text:
    E. M. Robbins, Appellant, v. Albert Slavin et al., Defendants. Hyman M. Seikowitz, Appellant, v. Albert Slavin et al., Defendants. First National Bank of Chicago et al., Appellees, v. E. M. Robbins et al., Appellants.
    Gen. No. 39,564.

      Opinion filed December 6, 1937.
    Rehearing denied December 20, 1937.
    Aaron Soble, of Chicago, for appellants; Max Chill, of Chicago, of counsel.
    Oscar S. Seaver, H. Irving Ripstra and Harold D.. Huszagh, all of Chicago, for appellees.
   Mr. Justice McSurely

delivered the opinion of the court.

This is an appeal by E. M. Robbins, plaintiff, and others, from an amendatory decree entered in foreclosure proceedings upon the petition of Ella McShane and other intervening* petitioners.

November 16, 1932, E. M. Robbins, complainant, filed a bill alleging* that she was the holder of notes aggregating $9,000, being* part of an issue of $35,000 secured by a trust deed on real estate in Chicago; that a vacancy existed in the office of trustee due to the resignation of the Sheridan Trust & Savings Bank, the trustee named in the deed, and the refusal to act of the Chicago Title & Trust Company, the successor-trustee; that there were defaults in the payment of interest and taxes, and the appointment of a successor-trustee was asked with instructions to foreclose the trust deed; she alleged that the owners of the remaining* notes were unknown and they were made parties defendant and served by publication as “unknown owners.”

January 11, 1933, a decree was entered appointing* Harry M. Selkowitz as successor-trustee. He filed a bill to foreclose, also alleging that the owners of the notes not held by E. M. Bobbins were unknown and making them parties defendant as ‘ ‘ unknown owners ’ ’ and service on them was by publication. October 9, 1933, decree was entered pursuant to the prayer of the bill.

November 28, 1933, Ella McShane, by leave of court, filed her petition asserting that she was the owner of one of the notes secured by the trust deed in the sum of $5,000 and alleged that she was made a party defendant to the bill of complaint of E. M. Bobbins as “unknown owner” but that her name and address were known to the complainant or could have been readily ascertained by her. She alleged in substance that the notes were executed by Albert Slavin and were unconditionally guaranteed by Sam Slavin and Philip Slavin, duly indorsed upon each of the notes; that Sam and Philip Slavin were the beneficial owners of the real estate conveyed by the trust deed; that they purchased for their own account from the receiver of the Sheridan Trust & Savings Bank the notes for $9,000 described in complainant’s bill for $3,800; that they procured the filing of the Bobbins bill, in which petitioner and others were made parties defendant as unknown owners, although their names and places of residence could have been readily ascertained.

The petition also alleged that E. M. Bobbins was not the owner of the notes aggregating $9,000 but holds them for the use and benefit of Sam and Philip Slavin, who are the real owners and liable as guarantors for the payment of the entire indebtedness; that the suit commenced by Bobbins for the appointment of a trustee and the filing of the foreclosure proceeding by Selkowitz as trustee were instituted on behalf of Sam and Philip Slavin for the purpose of sharing ratably and upon a parity with the owners of the remaining notes in the proceeds to be derived from a foreclosure sale of the mortgaged premises. Petitioner also alleged that she had no opportunity to contest the claims of Bobbins nor voice in the appointment of Selkowitz as trustee; that he was not a disinterested person but an employee in the office of the solicitor for Bobbins and was not a proper person to be appointed trustee.

Similar petitions were filed by other note holders shortly after the expiration of one year from the entry of the decree appointing Selkowitz successor-trustee. The First National Bank of Chicago as trustee, holder of one of the notes in question, by leave of court filed what is called a cross-bill setting forth substantially the same facts as contained in the petition of Ella McShane; all, of these petitions and the cross-bill, with answers, were referred to a master in chancery who took evidence and made his report. The only evidence introduced was that on behalf of petitioners.

An amendatory decree was entered upon the report of the master and the appeal is from this decree. It in substance provides for the protection of the intervening petitioners and places them substantially as they would have been placed had they been made defendants to the original bill under their proper names and hiid been served with summons. The amendatory decree amends the prior decrees in (1) certain finding’s of fact relative to the appointment of Selkowitz as successor-trustee, but did not vacate the order of his appointment. (2) Bemoves Selkowitz as successor-trustee as of the date of the entry of the amendatory decree, thus preserving the filing of the supplemental bill of foreclosure, and appoints Lee Walker as successor-trustee, substituting him as complainant in the supplemental bill to foreclose. (3) Declares the notes of Bobbins to be subject and subordinate to the notes of the petitioners and treats the lien of the trust deed securing their notes as a first lien on the premises and the lien securing- the notes held by Bobbins as a second lien. (4) Provides for the payment of costs and master’s fees and allows to Walker, trustee, for the use of the intervening- petitioners, reasonable solicitors’ and stenographer’s fees, but did not allow any solicitors’ fees on behalf of Selkowitz, the former successor-trustee. Certain expenses were allowed to Bobbins, but subject and subordinate to the lien of the petitioners.

The decision in this case rests largely upon the facts. It was shown that Samuel Slavin, Philip Slavin and Albert Slavin are brothers; that the last named is the signer of the trust deed and notes in question; Sam and Philip Slavin were the beneficial owners of certain real estate in Chicago, held in trust for them by the Sheridan Trust & Savings Bank. About February 1, 1929, this trustee, upon direction of the beneficiaries, conveyed the title to Albert Slavin who thereupon executed the trust deed conveying the property to the bank as trustee to secure the notes in question, and Albert Slavin conveyed the equity in the property to the bank as trustee to hold for the benefit of and subject to the direction of Sam and Philip Slavin.; about February 2, 1932, the bank as trustee, as directed by Sam and Philip Slavin, conveyed the title to Sam’s daughter Perle, who has since held title for the use and benefit of her father Sam and her uncle Philip; she has turned over all rents derived from the property to them.

The notes executed by Albert Slavin and secured by the trust deed were 18 in number, aggregating $35,000, one or more of them falling due each year to and including 1936; Sam and Philip Slavin indorsed on each note an unconditional guarantee of its payment at maturity as if it were an original obligation, their liability not to be discharged until full payment with interest.

The proceeds of the loan of $35,000 were used for the erection of a building on the real estate for the sale of automobiles, which since completion has been occupied by the North Town Motor Co., a corporation. Sam and Philip Slavin received the rent from this tenant, but they are also interested in the tenant motor company, both having power to sign its checks — Sam Slavin as its secretary-treasurer — and they are actively. engaged in carrying on its business.

The Sheridan Trust & Savings Bank sold its customers all the notes of this issue except those aggregating $9,000 described in the Bobbins bill of complaint; it kept a record of the names and addresses of the purchasers, and all of the petitioners, purchasers of these notes, reside at the same address in Chicago as shown on the bank recdrd or may be reached through the addresses shown on the record.

The first part of 1932 the bank was closed by the State auditor and a receiver placed in charge; there came into the receiver’s hands these unsold notes aggregating $9,000 and the list of names with addresses of those who had. purchased the remainder of the issue. In the spring* of 1932 these notes aggregating $9,000 were in default and Sam and Philip Slavin commenced negotiations with the receiver of the bank for their purchase at a discount; the interest, which fell due August 1, 1932, on the other notes outstanding* and in the hands of purchasers, was paid by checks of the North Town Motor Company; the Slav-ins continued their negotiations with the receiver for the purchase of the $9,000 of notes in his possession and finally, about November 1, 1932, through Harry Freeman, as attorney for the Slavins, the notes aggregating $9,000 were purchased from the receiver for $3,800.

When the Sheridan Trust & Savings Bank, the trustee in the trust deed, went into the hands of the receiver there was an understanding that the receiver would resign this trust, and Freeman, acting for the Slavins, through an intermediary procured the refusal to act of the Chicago Title & Trust Company, named in the trust deed as successor-trustee. When the purchase of the notes from the receiver was closed his resignation to act as trustee and the refusal of the Chicago Title & Trust Company to act were filed of record, thus leaving vacant the office of trustee under the trust deed.

At this same time there was delivered to Mr. Freeman the entire files of the bank relating to this mortgage, which included a list of the names and addresses of the persons who had purchased from the bank the notes of this issue; Freeman took a copy of the list from the bank and later wrote letters to these purchasers proposing to buy their notes at a discount on behalf of his clients, the Slavins. Freeman turned the notes purchased from the receiver over to Mr. Aaron Soble, the present attorney of record for the appellants, with instructions to file a bill for the appointment of a trustee to fill the vacancy and to foreclose the trust deed. The bill for appointing a successor-trustee was filed in the name of plaintiff E. M. Bobbins, who is Mr. Soble’s stenographer; Miss Bobbins typed the bill and affidavits of unknown owners and non-residence of the holders of the other notes, as dictated by Mr. Soble, who made no inquiry as to the owners of the remaining notes. It is also in evidence that when the interest maturing in August, 1932, was paid on these outstanding notes it was paid to virtually every note holder in person and nearly all of their names and the names of their agents appear on their checks and in the rent account of the North Town Motor Company and were known to Sam Slavin.

The master found, as did also the decree, that the names and addresses of the owners of the notes other than those held by E. M. Bobbins were readily ascertainable prior to the filing of the bill to appoint a successor-trustee and that the petitioners were entitled to have service by publication on them quashed, and the decrees of January 11 and October 9, 1933, vacated.

