226 U. S. 491]; Missouri, K. & T. Ry. Co. v. Harriman, supra [227 U. S. 657]. It was explicitly provided that in case the property was not removed within the specified time, it should be kept, subject to liability ‘as warehouseman only.’ ”

In the case of Cleveland, C., C. & St. L. Ry. Co. v. Dettlebach, 239 U. S. 588, the court said:

“We recognize the cogency of the reasoning from the standpoint of the common-law responsibility of a railway company as carrier and as warehouseman. But we have to deal with the effect of an express contract, made for the purpose of interstate transportation, and this must be determined in the light of the act of Congress regulating the matter. The question is federal in its nature.” Atchison, T. & S. F. Ry. Co. v. Harold, 241 U. S. 371.

Section 1 of the act to regulate commerce provides that the term “transportation” includes “all services in connection with the receipt, delivery, elevation and transfer in transit, ventilation, refrigeration or icing, storage and handling of property transported." Section 6 of the act requires that all carrier’s schedules “shall contain the classification of freight in force, and shall also state separately all terminal charges, storage charges, icing charges, and all other charges which the Commission may require, all privileges or facilities granted or allowed and any rules or regulations which in any wise change, effect, or determine any part of the aggregate of such aforesaid rates, fares, and charges, or the value of the service rendered to the passenger, shipper or consignee." This act prohibits a carrier from making any contract with a shipper for any privilege or facilities in transporta^tion, except such as are specifically set forth in the filed tariff schedules.

In the case of Cleveland, C., C. & St. L. Ry. Co. v. Dettlebach, supra, a case where goods were lost through negligence of a terminal carrier while in his possession as warehouseman, it was held:

“From this and other provisions of the Hepburn act it is evident that Congress recognized that the duty of carriers to the public included the performance of a variety of services that, according to the theory of the common law, were separable from the carrier’s service as carrier, and, in order to prevent overcharges and discriminations from being made under the pretext of performing such additional services, it enacted that, so far as interstate carriers by rail were concerned, the entire body of such services should be included together under the single term ‘transportation,’ and subjected to the provisions of the act respecting reasonable rates and the like. ’ ’

We are asked to reverse the judgment of the trial court for an alleged error of the court in refusing to admit evidence tendered by the defendant of a custom which prevailed in Indianapolis under which it was the practice of the consignees of transported goods to provide heater service in the cars. Notwithstanding the fact that the plaintiff was permitted to prove a custom prevailing in Chicago and Minneapolis which showed that heater service was in fact provided by carriers, the court refused to allow the defendant to prove that such service was performed under a rule of the Interstate Commerce Commission which permitted a charge of $2 per car for each 24 hours “when carriers furnish artificial heat for carload shipments of perishable freight while standing on tracks and awaiting disposition,” etc. The defendant offered proof, which was excluded, that the delivering carrier did not provide heater service in the cars at Indianapolis and that this service was customarily performed by the consignors or consignees of such goods. -

The case of Atchison, T. & S. F. Ry. Co. v. United States, 232 U. S. 199, involved the question whether a shipper had the right to place ice in bunkers in cars against the carrier’s wishes.. While this case had to do with a service connected with the loading of freight cars, it, the service, was incidental to a contract for the transportation of goods. In deciding the case the court said:

“For in the shipment of fruit, as in that of other articles, it is impossible to lay down a rule which definitely fixes what loading includes and by whom it must be done. ■ Nor is there any consistent practice on this subject, since from reported eases it appears that the claims of the parties are' based rather on interest than on some definite principle. Sometimes the shipper, as here, insists on the right to load and provide necessary appliances. At other times he demands that such services and appliances be furnished by the railroad company. Conversely, the carriers sometimes claim, as here, the right to furnish service and facilities, while in other cases insisting that the one or both must be suppled by the consignor.

* * * • * * # *

‘ ‘ The freight may be such as to require special covering, packing, icing or heating, in order to preserve the merchandise in condition fit for use at the end of the journey. Who is to furnish these needed facilities may he quite as uncertain as who is to place the freight in the car, and can only be determined by considering the character of the shipment, the place where the loading begins, and who can most economically perform the service required.

“Neither party has a right to insist upon a wasteful or expensive service for which the. consumer must ultimately pay.”

And so in the present case, we believe it was proper for the defendant to show that it was a prevailing custom at Indianapolis for consignees of transported goods to provide for heater service necessary to protect such goods from freezing, and that as a. matter of fact it, the delivering carrier, had no equipment for doing this service and did not, in any case, perform it.

The defendant’s charge was $1 a day for the detention of the car after the 48-hour period and notice to consignee. This charge in accordance with the filed schedule did not include any charge for heater service.

In the case of Southern Ry. Co. v. Prescott, supra, the United States Supreme Court held that where in a bill of lading of an interstate shipment it was provided that the carrier should be held liable as warehouseman only after the goods had arrived at their destination, such carrier could only be held upon proof of negligence. Whether the delivering carrier in the present case can be said to have been guilty of negligence depends upon whether it had by any act of commission or omission violated any duty which it owed, to plaintiff to protect the fruit from freezing while it remained in the car on the tracks at Indianapolis; the express contract is silent on the question. The federal cases seem to hold that the duty to furnish heater service is not imposed by federal law upon defendant as warehouseman. Whether defendant was bound by contract to perform the service would, of course, depend upon the terms of the contract. As stated, it was not so bound by any express terms therein, nor was it so bound by the federal statutes, by the rules of the Interstate Commerce Commission or the filed tariff schedules. Clearly, then, if it is sought to read into the contract an implied promise on the part of the defendant to perform the service, it was competent for defendant to show that by a general custom prevailing in Indianapolis it was the constant practice of owners and consignees of transported goods to provide heaters for perishable goods cars while they remained on the tracks at Indianapolis. Evidence of this custom was most material in the case, as without some evidence on this question it is impossible to say whose duty it was to furnish the heater service. The exclusion of the evidence with respect to the alleged custom left the jury with the impression that the defendant was required, as a matter of law, to perform this service. The duty imposed upon defendant by the bill of lading to keep the- vents on the refrigerator car in proper condition was a question which under the evidence was properly submitted to the jury. But we think that the jury should also have had submitted to it the doubtful question whether the freezing of the lemons was caused by the alleged open vents or by the admitted failure to provide heaters in the car. The testimony of one of the plaintiff’s witnesses was to the effect that if heaters had been placed in the car the shipment would not have frozen. Otherwise stated, nothing being shown by the evidence of an intention or a promise on the part of defendant or its delivering carrier to perform this service or to make a charge therefor, it was proper for defendant to show that as a matter of custom it had never performed any such service for the plaintiff or other shippers.

The plaintiff seeks to charge defendant with liability for the freezing of the lemons in the cars while on the tracks of the delivering carrier at Indianapolis, and in aid of its case it proved that carriers in Minneapolis and Chicago furnish heater service for cars containing perishable products. The admission of this evidence was error, we think; but in any event it is difficult to see why proof was not admissible which tended to show that this practice was the result of an Interstate Commerce Commission rule which provided for a charge of $2 a car for heater, service rendered shippers at Chicago and Minneapolis; proof of this rule was excluded.

For the error of the court in excluding the offered testimony, and its rulings on certain instructions, a consideration of which involves in the main only the questions discussed, the judgment of the county court will be reversed and the cause remanded to that court for a new trial.

Reversed and remanded.

