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    La Salle National Bank of La Salle v. Tolu Rock and Rye Company.
    1. Negotiable instrument — Ambiguity—Parol evidence. — ■ Where there is an ambiguity on the face of an instrument which purports to be executed in some representative capacity, rendering it doubtful whether the person signing means to bind himself, or only to bind a corporation or body of which he is the authorized agent, parol evidence is admissible as between the parties to prove extrinsic circumstances by which the respective liability of the principal or agent may be determined, especially in easeáwhere the intention to bind the one or the other was known to the person accepting the instrument at the time of acceptance.
    2. Parol evidence to explain ambiguous draet. — An action of assumpsit brought by appellant, a bank, as indorsee and holder of a bill of exchange drawn by the De Steiger Glass Co. on appellee’s company. The instrument was as follows: “Manufacturers of window glass, etc. Office of the De Steiger Glass Company, La Salle, Ill., Dec. 13, 1882. Thirty days after date, pay to the order of ourself eight hundred and twenty-five dollars, with exchange, value received, and charge the same to account of Phil. R. De Steiger, Pres’t. To the Tolu Rock & Rye Co., Chicago, Ill.” Written across the face was appellee’s acceptance, and it was indorsed, “ Pay to the order of La Salle National Bank. De Steiger Glass Co., Phil. R. De Steiger, Pres’t.” Appellant upon the trial introduced the draft in evidence, to the introduction of which appellee objected, on the ground that it was not the draft of the company, that it had never been indorsed by De Steiger, the drawer, and that there was a variance between the instrument declared on and the one offered in evidence. Appellant then offered parol evidence to prove extrinsic circumstances by which the liability of the Glass Co. could be determined, and to prove that the intention to bind the company and not the president was known to appellee at the time of accepting the draft. Appellant then offered the draft in evidence, with such parol evidence, which was rejected. Held, that the court erred in rejecting the parol evidence offered in connection with the draft, and that the draft and parol evidence, taken together, were sufficient to make a prima facie case for appellant.
    Appeal from the Superior Court of Cook county; the Hon. Rollin’ S. Williamson, Judge, presiding.
    Opinion filed February 12, 1884.
    This was assumpsit brought by the La Salle Rational Bank as indorsee and holder of a bill of exchange, alleged to have been drawn by the He Steiger Glass Company on the Tolu Rock and Rye Company, and accepted by the latter. The instrument was as follows:
    : $825.00.
    “Office of De Steiger Glass Company La Salle Ill. Dec. 13, 1882.
    Manufacturers of Window Glass, Glass Ware, Fruit Jars, &c.
    “Thirty days after date, pay to the order of ourself eight hundred and twenty-five dollars with exchange, value received, and charge the same to account of
    “Phil. R. De Steigee, Prest.”
    “To the Tolu Rock & Rye Co., Chicago, Ill.”
    (Written across the face)
    “Accepted, payable at 41 River street, Chicago.
    “ Tolu Rook & Rye Co.
    “F. E. Davis, Treas.”
    (Indorsed) “Pay to the order of La Salle Rational Bank.
    “ De Steigee Glass Co.
    “Phil. R. De Steiger, Prest.”
    The declaration was in the usual form, to which the defendant pleaded the general issue, also a special plea that the draft was the draft of Phil. R. De Steiger and not the draft of the De Steiger Glass Company.
    Upon the trial the plaintiff offered the draft in evidence, to the introduction of which the defendant objected on the ground that it was not the draft of the company, that it had never been indorsed by De Steiger, tbe drawer, and that there was a variance between the instrument declared upon, and the one offered in evidence. The court sustained the objection, and refused to admit the draft in evidence; whereupon the plaintiff offered to prove:
    1st. That the draft was drawn by Phil. P. De Steiger, as the president of the De Steiger Glass Company.
    2d. That it was within the usual function of said Phil. P. De Steiger, as president of said company, to make negotiable paper of said company.
    3d. That said company has customarily negotiated and treated paper «• so signed or drawn as was this draft, as the paper of the De Steiger Glass Company; and
    4th. That the draft offered in evidence was drawn by said Phil. B. De Steiger, president of said glass company, as the draft of said company, and that said intention was known to the defendant in this case.
    And again offered the draft in evidence in connection with such parol evidence, which the court again rejected. To which ruling of the court the plaintiff duly excepted. The plaintiff offering no further evidence, there was a verdict and judgment for the defendant,- and the plaintiff appealed to this court. The assignment of errors calls in question the rulings of the court in refusing to admit the evidence offered.
    Messrs. Peckham & Brown, for appellant;
    that as the draft was drawn to the order of “ ourself,” its indorsement by the company was a ratification by that company of its signature by the president, cited Melvin v. Hodges, 71 Ill. 422; Paul v. Berry, 78 Ill. 158; Conro v. Point Henry Co., 12 Barbour, 27; Fuller v. Hooper, 3 Gray, 334; Devendorf v. West Va. O., etc., Co., 17 West Va. 135.
    Parol evidence was admissible to explain the draft: Hypes v. Griffin, 89 Ill. 134; Mechanics Bk. v. Bk. of Columbia, 5 Wheaton, 526; Baldwin v. Bk. of Newbury, 1 Wallace, 234; Haile v. Pierce, 32 Md. 327; Brockway v. Allen, 17 Wendell, 40; Hood v. Hallenbeck, 7 Hun, 362; West v. First Nat. Bk., 20 Hun, 408; Hovey v. Magill, 2 Conn. 680; Hager v. Rice, 4 Colo. 90; Lazarus v. Shearer, 2 Ala. 718; May v. Hewitt, 83 Ala. 161; R. F. & P. R. R. Co. v. Snead, 19 Grat. 354; Hardy v. Pilcher, 57 Miss. 18; McClellan v. Reynolds, 49 Mo. 312.
    Messrs. G. W. and J. T. Kbetzinger, for appellee;
    that it is not the draft of the corporation, and that the president is liable individually, cited Barker v. Mechanics Ins. Co., 3 Wend. 94-8; Taft v. Brewster, 9 Johns. R. 234; White v. Skinner, 13 Johns. R. 307; Stone v. Wood, 7 Cowen, 453; Scott v. Baker, 3 West Va. 285; Macbean v. Morrison, 1 A. K. Marshall, 545; Hills v. Bannister, 8 Cowen, 31; Powers v. Briggs, 79 Ill. 404.
    As to the admission of parol evidence to explain the draft when the action against the acceptor is not brought by the president or the corporation, but a third party: Hypes v. Griffin, 89 Ill. 137.
   Wilson, J.

As to the action of the court in rejecting the draft when offered alone, it is unnecessary to express any opinion. The decisions upon the construction and interpretation of commercial instruments purporting to be executed by one in a representative capacity, are almost infinite in number and variety, some of them being seemingly in conflict with each other, while many are so near the border line as to make it seem they might as appropriately fall on one side as the other.

The only question we shall consider is, as to whether the draft, taken in connection with the parol evidence offered, was admissible; or, confining it within still narrower limits, was the parol evidence offered admissible, since if it was, it was ample to show that the draft was drawn as and for, and was intended to be, the company’s paper, and that this was known to appellee when accepting it, and also that He Steiger had authority to bind the company thereby? We shall assume what we think must be conceded without discussion, that it is, at least, doubtful upon the face of the instrument, whether it was intended to be the act of the company or of De Steiger individually.

We have examined with much care the adjudicated cases on this subject and have reached the conclusion both upon reason and authority, that under the conditions stated, such evidence is admissible.

The Supreme Court of the United States have repeatedly held in similar cases, that where the instrument was ambiguous on its face, rendering it doubtful whether it was intended to be the official act of the corporation or the private act of an agent, extrinsic evidence may be resorted to, to show which was intended; and that the admission of such evidence was not in violation of the rule against varying or contradicting the terms of a written instrument by parol.

In the leading case of Mechanics Bank v. Bank of Columbia, 5 Wheat. 326, an action was brought by the latter bank against the former on the following check:

“Mo. 18.

Mechanics Bank of Alexandria!

June 25, 1817.

Mechanics Bank of Alexandria.

Cashier of the Bank of Columbia. Pay to the order of P. H. Minor, Esq. ten thousand dollars.

$10,000. Wa. Patou, Jr.”

The check was offered in evidence by the plaintiff, and in connection with it, evidence to prove that Patón, before, at the time, and subsequent to the drawing of the check, was cashier of the Mechanics Bank, and that Minor was its teller; and in order to prove that the check was drawn by Patón in his capacity as cashier, and that it was so understood by the Bank of Columbia, evidence was further offered by the plaintiff to show that from a time anterior to the time of drawing the check, there was kept in the Mechanics Bank a book of printed checks in blank, to be used by the cashier in drawing his official checks, and that the check in question had been cut out of said book. It was further shown that Patón in drawing checks, and in official correspondence, sometimes added to his signature the letters “Cas” or “Ca.” and at other times omitted them.

