text:
    James G. Brown v. Frederick W. Krause et al.

      Trust Deeds—Foreclosure—Cross-Bill—Cancellation— Fraud—Rescission.

    In a proceeding to foreclose a trust deed, upon a review of the evidence, this court affirms the decree of the court below, granting relief on the cross-bill for the cancellation of the trust deed as procured by false and fraudulent representations in the sale of a plantation in Texas, the consideration being the notes secured.

      [Opinion filed March 13, 1889.]
    Appeal from the Superior Court of Cook County; the Hon. Egbert Jamieson, Judge; presiding.
    Messrs. Wise & Davis and Frederic Ullmann, for appellant.
    What is the law regarding the rescission of a contract by the parties?
    In Harrison v. Polar Star Lodge, 116 Ill. 287, the court says: “ Any circumstances or course of conduct from whence can be clearly deduced an agreement to put an end to the original contract, will amount to a rescission of it.”
    In Mix v. White, 36 Ill. 487, our Supreme Court says: To have that effect, evidence should be reasonably clear and definite, and, at least, satisfy the mind that such was the intention of the parties.”
    In Huffman v. Hummer, 18 N. J. Eq., p. 90, the court says: “ But such parol waiver or discharge must be clear and explicit, and proved beyond doubt.” The minds of both parties must agree to make a contract, and the proof must be clear to establish it; so in a rescission or abandonment of the contract the minds of the parties must meet and the proof must be equally clear that both parties intended to rescind or abandon it. We submit has Krause, by a preponderance of the evidence, proved that the parties rescinded the contract?
    We contend that there were, as a fact, no false or fraudulent representations—no rescissions; but supposing there were false and fraudulent representations made to induce him to purchase the land, and remembering that Krause went on the plantation in April, 1884, and remained there over one year before he returned to Chicago, according to his present story he knew of the fraud nearly all the time, yet never tendered a deed reconveying to Brown, China Grove plantation. What is the law ?
    Bigelow on Fraud, p. 421, Ed. 1888: “In case real property has been conveyed to the injured party, it is not enough to tender back the conveyance, for that would not restore the title to the former owner: the grantee should tender a reconveyance. A mere offer in the case of an exchange of lands to ' trade back ’ would, therefore, be insufficient.” The learned author, on the same page, holds that the same rule applies to infants and married women.
    In Jeffrey v. Forbes, 28 Kan. 179, which was a case of extreme hardship, the court uses this language : “ How, the rule is, that when parties seek to set aside a conveyance on the ground that it is fraudulent, they must restore, or offer to restore, all they have received under it. A party who has received certain consideration, no matter how small and inadequate, for any contract or conveyance, must return that consideration, or offer to return it, before he is entitled to have the contract or conveyance set aside. He can not, while retaining the benefit of the transaction, repudiate it as null and void; and the plaintiffs in this case should tender a reconveyance of the forty, acres as a condition of recovery.”
    In Wilbur v. Flood, 16 Mich. 45, Brewer, J., uses this language: “ A mere offer to trade back is no rescission of a contract. The party aggrieved must do what he can to place the other in statu quo, and when it is possible this can onty be done in cases like the present by a return or tender of a return of what he has received in exchange for what he has given. In the case of land this can only be done by a conveyance.”
    Our Supreme Court, in Smith v. Brittenham, 109 Ill. 551, uses this language: “In such a case it is a misapprehension to suppose that the right to return exists when both parties can not be placed in statu quo. To take the land from Smith and give it to Mrs. Brittenham, and give him, in lieu of the goods, a certain sum of money, such asa court or jury might think he was entitled to by way of compensation for his goods, would be, in effect, compelling him to sell his goods on terms he never consented to, and would not, in any legal sense, be a rescission of the contract. It would lack the essential element of mutuality. Compensation, as we understand it, has no place in the law of rescission. When property has been exchanged, as in the present case, it must be restored in kind, otherwise there can be no rescission; and if the injured party is unable to do this, by reason of having sold or otherwise disposed of what he had received under the contract, or any substantial part of it, he is simply in no position to ask a rescission.”
    Krause never tendered a deed of China Grove; he did not pay his note and interest when due; the land was duly and legally advertised and sold under the trust deed, Krause entering no protest, no objection to the sale, and taking no legal steps to prevent it. The property is sold and conveyed by the trustee, thus divesting Krause of any interest in China Grove. ¡Not- having any interest in China Grove, how can he re convey? It may be claimed that Brown became the purchaser; what of it? The sale was legal and proper and divested the title. Krause having no longer the title is in no position to rescind. If he ever had any such right, which we can not believe under the evidence, he lost it by his negligence.