Mr. Presiding Justice McSureey and Mr. Justice Hoedom concur.


text:
    Thomas G. Donovan et al., Appellees, v. Thomas A. Murphy, Appellant.
    Gen. No. 25,544.
    1. Landlord and tenant, § 57

      —what constitutes waiver of provision of lease as to time of payment of rent.. The provisions of a lease as to time of payment of rent may be waived and will be presumed to be waived where the parties to such lease have by-express or implied agreement chosen to disregard such provisions.
    2. Landlord and tenant, § 57*—when provisions of lease as to date of payment of rent modified ~by implication. Where a landlord accepts rent for premises on the 10th day of each month instead of on the 1st day as provided in the lease, and the tenant is led to believe, by the course of dealing with the landlord, that payment on the 10th will be accepted as a compliance with the lease, the lease is modified by the conduct of the parties, and the bringing of an unlawful detainer suit on the 9th day of a montii without giving any previous notice of an intention to insist on strict compliance with the lease is without legal right.
    3. Landlord and tenant, § 470

      —when want of strict compliance not ground for forfeitureWhere a lessee has been led to believe that strict compliance with the terms of a lease will not be insisted upon by the lessor, it would he unfair to permit a forfeiture of the lessee’s right because of a failure to strictly comply with the lease, and the courts will take hold of reasonable circumstances showing an intent to waive a forfeiture.
    Appeal from the Municipal Court of Chicago; the Hon. John B. Crabtree, Judge, presiding. Heard in this court at the October term, 1919.'
    Reversed and remanded.
    Opinion filed March 8, 1920.
    McInerney & Power, for appellant.
    Ziv, Levit & Silvertrust, for appellees.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Dever

delivered the opinion of the court.

This is an appeal from a judgment of the municipal court in favor of the plaintiff in a forcible detainer suit "brought by him to obtain possession of an apartment in a building known as No. 7131 Eberhart avenue, Chicago.

The owner of the building leased the apartment to defendant for a period commencing May 3, 1918, and ending April 30, 1919. _ After the termination of this period the defendant continued to occupy the premises under terms similar to those provided for in the lease, which among other things required the payment of rent in monthly instalments on the 1st day of each and every month during the term.

For the defendant it is insisted, first, that no notice of election to terminate the tenancy was served on defendant before filing suit; second, that plaintiffs waived the right to forfeit the lease for nonpayment of rent on the 1st day of the month, as provided in the lease, by reason of having accepted rent for previous months after the 1st day of the month.

The evidence introduced on the trial shows that from the time that the lease was executed and the defendant went into possession of the premises it had been his custom to pay the rent due therefor on or about the 10th day of each month. The rent for the month of July, 1919, was paid by check on the 10th of that month. The action was begun by the plaintiffs on August 9, 1919, without giving notice to the defendant of any intention on the part of the plaintiffs to forfeit the lease, for the reason, as alleged, that the defendant had failed to pay rent for the month of August, 1919, on the 1st day of that month in accordance with the provisions of the lease.

We are to determine then whether on the day the suit was brought the plaintiffs had a legal right to terminate the lease, and whether defendant was, as a matter of law, in default of the payment of rent due the plaintiffs. As stated, the evidence shows that notwithstanding the provisions of the lease the rent due thereunder was in fact paid on-or about the 10th day of each month.

There are several cases decided by the courts of review of this State which hold that the provisions of a lease with respect to times provided therein for the payment of rent may be waived and will be presumed to be waived where the parties to such lease have by an express or implied agreement chosen to disregard such provisions.

There is no evidence in the record before us which tends to show that the plaintiffs at any time prior to the bringing of the suit had declared any purpose to insist upon a strict compliance with the terms of the lease with respect to times provided therein for payment of rent. The lease does provide specifically that the lessor might declare a forfeiture of the lease for the failure on the part of the lessee to pay rent when due.

It is provided in the lease that the defendant waived his right to notice of an election on the part of the lessor to declare the term ended upon default of any of the provisions made therein, and it is insisted that the clause distinguishes the present case from the cases of Treat v. Smith, 139 Ill. App. 262; Vider v. Ferguson, 88 Ill. App. 136; and Jakes v. North American Union, 186 Ill. App. 7. The present case is to be distinguished in that here it is asserted that the parties to the lease had, by a course of dealings subsequent to the execution of the lease, modified the terms with reference to the times when the rent was to become due, and this seems to us to be the controlling fact in the case. The decisions in the cases, in principle similar to the one before us, in substance, rest upon an application of the doctrine of estoppel. In the present case the landlord saw fit to accept rent for the premises on the 10th day of each month and not upon the 1st day of the month, as provided for in the lease. The tenant was led to believe, by a course of dealings with the landlord, that payment on the 10th of the month would be a compliance with the conditions of the lease.

In the case of Espen v. Hinchliffe, 131 Ill. 468, it was held that under the lease the tenant had waived his right of notice to declare the term ended upon default of any of the provisions of the lease, and that the mere fact of nonpayment of rent by the lessee constituted a forcible detainer of the premises.

If, as a matter of fact, it can be said that the defendant was in default in payment of rent at the time the suit was brought, the Espen case, supra, would be an authority in favor of the plaintiff. In that ease rent was due under the terms of the lease at the time the suit was brought and a formal notice was served upon the tenant that unless the rent due was paid within a specified time the. lease would be terminated. In the present case no formal notice was given to the tenant, nor do we think on the evidence it can be said he was in default in the payment of rent.

In the case of Gradle v. Warner, 140 Ill. 123, the Supreme Court said:

“It is true that the lease provided that if the rent .should be unpaid on the day of payment, or if default should be made in any of the covenants of the lease, it should or might be lawful for the party of the first part to declare said term ended. But the lessor had the right to waive this provision of the lease, and unless some act to manifest an intention on her part to declare a forfeiture was done, it will be presumed that she waived the right.”

In the case of Jacobs v. Jurgensen, 191 Ill. App. 67, it was held that where a lease provided that the landlord might declare a forfeiture of the lease because of failure on the part of the lessee to pay rent when due, such landlord had the right to waive the forfeiture and the waiver would be presumed until the landlord did some act manifesting an intention to declare a forfeiture.

Construing the lease as modified by the admitted conduct of the parties, the plaintiffs had no legal right, as a matter of law, to bring the action on August 9, 1919. Under the circumstances, notwithstanding the provisions of the lease with respect to notice, it was the duty of the plaintiffs to notify the defendant of the intention to insist upon a strict compliance with the terms of the lease as written, and the plaintiffs were not justified by a mere secret mental operation in declaring forfeited the rights of the defendant under the lease. Hamer v. Butterly, 189 Ill. App. 79.

The courts are quite ready to take hold of any reasonable circumstances which show an intent to waive a forfeiture. Jakes v. North American Union, 186 Ill. App. 7. The rule which is to be applied in the present case is founded upon reason and justice. Where a lessee has been led by the conduct of the lessor to believe that a strict compliance with the terms of the lease will not be insisted upon, it would be manifestly unfair to permit a forfeiture of the lessee’s right under the lease because of the lessee’s failure to strictly comply with such terms.

The judgment of the municipal court must be reversed and as the error complained of is one of law, the cause will be remanded to that court.

Reversed and remanded.

Mr. Presiding Justice McSurely and Mr. Justice Holdom concur.


author: Mr. Justice Holdom

text:
    The Hibernian Banking Association, Defendant in Error, v. Chicago Title & Trust Company et al., Plaintiffs in Error.
    Gen. No. 25,361.
    1. Liens, § 2

      —when promise to pay out of proceeds of sale of premises does not create. A promise to pay out of the proceeds of the sale of premises creates no lien thereon unless it affirmatively appears and is patent from the language of the instrument containing the promise that it was the intention of the party at the time of executing it to create such a lien upon the property.
    2. Mobtgages, § 12*—what essential to creation of equitable mortgage. While a written instrument entered into for the purpose of pledging realty as security for a debt, informal or insufficient as a common-law or statutory mortgage, may be held to operate as an equitable mortgage, yet there must he present, before such equitable mortgage can be enforced, the element of an intention of the executant that such instrument shall operate as a lien upon the property described; and an equitable mortgage is not created where an instrument states that a maker of notes is the owner of certain realty, and that such notes will be paid out of the proceeds arising from a sale of the realty, if it is sold.