The defendant’s counsel objected to all such extrinsic evidence, insisting that the character of the check could only be determined by the check itself, and that no parol or other evidence could be received to explain the same. The trial court overruled the objection, and held that it was competent to prove by parol that the check was drawn under such circumstances and in such a manner as justified the plaintiff in considering it the check of the bank. The Supreme Court affirmed the ruling of the court below. Speaking by Johnson, J., the court said: “The question is whether a certain act done by the cashier of a bank was done in his official or individual capacity. Had the draft signed by Patón borne no marks of an official character on the face of it, the case would have presented more difficulty. But if marks of an official character not only exist on the face but predominate, the case is a very familiar one. * * * It is enough for the purpose of the defendant to establish that there existed on the face of the paper, circumstances from which it might reasonably be inferred that it was' either the one or the other. In that case, it became indispensable to resort to extrinsic evidence to remove the doubt.”

It is claimed by appellee’s counsel that the doctrine of that case must be regarded as having been subsequently overruled by the same court; but this, as will be seen further on, is a misapprehension. On the contrary, it has been expressly approved and re-affirmed in several later cases, while in the State courts it has been followed almost universally, whenever the question has been directly presented.

In Baldwin v. Bank of Newbury, 1 Wal. 234, the instrument was as follows:

“ $3,500. Boston, Dec. 9, 1853.

Five months after date, I promise to pay to the order of 0. 0. Hale. Esq., cashier, thirty-five hundred dollars; payable at either bank in Boston, value received.

(Signed) J. W. Baldwin.”

Suit was brought against the maker of the note by the Bank of Newbury, without any indorsement of the note by Hale, the person named therein as payee. It was objected that the note declared on was not admissible in evidenee under the declaration, not having been indorsed. It was conceded (subject to the opinion of the court as to its competency) that Hale was .in fact cashier of the bank, and that in taking the note he was acting for the bank as its agent and cashier, and the question was, whether parol evidence was admissible to prove such facts. The Supreme Court held the evidence admissible. Mr. Justice Clifford said, “ Counsel very properly admit that such evidence would be admissible in suits upon ordinary, simple contracts, but the argument is that a different rule prevails where the suit is upon a promissory note or bill of exchange. Suits in such cases, it is said, can only be maintained in the name of the person therein named as payee, and consequently, tliat the plaintiff bank can not be treated as such without explanatory evidence, and that parol evidence is not admissible to furnish any such explanation.” After declaring the position untenable, the opinion proceeds: “It is clear that evidence may be received to show that a note given to the cashier of a bank was intended as a promise to the corporation, and that such evidence has no tendency whatever to contradict the terms of the instrument. Where a check was drawn by a person who was cashier of an incorporated bank, and it appeared doubtful upon the face of the instrument whether it was an official or a private act, this court held, in the case of the Mechanics Bank v. The Bank of Columbia, 5 Wheat. 326, that parol evidence was admissible to show that it was an official act. The signature of the drawer in that case had nothing appended to it to show that he acted in an official character, and yet it was unhesitatingly held that parol evidence was admissible to show the real character of the transaction. * * The same rule as applied to ordinary simple contracts has since that time been fully adopted by this court.”

Again, in a recent case, Baldwin v. Williams, decided at October term, 1881, and reported in 14 Otto, 93, the check was as follows:

“No — . Alexakdria, Va. Oct. 2, 1875?

The First National Bank of Alexandria, pay to the order of A. E. & O. E. Tilton, seven thousand dollars.

E. P. Aistrop, W. C. Williams,

Secy. V. Prest.”

Suit was brought by the payees of the note against Williams personally. A default having been taken against him, he filed a bill in equity to set the same aside on the ground of surprise, which being satisfactorily shown, the main question arose as to the admissibility of extrinsic evidence, to prove that the check was the check of the Montpelier Humane Association, and not the individual check of Williams.

The case, in its essential features, was on all fours with the case at bar except that there were fewer ear-marks of official character on the face of the paper than on the De Steiger draft. In a well considered opinion, Mr. Justice ’'Bradley said: “ As to the merits of the case we agree with the court below in holding that according to the showing of the bill, and as between the parties, the check sued on was the check of the association. There is nothing on its face to preclude this construction. The bank was requested by two persons who sign themselves as officers, one as vice-president and the other as secretary, to pay a certain sum. Whether they made this request as officers or as individuals is anibiguous, to say the least. It is evident that an inquiry into the circumstances of the case might render it certain which was intended; as, if the bank had an account with a corporation of which these persons were the officers designated; if they had been in the habit of checking on the account in that form, with the knowledge and consent of the corporation, and the bank had been in the habit of answering such checks accordingly; and if all this were known to the party taking the checks, it would be a construction contrary to the truth to hold them to be the personal checks of the individuals, and not the checks of the corporation. Where a person acts merely as agent of another and signs papers in that capacity, that is, signs them as agent, and the party with whom he deals has full knowledge of his agency, and of the principal for whom he acts, an express disclosure of the principal’s name on the face of the papers, or in the signature, is not essential to protect the agent from personal liability. It is unnecessary to determine whether the form of the document in this case was sufficient to charge innocent holders of the checks with notice of its character.” The learned judge quotes with approbation the remarks of the court in the case of Mechanics Bank v. Bank of Columbia, saying they are apposite to the case before him, and adds, “ The ordinary rule undoubtedly is, that if a person merely adds to the signature of his name the word ‘agent,’ ‘trustee,’ ‘ treasurer,’ etc., without disclosing his principal, he is personally bound. The appendix is regarded as descriptio persones. It does not, of itself, make third persons chargeable with notice of any representative relation of the signer. But if he be in fact a mere agent, trustee or officer of some principal, and is in the habit of expressing in that way his representative character, in his dealings with a particular party who recognize him in that character, it would be contrary to justice and truth to construe the documents thus made and used as his personal obligations, contrary to the intent of the parties.”

We have quoted somewhat at length from the foregoing opinions, as fitly expressing our own views, and .as being, we think, founded in sound reason and justice.

Turning next to the State courts, it will be found that the prevailing current of the decisions is in harmony with those of the Federal court.

Flew York. In Brockway v. Allen, 17 Wend. 40, suit was brought against certain persons, as makers of a promissory uote, signed by them with the designation “ Trustees of the First Baptist Society of the Tillage of Brockport.” The defendants pleaded (1) that at the time of making the note, they were trustees of the society, that the society was indebted to the plaintiff, and that the defendants, as such Prustees, executed the note on account of such indebtedness; (2) A like plea, omitting the averment of the society’s indebtedness. Demurrers were sustained to these pleas for certain technical defects, but the court lay down the rule, that where individuals subscribe their proper names to a promissory note, prima faeie they are liable personally, though they add a description of the character in which the note was executed; hut such presumption of liability may be rebutted by proof that the note was in fact given by the makers, as the agents of the corporation, and that they were duly authorized to make such note, as the agents of the corporation; and such facts may be pleaded in bar of an action against the makers personally, a/verring knowledge on the fart of the payee. To the same effect is White v. Skinner, 13 John. 307, cited in Barber v. Mechs. Ins. Co., 3 Wend. 94; Babcock v. Beman, 11 N. Y. 200; Bank of Utica v. Magher, 18 John. 342; Bank of Genesee v. Patchin Bank, 19 N. Y. 312, where the court state the rule thus: “As a general proposition, it is undoubtedly true that one who signs a writing as agent, trustee or president, is regarded as merely describing himself, and hence is personally liable. But when a writing is thus executed with full authority from a principal, and is received by the payee as the obligation of a principal, the party oil whose account it is executed is alone liable,” citing among other cases Brockway v. Allen, supra; White v. Skinner, 13 John. 307; Randall v. Van Vetchen, 19 John. 60; Dubois v. Delaware and Hudson Canal Company, 4 Wend. 285; See also, Hicks v. Hinde et al., 9_ Barb. 528; Hood v. Hollenback, 7 Hun, 408. It is unnecessary to further multiply the citation of Hew York cases. Tire only case in that State which is apparently in conflict with the cases above cited is Hills v. Bannister, 8 Cow. 31, where the defendants had signed the note in suit individually, adding to their names “Trustees of Union Religious Society, Phelps,” and were held personally liable. That case was argued and decided mainly upon other grounds, and the question now under discussion was scarcely considered. Moreover, in the subsequent case of the Bank of Genesee v. Patchin Bank, the ruling in that case is expressly disaffirmed. The court, by Gray, after quoting numerous decisions to the contrary, said, “The principle decided by these cases is not in harmony with Hills v. Bannister. The cases to which I have referred have nevertheless been followed by the Supreme Court of this State, since the reorganization of our judicial system, and the principle settled by them fully affirmed by this court.”