Hyman M. Selkowitz, who was appointed successor-trustee, described in the decree drawn by Mr. Soble as a disinterested person, is a law clerk employed by Mr. Soble. The record shows that Selkowitz has joined with E. M. Bobbins in opposing the interest of the petitioners in this litigation.

The appealing parties first make the point that while Ella McShane is properly before the court, having filed her petition within one year after the first decree was entered, the other note holders, petitioners, are not properly before the court as their petitions were filed shortly after the expiration of one year. Sec. 19 of the Chancery Act of 1931, ch. 22, Cahill’s Ill. St. 1931, Ü19, provided that when any final decree has been entered against a defendant served by publication, he may, within one year after the entry of the decree, file a petition touching the matter of the decree which the court may hear, and may alter or amend the decree as shall appear just. The remaining petitions were filed within one year after the entry of the decree of foreclosure but after one year had elapsed from the entry of the decree appointing a successor-trustee. The question of the one year limitation, then, arises only in respect to the decree appointing the successor-trustee.

The statute prescribing proceedings against unknown owners contemplates an honest and well directed effort to ascertain the names and addresses of unknown parties. Where the record shows that such an effort has been made, then the period within which such a defendant may file a petition is limited to one year, but this limitation does not apply where the names and addresses of the defendants could have been readily ascertained. Graham v. O’Connor, 350 Ill. 36, involved a case where the record showed that due inquiry had not been made of a necessary party; the affidavits did not speak the truth and it necessarily followed that the court did not acquire jurisdiction over the parties by constructive service based upon false affidavits. The court held that, “The decree so obtained may be set aside at any time thereafter on the discovery of fraud,” citing Busby v. Maus, 294 Ill. 401. The court also held that sec. 19 of the Chancery Act did not apply in such a case, but applied only, “where, as a matter of fact, unknown parties are properly made parties to the action.” Other cases to the same effect are Wellington v. Heermans, 110 Ill. 564, 573; Wright v. Simpson, 200 Ill. 56, (62, 63); Caswell v. Caswell, 120 Ill. 377, 385; and Correll v. Greider, 245 Ill. 378, 381.

The appearance of the Chicago Title & Trust Company and the First National Bank of Chicago in the foreclosure suit is questioned. We do not think the point is important. The appearance in this suit was not an appearance in the suit to appoint a successor-trustee. Upon discovering the jurisdictional defect in this appointment they had a right to be heard. Northern Trust Co. v. Sanford, 308 Ill. 381, 392. Moreover, it is admitted that Ella McShane’s petition was filed within one year of the entry of both decrees and that she asked that they be vacated or amended as the circumstances required. If the relief she asked for was proper the amendatory decree should not be vacated with reference to other petitioners seeking the same relief.

We think the court properly removed Selkowitz as successor-trustee. A trustee filing a hill to' foreclose at the demand of one note holder must make reasonable inquiry to ascertain the names and addresses of the other note holders. Mr. Selkowitz took no action to this end although upon application to the Sheridan Trust & Savings Bank, the resigning trustee, he could have obtained the names and addresses of the holders of the outstanding notes. He made them parties to Ms bill as unknown owners. TMs clearly was opposed to their interests. Moreover, when the petitioners sought to assert their rights in court he joined with Bobbins in contesting their right to be heard. It is conclusively shown that the resignation of the Chicago Title & Trust Company as successor-trustee was procured so that a trustee could be appointed who was not free to act independently but was subject to the directions and orders of the attorney for the plaintiff. It is also difficult to escape the conclusion that making the petitioners parties to the bill as unknown owners.was intentional so that the foreclosure proceeding would take place without their knowledge. The decree of the court properly removed Selkowitz as trustee and allowed Mm no compensation for his services.

As we have already noted, each note bore the guaranty of Sam and Philip Slavin unconditionally guaranteeing payment at maturity, “as if it were an original obligation executed by us,” and “further agree that our liability under this guaranty is not to be discharged by any act of the holder of the within note until full payment thereof, with interest and costs as aforesaid.” Although plaintiff earnestly demes that the notes aggregating $9,000 were purchased from the receiver of the Sheridan Trust & Savings Bank by Sam and Philip Slavin, the testimony convincingly proves that the Slavins were the real purchasers although the negotiations were carried on in their behalf by a go-between.

Bearing in mind that the Slavins were the real owners of the mortgaged premises and also the real debtors upon the notes and trust deed and the guarantors of the notes, the question is presented as to whether, upon a foreclosure under such circumstances, such notes so acquired by them may be considered as purchased by a stranger and therefore properly decreed to be upon a parity with notes held by others. It seems self-evident that the Slavins in purchasing the notes from the receiver of the bank cannot be considered as strangers. They are obligated by their guaranty to pay the notes upon maturity. They cannot escape their obligation to pay them by purchasing them at a discount, to the injury of other note holders.

Plaintiff argues as if the question of merger were involved. The decree does not so find, but finds that the lien of the notes purchased by the Slavins is subordinate to the lien, of the other notes. Examination of the cases involving this question clearly show that if the guarantors pay the entire debt they then become entitled, by subrogation, to proceed against the security for the entire amount of the debt; but where they purchase only a part of the notes guaranteed by them their rights are subordinated to the rights of the other note holders. In other words, the whole indebtedness must first be paid before a guarantor can seek reimbursement from the security. In Darst v. Bates, 51 Ill. 439, 446, Bates held a mortgage on certain premises to secure him against loss because he had guaranteed certain notes secured by another mortgage ; foreclosure proceedings of both mortgages were commenced; Bates had never been required to pay the notes he had guaranteed and the bill to foreclose his mortgage was dismissed, the court holding that he had no right of recovery until he had paid the debt for which the notes were given. In Conwell v. McCowan, 53 Ill. 363, and Elgin Nat. Bank v. Goecke, 295 Ill. 403, 408, it is stated as an elementary principle of subrogation that the right does not exist until the surety has actually paid the' debt. In 25 R. C. L. sec. 6, p. 1318, is a full discussion of the subject of Subrogation, the author saying that a person is not entitled to be subrogated to a creditor’s securities until the claim of the creditor has been paid in full. “A pro tanto assignment or subrogation will not be allowed. ’ ’ And the author well says that the reason for the rule is that if the surety upon making a partial payment became entitled to subrogation, it would operate to place him upon a footing of equality with the holders of the unpaid part of the debt, and if the property were insufficient to pay the remainder of the debt for which the guarantor was bound the loss would fall proportionately upon the creditor and upon the surety, and that, ‘1 Such a result would be grossly inequitable. ’ ’ Obviously it would be unjust to permit a guarantor, on payment of part of k debt, to appropriate to himself the security which the creditor holds for the satisfaction of the entire indebtedness. Also to the same effect is 60 C. J., sec. 54, p. 745, and London & N. W. Am. Mtg. Co. v. Fitzgerald, 55 Minn. 71; Rice v. Morris, 82 Ind. 204; Loeb v. Fleming, 15 Ill. App. 503; and State Bank of Rock Island v. Bryan, 186 Ill. App. 207 (209, 210) (aff’d 268 Ill. 151). Plaintiff cites Chicago Title & Trust Co. v. Bidderman, 275 Ill. App. 457, as holding* to the contrary, but there was an express agreement that any notes purchased by the guarantors may stand upon a parity with the remaining notes. Other cases cited by plaintiff involve a merger, but as we have said, this is not a case of merger but of subrogation.

Applying the rule as above stated to the present situation, we hold that plaintiff Robbins holds notes for. the guarantors and that they are not entitled to payment on these notes out of the proceeds from the sale of the mortgaged premises until the petitioners’ guaranteed notes are paid in full. The lien of the notes held by Bobbins was properly subordinated to the lien of the notes held by petitioners.

We are of the opinion the court properly disallowed solicitor’s fees to Selkowitz, the former trustee. In view of the relationship between plaintiff Bobbins, Soble’s stenographer, and Selkowitz, his clerk, solicitor’s fees to Mr. Soble should not be allowed. This is especially true when we consider the manner in which the rights of the holders of the outstanding notes were intentionally violated.

Complaint is also made of the allowance of $4,500' as fees for the solicitors of the intervening* petitioners and cross complainant. The decree recites that the evidence taken in open court shows that this is the fair, reasonable and customary solicitor’s fee for the services performed in this case. Having in mind the character of the litigation and the strenuous opposition made by plaintiff and trustee Selkowitz to the claims of the intervening* petitioners, we cannot say that the allowance is improper.

The amendatory decree does complete justice to all of the parties and no sufficient reason has been presented for its reversal. It is therefore affirmed.

Affirmed.

O’Coiwor, P. J., and Matchett, J., concur.


source: Caselaw Access Project

author: Mr. Justice Matchett

license: Public Domain

text:
    Metropolitan Trust Company, Appellee, v. Bowman Dairy Company, Appellant.
    Gen. No. 39,553.

      Opinion filed December 6, 1937.
    Rehearing denied and supplemental opinion filed December 22, 1937.
    Montgomery, Hart, Pritchard & Herriott, of Chicago, for appellant; Louis E. Hart and L. Edward Hart, Jr., of counsel.
    Ryan, Sinnott & Miller and Kelner & Kelner, all of Chicago, for appellee.
   Mr. Justice Matchett

delivered the opinion of the court.