      3. Subrogation, § 31

      —when right to waived. A stipulation by which a lienholder agreed to subordinate his claims to three mortgage liens operates as a waiver of any rights of the lienholder to be subrogated to a payment made on one of the three mortgages.
    4. Mortgages, § 138*—when mortgagee entitled to pay off mechanics’ liens. Where a trust deed provided that the mortgagor should not suffer or permit any mechanics’ liens on the premises, the mortgagee had the right to pay lien claims to protect his own security, and when so paid he had the right to be subrogated to the rights of the lien claimant.
    5. Usuby, § 38*—who entitled to set up as defense. A defense of usury is personal and cannot be invoked by judgment creditors or their lienors, and a junior incumbrancer is not in privity with a mortgagor so as to be able to set up such defense in his behalf.
    6. Usuby, § 46*—necessity for pleading specially as a defense. Usury as a defense must be especially pleaded. Section 7 of chapter 74, Rev. St. (J. & A. H 6696).
    7. Appeals and error, § 1399*—when finding of master not disturbed. A finding of a master will not be disturbed unless it is manifestly against the weight of the evidence.
    Error to the Circuit Court of Cook county; the Hon. Kjckham Scanlan, ' Judge, presiding. Heard in this court at the October term, 1919.
    Reversed in part, affirmed in part and remanded with directions.
    Opinion filed March 8, 1920.
    Rehearing denied March 22, 1920.
    Frank Schoenfeld and David K. Tone, for plaintiff in error Arthur R. Jones.
    Ryan, Condon & Livingston, for defendant in error; Irvin I. Livingston, of counsel.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, saíne topic and section number.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number,

   Mr. Justice Holdom

delivered the opinion of the court.

This is a proceeding in chancery to foreclose a certain trust deed in which all the junior incumbrancers and lien claimants appearing of record are made defendants.

The cause proceeded to hearing upon the amendéd and substituted bill of complaint, answers of certain of the defendants, who set forth in such answers their several liens and claimed their several priorities, and replications of complainant to such answers. . The defendant Arthur E. Jones filed a. cross-bill seeking affirmative relief as to the claims and liens set out in his answer to complainant’s amended and substituted bill, and the defendant Ella H. Davis and others also filed their cross-bill praying for affirmative relief on the several claims and liens set .up in their respective answers, which involve two so-called equitable' mortgage liens on the real estate, the subject of the original foreclosure proceeding. Issues were joined on these cross-bills. However, the pleadings as such are not in controversy; therefore no further reference thereto will be made except as may hereafter be necessary to an understanding of the contentions projected into the writ of error before us.

Complainant’s bill was to foreclose a trust deed of what is known as the “Springer Building,” executed on June 5, 1913, by Marguerite Warren Springer (who subsequently intermarried with one Ed. Oliver and who will be hereinafter referred to as Mrs. Oliver) „to.the Chicago Title & Trust Company as trustee; conveying lots 3, 5, 6, 7 and 8 and the south 15 feet in width of lot 4 and the north 7y2 feet of lots 9 and 10, all in block 52; in School Section Addition to Chicago, etc., with the improvements thereon and everything therein contained, including the rents, issues and profits thereof.

The cause was referred to a master to take the proofs and report his findings of fact and law to the court, which he did, and a decree was° entered by the chancellor varying in some important particulars the recommendations of the master.

The decree ordered the mortgaged Springer property to be sold by the master in default of the payment of $356,035.89, the amount found due complainant, with directions to the master to pay certain other liens, hereinafter enumerated, in the chronological order of their enumeration, and if after so doing there should be a surplus from the proceeds of such sale still remaining in the master’s hands, he shall report the same to the court to abide its further order.

In the decree the priorities were fixed in the order enumerated as follows, the amounts found due being as of January 15, 1919, with interest thereon at 5 per cent per annum thereafter:

1. The amount found due complainant for unpaid principal and interest, including solicitors’ fees and moneys advanced for tax redemption, etc... $356,035.89

2. Amount due defendant Union Bank of Chicago under its trust deed...................... 30,062.50

3. Northern Trust Company as trustee under a trust deed securing a certain indebtedness. . 111,133.32

There is no dispute by any party in interest as to the correctness of the decree regarding the foregoing three items, either in amounts or priorities.

4. An amount due to certain parties, holders of certain notes of Mrs. Oliver, decreed to be secured by a so-called equitable mortgage upon the Springer property............................... 39,506.09

5. Amount due Ella H. Davis and others, also adjudged to be secured by a so-called equitable mortgage upon the Springer property................ 70,650

6. A subsisting lien in favor of Wheeling Corrugating Company to the amount of........... 1,115.37

7. To Arthur - R. Jones a valid and subsisting lien upon the Springer property to the amount of ..................................... 33,708.02

8. To Arthur R. Jones, owner of an indebtedness secured by a trust deed to Frank Schoenfeld, trustee, conveying the Springer property; amount found due thereon ................................ 66,712.65

9. That Samuel A. Albrecht as assignee of the First State Bank of Benson, in virtue of a judgment against Mrs. Oliver, entered in the superior court of Cook county, had a lien ujpon the Springer property to the amount of........................ 4.322.57

10. That the defendant Arthur R. Jones, and John T. Hetherington had a valid and subsisting lien upon the mortgaged premises ratably without priority of either over the other—

as to Arthur R. Jones in the sum of..... 1,758.16

as to John T. Hetherington in the sum of 1,062.41

11. That defendant Mercer Davis, as assignee of a judgment obtained by Frank Sullivan against Mrs. Oliver in the circuit court of DeWitt county, Illinois, has a valid lien upon the mortgaged premises, to the amount of .........'....................... 2,597

12. That the defendant W. A. Rowe had a valid and subsisting lien upon said mortgaged premises as assignee of a judgment obtained by the First State Bank of Benson against Mrs. Oliver et al., in the circuit court of Woodford county, Illinois, amounting to.................................. 6,097.48

13. That the defendants Ella H. Davis et al, as executors of the estate of George Perrin Davis, deceased, had a valid and subsisting lien upon said mortgaged premises as assignees of a judgment obtained by the German-American Bank of Bloomington in the circuit court of Cook county against Mrs. Oliver, amounting to........................... 3,857.98

Arthur R. Jones alone assigns errors on this record; they are ninety-three in number, but counsel have argued them under seven points, to which points we shall confine this opinion.

The first two points relate to and challenge the fourth and fifth liens, which are the so-called equitable morgage liens.

The third point questions the giving of an eighth lien to Jones for an item of $3,002.50 interest said to have been paid on Farwell notes.

The fourth point involves the item of $8,702 claimed to have been paid by Mrs. Oliver to Jones on the notes secured by trust deed to Frank Schoenfeld.

The fifth point relates to the holding that one of the sixteen $5,000 notes was for usurious interest.

The sixth point is a claim that it was error to deduct $2,400 paid by Jones on a lien claim for $5,832.93.

The seventh point complains of error in awarding a sixth lien to the Wheeling Corrugating Company claim. In the light of the conclusions at which we have arrived, it will be unnecessary to discuss this phase of the case.

We will first pass upon the priorities of the so-called equitable mortgages given priority in the decree, numbered 4 and 5 as aboye recited.

As to number 4, it appears that January 5, 1916, Mrs. Oliver, then Springer, executed seventeen principal promissory notes, payable to her own order and by her indorsed and delivered, held by several of the defendants, upon which the court adjudged to be due $39,506.09; that at the same time the maker of the notes executed, acknowledged and delivered the following writing:

“Chicago, Illinois, January 5,1916.

“The undersigned, Marguerite Warren Springer, of Chicago, Illinois, has this day executed her seventeen principal promissory notes, numbered one to seventeen, both inclusive, aggregating the principal of $35,-428.00, payable to the order of herself, and by her endorsed, with interest at six per cent per annum, payable at the Central Trust Company of Illinois, and she hereby declares that she is the owner of the real estate premises known as 306-308-310-312-314-316 and 318 S. Canal street, Chicago, Cook county, Illinois, and hereby agrees with the holder or holders of said notes that in ease, or whenever she sells or otherwise disposes of said real estate premises, she will cause the said notes to be paid out of the proceeds thereof.

Marguerite Warren Springer (Seal) ”

This instrument was filed for record in the recorder’s office of Cook county on January 17,1916.