New Jersey. In Kean v. Davis, 21 N. J. L. 683, suit was brought by the plaintiff, as indorsee, against the defendant, as drawer of certain bills of exchange, each as follows:

“ 8500 Elizabethtown, Sept. —, 1841.

Six months after date, please pay to the order of the Elizabethtown and Somerville Kailroad Company five hundred dollars, value received, and charge as ordered.

Your obed’t serv’t,

John Kean,

President Elizabethtown and Somerville R. R. Co.”

The drafts were addressed to William Thompson, Esq., Somerville, K. J., and were by him accepted. They were indorsed “The Elizabethtown and Somerville Kailroad Company, by John Kean, President.” The question was, whether the drafts were the individual drafts of Kean or of the railroad company. The defendant offered to prove that at the date of the bills Kean was president of the Elizabethtown and Somerville Kailroad Company; that the bills were drawn by him by arid under the direction of the boards of directors of the company, and in pursuance of authority vested in him for that purpose; that at the time of the delivery of the bills to the plaintiffs, they were informed that the railroad company was the drawer of the bills; that the bills were intended to be the bills of the company, and that the plaintiffs took them as such. This evidence, upon objection by the plaintiffs, was ruled out by the court, thus presenting a case entirely similar in its essential features to the case at bar. In an elaborate opinion by the chief justice, concurred in by all the judges, it was held that, as it did not clearly appear on the face of the instrument whether the drawing of the bills was designed as the act of the corporation or as the act of the individual, it was competent to resort to parol proof to show which was intended. The court said, “The question is not what is the true construction of the language of the contracting party, but who is the contracting party; Whose language is it? And the evidence is not adduced to discharge the agent from a personal liability which he has assumed, but to prove that in fact he never incurred that liability; not to aid in the construction of the instrument, but to prove whose instrument it is. The court held the evidence admissible, citing Mechanics Bank v. Bank of Columbia, as laying down the true rule in such cases.

Maryland. In Haile v. Pierce, 32 Md. 327, the instrument was as follows:

“$1,000. Baltimore County, Aug. 8, 1865.

Four months after date, we, the president and directors of the Dunlaney’s Talley Sweet Air Turnpike Company, promise to pay William F. Pierce, or order, one thousand dollars, for value received.

(Signed) Charles F. Hale, President.

J. H. Henderson, Director.

Joseph G. Dance.

Edward B. Sparks, Sec’y.”

Explanatory evidence was held admissible, the court stating the doctrine thus: Where individuals subscribe their proper names to a promissory note, prima facie they are personally liable, though they add a description of the character in which the note is given; but such presumption of liability may be rebutted, as between the original parties, by proof that the note was in fact given by the makers as agents, with the payee’s knowledge. Stewart, J., said: “The terms of the note, upon its face, being ambiguous and uncertain as to the fact whether appellants did sign it in their individual or official capacity, and as relevant and extraneous proof might aid in the solution of the question, it was competent for either party to show by any pertinent extraneous evidence on what account the note was given, and whether on the credit of the company or upon the individual responsibility of the appellants, as the joint makers thereof, for the purpose of proving or tending to prove the true character and purport of the note. This could not vary or contradict the instrument, but might be explanatory of its meaning where otherwise it would be unintelligible.”

Virginia. In Richmond, Fred’g and Potomac R. R. Co. v. Snead et al., 19 Graft. 354, the note read:

“$484. Richmond, May 31, 1856.

Due Joseph H. Snead and Benjamin E. Smith, lour hundred and eighty-four dollars in full, of labor performed on cottage lot of the railroad company, the same payable on demand. (Signed) Ed. Robinson.”

It was held that it being uncertain on the face of the instrument, whether it was designed to acknowledge a debt due by Robinson, individually, or by the company whose president and agent he was, parol evidence was admissible to show which was intended. See also, Early v. Wilkinson, 9 Gratt. 68.

Alabama. In Lazarus v. Shearer, 2 Ala. N. S. 718, a draft was drawn payable to the order of Lazarus, signed Andrew A. Dexter, Chf. Eng. S. & T. R. R. Co., and directed to Gilbert Shearer, Prest, of the Selma and Tennessee Railroad Company, Suit was brought by the payee against Shearer, individually, as acceptor of the draff. The plaintiff having offered in evidence the draft with the acceptance thereon, the defendant, against the objection of the plaintiff, was allowed'to prove by the drawer that the bill was drawn by him on the defendant, as president of the railroad company, and that the payee of the bill was apprised by the drawer, that it was intended to be drawn upon the defendant as such president, and not in his private capacity. The Supreme Court held the evidence competent, saying: “ When it it is doubtful from the face of the contract, whether it was intended to operate as the personal engagement of the party signing it, or to impose an obligation upon some third party as principal, parol evidence is admissible to show the true character of the transaction,” citing and quoting at length from Mechs. Bank v. Bank of Alexandria, and Brockway v. Allen, 17 Wend. The rule as stated in this case is qualified, as also in the other cases, to the effect that such evidence would not be admissible as against the rights of a bona fide indorsee of negotiable paper without notice. This case has been uniformly followed in that State. See May v. Hewitt, 3 Ala. 161, and cases cited.

Kentucky. In Owings v. Grubbs, 6 J. J. Marsh 31, the note was

“ State Furnace, March 16, 1830.

Due Richard H. Owings, seventy-seven dollars and two cents, for value received, as witness my hand,

(Signed) for Thomas D. Owings,

James Grubbs.”

Parol evidence was admitted to show that Grubbs was the manager of Owings’ works, and that he executed and delivered the note as the obligation of Owings. This ruling was approved by the Supreme Court. To the same effect is Webb v. Burke, 5 B. Mon. 51, where Owings v. Grubb is approved.

Missouri. In McLellan v. Reynolds, 49 Mo. 312, the note was as follows: “For value received, I promise to pay A. & B. $645 for building a school-house in Dist. Mo. 3, etc., with interest at ten per cent. (Signed) P. T. Reynolds, Local Director.”

In a suit by the payee against Reynolds, individually, it was held that parol evidence was admissible to show that it was not intended to be the note of Reynolds, but the note of the district.' To the same effect is Smith v. Alexander, 31 Mo. 193; Shuetz v. Bailey, 40 Mb. 69; Musser v. Johnson, 42 Mo. 74.

Mississippi. In Hardy v. Pilcher, 57 Miss. 17, the draft was, “ On the first day of December next, please pay to J. S. Pilcher, or bearer, four hundred dollars, and charge the same to my account. To Wm. S. Bolling. (Signed) H. W. Hardy.” Written across the face “ Accepted, Wm. S. Bolling, agent of W. H. Hardy.”

Suit was brought by Pilcher, the payee of the draft, against Hardy, as drawer. Chalmers J., said, “ Ordinarily, no extrinsic evidence of any kind is admissible to vary or explain negotiable instruments. Such paper speaks its own language and the meaning which the law affixes to it can not be changed by any evidence aliunde. One of the few exceptions to this rule is, where anything on the face of the paper suggests a doubt as to the party bound, or the character in which any of the signers has acted in affixing his name; in which case testimony may be admitted between the original parties to show -the true intent. Thus where one has signed as agent of another, while the prima facie presumption is that the words are merely desoriptio personae, and that the signer is individually bound, yet it may be shown in a suit between the parties that it was not so intended, but that on the contrary, the true intention was that the payee should look to the principal, whose name was disclosed in the signature of his agent, or who toas well known to he the true party to he hov/nd,” citing Mechs. Bank v. Bank of Columbia, and other cases above referred to.

Colorado. In Hagar v. Rice, 4 Col. 90, two drafts were drawn, payable to the order of Bice, and were signed Boulevard and Sloan Steam Navigation Company, by Win. Anderson, Prest. They were addressed to F. D. Hagar Treas., and accepted by him by writing across the face of the bill, “ F. D. Hagar, Treas.” In a suit by the payee, Bice, against Hagar, individually, the latter pleaded that he was the treasurer of the company; that he was authorized, and it was his duty as such treasurer, to pay out moneys in his hands belonging to the companj'-, on its order, and to accept as its treasurer, by the name and style of F. D. Hagar, Treas., all orders or bills of exchange drawn by said company on its treasurer, and to pay the same when due, of all which the plaintiff had notice, and that to the knowledge of the plaintiff, the defendant accepted the same as treasurer, and not otherwise. The Supreme Court, reversing the judgment below for the plaintiff on sustaining a demurrer to the plea, said: “ When there is a latent ambiguity, as between the original parties to a bill of exchange and others affected with notice, especially when the name of the principal is in some manner disclosed upon the face of the instrument, we'deem the rule to be that the real nature of the transaction may be investigated.”