The Bowman Dairy Company appeals from a judgment in the sum of $5,000, entered upon a verdict of the jury in an action under the statute for negligence causing the death of plaintiff’s intestate. The jury also returned a verdict that a codefendant, Fred G-. Kunz, was not guilty. It is urged for reversal that there was a fatal variance between the allegations of the original complaint and the proofs; that an amendment made to cure this variance states a new cause of action that is barred by the limitations contained in the Injuries Act, Ill. Rev. Stat. 1937, ch. 70, § 1 et seq.-, Jones Ill. Stats. Ann. 38.01 et seq.; that the court erred in the giving and refusing of instructions; that the verdict is contrary to undisputed facts as to the physical situation at the time of the accident, which establish the impossibility of the accident having occurred under the circumstances as plaintiff contends ; and that plaintiff failed to prove the accident was the actual cause of the death of plaintiff’s intestate.

The suit was begun in December, 1934. The complaint alleged the death of plaintiff’s intestate as a result of an accident which occurred at the northwest corner of 47th street and Albany avenue in Chicago on October 20, 1934; “that the defendants and each of them carelessly and negligently operated their vehicles in such a manner as to strike the decedent, inflicting severe personal injuries, which proximately resulted in the death of the decedent. ’ ’ The evidence shows that 47th street runs east and west and Albany avenue extends north and south. Deceased and her sister-in-law were walking east on the sidewalk on the north side of 47th street; they reached a point a few feet from the west curb line of Albany avenue; this was about 1 o’clock in the afternoon. It had been raining and the streets were wet and slippery; as deceased approached the point where the accident occurred a westbound automobile truck, driven by defendant Fred Kunz, approached the intersection from the east; at the same time Bruno Skopeck, driver of a milk wagon for defendant dairy company, drove the wagon, of the horse-drawn type, east on 47th street, driving on the south side of the street in the eastbound street car track; he was to make his next delivery of milk at 4618 Albany avenue, north of 47th street;- Kunz, driver of the truck, as he approached the intersection, was straddling the north rail of the westbound street car track, and as the evidence indicates, was moving at a speed not to exceed 20 miles an hour. The testimony of Kunz is to the effect that an eastbound street car pulled up behind the milk wagon, came to a stop, rang its gong, and that the driver of defendant’s milk wagon thereupon turned his horse abruptly and sharply toward the north into Albany avenue and directly in front of the approaching truck. Skopeck, the milk man, denies that there was any street car in the vicinity, but apparently testified to the contrary at the coroner’s inquest. There was evidence from which the jury might find that when the driver of the milk wagon suddenly turned toward the north, Kunz also turned toward the north in an effort to avoid a collision. The swerving of the truck, however, caused the rear of it to skid and it slid over the clay and tar on the pavement and over the curb on the northwest corner of the intersection, over the parkway and the sidewalk; the truck came to a stop in a vacant lot and was facing in a northeasterly or easterly direction. When the truck skidded up on the sidewalk it struck both women.

It appears from the undisputed evidence that the truck, not the milk wagon, struck decedent. During the trial on December 2, 1936, defendant pointed out an alleged variance between the proof and the complaint, in that it was alleged that both vehicles struck deceased while the evidence showed that only the truck actually struck her. An order was entered granting leave to plaintiff to amend its complaint, which was accordingly done. When the amendment was filed defendant dairy company made a motion to dismiss the amended complaint on the ground that it stated a cause of action which had not accrued within one year of the filing of the amendment. This motion was overruled. The defendant excepted and elected to allow its original answers to stand as its answers to the complaint as amended. Plaintiff then entered a motion to strike the motion of defendant Bowman Dairy Company which was denied, and defendant Kunz elected to allow his answer on file to stand as his answer to the complaint as amended. The dairy company now contends that this amendment to the complaint stated a new cause of action, because the original complaint alleged the striking of plaintiff’s intestate by a vehicle of the Bowman Dairy Company, whereas the amended complaint alleged that the vehicle of the dairy company caused the truck of defendant Kunz to so strike plaintiff’s intestate. Further, that this new cause of action is barred by the Injuries Act, which provides in substance that the death for which an action under the statute will lie must have occurred within one year of the filing of the suit, and that the filing of such a suit within one year from the date of the death of the decedent is a condition precedent to the right to maintain an action. At the time at which this suit was begun, indeed when the accident occurred, the Civil Practice Act was applicable. (See Ill. Rev. Stat. 1937, ch. 110, § 170, p. 2396; Jones Ill. Stats. Ann. 104.046). Sec. 46, subd. (1) is a continuation of sec. 39 of the old act (Cahill’s Ill. St. 1933 [Appendix] ch. 110, 39) but with significant changes. First, in the old act it was provided that amendments to a pleading might be made introducing any party necessary to be joined as plaintiff or defendant, etc. In the new act the provision is that the amendment may introduce any party who ought to have been joined as plaintiff or defendant. Second, in the old act it is provided that the amendment may discontinue as to any joint plaintiff or joint defendant. In the new act it is provided that the amendment may discontinue as to any plaintiff or defendant. Third, in the old act it is provided that the amendment may change the form of action. In the new, that it may change the cause of action or defense or adding new causes of action or defenses. Fourth, in the old statute the purpose of this is stated to be to enable the plaintiff to sustain the action for the claim for which it was intended to be brought, or the defendant to make a legal defense. In the new, the purpose is stated to be that the amendment may enable the plaintiff to sustain the claim for which it was intended to be brought or the defendant to make a defense or assert a cross-demand. The Appellate Courts of this State have not been by any means unanimous in the construction given to sec. 39 as amended. The second division of this court, in Hanley v. Waters, 255 Ill. App. 239, held that an amendment to a declaration filed under the Injuries Act, which for the first time alleged the deceased left next of kin surviving, stated a new cause of action and was not saved from the operation of the time limitation of that act by an amendment filed pursuant to said sec. 39. As a matter of fact, however, the action there was based upon an accident occurring October 27, 1925. The action was therefore barred before the amendment to sec. 39 of the old Practice Act was enacted in 1929. As the cause arose and the case was tried before July 1, 1929, when the amendment to sec. 39 went into effect, what was said in the opinion and specially concurring opinion on this question was purely obiter.

In the later case of Zister v. Pollack, 262 Ill. App. 170, it was stipulated that Zister was injured on February 16, 1929, and died as a result of the accident and injury February 24, 1929, and that the suit was begun February 21, 1930. The original declaration did not allege that Zister died on February 24, 1929. On June 25, 1930, an amendment was filed making that averment for the first time. The trial court held that the original declaration did not state a cause of action, and that the cause of action set up in the amended declaration was barred. This court, upon appeal, held in substance that the declaration would have been sufficient even at common law, after verdict. That by reason of the enactment of the amendment of 1929 to sec. 39 the amendment related back to the date of filing* the original pleading; that even assuming the original declaration did not state a cause of action, the amendment related back in conformity with sec. 39 as amended because the cause of action asserted in the amended declaration grew out of the same transaction or occurrence and was substantially the same as that set up in the original declaration. In that case we said (p. 179): “Prior to the enactment of the amendment to section 39, there were many pitfalls that were fatal to a plaintiff should his counsel fail to allege in his declaration all essential facts and should the time limited within which an action must be brought have expired before the omission had been discovered. And such omissions in most cases do not prejudicially affect the defendant in the filing* of his pleading* or the making of his defense. It was to obviate and remove these pitfalls that the Legislature enacted the amendment. With this construction, effect will be given to the enactment.”

After discussing* the case of Hanley v. Waters, 255 Ill. App. 239, we further said: “It has long been the settled law of this State that a ‘mere defect in the pleading’ might be amended after the statute of limitations had run, without affecting* the plaintiff’s right to recover. Klawiter v. Jones, 219 Ill. 626. So that the amendment as construed in the Hanley case would be ineffective and meaningless, — which construction we think ought not be adopted unless there is compelling reason for doing so.”

In the later case of Bandet v. Burns, 266 Ill. App. 382, a declaration for personal injuries alleged that the accident occurred on Lawrence avenue in Chicago, a short distance east of the intersection with Washtenaw avenue. The evidence showed that it in fact occurred at Campbell avenue, a few blocks to the east. The plaintiff asked leave to amend; the court refused on the theory that the amended declaration stated a new cause of action, and that the statute of limitations had barred the action. On the authority of Zister v. Pollack we reversed the judgment and remanded the cause.

In Straus Nat. Bank & Trust Co. v. Marcus, 274 Ill. App. 597, upon appeal from a judgment for plaintiff in an action brought under the Injuries Act, it appeared that the cqurt, during* the trial, allowed plaintiff to file two additional counts, to which defendant filed a plea of the statute of limitations, to which the plaintiff demurred, and the court sustained the demurrer. The court, after stating* that in its opinion the additional counts did not state a new cause of action, said (p. 615): “Furthermore, we think that under section 39 of our former Practice Act, in force when the present action was commenced and when the judgment appealed from was entered, said additional counts would relate back to the date of the filing of plaintiff’s original declaration. (Bandet v. Burns, supra; Zister v. Pollack, 262 Ill. App. 170, 179-182.)”