    In Wilbur v. Flood, the court uses this language: “It is an inflexible rule that a party complaining of fraud must be guilty of no unreasonable delay in repudiating and getting rid of his contract. When his object is to rescind it and reclaim his property, he is bound to lose no time unnecessarily in his action to that end. While no particular period can be laid down in all cases, yet it is quite well settled that no unnecessary delay can be permitted, and in the absence of some proof to excuse it, any considerable lapse of time must be conclusive evidence of neglect.”
    Our Supreme Court, in Cox v. Montgomery, 36 Ill. 398, uses this language: “ Still this species of remedy must be invoked with reasonable diligence. In a country where the values of real estate change as rapidly as in Illinois, it would be clearly unwise to permit a purchaser of land to retain it nearly eighteen months after the discovery of the fraud before filing a bill to rescind. This is an unreasonable delay, which a court of chancery can not tolerate.” It was much longer than this before the cross-bill was filed in this case.
    In Elder v. Sabin, 66 Ill. 130, the court says: “Having received the deed and gone into possession without taking the necessary steps to secure the use of water from the well on the adjoining lot, and having held the property for almost seven months, it must be held that the application comes too late to have the sale set aside, and the deed, notes and mortgage canceled. * * * Such delay and want of promptness on their part are, in the opinion of a majority of the court, strong evidence of a waiver of that part of the agreement, or at least as showing insufficient grounds to rescind the contract.”
    Messrs. John N. Jewett and Jewett Bros., for appellees.
    It is a well settled rule in law that the contracting party has a right to rely upon the statements of the vendor. In the case of Mead v. Bunn, 32 N. Y. 275, this principle is clearly stated:
    “Every contracting party has an absolute right to rely on the exjDress statement of an existing fact, the truth of which is known to the opposite party and unknown to him, as the basis of a mutual engagement. * * * And he is under no obligation to investigate and verify statements, to the truth of which the other party to the contract, with full means of knowledge, has deliberately pledged his faith.” See also McClellan v. Scott, 24 Wis. 81; Converse v. Blumrich, 14 Mich. 108.
    If one makes false representations, whether knowingly or not, upon which another, relying on them, acts to his injury, he is bound to make them good. Smith v. Richards, 13 Pet. 26-44.
    A party selling property is presumed to know whether his representations are true or false. If he knows them to be false, it is fraud; but if he does not know them to be false, he is guilty of gross negligence, which is legal fraud. 6 Vesey, 180, 189.
    “When one has made a false representation, knowing it to be false, the law infers that he did so with an intention to deceive. And where one has made a representation, positively, or professing to speak as of his own knowledge, without having any knowledge of the subject, the intentional falsehood is disclosed and the intention to deceive is also inferred.” Shepley, J., in Hammitt v. Emerson, 27 Me. 308, 326.
    “ We take it to be a settled rule,” say the court, per Shaw, C. J., in Hazzard v. Erwin, 18 Pick. 95, at page 104, “thatin the case of a false and fraudulent representation by a vendor in matter of fact, within his own knowledge, or which he affirms to be within his own knowledge, not as to matters of opinion, judgment, probability or expectation, in a matter essentially affecting the interests of the other party, a matter in which he reposes confidence in such affirmation, and is in fact deceived by it, the party thus deceived may repudiate and rescind the contract at his election.”
    If a party makes an untrue statement, and has at the time no knowledge of its truth, and even has no belief in its truth, he is chargeable with fraud, in equity as well as in law. Making a statement which the party does not believe to be true is only slightly removed in culpability from the making a statement which the party knows to be false. 2 Pomeroy Eq. Jur., 371; Cabot v. Christie, 42 Vt. 121; Fisher v. Miller, 103 Mass. 503.
    A party guilty of fraudulent conduct shall not be allowed to cry “negligence ” as against his own deliberate fraud. Linington v. Strong, 107 Ill. 295; Hale v. Philbrick, 42 Iowa, 81; Matlock v. Tod, 19 Ind. 130; Starkweather v. Benjamin, 32 Mich. 305.
    In calling the court’s attention to these decisions, we desire to emphasize the fact that Mrs. Josephine M. Krause, as appears from the testimony, did not reach China Grove plantation until the last of April, 1884; that she had been there scarcely two months when she died; that the opportunity for discovering the falseness of the representations was never accorded her, and that her children, nearly all being minors, were not bound by any doctrine of laches.
   Gary, J.