Connecticut. In Hovey v. Magill, 6 Conn. 680, suit was brought by Hovey, payee of a promissory note, signed by the defendant as follows: “Arthur W. Magill, agent for the Middletown Manufacturing Company.” It was held by a majority of the court, five of the judges concurring with the chief justice, and three dissenting, that the defendant was not liable individually, ‘evidence being admitted to show that he was the duly appointed agent of the company, and that he had been in the habit of signing notes in the same manner with the knowledge of the company, and which the company had regularly paid. To the same effect is Shelton v. Darling, 2 Id. 435.

Massachusetts. In Mann v. Chandler, 9 Mass. 337, the notes sued on were signed, “ Gardner S. Chandler, Treasurer, Dorchester Turnpike Corporation.” Suit was brought by the payee of the notes against Chandler, seeking to charge him personally. Proof was received to show that he was treasurer of the company, and as such was duly authorized to execute the notes in question, as the companj^s obligations. Upon a case reserved, the Supreme Court held that under the facts shown, the defendant was not liable. See also, to the same effect Dawes v. Jackson, 9 Mass. 490. It may seem at first blush that these cases are at variance with other Massachusetts decisions, but it will be found upon examination, that there is no necessary conflict between them, as the latter were for the most part decided upon the face of the instruments, no explanatory evidence being offered.

In Illinois the precise question involved in the present case does not appear to have received special consideration.

In Powers v. Briggs, 79 Ill. 493, the defendants had signed two promissory notes describing themselves as trustees of the Seventh Presbyterian Church. On the trial, evidence was admitted, over the plaintiff’s objection, showing that at the time the notes were executed the defendants were trustees of the church, and that the notes were given for the difference in value on exchange of church organs. There was a judgment for the defendants, which the Supreme Court reversed on tire double ground that the notes upon their face appeared to be the individual obligations of the defendants, and that the parol evidence was insufficient to show that the plaintiff was giving credit to the corporation, or that he knew the defendants intended by the notes he should do so. The court expressly declined to pass upon the question as to the admissibility of the parol evidence.

In Hypes v. Griffin, 89 Ill. 134, no reference is made to the effect of an ambiguity as bearing upon the admissibility of parol explanatory evidence. The signers of the note there had affixed nothing to their names indicating that they were acting in a representative character, and the court seem to have treated the paper as being on its face only their personal undertaking, with nothing to suggest a doubt that it was so intended. The court, however, in one portion of the opinion, says: “ It seems to be settled, so far as there is any well defined rule on this subject, that where a party signs his name as cashier or agent for a banking, railroad or other corporation, in drawing drafts or bills, or in accepting drafts or other evidence of indebtedness in its ordinary business, if it appears it was the obligation of the corporation, and the agent had authority to bind it, he will not be personally liable, and the facts may be shown by extrinsic evidence.”

It is said in some of the cases that the ambiguity is to be regarded as a latent rather than a patent one, while in others, treating it as a patent ambiguity, it is held to constitute an exception to the rule excluding parol evidence, in constructing written instruments. 40 Mo. 312; 6 J. J. Marsh 31; 6 Col. 90. But upon whatever ground it may be placed, the rule admitting such evidence under the circumstances stated, is too firmly established to be disregarded. A bona fide indorsor for value before maturity of commercial paper, has the right to rely upon what appears upon its face, as otherwise he might be taken by surprise, and be misled to his injury. But there can be no surprise where a note or bill is taken or accepted with knowledge that the person executing it acts only in a representative capacity, as the authorized agent of a known principal, intending-to bind, not himself, but such principal. The promisee in such case gets precisely what he bargains for, to wit, the obligation of the principal, and not of the agent; and the law is not so unreasonable as to permit him afterward to say to the agent, This appears on its face to bind you personally, and therefore you shall pay it.”

"We are aware that decisions are found in which the ruling, in Mechanics Bank v. Bank of Columbia, has been criticised but such ci’iticisms seem to have been placed, for the most part, though not always, on the ground that the instrument upon its face did not purport to be executed in a representative capacity, or that it was free from ambiguity, and therefore not open to explanation by extrinsic evidence.

In the light of the foregoing and other authorities of like import, as well as upon principles of reason and justice, we think it may be laid down as the true rule that where there is an ambiguity on tbe face of an instrument which purports to be executed in some representative capacity, rendering it doubtful whether the person signing means to bind himself, or only to bind a corporation or body of which he is the authorized agent, parol evidence is admissible, as between the parties, to prove extrinsic circumstances by which the respective liability of the principal or agent may be determined, especially in cases where the intention to bind the one or the other was known to the person accepting the instrument at the time of accepting it.

Our conclusions are (1) that the court erred in rejecting the parol evidence offered in connection with the draft, and (2) that the draft and parol evidence taken together were sufficient to make aprima faeie case for the plaintiff!

Bor the reasons indicated the judgment of the court below is reversed and the cause remanded for a new trial.

Reversed and remanded.


source: Caselaw Access Project

author: Bailey, •!.

license: Public Domain

text:
    George Bartalott v. The International Bank.
    1. Pleading — Statute of Limitations. — Action of assumpsit for money had and received. Defendant’s second plea was the Statute of Limitations, to which plaintiff pleaded a special replication seeidng to avail himself of the provisions of section 22 of the Statute of Limitations. Plaintiif’s claim was that he paid, the money in controversy to defendant to obtain the release of a certain deed of trust on land which he had recently purchased, in ignorance of the fact that it had already been paid to the defendant and satisfied in full, and that the fact of such previous payment was fraudulently concealed from him by the defendant at the time the money was paid and since, by reason of which he remained in ignorance, etc. Defendant urged that the replication failed to show that there was any defense to the trust deed. Held, that this point is not well taken. By the plea of the Statute of Limitations, plaintiff’s cause of action stands admitted, and the only office of the replication is to avoid the bar of the statute by bringing it within an exception to such statute and as plaintiff's replication sufficiently alleges'a fraudulent coneealnjent of his cause of action, the court below erred in sustaining the demurrer to it.
    2. Fraudulent concealment op cause op action — Statute op Limitations. — A replication to a plea of the Statute of Limitations, setting up a fraudulent concealment by the defendant of the cause of action, must set out the facts and circumstances constituting the fraud, and must show further that there has been no want of reasonable diligence on the part of (he plaintiff in discovering the cause of action; must disclose the time when, and circumstances under which the discovery was made. But it is not essential that the acts constituting the fraudulent concealment should be subsequent to the accruing of the cause of action. They may be coincident with or even prior to it, provided there is the relation of design and its consummation.
    Appeal from the Superior Court of Cook county; the Hon. Hollín S. ‘Williamson, Judge, presiding.
    Opinion filed February 12, 1884.
    Messrs. Beaming & Thompson, for appellant;
    that the fraud and deceit which enable the offender to do the wrong may precede its perpetration; the length of timéis not material, provided there is the relation of design and its consummation, cited Martin v. Smith, 1 Dillon, 95; Carr v. Hilton, 1 Curt. C. C. R. 230; Campbell v. Vining, 23 Ill. 525; Way v. Cutting, 20 N. H. 187; Bowman v. Sanborn, 18 N. H. 205; First Mass., etc., Co., v. Field, 3 Mass. 201; Atlantic Nat. Bk. v. Harris, 118 Mass. 152; Mayne v. Griswold, 3 Sandf. 463; Jones v. Conoway, 4 Yeates, 109; Mitchell v. Buffington, 15 Lancaster Bar, No. 16.
    Messrs. Hosentiial & Pence, for appellee;
    as to the elements of an equitable estoppel, cited Bigelow on Estoppel, 432; Smith v. Newton, 38 Ill. 230; International Bk. v. Bowen, 80 Ill. 541; Wood v. Carpenter, 101 U. S. 135; Kerr on Fraud, Am. ed., 73.
    The destruction or cancellation of the evidence of a debt does not release the debt: Heartt v. Rhodes, 66 Ill. 351.
    The payment of part of a debt in satisfaction of the whole will not satisfy the whole, and can not be pleaded in bar: Chitty on Contracts, 10th Am. ed., 821.
    An agreement to abandon a claim, unless there be a consideration shown, is a mere ntidum factum: Wilson v. Keller, 9 Bradwell, 348; Addison on Contracts, 7th ed., 267; Chitty on Contracts, 10th Am. ed., 841.
    Unless appellant was free from laches, or if he intended to waive all inquiry into the truth of the bank’s claim, he can not recover: International Bk. v. Bartalott, 11 Bradwell, 620; Chitty on Contracts, 10th Am. ed., 694; Marriott v. Hampton, 2 Smith’s Leading Cases, *400, 1; Milnes v. Duncan, 6 B. & C. 671; Kelly v. Solari, 9 M. & W. 54.
    As to what will constitute a fraudulent concealment of the cause of action so as to take it out of the bar of the Statute of Limitations: Wood v. Carpenter, 101 U. S. 135; Rudd v. Hamblin, 8 Allen, 132; International Bk. v. Bartalott, 11 Bradwell, 620.
   Bailey, •!.