In McGirr v. Pritchard, 258 Ill. App. 467, a declaration under the Injuries Act was filed January 26, 1928. The declaration did not aver either the date on which the accident occurred nor the date on which the decedent died. On March 18, 1929, the court granted defendant leave to withdraw his plea of not guilty and to file a demurrer to the declaration which was confessed by plaintiff. June 25, 1929, plaintiff filed a motion for leave to amend by inserting* the date of the death of the decedent in each count of the declaration. The court denied the motion and dismissed the suit, rendering judgment against plaintiff. After the filing of the motion to amend his declaration, sec. 39 of the former Practice Act as amended became effective on July 1, 1929. The court said that the question upon the record was whether the amendment became operative and effective so as to authorize the amendment to the declaration. The court held that the cause of action once harred by the statute of limitations could not be revived, or the right of defense to an action when once acquired could not be affected by a subsequent amendment or repeal of the statute; that the right to set up the bar of such a statute or to impose any other defense theretofore acquired was a vested property right which could not be taken away by legislation, and on that theory affirmed the judgment of the trial court.

In Holden v. Schley, 271 Ill. App. 159, the administratrix sued under the Injuries Act because of injuries from which decedent died September 3, 1928. The original declaration was filed September 24, 1929. At the May term, 1930, an amendment to the declaration was filed, which for the first time averred that decedent left next of kin him surviving. The original declaration also failed to allege that the next of kin were in the exercise of due care. The trial court sustained a demurrer to the amended declaration, and the Appellate Court for the third district affirmed the judgment of the trial court, holding that sec. 39 as amended was not applicable to an action under the Injuries Act. Upon appeal to the Supreme Court the judgment was reversed. (355 Ill. 545.)

In Keslick v. Williams Oil-O-Matic Heating Corp., 277 Ill. App. 263, the plaintiff, as administratrix, on November 3, 1932, filed her suit for damages on account of the death of her husband, as the declaration alleged by reason of violation by defendant of the Occupational Diseases Act. Additional counts were filed and defendant afterward filed a demurrer to the original declaration and additional counts, and the demurrer was sustained on the ground that the action was improperly brought by the administratrix. Thereafter, on September 26, 1933, the declaration and additional counts were amended by substituting Lucille Keslick, individually, and William Keslick by Lucille Keslick (the widow and children) his next friend, as plaintiffs instead of the administratrix. October 18, 1933, the plaintiff dismissed William Keslick, by his next friend, as a party plaintiff and also dismissed all counts except the original declaration as amended. This left Lucille Keslick as the sole plaintiff. Defendant filed a plea of the general issue and an amended and special plea, setting up that the supposed causes of action were separate and distinct from those alleged in the original declaration, and that the same did not accrue at any time within one year next before the filing of the amended declaration. Plaintiff demurred to the plea. The court overruled the demurrer. She elected to stand by it, and judgment of nil capiat was entered from which plaintiff appealed to the Appellate Court of the third district. It was argued that under sec. 39 of the old Practice Act the amendment related back to the filing of the suit. The Appellate Court of the third district said that the original declaration failed to state a cause of action because the statute did not authorize suit to be brought by the administratrix. The court said (p. 266): “We therefore do not think that the cause of action asserted in the amended declaration can be held as being substantially the same as that stated in the original declaration. The Appellate Courts of this State have recently so construed that amendment to the Practice Act. Hanley v. Waters, 255 Ill. App. 239; Holden v. Schley, 271 Ill. App. 159; Redmond v. Schilthelm, 273 Ill. App. 222. The case of Zister v. Pollack, 262 Ill. App. 170, relied on by appellant, might seemingly appear to be in conflict, but in that case there was a defective statement of a good cause of action and not the assertion of a new cause of action in the amendment.”

In Smith v. Illinois Power Co., 279 Ill. App. 505, the plaintiff sued for personal injuries which she alleged she sustained February 21, 1930. Three additional counts were filed January 10, 1933. Defendant pleaded the statute of limitations, to which plaintiff demurred. The demurrer was overruled and plaintiff elected to abide by her demurrer. After pointing out that plaintiff contended the additional counts fell within the meaning of sec. 39 of the old Practice Act, and that act had been repealed by the Civil Practice Act, which contained a saving clause, the court said (p. 513): “"While the Appellate Courts of this State have given this section a liberal construction so far as its terms will permit, it has never been held that its effect is to repeal the two-year limitation for the bringing*, of actions for personal injuries as prescribed by the statute. Keslick v. Williams Oil-O-Matic Seating Corp., 277 Ill. App. 263. While we can say with conviction that the purpose of section 39, as amended in 1929, was to remedy the evil that the statute of limitations should not bar an amendment to a declaration which contained a defective statement of a good cause of action in that it did not allege the performance of conditions precedent, and the amendment substantially states the same cause of action declared upon in the original declaration, then the amendment is not barred by the statute of limitations, the further intention and purpose, if any, of the section is not clear. In other Avords, amendments to declarations were permitted before the enactment of section 39 unless the amendment set up a new cause of action barred by the statute of limitations. If the amendment sets out a new cause of action, we cannot say that the amendment is substantially the same as the original declaration.”

In Friend v. Alton R. Co., 283 Ill. App. 366, suit was brought under the Injuries Act, to the September Term, 1932, of the circuit court, "based on the death of Jessie Mae Friend, who died May 23, 1932. The suit was brought in the name of the husband, William Friend, and minor children. A general demurrer to the declaration was sustained and on July 2, 1934, an amended complaint was filed by W. L. Friend, as administrator of the estate of Jessie Mae Friend. Defendant pleaded that the action was not begun within one year of the date of death. Plaintiff moved to strike the plea. The motion was denied and judgment for defendant entered. Plaintiff appealed. The Appellate Court of the third district, citing Bishop v. Chicago Rys. Co., 303 Ill. 273; Welch v. City of Chicago, 323 Ill. 498; and Wilcox v. Bierd, 330 Ill. 571, said a plaintiff must bring himself within the conditions of the act upon which the suit was based; that the limitation of one year in the Injuries Act was a condition of the liability itself; that to give to sec. 46 (2) of the Civil Practice Act the construction for which plaintiff contended would amount to the elimination of the condition; that the action must be brought in the name of the deceased and must be commenced within one year after the death. However, the Appellate Court cites no case, nor is the language of sec. 46 of the Civil Practice Act analyzed in any way.

Whatever may have been the proper construction of sec. 39 of the old Practice Act as amended, we think it is clear it was the intention of the legislature in the enactment of the Civil Practice Act, which (as we have seen) is applicable here, to make such a construction as that adopted in Friend v. Alton R. Co. and Holden v. Schley, impossible. Professor Sunderland, to whom was committed the task of drafting the Civil Practice Act (see Ill. State Bar Stats. 1935, p. 2431) writing in the Illinois Law Review, vol. 28, p. 870, in March, 1934, said: “Amendments of all kinds are permitted and I think the provisions of the new Practice Act go a little farther than the amendment of 1929. Such a decision as Holden v. Schley ought to be impossible under the new Practice Act. That was a case of wrongful death where it was held that an amendment made more than a year after the cause of action accrued, which added an allegation of due care on the part of the next of kin, did not relate back so as to save the case. An amendment will always relate back, for the purpose of preserving the cause of action, when the matters set up by the amendment grew out of the same transaction or occurrence set up in the original pleading.”

Dean Clark of the Yale Law School (see Clark Code Pleading, 1928, p. 513) says: “Now in all but a few jurisdictions the amendment is allowed if it refers to the same general aggregate of operative facts upon which the original complaint was based.”

A writer in the Illinois Law Review, vol. 31, p. 396, discussing Friend v. Alton R. Co., 283 Ill. App. 366, after pointing out how the Illinois Practice Act of 1872 was construed to permit amendments which changed the capacity in which the plaintiff sued, (to which he cites Litchfield Coal Co. v. Taylor, 81 Ill. 590; Teutonia Life Ins. Co. v. Mueller, 77 Ill. 22; Chandler v. Frost, 88 Ill. 559; McCall v. Lee, 120 Ill. 261, and Houghland v. Avery Coal & Min. Co., 246 Ill. 609, 93 N. E. 40) and how by the amendment of 1929, the legislature attempted to abolish the technical distinction between stating a cause of action and stating’ a cause of action defectively, says: “The emasculation of the 1929 amendment, initiated in Hanley v. Waters, and furthered in Holden v. Schley, was completed in Keslick v. Williams Heating Corporation. There the court held that the cause of action in an amendment which changed the capacity in which the plaintiff sued was not ‘substantially the same’ as that in the original declaration. In 1934, the Civil Practice Act omitted the words ‘substantially the same.’ Yet in derogation of plain legislative intent, and without regard to prior decisions of the Illinois Supreme Court permitting amendments changing the capacity in which plaintiff sued to relate back, the court in the instant case concluded that time is a condition of liability and not a statute of limitations, and that therefore the plaintiff’s original complaint failed to state a cause of action. Inasmuch as the new Act, by express language, includes ‘any statute’ either ‘prescribing’ or ‘limiting’ the time within which an action may be brought, the distinction seems unwarranted.”

Speaking of the Keslick case the writer says: “This case was severely criticized in Note (1935) 24 Ill. Bar J. 96. The Keslick decision may possibly be justified on the ground that the 1929 amendment implied the necessity that a cause of action be set up in the original complaint. But the present Act carries no sibch implication. It refers to the cause of action in the amended pleading, hut such cause of action need only grow out of the same transaction or occurrence set up in the original pleading in order to relate hack. Nowhere in § 46 (2) is there to be found the inference that the provision on relation back cannot be operative unless the original complaint states a cause of action. Indeed it is difficult to see how a complaint failing to state a condition precedent necessary to the right of recovery could state a cause of action.”