The appellant filed his bill against Frederick W. Krause, and the children of said Krause and his deceased wife, Josephine M., the children being her heirs-at-law, to foreclose a deed of trust in the nature of a mortgage made by her with her husband upon her property, to secure the payment of promissory notes made by Frederick W. for the principal part of the purchase money of a Texas plantation, sold to him by the appellant. There were other defendants, but nothing in the case is affected by that circumstance.

The appellees tiled a cross-bill for the cancellation of the notes and deed of trust, upon the charges that the sale was procured and Mrs. Krause induced to make the deed of trust by false and fraudulent representations made by appellant as to the character of the plantation, and that afterward, by mutual consent,- the whole transaction was rescinded. The sale of the plantation was in March, 1884. In April the Krause family moved to it, and in June she died there.

On the question of fraud, while the testimony of Frederick W. Krause and his son, Frederick F. Krause, is justly subject to the severe criticism of the apipellant’s counsel, because of the alleged inconsistency between it, and their silence as to any misrepresentations during all the residue of the year 1884 after their arrival at the plantation and knowledge of its real character, yet it is so strongly supported by collateral circumstances and intrinsic probability, that, at least with some allowance for exaggeration always attending strong feeling, it ought to be taken as a true history of the interview between the appellant and Mrs. Krause. It is not necessary that the evidence in the case should be repeated, or even summarized at much length. It is hardly disputable that, as a fact in the case, the plantation itself was such a one as no prudent mother would consent, with knowledge of what it was, to take her family to; that not merely as a business enterprise was the purchase foolish, but as a home the plantation was wholly unfit for a family caring for health and accustomed to the ordinary comforts of life. There is but little evidence in this record as to her capacity, but that little is strongly in her favor. The appellant put in evidence a great many letters written by F. W. Krause. October 22, 1888, in relation to a contract for the purchase, which he had made a few days before, but which was afterward abandoned, he writes:

“Ton will remember I told you, when here, I hardly ever make a contract without sleeping over it, and to get it right. Deviating from this resolve has caused me sleepless nights and regrets in this case ever since my return from St. Louis. When I returned to my house and explained to my wife what I had done, she exclaimed with surprise, and apale countenance, Ton risk all we have in this enterprise. That will never do and upon due reflection I must admit she is right.”

October 19, 1884, in another of those letters, he says: “ In the stillness of the night I can not suppress my tears and bewail my misfortune, but among the memories of my departed wife, the most prudent, sagacious and industrious woman which ever honored Texas with footsteps, I found this : ‘ Complain not of thy woes to the public; they will not more pity thee than the hunters of prey pity the wounded deer.’ ”

The many letters of Krause show him to have been of a very ardent disposition. That after a life of thirty-five years in a machine shop here in the north, he had become infatuated with the idea of an open air life, in a warmer climate. He visited the plantation in August, 1883, but, as it would seem,' made very little examination of it, and that little with a mental incapacity to see any defects that should hinder the indulgence of his desire to live in the south. But she saw nothing of the plantation until she went there to die. The appellant testifies that before the sale of the plantation he was one evening at the residence of Krause for an hour and a half, and saw his wife and children, and he admits that there was conversation; that they “ talked the subject over, and about the climate. Hover spoke about the condition of the house on the plantation. We talked about everything; all sorts of subjects; the question as to whether it was a place for a residence of his family was not seriously talked of at the time.” And again he says: I told him generally as to the actual condition of things;” but whether that is meant to refer to the evening visit, does not appear.