This cause was before this court at the October term, 1882, at which time a judgment in favor of the plaintiff was reversed. International Bank v. Bartalott, 11 Bradwell, 620. The action was assumpsit for money had and received, and was brought by the appellant against the appellee. The defendant pleaded non-assumpsit and the Statute of Limitations. To the first of these pleas, the plaintiff added a similiter, and to the second he pleaded a special replication, alleging the fraudulent concealment from him by the defendant of his said cause of action, until within less than five years next prior to the commencement of the suit. Since the decision of the former appeal, the plaintiff has amended his replication, and a demurrer thereto having been sustained by the court, and the plaintiff having elected to abide by his replication, judgment was rendered against him for costs. From that judgment this appeal is prosecuted, and the only question now presented is as to the sufficiency of the amended replication.

The plaintiff, by said replication, seeks to avail himself of the provisions of the twenty-second section of the Statute of Limitations, which is as follows: “If a person liable to an action, fraudulently conceals the cause of action from the knowledge of the person entitled thereto, the action may be commenced at any time within five years after the person entitled to bring the same, discovers that he has such cause of action, and not afterward.” The grounds of demurrer to the replication engaged by counsel for the defendant, are the following:

First. The facts alleged in the replication do not show any defense to the deed of trust at the time the plaintiff paid for its release.

Second. The facts alleged do not show that the plaintiff was free from laches, or that he did not intend to waive all inquiry into the truth of the matter of the amount actually due the defendant at the time of such payment, and,

Third. The replication does not contain any allegation of facts sufficient to constitute fraudulent concealment of the cause of action, or to show diligence on the part of the plaintiff in discovering it.

It is manifest, we think, that the first and second of these propositions are untenable, except so far as they are included in the third. The plaintiff’s claim is, that he paid the money in controversy to the defendant, to obtain the release of a certain deed of trust on land which he had recently purchased, in ignorance of the fact that it had already been paid to the defendant and satisfied in full, and that the fact of such previous payment was fraudulently concealed from him by the defendant at the time the money in question was paid, and since, by reason of which he remained in ignorance of such fact and of his right to recover said money back, until a short time prior to the commencement of this suit. The first point urged, viz., that the replication fails to show that there was any defense to the trust deed, is only saying in another form that the replication fails to show that the plaintiff has a good cause of action. If there was no defense to the trust deed, or, in other words, if at the time the plaintiff paid said money and obtained the release, the trust deed was a valid and subsisting lien on his land, then clearly the payment was made upon a sufficient consideration, and under no mistake as to any material fact, and the money paid can not be recovered back. But is it necessary for the plaintiff to show by his replication that he has a good cause of action ? The plea of the Statute of Limitations is a plea in confession and avoidance. It confesses the plaintiff’s cause of action, but seeks to avoid a recovery, by invoking the bar of the statute. So far then as any issue on that plea is concerned, the plaintiff’s cause of. action stands admitted, and there is no occasion for re-stating it in the replication. The case is not one calling for a new assignment, but the only office of the replication is to avoid the bar set up in the plea by bringing the case within the exception provided in the twenty-second section of the statute. It was doubtless proper for the pleader to set out in his replication the circumstances of the transaction, out of which the cause of action arose, so far as necessary in order to a sufficient averment of the fraudulent concealment complained of, but this is not for the purpose of re-stating the cause of action as such, but of giving in detail the facts which constituted the fraudulent concealment.

Substantially, the same answer may be given to the second point made in support of the demurrer. Laches on the part of the plaintiff in omitting to avail himself, at the time he ■paid the money, of the means of knowledge within his reach, or an intention on his part to waive all inquiry into the truth of the matter of the amount actually due the defendant, would be a T>ar to his right to recover the money back. This rule is recognized in our opinion in this case, on the former appeal, and such is the doctrine of the authorities referred to by counsel for the defendant, in support of this branch of their argument. Such facts would doubtless constitute a defense available under the plea of non-assumpsit, but the plaintiff in his replication to a plea, setting up the bar of the statute, is called upon to meet and avoid that defense, and none other. Doubtless laches, or an intention to waive inquiry as to the amount due, if affirmatively shown, would tend to rebut the charge of fraud, but laches, as a defense, was not within the issue tendered by the plea replied to.

Recurring then to the third proposition urged, it seems to be well settled by the authorities that a replication to a plea of the Statute of Limitations, setting upa fraudulent concealment by the defendant of the cause of action, must set out the facts and circumstances constituting the fraud. It must further show that there has been no want of reasonable diligence on the part of the plaintiff in discovering the cause of action, and must also disclose the time when and circumstances under which the discovery was made. But it is not essential that the acts constituting the fraudulent concealment should be subsequent to the accruing of the cause of action. They may be coincident with or even prior to it, provided there is the relation of design and its consummation. Way v. Cutting, 20 N. H. 187; Bowman v. Sanborn, 18 Id. 205; Wood v. Carpenter, 101 U. S. 135; Boyd v. Boyd, 27 Ind. 429; Campbell v. Vining, 23 Ill. 525.

The facts alleged in the replication when stripped somewhat of their verbiage, are as follows: On or about October 12, 1870, the plaintiff purchased certain land in Cook county, of Samuel J. Walker, and paid him therefor $48,000, Walker procuring a conveyance of the land to the plaintiff from Henry H. Walker, and assuring plaintiff that it was free from all incumbrances, and promising to furnish him an abstract of title. Walker failing to furnish the abstract, the plaintiff, about January 1, 1874, obtained one for himself, and on examining it, ascertained that there appeared of record a deed of trust on said land, bearing date July 22, 1869, executed by Henry H. Walker to one Francis A. Hoffman, to secure two promissory notes for $15,000 each, payable to the order of Samuel J. Walker. Plaintiff, at the time he purchased the land did not purchase subject to said trust deed or assume its payment, and did not know of its 'existence. Said notes had been deposited by Samuel J. Walker with the defendant, as collateral security to certain other notes amounting to $20,000, and on the 11th of September, 1873, Walker paid the defendant $20,000 and canceled the principal notes, and also the two $15,000 notes, secured by the deed of trust, but left all of said notes in the defendant’s keeping. When the plaintiff discovered the incumbrance, he made diligent inquiry to learn whether it had been paid. Among other things he inquired of Henry H. Walker, the maker of the notes, who informed him that Samuel J". Walker was to pay them, and referred plaintiff to him for information as to their .payment. The plaintiff then asked Samuel J. Walker in relation to the matter, and was informed by him that the defendant held the notes, and that $20,000 remained due thereon, which he, Walker, was unable to pay.

In February, 1874, the plaintiff went to the defendant’s office, and inquired of its president, whether the defendant held said notes and if they were paid, and said president informed him that the defendant did hold said notes and trust deed. And said president, well knowingthat the indebtedness for which said notes were held as security had been previously paid, and that said notes had been surrendered by said defendant and canceled, fraudulently represented to the plaintiff that said notes had not been paid, and that there was due thereon the sum of $20,000. The plaintiff fearing that said land would be sold under said trust deed, and not knowing that the indebtedness secured by said notes .had already been paid, and'relying upon the false and fraudulent representations of the defendant, that there was due the defendant on said notes said sum of $20,000, on or about the 4th day of April, 1874, at the instance and request of the defendant, paid the defendant the sum of $15,000, in full satisfaction of the indebtedness so claimed and for a release of said land from said trust deed; and that thereby an action accrued to the plaintiff to recover back from the defendant said money so wrongfully and fraudulently obtained from the plaintiff.

In consequence of said fraudulent representations, said cause of action was not known to the plaintiff at the time it accrued. After said money was paid, the plaintiff demanded of the defendant the surrender to him of said notes and trust deed, but the defendant, by its president, with the fraudulent design of concealing from the plaintiff the fact of such previous payment by "Walker and the cancellation of said notes, and to suppress further inquiry by the plaintiff in respect thereto, replied that said notes and deed of trust were destroyed in the Chicago fire of 1871. In June following, said Henry H. Walker applied to the defendant for the surrender of said notes, and the defendant, with a like fraudulent design, represented that said notes were misplaced or lost, but the defendant at the time of said payment by the plaintiff and thence hitherto has retained said notes in its possession, and refused to produce the same. With a like fraudulent design, the defendant, at the time of the payment of said $15,000 by the plaintiff, purposely omitted and from thence hitherto has omitted to enter any receipt of said money on its books.