The article referred to in the Illinois Bar Journal, p. 96, after reviewing all the Illinois authorities, concludes: “In order to give any meaning to the amendment it must be realized that the intent therein expressed is to shift any emphasis that has been placed on the pleading of the cause of action to the cause of action itself, i. e. the factual set-up leading to liability. Pleadings do not create facts; they merely describe them. The test, then, whether an action is barred by a limitation is not to be the sufficiency or insufficiency of the first pleading, but the existence or non-existence of certain facts. This cannot be known definitely until the trial, but a plaintiff will not be precluded from asserting the existence of those facts in an amended pleading if a comparison of the amended with the original pleading, without resort to nice legal distinctions, fairly shows that the pleader was attempting to disclose the same factual situation.”

It is to be noted that former statutes permitting amendments to pleadings have been by the Supreme Court held applicable to death cases in Swift Co. v. Gaylord, 229 Ill. 330. Sec. 46 of the Civil Practice Act, ch. 110, Ill. Rev. Stat. 1937, § 170; Jones Ill. Stats. Ann. 104.046, covers the same subject matter as Sec. 39 of the former Practice Act, but is much broader in its terms and by direction of the legislature is to be liberally construed. The changes made when sec. 39 was rewritten into sec. 46 of the Civil Practice Act show clearly the legislative intention to liberalize that section. It is for us to carry out the legislative intent rather than by refined technicalities obstruct it. McCaskill’s Civil Practice. Act, 1936, pp. 120-128 inclusive. Hinton Illinois Civil Practice Act, pp. 64 — 73.

Giving consideration to the legislation concerning amendments to pleadings in this State from 1872 up to the adoption of the Civil Practice Act, we think sec. 46 of that act discloses a change which is fundamental in its character. For the subtle distinctions between “actions” and “causes of action,” between identity of “actions” and identity of “causes of action,” between “defective causes of action” and “defective statements of a good cause of action,” as illusstrated by Fish v. Farwell, 160 Ill. 236, and Walters v. City of Ottawa, 240 Ill. 259, 88 N. E. 651, this section of the Civil Practice Act substitutes the test of reality, namely, whether the transaction or occurrence set forth in the amended pleading is the same as that set up in the original pleading. The failure in the original pleading to state and describe a condition precedent under this theory becomes wholly immaterial. The difference between the two theories is well illustrated by a comparison of Fish v. Farwell, 160 Ill. 236, and Enberg v. City of Chicago, 271 Ill. 404, 111 N. E. 114. This fundamental distinction does not appear to have been called to the attention of the court in Friend v. Alton R. Co., 283 Ill. App. 366. We hold that under sec. 46 of the Practice Act the amendment was permissible and related back to the filing of the original complaint, since both pleadings described the same transaction or occurrence.

Defendant contends that plaintiff’s given instruction No.-15 was erroneous in that it omitted the necessary element of proximate cause. It is as follows: “The court instructs you, that if you believe from the preponderance of the evidence, under the instructions of the court, that the driver of the wagon of the defendant Bowman Dairy Company, a corporation, on the occasion in question, was guilty of negligence in the management and operation of said vehicle, as charged in the plaintiff’s complaint, and if you further believe from the preponderance of the evidence that such negligence, if any, caused or proximately contributed to cause the injury and death complained of by the plaintiff in this case, and that the decedent was at and before the happening of said accident in the exercise of ordinary care for her own safety, then you - should find the defendant Bowman Dairy Company, a corporation, guilty.”

Defendant points out that in view of the conflict in the evidence it was important that the jury should be properly instructed and says that an instruction substantially in the form of No. 15 was condemiied in the case of Denton v. Midwest Dairy Products Corp., 284 Ill. App. 279. Defendant also calls our attention to the memorandum opinion in Temple v. Alton, Granite & St. Louis Traction Co., 197 Ill. App. 227, and Beach v. Patton, 208 N. C. 134, 179 S. E. 446. As far as the Temple case is concerned, we find nothing in the memorandum which is inconsistent with the instruction complained of. The instruction criticized in the Denton case is clearly distinguishable in that the jury was there told that the defendant might be found guilty if, with other necessary elements included, defendant was guilty of conduct which “contributed to the death of plaintiff’s intestate.” The court said that the instruction was not accurate in that it omitted the necessary element of proximate cause. Legal or proximate cause is a prerequisite to liability for tort (Eestatement, sec. 9, p. 18) but this element is not absent from this instruction. Complaint is also made that the conrt refused to give instruction No. 3 requested by defendant. This instruction was as follows: ‘ ‘ The court instructs the jury that if yon find from the evidence that the horse and wagon of the Bowman Dairy Company remained in the eastbound rail on 47th street or did not turn so far as to be in the actual path of the truck of the defendant, Fred Kunz, as he was proceeding west on 47th street, you must find the defendant Bowman Dairy Company not guilty.”

The instruction was subject to criticism in that it singled out for the consideration of the jury particular facts and told the jury that such facts would relieve the defendant from liability, ignoring the theory upon which plaintiff tried the case. It was not error to refuse the instruction.

It is further contended that the verdict for plaintiff is inconsistent with physical facts as shown by the evidence to have existed at the time of the accident. It is undisputed, argues defendant, that the truck of Kunz passed the milk wagon without colliding with either it or the horse, and is undisputed that the rear of the truck skidded to the southwest as the driver of the truck turned the wheels to the north. The truck was 20 feet long, and it is argued that it could not have failed to hit the horse or wagon if, as the testimony for plaintiff tends to show, the head of the horse was within 5 or 6 feet of the north curb of 47th street. Pointing out the width of 47th street from curb to curb, the distance between the north rail of the westbound track and the curb of 47th street, and the distance of the outside westbound rail to the south rail of the westbound track, defendant says there was less than 24 feet between the north rail of the eastbound track and the curb of 47th street, and that a truck 20 feet in length which was whirling around at the time, which passed the horse and wagon, must have occupied at least 20 feet of the highway, and that if it did not touch the horse then the horse must have been at least 20 feet south of the curb of 47th street, and it cannot, therefore, be said that the driver of the milk wagon was guilty of negligence.

Defendant concludes that since the evidence tended to show that the owner of the truck was a man of little means, and since the jury felt that someone ought to pay for the death of decedent, the jury arbitrarily imposed this obligation on the dairy company, which is able to pay.

Defendant does not contend that the verdict is against the weight of the evidence. The argument of defendant assumes the correctness of testimony of plaintiff as defendant understands it, to the effect that the head of defendant’s horse at the time of the accident was within 5 or 6 feet of the north curb of 47th street. This evidence was, of course, only opinion evidence, at best, a mere approximation. There was other evidence bearing on this point and the question was distinctly for the jury. It is apparent the jury rejected the testimony of defendant’s driver. If defendant is in fact guilty, the fact (if it be a fact) that the jury unjustifiably let out Kunz is no reason for reversing a just judgment against defendant. Wolff Mfg. Co. v. Wilson, 46 Ill. App. 381.

Finally, defendant contends that plaintiff failed to prove that the accident caused the death of plaintiff’s intestate. This contention is based upon the theory that there was no direct medical evidence showing the connection between the accident and her death. The record does not sustain this contention, which is made for the first time in this court. The evidence shows that the accident occurred after one o’clock p. m., Saturday, October 20,1934. The trial took place more than two years thereafter. The evidence shows that after she was knocked down by the truck deceased was taken in a semiconscious condition to the German Deaconess Hospital, where she became unconscious. It is true that the attending physician said he first saw decedent on Sunday, but the whole evidence shows he was mistaken in this statement, and that he in fact saw her on Saturday. The doctor testified that when decedent came to the hospital she was unconscious, and she was taken there on Saturday. The testimony shows that prior to the accident decedent was in perfect health, and that the doctor found upon examination that she presented a clinical picture of acute trauma to the abdomen; she was given a blood transfusion, and as soon as her condition warranted an exploratory operation was performed. The abdomen was found to be full of blood, urine and pieces of liver floating in the abdomen; the intestine, the bladder and the liver were ruptured. The doctor says: “The cause of death was ruptured bladder, ruptured liver and a ruptured intestine. I have an opinion as to what caused the ruptures — trauma. That is being struck on the abdomen. Trauma means injury.” The doctor also says: “I stayed with her until she died.” The jury was, we think, justified in finding that the decedent died as a result of the injury she received from the accident.

The judgment is affirmed.

Affirmed.

O’Connor, P. J., and McSurely, J., concur.

Supplemental Opinion Upon Rehearing.

In its petition for rehearing the Bowman Dairy Company points out that the opinion of this court “overlooked the fact that neither in the original complaint nor in the amended complaint is there any allegation as to the date of death of plaintiff’s decedent, or an allegation that suit was commenced against defendant within one year of the death of decedent. ’ ’

The opinion does (without discussion, however), state the facts which show this contention to be without merit. It states that the complaint by the administrator of the deceased was filed on December 19,1934; that Genevieve Stachura died as a result of injuries she received on October 20, 1934. The complaint does not specifically aver that the time intervening between October 20, 1934, and December 19, 1934, is less than one year (but any intelligent person would know that such was the fact) and it would seem that a complaint giving such knowledge to an ordinary person should not leave a court in ignorance. The petition for rehearing is denied.

Petition denied.


text:
    Benjamin H. Ehrlich, Appellee, v. Hans S. Rothschild et al., Appellants.
    Gen. No. 39,687.