The appellant thinks this was in Hovembor, 1883. F. W. Krause says December 4th, and F. F. about December 1st. How, why did the appellant go to the house of Krause at all ? The only re asonab’e explanation, there being no previous acquaintance, is, that Mrs. Krause was yet hesitating or objecting to the purchase. But leaving the purpose out of view, the undisputed fact in the case is, that the appellant spent an hour and a half, as he says, about three hours, as F. W. and F. F. Krause say, at the house of Krause, in conversation to which she was a party, when the topic most absorbing to her was, whether she should consent to a purchase, far beyond their means, of a Texas plantation, and with her children, go there to live, and when the only subject mutually interesting to the appellant and the Kranse family was, whether that purchase should be made. Under such circumstances the conversation must have been, as the Krauses say it was, upon the subject of mutual interest.

They say that she did not wish to complete the purchase without further examination by the father or son, or both, but that appellant dissuaded her from that as a needless expense, assured her of the truth of his statements and praised the place and enumerated its good qualities, extolling it as a paradise of comfort, luxury and health. Upon these representations she made the deed of trust. In her lifetime she would not have been, since her death her heirs are not, bound by it.

' While it may b'e presumed that F. W. Krause did tell his wife what he saw in visiting the plantation in August, 1883, yet his description must have been of such aplace as his hopes and desires made it. It is not credible that with a true picture of it before her, she would have consented to the pledge of all that her family had in the world for the' purchase of such a place as the evidence shows this to have heen. The charge of fraud, upon which, without reference to the subsequent rescissions, Mrs. Kranse in her lifetime, and her heirs since her death, are entitled to be relieved from the deed of trust, is amply sustained, and her silence and acquiescence, and that of her children, is excused by her brief life and their infancy.

F. W. Krause, as well as his son, testifies that he took to the plantation machinery and a saw-mill of the value, or in his words, which “ inventoried,” $10,000. And they both testified that in November, 1884, Mr. Dodd, who was the senior partner of the firm of Dodd, Brown & Co., to whom at the time of the sale to Kranse the plantation belonged, the title being, it seems, in Brown for the firm, came to the place, and by agreement then made between Krause and Dodd, Krause abandoned everything he had upon the plantation, made a bill of sale to Dodd, Brown & Co. of the sugar and molasses of the crop of 1884, and that Dodd accepted this abandonment and bill of sale as a rescission of the relations between them. Dodd denies the rescission, but his recollection of the incidents of his visit to the plantation at that time seems to be very vague. That he took the bill of sale, he admits. That Krause left the place, with his machinery upon it, is not denied. Dodd saw the machinery but has no explanation of why it was left. He simply denies that there was any agreement for a rescission. That in equity and good conscience there ought to have been a rescission, is a fair deduction from all the facts' in the case. If there was one, it was not carried into execution by proper papers. Krause stayed until spring and finished and shipped the crop, which he says was part of his agreement. Dodd admits that Krause agreed that, as he could not continue any longer to conduct the place, he would turn it back, but he says that was to be done in pursuance of the original contract, which contained a provision, upon special terms, for such a contingency.

It is difficult to reconcile all the conduct of either party with the version of either, and it is not altogether satisfactorily established that as to the notes themselves the parties ought not to be left to their remedies and dofensés at law. The notes, however, seem to be of little value if separated from the deed of trust. The personal obligations of a man in the last ten years of the three score and ten, bereft of all property, are not very valuable. The real substance of the controversy is the deed of, trust. The decree, as a whole, will therefore be affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Gary, J.

license: Public Domain

text:
    George B. Johnson v. Henry W. Leman et al.

      Trusts—Charge against Estate for Commissions—Express Agreement.