On January 28, 1916, Mrs. Oliver, then Mrs. Springer, made five promissory notes, all payable to her own order and by her indorsed and delivered, due one year from date, three of said notes being for the sum of $10,000 each, one for $5,000 and one for $25,000, which said notes are held by Ella H. Davis and others, same being given priority of lien number 5, a.s before recited, and upon which the decree found due the sum' of $70,650. Coincident with the delivery of said notes the then Mrs. Springer executed, acknowledged and delivered the f ollowing writing:

“Bloomington, Illinois,

January 31, 1916.

“The undersigned /hereby declares and states that she has executed and delivered her five promissory notes bearing the date of January 28th, 1916, payable in one year from date, and bearing interest at the rate of six per cent-(6%) per annum, payable to the order of herself, and by her endorsed in blank as follows:

One note for the sum of Ten Thousand Dollars ($10,000.00);
One note for the sum of Ten Thousand Dollars ($10,000.00);
One note for the sum of Five Thousand Dollars ($5,000.00);
One note for the sum of Ten Thousand Dollars ($10,000.00);
One note for the sum of Twenty-five Thousand Dollars ($25,000.00);

all payable at the Peoples Bank, at the City of Bloomington, Illinois, and she further declares and states that she owes the said sums of money so evidenced as aforesaid, and that she is the owner in fee simple of Lots Three (3), Five (5), Six (6), Seven (7), Eight (8), and the south Fifteen (15) feet of Lot Four (4), and the North Seven and one-half (7%) feet of Lots Nine (9) and Ten (10) in Block Fifty-two (52), in the School Section Addition to Chicago, in Cook County, Illinois, and she further declares that in case said premises so described as aforesaid are sold, then that said notes heretofore described, shall be paid out of the proceeds of the sale of said premises.

(Signed) Marguerite Warren Springer.” '

Which writing was filed for record in the recorder’s office of Cook county.

The master’s conclusion upon these two documents as appears in his report is as follows:

“The master is of opinion, and concludes as a matter of law, that the instruments above described do not show any intention on the part of Marguerite Springer Oliver to create a lien or charge upon the premises described, and that the holders of the said notes are not entitled to any lien, equitable or otherwise, upon the premises described, by reason of said instruments; and that the said instruments were not intended to be, and do not constitute, equitable mortgages upon the premises hereinbefore described.”

We are in entire accord with this conclusion of the master, because a promise to pay out of the proceeds of the sale of the premises creates no lien thereon unless it affirmatively appears and is patent from the language of the instrument itself that it was the intention of the party at the time of executing it to create a lien upon such property. While it cannot be gainsaid that a written contract entered into for the purpose of pledging realty as security for a debt, informal or insufficient as a common-law or statutory mortgage, may be held to operate as an equitable mortgage upon Such property, yet there must be present, before it can be enforced, the element of an intention of the executant that such instrument should operate as a lien upon the property described; until it does so appear an equitable mortgage is not established.

In Vaniman v. Gardner, 99 Ill. App. 345, it was held that while, as a general rule, any written contract entered into for the purpose of pledging property or some interest therein as security for a debt, which is informal or insufficient as a common-law statutory mortgage, but which shows that it was the intention of the parties that it should operate as a charge upon the property, will constitute an equitable mortgage and be enforced as such in a court of equity, yet a mere promise to pay out of the proceeds of the sale of the property is not sufficient to constitute an equitable mortgage upon the property itself. The intention must be to create a lien upon the property, as distinguished from an agreement to apply the proceeds of a sale of it to the payment of a debt. Hamilton v. Downer, 46 Ill. App. 541, sustains this principle and was affirmed in 152 Ill. 661; Jones on Liens, sec. 32; Gibson v. Decius, 82 Ill. 304. Such is, we think, the test to be applied in the instant case.

We cannot infer or extract from the language used in either of these documents any intention upon the part of Mrs. Springer, now Oliver, to create a lien upon,the Springer property, or to create any charge thereon; they are simply agreements to pay the debts mentioned out of the proceeds of the property when sold, without any obligation upon her part to sell at any particular time. Nor is there any language in either of these writings from which a court of equity could, upon the application of any person in interest, coerce a sale for the purpose of paying the indebtedness set out in these instruments. The intent to create a lien is not open to inference; it must affirmatively appear from the document itself; for as said in Hossack v. Graham, 20 Wash. 184:

“If it had been the intention of the parties to have created a lien * * * it would have been an easy matter to make that fact appear * *

It is clear that these two instruments were no more than a promise to pay out of the proceeds of the sale of the property whenever it should be sold.

As items 4 and 5 are by this opinion eliminated from the decree, items 7 and 8, awarding liens to Arthur R. Jones, will automatically become fifth and sixth hens upon the Springer property.

Jones contends that $3,002.50 interest paid on the so-called Farwell mortgage, numbered 3 in the enumeration of the priorities before us, was paid to prevent foreclosure proceedings, and that he should be subrogated to the lien which Farwell had at the time the payment was made.

We think the contention that the payment was not made on the Farwell mortgage, but made and indorsed on the collateral note executed by Mrs. Oliver, held by Mrs. Farwell, under which the notes and trust deed were held as security, is sustained by the proof. While it may be doubtful as to whether the doctrine of subrogation extends pro tanto to a part payment only, still we think that Jones is barred under his stipulation in which he agreed to subordinate all of his claims to the first three mortgage liens; this operating as a waiver of the right, if it ever existed, in Jones to be subrogated to the Farwell mortgage for such payment, and that the decree therefore is in this regard without error.

We next come to an item of $8,702, which grows out of an $80,000 loan made by Arthur B. Jones to Mrs. Oliver. The transaction is much involved, but the evidence proves that the loan was made and that the money was paid either to or for the account of Mrs. Oliver. One Mackie was the agent of Mrs. Oliver in' this transaction. The $80,000 loan was secured by a trust deed on the Springer property to one Schoenfeld as trustee, and when made was the fourth mortgage on that property. By reason of the Springer property being already incumbered to the amount of nearly half a million dollars, Schoenfeld claimed that the commission should be large and that he would expect $5,000 for commission and $500 for attorney’s fees for preparing the papers, etc. These amounts were in fact paid to him by Jones. The controversy relates to a payment of $5,029.17, which Mrs. Oliver contends was in payment of a $5,000 note, while Jones contends that the money was received and applied to the paying off of construction claims of one Angus, who had a lien for some alterations in construction made by him on the Springer Building; that three other payments of $2,000, $1,000 and $702 thereafter made, were by Jones paid to Angus for construction and alteration work on the Springer Building; that these sums, totaling $8,702, were not payments on account of the mortgage indebtedness, but were payments made by Mrs. Oliver to J ones, which sum was credited to her general account by Jones.

The proof and the environing circumstances, we think, sustain Jones’ contention in this regard. There was a provision in the trust deed securing these $80,000 notes by which Mrs. Oliver agreed not to “suffer any mechanic’s lien to attach to said premises, nor do, nor permit to be done, to or upon said premises, anything that may impair the value thereof, or the security intended to be affected by virtue of this instrument.” We think that under this Jones had a right to pay- the Angus lien claims to protect his own security under the trust deed, and when so paid to be subrogated to the rights of the lien claimant. This the master found as between the parties to be their relative rights, but held that the judgment creditors had priority over the Jones liens for the items aggregating $8,702. In varying the master’s report in this regard, the decree is erroneous.

In decreeing that one of the sixteen notes for $5,000 each, secured by trust deed to Frank Schoenfeld, trustee, was given as usurious interest, the decree is erroneous. Without going into the merits of the question of usury thus raised, suffice it to say that neither Mrs. Oliver nor McKey, trustee to her estate in bankruptcy, set up any such defense. Such defense is personal and cannot be invoked by judgment creditors or their lienors. Section 7, ch. 74, Rev. St. (J. & A. ¶ 6696), provides regarding usury that:

“The defense of usury shall not be allowed in any suit, unless the person relying upon such defense shall set up the same by plea, or file in the cause a notice in writing, stating that he intends to defend against the contract sued upon or set off, on the ground that the contract is. usurious. ’ ’

In Home Building & Loan Ass’n v. McKay, 217 Ill. 551, it is said:

“The statute provides that usury must be specially pleaded, and the fact wherein it is alleged the usury charged consists must be specifically alleged in the answer setting up the defense.”