About the 1st day of January, 1876, the defendant, during the investigation by an expert into its account with Samuel J. Walker, with like fraudulent design of concealing the plaintiff’s cause of action, volunteered, through its president, to read to said expert the check given by Walker in payment of the indebtedness secured by said two $15,000 notes, and notwithstanding said check was so drawn as to designate the notes in payment of which it was given, said president, in Order to mislead saicl expert and conceal from him the fact that the check did designate by words and figures the indebtedness for which it was given, read said check as Hew York exchange, seeking thereby to convey the impression that said check was a draft on Hew York, instead of a check on the defendant in payment of and designating said indebtedness.

Again, on the first day of February, 1877, the defendant’s president and chief executive officer, in a certain cause then pending in the Superior Court of Cook county, wherein said president was called as a witness, with the design of further misleading the plaintiff and concealing his cause of action and suppressing inquiry on his part which might have led to the discovery thereof, falsely stated under oath that the notes designated in said check of "Walker’s were paid, taken up and surrendered, with their securities, April 4, 1874, the the date of the payment of said $15,000 by the plaintiff.

The replication avers that said fraudulent representations were calculated to and did have the effect of concealing from the plaintiff liis said cause of action, notwithstanding the exercise on his part of due diligence, from the date of the payment by him of said $15,000 until some time in July, 1881; that in that month, the plaintiff discovered the existence of said cause of action in this way: In a conversation between one O. F. Badger and one A. T. Ewing, held during that month, said Badger informed said Ewing that about December, 1876, he, said Badger, acted as an expert book-keeper in the examination of the account between the defendant and Samuel J. Walker, and through said examination discovered that said Walker paid the indebtedness for which the two $15,000 notes and deed of trust were held by the defendant, on the 11th day of September, 1873, by giving the defendant the check above mentioned, and during said month of July, 1881, said Ewing communicated said fact to the plaintiff. It is further alleged that the plaintiff did not know or suspect the existence of said cause of action, until the date last aforesaid, and that he brought his suit within five years next after making such discove2y.

There can be no doxibt, we think, that a fraudulent concealment from the plaintiff of his cause of action is sufficiently alleged. Independently of the various devices by which the defendant is charged with having subsequently sought to keep the plaintiff in ignorance of his rights, and to suppress inquiry in relation thereto, the means e2nployed by the defendant to obtain fi-om the. plaintiff the money in question not only constituted in themselves a fraud, but the fraud was of such a nature as to be calculated to perpetuate itself by first deceiving the plaintiff as to his rights, and afterwa2’d keeping him in ignorance thei’eof. Taking the averments of the replication as true, and they are so admitted by the demurrer, the defe:idant, at the time the plaintiff inquired of it as to the situation of the iucumbrance on his land, had been paid in full all the money due it, and was merely a custodian for Walker, of the surrendered and canceled notes. All other available sources of information in relation to the matter had already been exhausted by the plaintiff. On obtaining his abstract and discovering an incumbrance of record, he very naturally applied first to the maker of the notes and trust deed for information. By him, plaintiff was referred to Samuel J. Walker, the payee, and was told that he was to look after .the payment of the notes, and conld give the plaintiff the desired information. Plaintiff then applied to Samuel J. Walker, and he, whether by mistake or by collusion with the defendant is immaterial, falsely informed the plaintiff that the notes and trust deed were held by the defendant as collateral security for an indebtedness of $20,000. The only other available source of information to which the plaintiff could apply, was the defendant itself. He thereupon went to the defendant, and made inquiries of its chief executive officer, and he, well knowing that the indebtedness for which the defendant had previously held said notes had been paid, and that the notes had been surrendered and canceled, falsely and fraudulently represented to the plaintiff that the notes had not been paid, but were then- held by the defendant, as security for $20,000. The plaintiff’s means of information were then apparently exhausted. His only alternative was to pay the sum of money demanded by the defendant for a release, or suffer his land to be sold under the deed of trust. He chose the former, and by paying $15,000 obtained his release. Having paid the money, he asked for a surrender of. the notes, but was told, falsely it seems, that they were destroyed in the Chicago fire of 1871, and as they bore date more than two years prior to the fire, that story did not seem improbable. Had the notes been produced, it may be presumed that they would have furnished evidence of the fraud, and thus put the plaintiff upon inquiry as to his rights. By their non-production that means of information was_denied him.

As said by the Supreme Court in Campbell v. Vining, 23 Ill. 525, “Fraudulent concealment may consist in the fraud connected with, or constituting the cause of action, or it may consist in acts subsequent, designed to conceal a cause of action originating without fraud.”

Way v. Cutting, 20 N. H. 187, was a suit for damages for false and fraudulent representations as to the value of cei’tain land, by means of which the plaintiff was induced to purchase said land, and pay therefor more than it was worth. To a plea of the Statute of Limitations, the plaintiff replied a fraudulent concealment from him by the defendant of his cause of action. After reviewing certain authorities, „ the court says: “Ho one of them appears to suggest the notion, that the fraud by which the cause of action is concealed from the plaintiff, need be other than that which caused or attended the original injury itself, in order to retard or prevent the operation of the statute. And again: “The deceit by which the plaintiff was at first wronged, sufficed, through the silence and secrecy of its author, to keep him for a time in ignorance of the wrong. Iiis cause of action was therefore most obviously concealed from him by the act of the defendant, having its beginning in the false representation by which he was induced to enter into the bargain, and continued and kept alive by the secrecy that followed. We are therefore of the opinion that the position assumed by the defendant, that some new act of fraud and concealment, beside the representation made at the sale, must be proved upon him in order to deprive him of the protection of the statute, is not supported by authority or sound reason.”

The foregoing reasoning commends itself to our judgment, and it is, we believe, in harmony with the general current of the authorities.

The replication before us, in addition to the original fraud, details various subsequent acts of the defendant, done with the fraudulent intent of keeping said cause of action concealed from the plaintiff, but which, so far as appears, were not brought home to the knowledge of the plaintiff Did the case made by the replication stand on such subsequent acts alone, it may be doubtful whether it would have sufficiently shown the relation of design and its consummation. But such subsequent acts are material at least as showing that the defendant, after effectually concealing from the plaintiff his cause of action, by means of the original fraud, was carrying out its fraudulent intent by carefully guarding every avenue by which the truth of the matter might become known to others and thus reach the plaintiff. For instance, if the defendant had consummated its fraudulent design in misreading said check, so as to have effectually misled the expert, it is possible that the plaintiff might never have learned the truth of the matter.

Such subsequent expedients on the part of the defendant have an important bearing upon the question of proper diligence on the part of the plaintiff in discovering his cause of action. On that question we are unable to see that the replication is open to any criticism. The fraud was perpetrated, as we have seen, after the plaintiff had exhausted every other available means of information, and when he was shut up, so to speak, to a reliance upon the representations made to him by the defendant. Owing to the care and persistence by which the defendant kept the matter concealed, no facts were afterward brought to the attention of the plaintiff, informing him, or calculated to raise in his mind a suspicion even of the truth, until the discovery was made in the manner stated in the replication.

The court below erred in sustaining the demurrer to the replication, and the judgment will, therefore, be reversed and the cause remanded, with directions to the court below to enter an order overruling said demurrer, and giving the defendant an opportunity to rejoin, if be shall so desire, and for other proceedings.

Judgment reversed.


author: McAllister, P. J.