    1. A claim for commissions for procuring a loan at the request of the trustee can not be made a charge upon a trust estate, without an express agreement to create such charge.
    2. It seems to be a matter of doubt whether such a charge can be created even by express agreement.
    [Opinion filed March 13, 1889.]
    Appeal from the Circuit Court of Cook County; the Hon. Lorin C. Collins, Judge, presiding
    Messrs. Peckham & Brown, for appellant.
    Messrs. William C. Wilson and David L. Zook, for appellees.
    Mr. W. T. Burgess, for Hugh A. White, trustee.
   Gary, J.

The appellant filed his bill, to be paid by the trustee out of the funds of the estate of the late Francis C. Sherman, formerly an eminent citizen, and twice mayor of Chicago, compensation for services, beneficial, as he claims, to the estate, and rendered at the request of a former trustee. The briefs on his behalf concede, in effect, that there is no precedent in his favor, and- that what authority there is, is against him, and ask that some new law shall be made to fit his ease. The court can hardly be expected to comply with such a request.

The farthest that any cases, which can be considered authority, go, is that when a trustee is authorized to make an expenditure, and has no trust funds, and the expenditure is necessary for the protection, reparation or safety of the trust estate, and he is not willing to make himself personally liable, he may, by express agreement, make the expenditure a charge upon the trust estate.

It is not sufficient to show that the expenditure was upon the faith or credit of the trust estate. A lien or charge upon the trust estate can only be by virtue of some agreement to that effect. New v. Nicoll, 73 N. Y. 127. And even to that extent the rule is questionable.

Many cases hold that the trustee can not, unless so authorized by the instrument under which he holds, create such charge by express agreement. 2 Pom. Eq. Jur., Sec. 1085, note 2. See, generally, Barker v. Kunkel, 10 Ill. App. 407; Lewin on Trusts, Ch. 24, Sec. 2, par. 15; Hill on Trustees, 567; 2 Spence Eq. Jur. 804. Ho such agreement is alleged in this case. The averment that " as trustee ” the trastee retained the appellant, is no averment of such an agreement.

The decree dismissing the bill is affirmed.

Decree affirmed.


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    Edwin Hinchliffe, Impleaded, etc., v. Selmer Espen and Sigmund Ruthstadt.

      Landlord and Tenant—Forcible Detainer—Sec. 15, Act of 1874.

    Sec. 15 of the act of 1874 does not warrant a judgment in forcible . detainer against the original tenant, if he was out of possession when the suit was begun.
    [Opinion filed March 13, 1889.]
    Appeal from the Circuit Court of Cook County; the Hon. Frank Baker, Judge, presiding.
    Mr. E. A. Sherburne, for appellant.

      Messrs. Hofheimer, Zeisler & Rosenberg, for appellees.
   Gary, J.

This was an action for a forcible detainer by appellees, in which the appellant was joined with his sub-tenants, who were in possession, under Sec. 15 of the act of 1874.

This section does not warrant a judgment against the original tenant, out of possession when the suit was begun. The judgment is required to be according as their actual holdings shall be found to be.

There is some ambiguity in the section, but language unequivocal would be necessary to make a party guilty of forcibly detaining what he did not hold at all. Godard v. Lieberman, 18 Ill. App. 366.

Judgment reversed.


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    Cleveland Co-operative Stove Company v. Canute R. Matson et al.

      8a les— Con dition—Fraud—Attachment.

    The delivery of goods to a dealer upon condition that the title is not to pass until sold to bona fide purchasers, for use, the proceeds, to the extent of the price at which the goods are billed, to belong to the party making such delivery, is fraudulent as against the creditors of such dealer.
    [Opinion filed March 13, 1889.]
    Appeal from the Circuit Court of Cook County; the Hon. Rollin S. Williamson, Judge, ¡^residing.
    Mr. Edward Owings Towne, for appellant.
    The question presented is whether the goods, the title to which is to be determined, were consigned for sale, or whether, under a pretended contract of consignment, they were sold upon a credit given.