Again it is said in Union Nat. Bank v. International Bank, 123 Ill. 510:

‘ ‘ The right to set up usury as a defense is personal to the debtor. If any one is injured by the usury, it is he, and it is for him to say whether he has been injured or not. If he chooses to perform the contract, or to waive the defense of usury, no one else has a right to say that he shall not do so. It is for him to elect. * * *” '

As to the right of a junior incumbrancer of the debtor to avail of the defense of usury, the court said in Mason v. Pierce, 142 Ill. 331:

“Nor can Mason set up or avail himself of the charge of usury. While the defense might be set up by the debtor or those in privity with him, a junior incumbrancer by virtue o’f a judgment lien is not in privity with the mortgagor so as to be able to set up the defense in his own behalf. This is so completely settled by our decision in Union Nat. Bank v. International Bank, 123 Ill. 510, as to require no discussion here.”

It therefore follows that the decree is erroneous in eliminating the $5,000 note as usurious and in denying interest upon- all of the notes. Jones is entitled to and should be allowed the $5,000 note with interest on all the unpaid notes from January 16, 1919.

The master and the chancellor both found that the Angus claim for mechanic’s lien for $5,832.93 assigned to Jones was entitled to a credit of $2,400 paid thereon, which was paid not by Jones but by Mrs. Oliver, or her husband for her; and an examination of the testimony convinces us that this credit was properly allowed. Furthermore, the Avhole question is one of disputed fact, and unless we are able to say—which we are not—that the conclusion of the master, who saw the witnesses, was manifestly against the weight of the evidence, we would not be justified in disturbing the finding of the master.

For the reasons heretofore stated, the decree of the circuit court is reversed and the cause is remanded with directions to entirely eliminate from the decree the two so-called equitable mortgages given priority as fourth and fifth liens, respectively; that the amount due on the $80,000 loan secured by the trust deed to Frank Schoenfeld, trustee, less payments found by the master to have been made by Mrs. Oliver, be included in the decree in the place and stead of the amount found due in the decfiee' as lien number 8, and that in all other respects the decree is affirmed.

Reversed in part, affirmed in part and remanded %vith directions.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.


text:
    A. C. Becken Company, Appellee, v. Ottawa Pianophone Company, Appellant.
    Gen. No. 25,500.
    1. Contracts, § 250

      —change by parol. Writings constituting contracts between parties cannot be subsequently changed or modified by parol.
    2. Contracts, § 381*—what evidence admissible to excuse nonperformance. Under contracts for the making of phonograph cabinets within a certain time but with exceptions in case of coal shortage or a shutdown of the factory, evidence of interference by the government and diversion of coal bought at the mines whereby the defendant contractor was unable to operate its factory, and that such facts were communicated to the plaintiff’s president who replied that he knew of the conditions, should have been admitted, as such facts tended to excuse nondelivery within the time specified.
    3. Bailment, § 8*—what is liability of manufacturer receiving materials for manufacture. Where a defendant contracted to make phonograph cabinets and received material therefor from the plaintiff, it was responsible to the plaintiff as bailee of its goods only in the same degree of care and diligence as a person of ordinary caution would exercise in regard to his own property.
    4. Bailment, § 8*—what is liability of manufacturer for loss of material by fire. Where a defendant contracted to make phonograph cabinets and received material therefor from the plaintiff, and the defendant’s factory was destroyed by fire, the plaintiff could not recover for the loss unless it could prove that the fire which destroyed its property in the factory of defendant was occasioned by some negligent act of defendant or want of ordinary care upon its part, and the burden of proof was upon the plaintiff bailor.
    Appeal from the Municipal Court of Chicago; the Hon. Howard W. Hayes, Judge, presiding. Heard in this court at the March term, 1920.
    Reversed and remanded.
    Opinion filed March 8, 1920.
    Rehearing denied March 22, 1920.
    Harry A. Tiffany, for appellant.
    Allen G. Mills and Beverly W. Howe, for appellee.

      See Illinois Notes Digest, Vols, XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Holdom

delivered the opinion of the court.

On a trial before the court without a jury, plaintiff had judgment for $776.40, and defendant appeals.

Plaintiff had two contracts with defendant to make certain phonograph cabinets: one, dated January 11, 1918, was for 120 cabinets; the other, dated January 17, 1918, was for 40 fumed oak cabinets. In the first contract deliveries were to be made within 30 days and in the second contract.they were to be made “as early as possible.” Bach contract contained the following clause: “In case of coal shortage or a shut down of factory it is understood that you will furnish cabinets only. * * *”

Plaintiff delivered certain materials for the making of these cabinets of the claimed value of $646.40, and also paid to defendant the sum of $130 with which to purchase certain motors, which motors were purchased. No phonographs were delivered under either of these contracts, and on March 9, 1918, defendant’s factory with the property of plaintiff therein, was destroyed by fire, entailing a total loss by defendant of $120,000.

Plaintiff contends that defendant failed to perform its work upon the property delivered to it within the time limited by the contracts; that if the property was thereafter destroyed by-fire—which is the fact—even though the fire could not be avoided by defendant, yet it is liable to plaintiff for the value of the property delivered to defendant and for the amount of money given to it by plaintiff with which to purchase the motors; that defendant’s failure to perform the work within the time limited by the contracts, rendering it unable to return the same to plaintiff upon demand and resulting in the loss of the goods in the fire occurring after such goods should have been delivered to plaintiff,is no defense to plaintiff’s claim.

The two writings constituted the contracts between the parties and could not be subsequently changed or modified by parol.

There are many errors in the court’s rulings on the admission of evidence, but under the facts before us they are not controlling in their effect. The real question in the case is the liability of defendant as bailee of the property of plaintiff which was destroyed by fire.

The contracts contemplated two things—coal shortage or a shutdown of the factory. The evidence shows clearly that during such time defendant was, without any fault on its part, without fuel, that no fuel could for a time be obtained by it, and that it was forced to and did go into the woods and cut down trees for fuel to keep its plant from freezing. Defendant offered to prove interference by the government in the carrying on of its business, in that the government diverted the coal bought by it at the mines, and that by reason thereof defendant was unable to operate its factory and communicated such fact to the plaintiff’s president, who, it is said, replied that he knew ,what the conditions were, that he further knew that defendant was doing the best it could, and that he knew about the shortage of fuel.

We think these facts if sustained by proof constitute a good defense. . The court erred in not receiving such evidence. Furthermore, it is in evidence that plaintiff attempted to make certain changes in the orders which in themselves necessitated delay and which would in a measure excuse defendant from delivering the cabinets within the time originally contracted for. It is patent that if the cabinets had been delivered within ‘30 days under the first contract and within what plaintiff designates as a reasonable time under the second contract, the property of plaintiff would not have been destroyed in the burning of defendant’s factory March 8, 1918. But it is evident that if defendant had been permitted to make the proffered proof of a shortage of coal and the closing down of its factory by the government—conditions over which it had no control—such proof would have tended to excuse defendant’s nondelivery of the cabinets within the time claimed by plaintiff as specified in the contracts.

Then again, defendant endeavored to show that the fire which consumed its factory was not attributable to any negligence on its part, which evidence, however, was excluded by the, court. As a matter of law, defendant was responsible to plaintiff as bailee of its goods only in the same degree of care and diligence as a person of ordinary caution would exercise in regard to his own property. Russell v. Koehler, 66 Ill. 459. In this condition it became the duty of plaintiff to prove, before it could recover in its action, that the fire which destroyed its property in the factory of defendant was occasioned by some negligent act of defendant or want of proper or ordinary care upon its part. It is true, as said in Ford Motor Co. v. Osburn, 140 Ill. App. 642, that ‘ ‘ each case must rest on its own circumstances.” Applying this rule to the instant case, the evidence proffered by defendant and excluded by the court tended to present a complete defense to plaintiff’s action. Plaintiff proceded, however, upon the assumption that it was not necessary for it to make any proof of any act of commission or omission on the part of defendant which occasioned the destruction of its property in defendant’s factory by fire. The burden of proving such negligence was upon plaintiff, but while no evidence to that end was tendered by it, evidence relating thereto offered by defendant was on motion of plaintiff excluded by the court. As held in Nichols v. Union Stock Yards & Transit Co., 193 Ill. App. 14, the law will not presume negligence where the failure of the bailee to deliver is explained by the fact that the goods bailed have been destroyed by fire and the bailee is therefore unable to deliver them, but that the burden of proving negligence in such case is on the bailor.