      Opinion filed December 6, 1937.
    Tenney, Harding, Sherman & Rogers, of Chicago, for appellants; Henry F. Tenney and William W. Miller, of Chicago, of counsel.
    William L. Bourland and Aaron H. Cohn, both of Chicago, for appellee.
   Mr. Justice Matchett

delivered the opinion of the court.

Plaintiff sues to recover money alleged to have been lost to the defendants in a gambling transaction. At the close of plaintiff’s evidence the court directed a verdict in favor of defendants and entered judgment on the verdict. Subsequently the plaintiff moved for a new trial on the grounds, first, that pertain letters offered by plaintiff were erroneously excluded by the court, and second, that the court erred in directing the jury to return a verdict in favor of defendants. This motion for a new trial was granted, and this appeal was perfected by defendants pursuant to sec. 77 of the Civil Practice Act (Ill. State Bar Stats. 1935, ch. 110, ft 205; Jones Ill. Stats. Ann. 104.077) and Rules 30 of the Supreme Court and 20 of this court.

The parties are agreed that the sole question for consideration is whether plaintiff produced sufficient evidence to warrant the submission of the cause to the jury.

The complaint was in 10 paragraphs. Defendants filed an answer in six paragraphs, admitting the first paragraph of the complaint as to the business of defendants, etc., but denying every other material allegation of the complaint. Plaintiff was the only witness called in his own behalf and his testimony, together with 38 exhibits disclosing the nature of the transactions between plaintiff and defendants during the time in question, constitutes the only evidence in the case. Plaintiff lives at 7528 North Ellwood avenue and is an attorney at law. Defendants are brokers dealing on the exchanges and in their business with plaintiff were represented by Mr. Edwin Rothschild. Prior to the transactions here in dispute plaintiff bought and sold stock and grain on the exchanges through defendants, and on June 7, 1933, plaintiff received from defendants, through Mr. Rothschild, a check for $6,437.75, in settlement of these prior transactions, concerning which no complaint is made. Plaintiff says Rothschild delivered the check to him June 7th and said that he thought he would come over and talk with plaintiff about the market, which looked good to him, and he wanted to get back into it. Plaintiff says: “I told him that I was through gambling for all time, ‘you remember, I told you a year and a half ago I never wanted to see a market as long as I live. ’ ’ ’ Rothschild replied: “Well, I know, but those things have been said hundreds of time by better men than you, I want you to get back in because there are some good buys there. I have some good ones I want you to take a flyer on, you have got a chance to get your money back.” Plaintiff said: “No, I needed this money because I have a mortgage coming due, and I needed the better part of it to pay the mortgage, and it was all the money I had and I didn’t want to get back in any stocks any more. ’ ’

In the six weeks that followed plaintiff talked with Bothsehild 10 or 12 different times. Bothsehild called on the telephone, came over once or twice; they lunched together and tallied about the market; plaintiff kept telling* Bothsehild that was all the money he had in the world, he did not want to gamble another nickel of it, needed it to pay a mortgage; that business was bad anyway, and he had to have some money to run his office. Bothsehild said plaintiff was not taking* any chance because he, Bothsehild, had a good one on United States Steel; he wanted plaintiff to take a flyer on a couple of hundred of United States Steel; plaintiff replied, “Well, I don’t know anything* about it, and I don’t want to know anything* about it, I want to be left alone,” and Bothsehild said, “Well, let me buy you two hundred steel,” and he says, “Ton don’t need to give me any money even, a couple of days, two or three days time, probably will turn you probably three or four points, as soon the market shows three or four points profit, I will just take it and credit your account. ’ ’

Plaintiff says these conversations ran along* until about July 17th; that on that date Bothsehild again asked his permission to put in an order for 200 U. S. Steel and plaintiff says, “I told him, I didn’t have anything* but this money, and I had used some of that, and asked him what the price of the stock was, and I don’t remember exactly now, but I know it was many thousands of dollars more than I had, and I told bim so. He says, ‘You don’t need to worry about the money at all, I will put the order in for you; you will get a profit out of it in two or three days and get some of your money back’; he says, ‘Let me guide your hand this time.’ I told him to go ahead.” Exhibit 4 is a statement on the stationery of defendants showing this transaction to the extent of $13,210. The statement shows the transaction to have been upon “the following terms and conditions assented to by you, viz: 1. That all transactions are subject to the rules and customs of the Exchange and Clearing House where executed. 2. That all securities from time to time carried in the customer’s account or deposited to protect the same may be loaned by the broker, or may be pledged by him either separately or together with other securities either for the sum due thereon or for a greater sum, all without further notice to the customer. 3. It is also agreed that all such securities shall secure all my (our) liabilities to Sutro Bros. & Co. and Sutro Bros. & Co. are authorized in their discretion to sell all or any of them without any notice to me (us) whenever in the opinion of Sutro Bros. & Co. my (our) margin is insufficient.”

Plaintiff’s exhibit 5 is a receipt from defendants for $4,000 in cash, credited upon this account. A few days later plaintiff paid defendant a further sum of $1,000. Plaintiff further testified that no offer was ever made to deliver this stock to him. On July 20th defendants wrote plaintiff his stock account required additional funds and asked for $1,300, or bankable security in the equivalent amount. On August 1st defendants again requested $3,000; on August 11th a similar request for $1,100, August 12th for $1,700, and August 14th for $1,700; on this last request was written in pencil, “Final Request. ’’ On August 1.6th a deposit of margin to the amount of $2,300 was demanded. The words, “Final Request” appeared on the writing with the statement that if the matter was not taken care of before 9:30 of the following* day, “we shall be forced to liquidate your account.” On August 31st defendants mailed to plaintiff a statement of account showing* the purchase of this stock and payments made thereon, showing* a balance of $1,090.65 due. On August 1st plaintiff talked over the telephone with Rothschild, who called him about nine o’clock in the morning* and told him there had been a peg put on wheat, either the government had pegged the price so that it couldn’t go below the price it had been the day before, or that the grain exchange had done it themselves so that it wouldn’t go but one way, could only go up; that this was an opportunity to g*et back the loss he- had in steel, and that he wanted plaintiff to buy 20.000 bushels of wheat. Plaintiff said to him, “Well, where do you think the money is coming* from for all this? So far I have got a loss, you got me into this thing, now, with a loss in steel, and my equity is very low, I have got quite a loss there in steel, certainly I haven’t any money to pay for that, let alone buy wheat.” He said Rothschild replied, “It can only go one way, and if you will let me pile in here with an open order this morning” he says, “I will probably take three or four cents profit by the end of the day, ’ ’ and he says, “You don’t need to worry about it, I can handle it all right.” Plaintiff said, “Well, you started me in the thing, you got me into it, do what you please,I don’t care.” So he called plaintiff back and said he had got him 20,000 bushels of wheat. Witness says he never saw any of the wheat, that he wouldn’t know what it looked like if he saw it; that he had no warehouse in which to store wheat and didn’t need any in his business as a lawyer.

On August 1st defendant sent plaintiff a statement of the transaction in wheat, showing the purchase of 5.000 bushels September at 95% and 15,000 September at 95%. The statement said that the contract was made under authority of the United States Grain Futures Act and further, “in accordance with your instructions and on the understanding that actual receipt or delivery is intended, we have today executed the above orders for your account and risk under the conditions of our standard customer’s agreement including: (1) All transactions shall be subject to the rules and customs of the Exchange where such transactions are consummated, and the Clearing House of such Exchange”; with other provisions as to margins, etc. Plaintiff made another payment of $500 besides the two payments represented by plaintiff’s exhibits 13 and 14 of $4,000 and $1,000. He also sent $1,000 in cash by a man in his office, making a total of $5,500. Plaintiff further says that in a conversation with Rothschild on the day that he said he was going to buy the steel shares, Rothschild said he was going to put in an order at the same time to sell it for a profit of 4 points; that he would put in the two orders at one time, so that if he got it they would immediately have an order to sell it as soon as it hit the four point profit mark, if it got there, and as to the wheat, .he said he would put in two orders at the same time, whatever he got it at, to sell it at 5 cents a bushel higher. Witness said that he never had any intention to pay the balance on the 200 shares of TI. S. Steel because he could not as he didn’t have the money, and never intended to be called upon to pay for them; that he never intended to take the wheat, had no place to store it, etc. Plaintiff said Rothschild further told him that his “boss was bawling him out” for buying so much stuff on plaintiff’s account for so little money; that Rothschild called him up practically every day, told him how. the market was going, and that he let go of the wheat, and bought it back again and then let it go again; that he sold it out and then bought it back three or four different times, so Mr. Rothschild told plaintiff. About August 14th Rothschild called plaintiff and told him he was forced to get $1,700 additional margin, and would be forced to sell out plaintiff’s account. Plaintiff replied he didn’t have any way of getting it for him; on the 16th when he got his final request, Rothschild said he was going to put a stop order on the IT. S. Steel at a point around 42 or 43, and unless plaintiff could give him some more money his business was making him sell it out. The last money plaintiff gave defendants was his check of September 22nd for $500. September 30th plaintiff received back from defendants a check for $966.86, which was what he got back out of the $5,500 he put in.