text:
    George Kappes et al. v. Henry Appel.
    1. Action on note — Damages—Guaranty.—Where the defendants’ evidence tended to show that they in good faith and for sufficient reasons, disputed the justice of plaintiff’s claim to $500, the balance of the contract price, on the ground of defective work and materials done and furnished by plaintiff; that as a sort of compromise the plaintiff, at the time of the giving the note in suit for $500, entered into an undertaking of guaranty and warranty that the building was all right, which was to continue during the time the note was to run, and that defendants gave the note upon that condition. Held, that there being evidence of that tendency, the defendants had a right to try their case upon that theory and to endeavor to recoup from the amount of the note all such damages as they could legitimately show were the direct and natural result of a breach of said guaranty and warranty.
    2. Duty of owner of land. — Falling of house. — An owner of land has the same duty to keep on his own land a house or wall built thereon, as the filth in his cess-pool or the water in his reservoir or the snow upon his roof. His duty is to keep it in such a state that his neighbor may not be injured by its fall.
    Appeal from the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed February 12, 1884.
    This was an action by appellee, Appel, against the appellants, Kappes & Eggers, upon a promissory note made by the latter, of date Hoy. 10, 1880, for five hundred dollars with interest, payable to the former one jrear after date.
    On the trial upon the general issue and stipulation authorizing the admission of matter showing failure of consideration of said note, if proper under any special plea, the defendants gave evidence tending to. show that the plaintiff, with knowledge of the purpose and use thereof, had previously erected a brick building for defendants, 40 feet by 120 and three stories high, to be used by defendants as a furniture factory, for the price of $1,800, the plaintiff to furnish the brick and do the work; that the contract was for first-class work and material; that the job was finished Nov. 1st, 1881, and defendants took possession; that the materials put in were bad and the work very defectively done; that a balance of §500 of the price remaining unpaid, the defendants refused to pay it, and complained of the bad materials and work; that finally they agreed that if plaintiff would guarantee and warrant the building, and keep it in repair, they would give their note for such balance payable in one year; that plaintiff so agreed and the note was given on that condition; that some two weeks afterward, large portions of the upper part of the north wall of said building fell, when there was no storm or wind or inevitable accident, down upon the roof of a cottage adjoining said building. The defendants offered to prove the nature and extent of said injury to the cottage, and what they were obliged to and did pay to the proprietor thereof on account of it. But, on objection by plaintiff, the court excluded the evidence, to which exception was taken by defendants. The defendants having given evidence tending to show the bad and defective materials and construction of said building by plaintiff, and that in consequence, the floors thereof .had sunk out of their proper places so as to interfere with the use of the building for the purposes of a furniture factory, offered to prove the difference between the value of said building with the floors so sunken, and what it would be if they had not been so sunken. To this the plaintiff’s counsel objected on the ground the inquiry should be what it would cost to repair the building.
    The court sustained the objection and excluded the evidence. There were various other exceptions. The plaintiff had judgment for the full amount of the note.
    Messrs. Brandt & Hoffman, for appellants.
    Mr. Elbridge Haneoy, for appellee.
   McAllister, P. J.

It is indisputable that the defendants’ evidence tended to show that they in good faith, and for sufficient reasons, disputed the justice of the plaintiff’s clairii to the five hundred dollars, the balance of the contract price, on the ground of defective work aud materials done and furnished by the plaintiff, in constructing the mason work of defendants’ building; that, as a sort of compromise, the plaintiff, at the time of the giving the note in suit, entered into an undertaking of guaranty and warranty that the building was all right, which was to continue during the time the note was to run, and that the defendants gave the note upon that condition. There being evidence of that tendency, the defendants had the clear right to try their case upon that theory, and to endeavor to recoup from the amount of the note all such damages as they could legitimately show to have been the direct and natural result of a breach of said guaranty and warranty.

The building was in the city; the defendants, being the owners, were in the possession and use of it for a furniture factory. They owed, therefore, substantially the same duties to the proprietor of an adjoining building as they would to persons in the lawful use of the street on which it abutted. Add. on Torts, 169, 178.

“ An owner of land has the same duty to keep on his own land a house or wall built thereon, as the filth in his cess-pool, or the water in his reservoir, or the snow upon his roof.” His duty is, in the words of Baron Parke, to keep it in such a state that his neighbor may not be injured by its fall.” Gorham v. Gross, 125 Mass. 232.

The evidence for defendant clearly tended to "show that the defendants, by the falling of the wall of their building, without inevitable accident, over upon the roof of the adjoining cottage, were legally liable to the proprietor of that cottage for the damages thereby occasioned. Mullen v. St. John, 57 N. Y. 567.

That being the case, it seems to us that the'plaintiff was liable over to the defendants, upon his guaranty and warranty, for what the defendants were so liable to pay to said proprietor, or what they, in good faith, had paid to him, in respect of such damages, provided they were such as the defendants were obliged or authorized to pay under the circumstances.

The court below excluded all inquiry into such damages, and in this we think there was error. The undertaking on the part of the plaintiff, which the defendants’ evidence tended to prove, was, in legal effect, one of indemnity, and covered the loss which the defendants incurred by their wall falling onto this cottage by reason of the defect in its structure, which the evidence tended to show. Other exceptions were taken on the trial, which have been urged for reversal, but which we shall not stop to consider, since the error pointed out is clear, and was prejudicial to the appellants. The judgment of the court below will be reversed and the cause remanded.

Beversed and remanded.


author: Bailey, J.

text:
    John K. Stevens v. Christopher C. Brown et al., Ex’rs.
    Landlord and tenant — Injury by excavation. — Where the wrongful acts alleged in plaintiff’s first and second counts consisted merely in defendants’ intestate, who was plaintiff’s landlord, diggingadeep trench in the ground, close to and adjoining plaintiff’s premises, whereby the foundation of his building was disturbed and caused to settle and give way, thereby causing the injuries complained of, and there was evidence given tending to support these counts. Held, that said counts sufficiently set forth a cause of action, and it was error for the court to so modify plaintiff’s instructions as to require plaintiff, in order to recover, to prove that defendant’s intestate wrongfully entered upon the premises in possession of the plaintiff as his tenant.
    Appeal from the Superior Court of Cook county; the Hon. Elliott Anthony, Judge, presiding.
    Opinion filed February 12, 1884.
    This was an action on the case, brought by John K. Stevens, as tenant of John E. Owsley, to recover damages for certain alleged injuries to his possession of the demised premises. Owsley was named as defendant in the original summons, but it afterward appearing that he was dead, the suit was prosecuted against his executors.

      It appears that on the 29th day of April, 1881, Owsley leased to the plaintiff, for the term of one year, certain premises situated on the southwest corner of Madison and Kobey streets, Chicago, to be used by the plaintiff as a photograph gallery, and that while the plaintiff was in possession under his lease, Owsley, who also owned the land adjoining the demised premises on the west, erected a large three or four story brick building west of and adjoining said premises, and in order to lay the foundations of said building, caused a deep trench or excavation to be dug in the ground along and adjoining the west side of the demised premises. The plaintiff alleges that by reason thereof, the foundations of his building gave way and settled, causing serious injury to his possession of the building and destroying or damaging a large amount of his photographic materia], negatives and furniture therein.
    Adjoining theplaintiff’s building on the south was certain vacant ground owned by Owsley aud claimed by the plaintiff as appurtenant to his building and a part of the demised premises. On this ground and within five feet of the plaintiff’s building, there was also erected at about the same time, a one-story frame building, the erection of which, as is alleged, cut off the light from that direction, by which the plaintiff was accustomed to do his photographic printing, thereby greatly incommoding and injuring him in his business.
    The declaration consists of three counts, the first and second of which relate solely to the injuries arising to the plaintiff from the excavation and building west of the demised premises, while the third count relates to the erection of the structure south of the plaintiff’s building. Among other instructions, the plaintiff asked the following, which the court modified by inserting the words in italics, and gave them to the jury so modified.
    2. “ The jury are further instructed that a landlord has no right by any act of his, to interfere with the full enjoyment by the tenant of the premises granted, and in this case, if the jury believe from the evidence that the plaintiff was the tenant at the time in question of John E. Owsley, and that said Owsley, without any leave or license from the plaintiff, purposely did or caused to be done any of the acts charged in the declaration, by taking possession of any portion of the premises leased, or by willfully invading the possession of the plaintiff,, and interfering with the enjoyment of the premises, and if the jury further believe from the evidence that such acts resulted in injury to the property of said Stevens, then the jury should find for the plaintiff and assess his damages at such sum as the jury may believe from the evidence he has sustained.

      i. “ The jury are the sole judges of the evidence and of the weight thereof in this case, and if the jury believe from the evidence that John E. Owsley, in his life-time, and while the plaintiff was the tenant of said Owsley in possession of the photograph gallery in question, and of a yard adjoining said gallery, and that he did wrongfully enter upon said premises and undermine or cause to be undermined the west side or west wall of said gallery, in such manner as to cause said west wall to settle, the plastering in various parts of the gallery building to fall off, and to cause the roof of the gallery building to leak, and that such undermining was done without the consent of the plaintiff, theu the jury should find for the plaintiff.”
    Proper exceptions to the decisions of the court in relation to the instructions were preserved by the plaintiff. The verdict and judgment were for the defendants, and the plaintiff brings the record to this court by appeal.
    Messrs. Frank J. Smith & F. A. Helmer, for appellant.
    Messrs. G. & W. Garnett, for appellees;
    that the bill of exceptions does not purport to show all the instructions that the court below gave, and therefore this court can not say that there was error in modifying those that were given, cited Wallace v. Goold, 91 Ill. 15; England v. Selby, 93 Ill. 310.
   Bailey, J.

The first ground urged for the reversal of the judgment in this case is, the rejection of evidence as to the nature and extent of the plaintiff’s business at the time it is alleged to' have been wrongfully interrupted or interfered with by the defendant’s testator. On this point it is sufficient to say, that evidence of this character, 'if admissible, was material only as bearing on the question of damages, and as the jury found the defendants not guilt}*-, they did not reach the consideration of that question, and the plaintiff, therefore, was in no way prejudiced by the exclusion of evidence which the jury, as they viewed the case, would not have considered if it had been before them.