In the case of destruction of the bailed goods by fire, the law will not presume negligence, but the onus of proving such is cast upon the bailor. Standard Brewery v. Hales & Curtis Malting Co., 70 Ill. App. 363, affirmed in 171 Ill. 602; Bryan v. Chicago & A. R. Co., 169 Ill. App. 181.

While the record is silent as to how the fire started, making it impossible for the court to know whether or not such fire was attributable to defendant’s negligence, such condition of the record is brought about in the first place by plaintiff’s refusal to assume the burden of proof, which the law cast upon it, and in the second place in causing the court to erroneously rule out proof tendered by defendant in an attempt to fix the cause of the fire.

For the errors indicated the judgment of the municipal court is reversed and the cause is remanded.

Reversed and remanded.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.


text:
    Jacob E. Zink, Appellee, v. Supreme Lodge Knights of Pythias Insurance Department, Appellant.
    Gen. No. 25,547.
    1. Insurance, § 765

      —when insured’s consent to change of plan shown. In an action on a benefit certificate where the insured committed suicide, and a question arose ás to whether the insured had consciously changed his insurance from one plan to another, the plan under which he was insured being terminated when he attained his 65th birthday, and where the evidence showed that the wound inflicted deprived the insured of his power of speech, that the change in plan was made by the execution of his mark, through the beneficiary, and that the insured was able to communicate his wishes by squeezing the hand of another person, the evidence established that the act was conscious, done with conscious intent, especially as the insured had intended to make the change.
    2. Insurance, § 844*—date of death or date of commission of act as determining time of suicide. Where an insured committed suicide and died a few days later, on May 6,'the suicide was not to be reckoned as occurring at the time of death, but occurred on April 30, the death on, the later day being the result of the suicidal act.
    3. Insurance, § 844*—construction of by-laws as to suicide. A by-law reducing insurance in case of suicide held not to apply where other by-laws of the fraternal order stated that the reduction should not apply to members in the “fifth class” and the member was in such class.
    4. Insurance, § 347*—incontestible provisions favored. Incontestible provisions in insurance policies are favored by the law as creating a short statute of limitations in favor of the insured.
    5. Fraternal and mutual benefit societies, § 88*—how by-laws construed in case of conflict. A conflict between by-laws of a fraternal order and provisions of a benefit certificate, as to payment of monthly instalments, must be resolved in favor of the insured, and the by-laws must be held to govern when in conflict with the certificate.
    Appeal from the Municipal Court of Chicago; the Hon. William N. Gemmill, Judge, presiding. Heard in this court at the October term, 1919.

      Certiorari denied by Supreme Court (making opinion final).
    Affirmed.
    Opinion filed March 8, 1920.

      Edmund S. Cummings, for appellant; Watson & Esarey, of counsel.
    Gustav E. Beerly, for appellee; Ellis S. Chesbrough, of counsel.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Holdom

delivered the opinion of the court.

The father of the plaintiff, bearing the same name, was a member of the defendant order and was insured therein in the sum of $3,000. When he joined the order he was 28 years of age; when he died felo de se he had passéd his 65th year, having attained that age May 5,-1917, dying on the next day. He committed the act which culminated in his death April 30, 1917. Plaintiff is the beneficiary named in the benefit certificate in suit. On a trial before the court there was a finding and judgment for $3,275, the amount of the certificate with interest, and defendant appeals.

The insured, plaintiff’s father, was a member of defendant’s society from the time he was 28 years of age and he was 65 when he died, as above stated. He had, during his membership in the defendant order, passed through several stages in accord with its orders, rules and regulations, in each stage making the monthly payments required by defendant’s bylaws. On April 30, 1917, he shot himself in the head with suicidal intent. At that time the insured was carrying a benefit certificate in class 5, plan D, for $3,000 on a monthly payment of $8.10; the benefit certificate in suit insured him under plan A for the same amount, the monthly payment thereon being $20.85.

Defendant urges for reversal that the benefit certificate sued on is nonexistent; that the insured committed suicide, which act relieved defendant of any liability; that the premium under the benefit certificate, the payment of which was a condition precedent to the certificate’s yalidjty, was not paid.

The real controversy here involves the validity of the benefit certificate issued in plan A, in the verity of which the judgment appealed from was entered. If the insured had died May 4, 1917, the day when he completed his 65th year of life, his benefit certificate under plan D would have been in force, and unless the change was made to plan A his membership in defendant would have ceased and with it all right to any insurance benefit.

The most difficult question presented by the record for our solution is whether the change from plan D to plan A was a conscious act upon the part of the insured, Jacob E. Zink, the father. He died 6 days after he shot himself. During all of this time he was in the hospital and in a more or less unconscious condition. His wound had the effect of depriving him of the power of. speech. However, he executed by his mark, through the plaintiff, the application for the transfer to plan A. When it was discovered that he could not speak he was requested to indicate his wishes by squeezing the hand of the witness McCabe in answer to questions put to him by his son and Mc-Cabe, which he did. Such act is somewhat emphasized by the known intention of the insured to make the change. We think the proof sufficient to establish the insured’s act in this regard as a conscious one, done with conscious intent.

The by-laws of defendant provided that:

“Whenever a member of said Plan ‘D’ attains the age of 65 years, his certificate shall thereby cease to have any value or be of any effect, and payments under said certificate shall cease. Upon members of Plan D’ attaining the age of 65 years, those who may elect to do so shall be transferred to Plan ‘A,’ rated at attained age, and, without, medical examination or expense for transfer, receive Plan ‘A’ certificates for so much insurance as they may transfer, and shall upon being transferred be treated as members of Plan ‘A.’ ”

Five days before the insured attained his 65th year» of life he committed suicide by shooting himself, in the head. Although he did not actually die until May 6, 1917, the suicide is not to be reckoned as occurring at the time of death, but as relating back to the time when the act was committed with suicidal intent, resulting in death; so that as applied to the instant case, the insured committed suicide April 30, 1917, and died as the result of such suicidal act on May 6 thereafter.

An early case to which we are cited is Hales v. Pettit, 1 Plowden 253, in the third reign of Queen Elizabeth, which arose from the suicide of Lord Chief Justice Hales of the Court of Common Pleas, who committed suicide by jumping from a bridge into the river below. In order to prevent a forfeiture of certain property to the crown, it was attempted to show that the chief justice when in the water struggled to get out, which, it was argued, inhibited the presumption of suicide but was evidence that the drowning was accidental. It was also proven that this legal luminary had previously attempted suicide, and the court held that aside from any assumed subsequent repentance, he became feto de se when he threw himself into the water with suicidal intent. So, by parity of reasoning, the suicide of the insured Zink occurred on the day he inflicted, with suicidal intent, the mortal wound. Crane v. Chicago & W. I. R. Co., 233 Ill. 259, sustains by analogy the ruling in Hales v. Pettit, supra.

Defendant argues that in becoming insured under plan A, May 5, 1917, the insured did so in contemplation of suicide. Seeing that insured committed suicide 5 days previously, we are unable to follow counsel in their reasoning that the suicidal intent occured at the later date.

Defendant urges that there is a by-law which provides that if the death of a member results from suicide, whether voluntarily or involuntarily, sane or insane, then the amount to be paid upon the certificate should be such an amount as provided by certain mortuary tables, and that under such by-law there could be no recovery for the full amount of the certificate. This contention, however, falls by weight of the exception in the by-law, which reads: “provided, further, that this section shall not apply to any member of the Fifth Class who has at the time of. his death been in continuous good standing in the Fifth Class for thirty-six months, consecutively, immediately preceding his death.”