On cross-examination plaintiff said his practice as a lawyer was mostly in divorce cases; that he first traded with defendants about a year and a half before these transactions; that before that he had known Rothschild slightly; that he was introduced to him by a lawyer named Pearlman; that he bought and sold some stock and grain through the defendants before this, and that Rothschild handled these transactions; he was not suing for losses in any of these. Plaintiff acknowledged that the legend on an exhibit that all orders for purchase or sale was with the distinct understanding that actual receipt or delivery was intended, and that similar statements were read by him; that this was “stock stuff”; that he understood that in certain respects the transactions were to be carried on in accordance with the .rules of the exchange; that he gave the written order for the purchase of 200 shares of steel on July 17th; that he ordered the 20,000 bushels of wheat of August 1st and the 20,000 bushels of August 4th, and that he purchased 20,000 bushels on .August 11th and 5,000 bushels on August 29th; on September 19th, 100 shares of U. S. Steel; that it would be a wild guess to say whether his net worth at the time of these transactions was $50,000; he had, however, signed a bail bond presenting a schedule in the municipal court which stated he was worth over and above all liabilities at least $50,000.

Defendants contend there is no evidence of any illegal contracts between these parties for the. reason that to constitute a gambling transaction it must be made to appear that neither party intended the commodity purchased to be delivered, but both intended the transaction should be settled on differences. It was so held by the Supreme Court in Pelouze v. Slaughter, 241 Ill. 215, and by the Appellate Court in Johnson v. Milmine, 150 Ill. App. 208. In the latter case this court said that if either party acted in good faith, intending delivery and intending that the commodity should be received and paid for, the contract would be valid and binding.

Plaintiff testified that he himself did not intend to accept delivery, but he does not anywhere in his testimony say that Rothschild was so informed by him, or that he agreed to any such method of doing business. All the written evidence is inconsistent with the theory that defendants had any such intention. Plaintiff testified in substance that he knew the transactions were to be carried on in accordance with the rules of the Board of Trade and Stock Exchange. The burden of proof was upon him. It was for him, to show that defendants intended to enter into a gambling transaction. We agree with the statement of plaintiff’s brief that, “the intention to gamble, contrary to the Illinois Statute, is the nub of the case,” and that the intention of the parties may appear from all the circumstances in evidence, as is held in Pope v. Hanke, 155 Ill. 617 ; Jamieson v. Wallace, 167 Ill. 388; First Nat. Bank of El Paso v. Miller, 235 Ill. 135; Weare Commission Co. v. People, 209 Ill. 528; and Riordan v. McCabe, 341 Ill. 506, all of which are cited and relied on by plaintiff.

Any circumstance tending to show the real intention of both parties is admissible, but it is not sufficient to present evidence tending to show the intention of only one of them. It requires two guilty minds to make' a contract in violation of the statute. None of the many cases since decided gives a clearer exposition of the law of this State on this subject and the reason for it than is to be found in the opinion of Judge Mc-Allister delivered at nisi prius, but adopted by the Appellate Court in Tenney v. Foote, 4 Ill. App. 594, and approved by the Supreme Court in 95 Ill. 99. The conclusions there announced are also in harmony with the views expressed by the English courts in Grizewood v. Blaine, 11 Common Bench 525, construing a similar statute. The opinion of Judge McAllister, p. 599, speaking of the contract there involved, says : “In practice on the stock exchange, it was often the intention of the parties that no stock should be delivered, but the transaction settled upon differences. This became common, and the English statute was aimed at its repression because it was, in effect, gambling. Our statute is directed against the same evil, and extends to transactions in grain and other commodities as well as stocks. So that the word ‘option’ as used in the statute here, taken with the context, means a mere choice, right or privilege of selling or buying; and it is the contracting for such choice, right or privilege of selling or buying- at a future time any commodity the statute was intended to prohibit, as contradistinguished from an actual sale or purchase, with the intention of delivering and accepting the commodity specified.”

In the Restatement, Contracts, sec. 323, the authors say (p. 1014): “ (1) A bargain purporting* to be for purchase and sale is a wager if it is part of the bargain that no actual delivery of the subject matter shall be made, and that settlement between the parties shall be made on the basis of differences in market prices. But an undisclosed intention of one or both parties to a bargain does not invalidate it.

“(2) A bargain for purchase and sale, originally legal, is not made illegal by a subsequent agreement between the parties to discharge their rights and duties by a payment based on the difference between the market price at the time of the original bargain and that at the time of the subsequent agreement.”

In the Illinois Annotations to the Restatement, sec. 523, pp. 273, 274, the Illinois cases are collected and classified. It is stated that the first subsection of the Restatement states the Illinois law as to cases involving the Illinois statute (Smith-Hurd Ill. Stats. 1935, ch. 38, § 328; Ill. State Bar Stats., eh. 38, If 308; Jones Ill. Stats. Ann. 37.258) and that cases in this State involving litigation between broker and customer usually fall into two classes: One, those in which the customer retains a broker to place wagers as to the rise or fall in the prices of commodities or securities, and the other those in which the broker and his customer intend that the former shall on the latters’ behalf make purchases and sales calling for actual delivery. In the first class the contract is illegal; in the second it is valid. In order that the agreement between the broker and his customer shall constitute gambling under the statute, there must be an affirmative intent by the parties not to deliver commodities or securities but to settle on differences only. The intention must be mutual and be disclosed; and in considering whether the broker and his customer intended a settlement by payment of differences, the court may consider various circumstances, such as the lack of facilities of a buyer to accept delivery of a commodity in the quantities ordered, as in Pope v. Hanke, 155 Ill. 617, 40 N. E. 839, 28 L. R. A. 568; Lamson v. West, 201 Ill. App. 251; Campbell v. McConnell, 214 Ill. App. 342. Also the fact that the customer is not in a business reasonably requiring the purchase or sale of the particular commodity in the particular quantities, as in Bartlett v. Slusher, 215 Ill. 348, 74 N. E. 370; Wheeler v. McDermid, 36 Ill. App. 179; Watte v. Costello, 40 Ill. App. 307; Hartwig v. Booth, 217 Ill. App. 70, although in two cases this factor is given but little weight; Johnson v. Milmine, 150 Ill. App. 208, and Ennis v. Edgar, 154 Ill. App. 543. Also the previous dealings between parties, as in Colderwood v. McCrea, 11 Ill. App. 543; Miles v. Andrews, 40 Ill. App. 155; or even subsequent dealings, as in Gardner v. Meeker, 169 Ill. 40, 48 N. E. 307; also dealings between the broker and other persons at the same time and place, as in Staninger v. Tabor, 103 Ill. App. 330; or the fact that only small amounts as deposits are required of the customer, as in Jamieson v. Wallace, 167 Ill. 388. 47 N. E. 762; 59 Am. St. Rep. 302; Pratt & Co. v. Ashmore, 224 Ill. 587, 79 N. E. 952; Towne v. Buckley, 230 Ill. App. 573; or the financial inability of the customer, as in Jamieson v. Wallace, 167 Ill. 388, 47 N. E. 762, 59 Am. St. Rep. 302; Pratt & Co. v. Ashmore, 224 Ill. 587, 79 N. E. 952; Riordan v. McCabe, 341 Ill. 506, 173 N. E. 660, 83 A. L. R. 512; Carroll v. Holmes, 24 Ill. App. 453; Doyle Bros. v. Bartelme, 170 Ill. App. 74; Graff v. Moench, 181 Ill. App. 127; Easton Farmers Grain Co. v. Fernandes Grain Co., 229 Ill. App. 102; Ohlendorf v. Bennett, 241 Ill. App. 537; or that the financial ability of the customer may be such as to warrant finding that he and the broker did not intend a settlement only by paymént of differences, as in Pelouze v. Slaughter, 241 Ill. 215, 89 N. E. 259. If we apply the rules stated in these cases to the facts before us we find no testimony that either of the parties intended that the transactions should be settled by payment of differences. There is as to the grain (but not as to the stock) evidence of lack of facilities of the buyer to accept physical delivery, but there is no evidence that the customer could not reasonably require or conveniently use the stock or grain to the amount purchased. The previous dealings between the parties indicated purchases and deliveries with settlement, concerning which no complaint was made. The deposits of margins made seem to have been ample. Most important, and controlling, the plaintiff was financially able to carry all of the transactions. Even if it is conceded that the letters excluded should have been received in evidence, our conclusion would not be different. Upon the whole record we are of the opinion the plaintiff failed to introduce evidence from which the jury could reasonably find that both plaintiff and defendants intended to enter into gambling contracts. It follows that the court erred in granting a new trial and that the order to that effect must be reversed and the cause remanded with directions to enter judgment upon the verdict in favor of defendants.

Reversed and remanded with directions. -

0’Connor, P. J., and McSurely, J., concur.


author: Mr. Presiding Justice Fulton

text:
    William K. Galeener, Appellee, v. J. Fred Hessel, Appellant.
    Gen. No. 9,053.

      Opinion filed October 15, 1937.
    Rehearing denied January 4, 1938.
    DobbiHs, Dobbins, Barr & Thomas, of Urbana, for appellant; James G-. Thomas, of Urbana, and John J. Bresee, of counsel.
    Little & Finerock, of Urbana, for appellee.
   Mr. Presiding Justice Fulton

delivered the opinion of the court.