But we are unable to say from the record, that the court below ruled that evidence of this character was inadmissible. In the examination of one of the plaintiff’s witnesses, this question was asked: “ About how large and what kind of a business was Mr. Stevens doing there at that time?” To this the witness answered: He was doing a very nice business at that time, and previous to this — .” At this point he seems to have been interrupted by an objection; and there follows this memorandum: “ Objected to, objection sustained, exception by counsel for plaintiff.” Neither the ground of objection nor the thing objected to'is specifically pointed out. It would appear, then, according to the most obvious construction of the record, that the objection made was merely to that portion of the answer of the witness which he was proceeding to give when interrupted, viz., the extent and nature of the plaintiff’s business at some previous period. That was clearly immaterial and the objection thereto was properly sustained. No other question on this subject was put to any witness, nor was the court called upon to make any other ruling in relation to it.

But we are of the opinion that the modification of the plaintiff’s second instruction was erroneous. By that modification the burden was. thrown on the plaintiff, in order to recover under either count of the declaration, to prove that the defendant’s testator either took possession of portion of the premises leased, or willfully invaded the plaintiff’s possession. In the case made by the first and second counts, no invasion of the plaintiff’s possession is charged. The wrongful acts alleged in those counts consist merely of digging a deep trench or excavation in. the ground, along the west side of, close to and adjoining the plaintiff’s premises,whereby the foundation of his building was disturbed and caused to settle and give way, thereby causing the injuries complained of That these counts sufficiently set forth a cause of action, is not questioned, and there is evidence in the record tending to support them; hut the instruction as modified, imposed upon the plaintiff the burden of proving facts not alleged in those counts, and not necessary to a recovery under them.

The same error also appears in the modification of the plaintiff’s fourth instruction. There, in order to a recovery, the plaintiff is required in like manner to prove that the defendant’s intestate wrongfully entered upon the premises in possession of the plaintiff as his tenant. This under the first and second counts of the declaration was unnecessary. By these instructions those two counts were practically excluded from the jury. For these errors the judgment must be reversed and the cause remanded.

Judgment reversed.


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    George W. Miller v. Victor K. Glass.
    1. Weit of eebob. — Must show a good becobd. — On a writ of error the party to retain his judgment must show a good record. It is essential that the record should show that the court below had in some of the ways recognized by law, acquired jurisdiction of the person of the party against whom the judgment was rendered, that a declaration was filed, and that such declaration set out a cause of action good in substance and that the power of the court had been invoked by the institution of a suit, in some of the modes and forms known to the law.
    2. When peoceedihg is behanded — Notice.—Under the provisions of section 83 (Laws 1877, p. 152) of the statute, “When a causeor proceeding is remanded, etc.,” notice to the adverse party or his attorney is just as indispensable to the authority of the court, to re-instate the cause or proceeding therein, as the filing the transcript of the remanding order, unless such notice is waived. The notice contemplated is, when the party can be found, a personal notice served upon him or his attorney, and where the statute requires a personal notice to be served on the party, a notice in writing is meant.
    Error to the Superior Court of Cook county; the Hon. Joseph E. Gary, Judge, presiding.
    Opinion filed February 12, 1884.
    The record in this case begins with the formalplaeita, then recites that Hov. 23, 1882, there was filed with the clerk of the superior court a transcript of a remanding order of the Appellate Court of the First District, which sets out such order, which is in the ordinary form, and purports to remand a cause between the same parties, from such appellate to the superior court; but the record is silent as to any notice to any party or attorney, and as to any order of the superior court, re-instating the cause therein. The record then shows that February 23, 1883, a judgment by default was entered in favor of Glass and against Miller and Brahurstedt for $1,431, besides costs; but it contains no declaration or summons; nor is there anything by way of recital or otherwise, showing any service or process or notice on either of the persons against whom the judgment was entered, or that either of them entered any appearance. Miller prosecutes this writ of error, assigning for error the rendition of such judgment without notice. Glass appeared by attorney in this court and submitted the cause without alleging diminution of record.
    Mr. John W. Wattgiiop, for plaintiff in error;
    cited Smith v. Brittenham, 94 Ill. 624; Cummings v. The People, 50 Ill, 135.
    Messrs. G. & W. Garnett, for defendant in error;
    that every presumption will be indulged to support a judgment of a court of general jurisdiction, cited Blair v. Kay, 5 Bradwell, 455; City of Virginia v. Hall, 96 Ill. 278; Casey v. Harvey, 14 Ill. 45; Johnson v. Berlizheimer, 84 Ill. 54; Gardner v. Russell, 78 Ill. 292.
   McAllister, P. J.

In Sweeney v. The People, 28 Ill. 208, it was stated to be the general rule, that, on a writ of error, the party, to retain his judgment, must show a good record. That rule has been applied, in effect, in various cases, by the Supreme Court of this State, irrespective of the question whether the court wherein the judgment was entered was a court of general and superior jurisdiction, or inferior and limited. It means that, even where the court belongs to the former class, and its judgment is challenged, in a direct proceeding upon error or appeal, the record must show certain requisites, or the party who has obtained the judgment can not retain it. That is, the record must show, as among these essentials, that the court had, in some of the ways recognized by law, acquired jurisdiction of the person of the party against whom the judgment was rendered. Varien v. Edmonson, 5 Gilm. 270; Brockman v. McDonald, 16 Ill. 112.

It must also show, not only that a declaration was filed, but that such declaration set out a cause of action good in substance. And above all these requisites, it must show that the powers of the court had been invoked by the institution of a suit in some of the modes and forms known to the law. Ex parte Cohen, 6 Cal. 318.

The record in this case contains no summons, or other original process, makes no allusion by recital, or otherwise, to any service of process or notice, or to any appearance by either of the parties against whom the judgment purports to have been entered; and it contains no declaration. It begins with the usual plaeita, and then recites that, November 23, 1882, there was filed in the office of the clerk of the superior court, a certified transcript of a remanding order of the Appellate Court of the First District of Illinois, setting it out at length. That order is in the usual form, and shows on its face that it was made in a cause between the same parties as those to the judgment now in question, which was by default; but the l’ecord is wholly silent as to notice having been given to any body of the filing of such transcript of a remanding order, and as to there having been any appearance in the court below, by either of the parties defendant in said judgment, after the filing therein of such remanding order-The party in whose favor such judgment was rendered has appeared in this court, on the hearing of this writ of error, and submitted his case without alleging diminution of record, thereby affirming that the record, in its present state, is complete. Cheetham v. Tillotson, 4 Johns. 500; R. S. 1874, Chap. 110, § 80.

If we were to presume from the remanding order alone that the superior court originally liad jurisdiction of the parties and the subject-matter, we are still confronted with the difficulty that the court below had no authority from anything appearing in the record, to proceed and render judgment by default against the defendants. Independently of the statute, to which we shall refer, if a ease had been regularly before the court, by the institution of a suit which had proceeded to judgment, and that judgment had been taken to the Supreme or appellate court, and there reversed with an order remanding the cause, the court below would have no authority to proceed at the instance pf the plaintiff in such judgment and render another judgment against the defendants therein, by default, without having a transcript of such remanding order first filed therein. Livingston v. Rogers, 1 Caines R. 588; Blair v. Bristoe, Littel’s Sel. Cas. 20.

Recognizing this doctrine, our legislature has provided by statute, a course of practice in such cases, thus: “ When a cause or proceeding is remanded by the Supreme or appellate court, upon a transcript of the order of the court remanding the same being filed in the court from which the cause or proceeding was removed, or in which the cause originated, as the case may require, and not less than ten days notice thereof leirng given to the adverse party or his attorney, the cause or proceeding shall be re-instated therein. In case of non-resident parties, or parties who can not be found, so that personal notice can not be served upon them, the notice may be given as in cases in chancery, or as may be directed by the court.” § 83, Laws 1877, p. 152.

It is apparent from the provisions of that statute, that notice to the adverse party or his attorney, is just as indispensable to the authority of the court, to re-instate the cause or proceeding therein, as the filing the transcript of the remanding order, unless such notice is waived. The notice contemplated is, when the party can be found, a personal notice served upon him or his attorney.

It seems to us that where the statute requires a personal notice to be served on the party, a notice in writing is meant; because it is quite as necessary in order to give the party his further day in court, as in the case of an original suit; and if a mere oral notice were held sufficient, it would open a way to great abuses. It is true there is no bill of exceptions in this case. But the judgment being by default and without notice, so far as the record shows, there could have been none; and there having been no appearance, there was no waiver. We think that under such circumstances, there can be no intendment that notice was given. Hettrick v. Wilson, 12 Ohio St. 136.

The judgment of the court below will be reversed and the cause remanded.

Judgment reversed.