Plan “D” and plan “A” are both within the fifth class, and whichever plan Zink was under at the time of his death, the suicidal provision of the by-laws is not available as a defense because Zink had been a member in the fifth class many years in excess of the 36 months’ limitation in the by-laws. As argued by appellee, this incontestability applies to members of the fifth class and does not differentiate between certificate holders in either plan “A” or “D.” The incontestible provisions in insurance policies are favored by the law as creating a short statute of limitations in favor of the insured, as held in Monahan v. Metropolitan Life Ins. Co., 283 Ill. 136.

The benefit certificate under plan “A” provided that It should not take effect until delivered in the lifetime of the member and until the first assessment is paid, and it is argued that because the first assessment was not paid, therefore the certificate was not enforceable. Section 519 of the by-laws gives members until the 20th of the month in which to pay their monthly assessments. On the application blank to transfer to plan “A” this appears: “First payment on new certificate will be for the month of May, 1917. ’ ’ The receipts given for the monthly payments to Zink also contained this statement: “Monthly payments due and payable to the Secretary on or before the 20th day of each month.” The conflict between the by-laws and the certificate regarding the payment of monthly instalments must he resolved in favor of the insured, and the by-laws must be held to govern when in conflict with the certificate. Booth v. Knights of Pythias, 187 Ill. App. 372. Furthermore, .the amount of the instalment was tendered by plaintiff to the secretary and refused by that officer, who has since died, on the ground that it was not payable until the 20th of the month. Furthermore, on the 15th day of May, 1917, plaintiff paid to the secretary the first monthly payment of $20.85 on the certificate in suit and took the receipt of the secretary therefor. The application blank states that “First payment on new certificate will be for the month of May, Í917. ’ ’

We see no reason for disturbing the judgment of the municipal court and it is therefore affirmed.

Affirmed.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.


text:
    Aurora Automatic Machinery Company, Appellee, v. Chicago, Burlington & Quincy Railroad Company, Appellant.
    Gen. No. 25,642.
    1. Carriers, § 146
      —when liability that of warehouseman. Where a carrier notified a consignee of the arrival of goods and such goods were placed in a warehouse with the knowledge and acquiescence of the consignee, where they were destroyed by fire, the facts showed a delivery in law, and the carrier under the law and in accordance with the bill of lading was responsible as a warehouseman only.
    2. Carriers, § 74*—when deviation in route justified by floods. Where goods were not carried as routed, but the carrier had the right to deviate from the route in case of floods, and the existence of such floods was proved, the deviation was proper, and, in any event, necessity of such a controlling nature would as a matter of law have justified the deviation.
    3. Carriers, § 154*—when not liable for destruction of goods in warehouse. In an action against an initial carrier for the loss of goods, where the court found that the goods arrived at their destination, that the consignee was notified of the arrival, and that the goods were destroyed a month later by fire in a warehouse, there being no evidence of the cause of the fire, such finding would have justified a verdict for the defendant.
    4. Carriers, §. 81*—when liability discharged by notice to consignee of arrival of goods. Where a consignee of goods was the agent of the consignor, and the carrier notified such agent of arrival of the goods at their destination, it discharged its liability as carrier, and if the consignor or its agent desired to give any other directions it was their duty to do so.
    5. Carriers, § 157*—what must be proved to hold carrier as warehouseman for loss of goods. In an action against an initial carrier for the loss of goods destroyed by fire at their destination after being placed in a warehouse, where the shipment was interstate, the plaintiff was required to prove as a sine qua non to its right of way of recovery that the fire which destroyed the goods resulted in some way from negligence of the defendant.
    Appeal from the Municipal Court of Chicago; the Hon. Irwin R. Hazen, Judge, presiding. Heard in this court at the October term, 1919.
    Reversed and judgment of nil capiat here.
    Opinion filed March 8, 1920.
    J. A. Connell and S. F. Blanc, for appellant.
    Gurdon Williams, for appellee.

      See Illinois Notes Digest, Vols. XI to XV, and Cumulative Quarterly, same topic and section number,

   Mr. Justice Holdom

delivered the opinion of the court.

Plaintiff had judgment for $580 on a finding by the trial judge, and defendant appeals.

The suit is against defendant as the initial carrier of two motorcycles for which defendant gave two bills of lading of standard form as approved by the Interstate Commerce Commission. The carriage was from Aurora, Illinois, to Savannah, Georgia. The routing was specified in the bills of lading, which was, however, on account of floods, deviated from. The motorcycles were consigned to the order of plaintiff with a notation on the bill of lading to “Notify Williams Motor Company, 238 Drayton street.” It was proven that the William's Motor Company was a customer of plaintiff with exclusive sales privileges at Savannah.

The motorcycles arrived at Savannah April 23,1913, and were destroyed by fire on May 23, 1913, while in a warehouse of the Seaboard Air Line Company in Savannah. On the arrival of the motorcycles at Savannah the Williams Motor Company was notified in writing as well as by telephone, and the motorcycles were put in storage with the knowledge and acquiescence of the Williams Motor Company.

The judgment was for the value of the two motorcycles.

The bill of lading contained among others the following provisions:

“For loss, damage or delay caused by fire occurring after 48 hours after notice of the arrival of the property at destination * * * has been duly sent or given, the carrier’s liability shall be that of warehouseman only.” Also:

"Every carrier shall have the right in case of physical necessity to forward said property by any railroad or route between the point of shipment and the point of destination.”

The carrier notified the Williams Motor Company of the arrival of the motorcycles on the day they reached Savannah, the point of destination. The Williams Company, instead of removing the motorcycles from the cars, acquiesced in their being put in a warehouse and, with knowledge tliat they were warehoused, allowed them there to remain until their destruction by fire, which occurred one month after their arrival at Savannah, and after the Williams Motor Company had actual notice of such arrival, subsequently agreeing to their being warehoused.

These facts constitute in law a delivery and therefore the responsibility of defendant under the law and also under the bill of lading was that of a warehouseman.

While it is true that the motorcycles were not carried as routed, defendant had, under the terms of the bill of lading, a right to deviate from such routing in case of physical necessity; it is proven that floods intervened and created the physical necessity of changing from the route specified. In any event, necessity of such a controlling nature would as matter of law have justified such deviation. Moreover, plaintiff suffered no damage on this account either by delay or accident springing from such change of route.

The trial judge made the following special' finding, which the proofs fully support:

“The court finds from the evidence that the motorcycles in controversy arrived at the delivery warehouse of the Seaboard Air Line, Savannah, Georgia, on April 23, 1913; that on April 23, 1913, notice of their arrival was given to Williams Motor Company; that said motorcycles were destroyed by fire in the said delivery warehouse May 23, 1913; that there is no evidence as to the cause of the fire which destroyed said motorcycles.”

From these proven and conceded facts the finding of the court should have been for the defendant.

By the notation and direction on the bill of lading, the Williams Motor Company was the agent of plaintiff so far as these two motorcycles are concerned. The record does not disclose that plaintiff had any other agent or person in Savannah representing it, either for these motorcycles or for any other purpose. The Williams Motor Company was the only channel through which defendant or its connecting carriers had any information regarding delivery. What the Williams Motor Company’s obligations to plaintiff were was no concern of defendant, who discharged its liability as a carrier of the motorcycles when the notice was given. If any further or.other directions were desired by plaintiff, it remained for it to make such desire known. It is true, if the motorcycles had not been in the warehouse they would not have been destroyed by fire; but they were there with the consent of the only representative of plaintiff of which defendant had any knowledge.

The shipment being an interstate one, it was incumbent upon the plaintiff to prove as a sine qua non to its right of recovery that the fire which destroyed the motorcycles in some way resulted from some negligent act of defendant. There was no such proof. Cincinnati, N. O. & T. P. Ry. Co. v. Rankin, 241 U. S. 319.

As said in Southern Ry. Co. v. Prescott, 240 U. S. 632:

“If, however, it appears that the loss is due to fire, that fact in itself, in the absence of circumstances permitting the inference of lack of reasonable precautions, does not suffice to show neglect, and the plaintiff, having the affirmative of the issue, must go forward with the evidence.”