The appellee, William K. Graleener, termed plaintiff in this opinion, filed his complaint in the circuit court of Champaign county, against the appellant J. Fred Hessel, the defendant in the cause, on January 25, 1936, and summons was duly served upon the said defendant. On January 30, 1936, the plaintiff moved to dismiss the complaint and the court ordered the cause dismissed at the cost of the plaintiff. It appearing that all costs had been paid, the cause was stricken from the docket. No notice was served upon the defendant or his attorneys of the said motion made by the plaintiff nor that an order had been entered dismissing the complaint. On February 11, 1936, which was prior to the first return day set forth in the summons, the defendant moved to vacate the order of dismissal and for leave to file answer and counterclaim. On February 15, 1936, the court allowed the defendant’s motion, vacated the order of dismissal, and granted defendant leave to file answer and counterclaim. Plaintiff thereupon entered a motion to strike the motion and counterclaim filed by defendant and a further motion for leave to dismiss the cause at his cost. On September 25, 1936, the plaintiff orally moved to withdraw his motions of February 15, 1936, and for leave to file demand for jury trial. The court thereupon granted the plaintiff leave to file said motions in writing by September 26, 1936. On the next day, September 26, the plaintiff moved to withdraw his motion made September 25, 1936, for leave to reinstate motions made by plaintiff on February 15, 1936. The court held the motions under advisement until December 4, 1936, and then allowed the plaintiff’s motion to withdraw his motions made on September 25, 1936, and reinstated his motions of February 15, 1936. The court then granted the motion of plaintiff to strike the counterclaim filed by the defendant on February 15, 1936, and to dismiss the cause at plaintiff’s costs. The defendant has prosecuted this appeal from the rulings of the court upon the pleadings.

There are no questions of fact involved in this appeal. The problems are questions of procedure, and propositions of law only are presented here for decision. The defendant, who is the appellant in this court, contends that the trial court should not have allowed the plaintiff, on September 26, 1936, to withdraw the oral motion made September 25,1936, and to reinstate his motions made February 15, 1936, but we believe the main or principal question in this cause is whether or not a plaintiff may be permitted to dismiss his cause of action after service of summons, but before there is any appearance or answer on the part of the defendant on file, and before the first return day named in the summons. Section 52 of the Civil Practice Act provides as follows: “The plaintiff may, at any time before trial or hearing begins, upon notice to the defendant or his attorney, and on the payment of costs, dismiss his action or any part thereof as to such defendant, without prejudice, by order filed in the cause.” Ill. Rev. Stat. 1937, ch. 110, § 176; Jones Ill. Stats. Ann. 104.052.

We do not feel that the failure to notify defendant of the dismissal of his suit by plaintiff at his costs would in every case be reversible error. At common law a plaintiff could take a voluntary nonsuit as a matter of right at any time before the verdict was rendered in open court. Section 70 of the Practice Act of 1907 provided that every person desirous of suffering a nonsuit, shall be barred therefrom, unless he do so before the jury retire from the bar, or if the case is tried before the court, before the case is submitted for final decision. Under section 52 of the Civil- Practice Act it would appear that a plaintiff has a right to dismissal at any time between the bringing of the suit and the entry upon the trial, upon giving notice to the defendant and the payment of costs. However, to say that under the circumstances of this case, a plaintiff does not have the right to discontinue or dismiss his suit upon such terms as the court may impose, which should include the payment of costs, is holding a party to an extremely strict interpretation of the Act. If the defendant upon a motion to vacate the order of dismissal can show that his rights have been prejudiced, or that he has been deprived of some substantive rights concerning his defenses, not available in another suit or that might be endangered by the dismissal, then the cause should be reinstated, but the mere failure to give the notice to defendant without prejudice being shown is not fatal.

A great deal of confusion over the motions and the pleadings appears in this record, but it is our judgment that the control of all such matters and the procedure in the cause is under the control and within the discretion of the trial court.

Section 4 of the Civil Practice Act provides:

“This Act shall be liberally construed, to the end that controversies may be speedily and finally determined according to the substantive rights of the parties, and the rule that statutes in derogation of the common law must be strictly construed shall not apply to this Act or to the rules made pursuant thereto.” Ill. Rev. Stat. 1937, ch. 110, § 128; Jones Ill. Stats. Ann. 104.004.

In the case of Schornick v. Prudential Ins. Co., 277 Ill. App. 36, the strict provisions of the Practice Act regarding the manner of serving notice in perfecting an appeal were disregarded and the court said, “This Act was enacted to assist litigants in having their cases tried — not to keep them from trying their cases.” Also, “We are not inclined to indulge in highly technical interpretations of the Act, especially until it is generally and uniformly understood.” A similar rule was adopted in Aetna Ins. Co. v. Illinois Cent. R. Co., 283 Ill. App. 527. While tljis court does not mean to be understood as disregarding, partially or otherwise, the plain provisions of the Civil Practice Act adopted for the orderly and convenient trial of cases, in this particular case we feel that the trial court did not abuse its discretion in permitting the plaintiff to withdraw its motions of September 25, and that the ruling on September 26, allowing the motion to strike the counterclaim of defendant and to dismiss the cause at plaintiff’s costs was correct.

In the light of our conclusions, we do not deem it necessary to discuss the other questions raised in the briefs of counsel. The judgment of the circuit court is affirmed.

Affirmed.


author: Mr. Justice Edwards

text:
    Carrie Stevenson, Appellee, v. Illinois State Trust Company, Appellant.

      Opinion filed November 8, 1937.
    Rehearing denied December 28, 1937.
    H. Grady Vien, of East St. Louis, for appellant.
    John M. Karns, of East St. Louis, and Harold J. Bandy, of Granite City, for appellee.
   Mr. Justice Edwards

delivered the opinion of the court.

Plaintiff sued for and recovered a judgment against defendant in the city court of East St. Louis, from which the latter has taken proceedings to appeal.

Defendant, on April 29, 1937, filed in this court an abstract of record together with brief and argument. On May 20, 1937, plaintiff presented her motion to dismiss the appeal, averring therein that the abstract of defendant was insufficient in that it failed to show, first, that notice of appeal was filed in the office of the clerk of the trial court; second, that it was filed within the time required by the Civil Practice Act, and third, that a copy of same was served upon plaintiff or her attorneys. On May 21,1937, defendant filed its written objections to such motion, and on May 25, 1937, exhibited to this court its application for leave to file a supplemental abstract, alleging that its abstract appears to be deficient for the reasons claimed in plaintiff’s motion as grounds for dismissing the appeal, that such matters are all shown by the transcript of the original record of the cause, and that the omission of the abstract to show such facts “was not intentional, but was accidental and inadvertent. ’ ’ This motion was not verified by affidavit. Plaintiff has in writing objected to the grant of the prayer of defendant’s said motion. We shall consider such motions inversely in the order of their filing.

Defendant’s application for leave to file a supplemental abstract is by its terms and in its effect a confession of the averments of plaintiff’s motion to dismiss the appeal, as to the insufficiency of defendant’s abstract. It remains to inquire whether defendant, by its said application, has shown a reason why it should be permitted to file a supplemental abstract. The only averment in that regard is that “the omission of such facts from the abstract of record heretofore filed was not intentional, but was accidental and inadvertent.” This allegation is a pure conclusion, no facts or circumstances are set forth from which the court might infer that the failure was accidental and inadvertent and not the result of intention or neglect. We do not think the allegation is sufficient. Moreover, the application was not sworn to.

Number 12 of the rules of this court requires that all motions shall be in writing, and when the same is based upon matter which does not appear of record, it shall be supported by affidavit. The matters as to accident and inadvertence relied upon as the basis of the motion, are not manifested by the record, hence, within said rule, the application not being verified, was insufficient and its prayer will be denied.

This presents for consideration plaintiff’s motion to' dismiss the appeal; this likewise is unsworn; however, the matters upon which it is grounded are apparent of record, hence it need not be verified.

In Shaw v. Davis, 289 Ill. App. 447, we held: “The right of appeal, under the Civil Practice Act, is purely statutory, and the provisions of the act must be complied with, otherwise the appeal is not legally perfected. One of the first requirements of the statute relative to appeal is that notice of appeal be filed in the court from which the appeal is taken; sec. 76, Civil Practice Act, Ill. State Bar Stats. 1935, ch 110, If 204; Jones Ill. Stats. Ann. 104.076; and if the notice be not filed the appeal is not perfected. People ex rel. Dilks v. Board of Education, 283 Ill. App. 378. If there be a failure to file such notice, the attempted appeal is ineffectual and will be stricken. Hunter v. Hill, 284 Ill. App. 655 (Abst.), 2 N. E. (2d) 388.”

“It is elementary that the abstract must show all the necessary steps in the litigation and a compliance with all the essential requirements as to appeal. Village of Winnetka v. McMartin, 351 Ill. 134; Christy v. Elliott, 216 Ill. 31. The abstract is therefore insufficient for failure to affirmatively show that appellants filed notice of appeal in the trial court within the prescribed time. Where such is true the reviewing court is not bound to entertain the appeal. Watson v. Sullivan, 260 Ill. App. 259; Bour v. Cook, 209 Ill. App. 315.”

Defendant’s abstract falls squarely within the rule as thus declared in Shaw v. Davis, supra, and the authorities cited therein, and is insufficient. In addition, defendant in its motion for leave to file a supplemental abstract has stated that “the abstract of record heretofore filed by appellant appears to be deficient and incomplete in so far as said matters are concerned,” referring to the claimed deficiencies set forth in plaintiff’s motion to dismiss the appeal. This is a confession of its insufficiency.

The abstract of defendant, failing to show necessary jurisdictional steps in the tailing of the appeal, must be held insufficient as a matter of law, and the motion to dismiss the appeal must be sustained. -

Appeal dismissed.