Plaintiff having failed to prove actionable negligence against defendant as a warehouseman, the judgment of the municipal'court is reversed with a judgment of nil capiat and for costs in this court.

Reversed and judgment of nil capiat here.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.


text:
    Lithflux Mineral & Chemical Works, Appellant, v. W. H. & F. Jordan, Jr. (corporation), Appellee.
    Gen. No. 25,722.
    1. Sales, § 130

      —when delay in performance not excused. Under a contract providing for “prompt shipment” of a quantity of hyposulphite, a contention of the plaintiff that delay was excused on the ground of interference by the government was contradictory of a claim that prompt shipment meant by custom within 30 days, and could not be sustained when one of the witnesses for the plaintiff testified that the contract was made after the government’s interference.
    2. Sales, § 71*—when construction of contract as to time for shipment sustained. Under a contract providing for prompt shipment of a quantity of hyposulphite, where the evidence conflicted as to the meaning of the term “prompt shipment,” a finding of the trial judge that 2 or 3 days would fulfil the stipulation for prompt shipment was justified by the evidence and was not contrary to the manifest weight of the evidence, wherefore such finding would not be interfered with.
    3. Sales, § 71*—how provision for “prompt shipment” construed. A contract providing for “prompt shipment” of goods implies expedition and admits of less delay than would be permitted under a contract to act merely within a reasonable time.
    Appeal from the Municipal Court of Chicago; the Hon. John R. Newcomer, Judge, presiding. Heard in this court at the October term, 1919.
    Affirmed.
    Opinion filed March 8, 1920.

      John S. Charone, for appellant.
    Josephine E. Melville, for appellee; Willis Melville, of counsel.

      See Illinois Notes Digest, Yols. XI to XV, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Holdom

delivered the opinion of the court.

October 23, 1918, plaintiff made a contract with defendant to deliver, at a price, one hundred and fifty barrels of hyposulphite. This contract provided for “prompt shipment.” Delivery was not tendered until November 18, 1918, and defendant refused to accept on the ground that prompt shipment was not made and that the condition of the contract in this regard was broken by plaintiff. The price of hyposulphite declined, and by this suit it is sought to recover the difference between the contract and the market price, which was, as plaintiff claims, $183.75.

The cause was tried by the court without a jury and the finding was for defendant with a judgment of nil capiat, of which judgment plaintiff by this appeal seeks a review.

The whole case rests in an interpretation of the meaning of the words “prompt shipment,” plaintiff claiming that by custom 30 days is prompt shipment. This defendant disputes, insisting that the true meaning is a few days, viz., 2 or 3 days. Plaintiff, however, sought to excuse the delay on the ground that the federal government had under war power taken possession of all hyposulphite. This contention is contradictory of the claim that prompt shipment meant by custom within 30 days. However, a witness for plaintiff .testified that he took the order for plaintiff from defendant after the government had commandeered all hyposulphite at the manufacturers.

The evidence was in conflict on the point of the meaning of the words “prompt shipment.” We do not think plaintiff established the 30-day custom for which he contends, but that on the contrary the trial judge might reasonably conclude from the proofs that 2 or 3 days would fulfil the stipulation for prompt shipment in the contract. The conflict in the testimony was peculiarly one to be solved by the trial judge, who was better able to judge of the credibility of the witnesses and their knowledge of the matters about which they testified than are we.

Moreover, we cannot say that the conclusions arrived at by the trial judge are contrary to the manifest weight of the evidence; that being so, we would not be justified in reversing the judgment.

We think the applicable principle is fairly well stated in Tobias v. Lissberger, 105 N. Y. 410, where the court said:

"Had there been no time specified it would undoubtedly have been the duty of the vendor to make delivery of the things sold within a reasonable time. But the contract provides for prompt shipment. This implies expedition and admits of less delay than would be permitted under a covenant to act merely within a reasonable time. The sole object of prompt shipment is to secure a speedy arrival One who is ready is said to be prepared at the moment, while one who is prompt is said to be prepared beforehand. ’ ’

From the dates of the contract it is patent that the decline in the market price of hyposulphite was in all probability produced by the cessation of hostilities in the great world war. Under a fair interpretation of the contract, we think this loss falls upon the plaintiff.

As there is no reason apparent for reversing the judgment of the municipal court, it is affirmed.

Affirmed.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.


text:
    Robert L. Pangborn, Appellee, v. Addison Blakely, Appellant.
    Gen. No. 25,781.
    Landlord and tenant, § 478

      —how tenancy from, year to year .terminated. Where a tenant holds possession of premises from year to year, such tenancy will so continue until terminated by a 60-day notice given in pursuance of Rev. St. ch. 80, sec. 5 (J. & A. 1i 7043), and such notice must be served at some time within the first 4 months of the last half of the then existing yearly term.
    Appeal from the Municipal Court of Chicago; the Hon. Warren H. Orr, Judge, presiding. Heard in this court at the Optober term, 1919.
    Reversed with judgment of nil capiat.

    Opinion filed March 8, 1920.
    William McKinley, for appellant.
    Richard H. Peterson, for appellee.

      See Illinois Notes Digest, Tols. XI to XT, and Cumulative Quarterly, same topic and section number.

   Mr. Justice Holdom

delivered the opinion of the court.

This is an action of forcible detainer for possession of an apartment at 7361 North Ashland avenue, Chicag’o, in which plaintiff had judgment for possession, and defendant appeals.

Plaintiff claims under a lease from the fee owner, James B. Carter. Defendant has been in possession of the apartment as a tenant from year to year. The leasing has been by oral agreement, commencing the first term October 1, 1913, and ending September 30, 1914.

Defendant’s first landlord was Rose Steiner, who sold the property in which the premises in dispute are situate in December, 1914, to Kusel So Harris. Defendant, commencing January 1, 1915, paid rent to P. A. Harris until March, 1917, when the property was transferred to James B. Carter, the present owner. During all this time defendant paid the agreed rental to the several owners to the time of the commencement of this suit. James B. Carter served a 60-day notice, which expired February 28, 1919, notifying defendant that his right to possession would terminate on that date; as defendant did not move out, this suit in forcible detainer was instituted.

Defendant’s tenancy was from year to year under the facts in evidence; at first under a definite agreement for one year and thereafter by a continuance in possession with the acquiescence of the landlord for the time being. • Such tenancy has continued for yearly terms and will so continue until terminated by a 60-day notice given in pursuance of section 5, ch. 80, Rev. St. (J. & A. ¶ 7043). This notice must be served at some time within the first 4 months of the last half of the then existing yearly term.

That defendant paid the stipulated rent during, all the time of his occupancy to the commencement of this suit is not disputed; nor is the fact called in question that the yearly terms of occupancy expired on September 30 in each year. Therefore, at the time this suit was brought his' term would not expire until September 30, 1919, and could then only be terminated by the giving of a 60-day notice under section 5, supra, terminating the tenancy by service of such notice more than 60 days prior to the last-mentioned date. Defendant ’s tenancy could not be terminated in any other way except for nonpayment of rental in monthly instalments as agreed. In other words, after September 30, 1914, defendant became a tenant of the premises for another year upon the same terms and at the same rental as agreed upon in the original oral lease, and so on yearly thereafter, and such tenancy will continue until terminated as provided in section 5, supra, or in some other way as provided by statute should defendant default in the payment of rental instalments or be guilty of any other breach of the implied covenants of his leasing.

The facts in this ease fall within the principle and reasoning in Evans v. Schwartz, 211 Ill. App. 573, and the numerous cases there cited.

As defendant was rightfully in possession at the time the forcible detainer suit in question was commenced, and as defendant was not delinquent in the payment of the agreed rental at that time, the plaintiff had then no cause of action against defendant; therefore the judgment of the municipal court is wrong, and it is reversed and a judgment of nil capiat entered in this court.

Reversed with judgment of nil capiat.

Mr. Presiding Justice McSurely and Mr. Justice Dever concur.