      In drawing the distinction between a sale “which is a present transfer of the title to a chattel for a consideration in money,” and a consignment of goods to be sold, “ which is ■ a bailment,” it is to be observed:
    That to constitute a contract of sale requires an intention on the one part to buy, and on the other to sell, and that the relation of debtor and creditor be created, either at the time of the transaction or in contemplation.
    Measured by the rule stated, it is submitted that the arrangement, as made and carried out between the Cleveland Co-operative Stove Company and W. L. Eisengart, falls far short of a sale of goods upon a credit given, and a true construction of the contract between the parties finds it a consignment of goods for sale—a bailment, pure and simple.
    The relation of debtor and creditor under this contract at no time, either present or in contemplation, could exist. See Walker v. Butterick, 105 Mass. 237; Bulkley v. Andrews, 39 Conn. 70; Pam v. Vilmar, 54 How. (N. Y.) Pr. 235; Blood v. Palmer, 11 Me. 414; Ayres v. Sleeper, 7 Met. 45 ; Brown v. Holbrook, 70 Mass. 102; Reissner v. Oxley, 80 Ind. 580; Benjamin on Sales (Ed. 1888), Sec. 2, note 6.
    Messrs. G. Frank White and Louis H. Mitchell, for appellees.
    When the identical thing delivered is to be restored in the same or in an altered form, the contract is one of bailment, and the title is not changed; but when there is no obligation to restore the specific article, and the receiver is at liberty to return another thing of equal value, or the money value, he becomes the debtor to make a return, and the title to the property is unchanged; it is a sale. Bastress v. Chickering, 18 Ill. App. 198, and cases cited.
    Whatever the form of an agreement, if its purpose is to cover up a sale and preserve a lien in the vendors for the price of the goods, it is void as respects creditors. Thompson v. Pratt, 94 Pa. St. 295, cited in 18 Ill. App. 208.
   Gary, J.

The appellee, as sheriff of Cook County, levied an attachment upon some stoves in the possession of W. L. Eisengart, the defendant therein. The appellants replevied, claiming the stoves as their own, because they had delivered them to Eisengart under the following agreement;

“ Article oe Agreement.
“ Chicago, Jan’y 22, 1887.
“ This article of agreement, made this 22nd day of J anuary, 1887, by and between Cleveland Co-operative Stove Co., of the first part, and W. L. Eisengart, of 758 Boot St., of the second part, witnesseth, that the party of the first part hereby agree to furnish to the party of the second part such stoves and ranges as he may order, and which the party of the first part may be able to furnish, subject to the terms set forth in this agreement. The party of the second part agrees to place the goods on sale for the party of the first part and be responsible for their safe-keeping, holding himself responsible for any loss or damage, whether by fire or otherwise. Also agree to pay for all goods soon as sold.
“It is further understood and agreed, that the goods are to be and remain the property of the party of the first part, until such time as they may be sold to a bona fide purchaser, for use. Also, that said goods shall be delivered to the party of the first part on demand at any time prior to the settlement for the same by the party of the second part or the sale of the same to a bona fide purchaser as above stated. Also, that the proceeds shall belong to the said party of the first part, to the extent of their billing price, until the same shall have been remitted to, or placed in the possession of their duly authorized agent.
“ Signed in duplicate, this 22nd of Jan’y, 1887.
“ Second part, Wm. L. Eisengart.
“First part, Cleveland Co-operative Co.
“ (B. K. B.) ”

Eisengart was a retail hardware merchant, and kept for sale, not only the stoves replevied, but those of manufacturers other than the appellants. He had absconded before the attachment issued, owing the debt for which it issued. The stoves were delivered to him under bill heads of the usual form, except that the word “ Contract” was written on them.

The agent of the appellants testified: “ At the time he (Eisengart) started into business, he had so small capital that we could give him no credit. We entered into the contract for the purpose of preserving in the company the right of property in the goods, and in no sense to cover up a sale of the goods.”

It is no doubt true that no fraud upon anybody was intended by the parties to this agreement, but it is equally true that the whole object and purpose of the agreement was to enable one to conduct, for his own account, business, with capital furnished by another, without putting the capital itself at the risk of the business.

All of the reasoning by which the chattel mortgage was held void in Davis v. Ransom, 18 Ill. 396, applies with equal force to this case. And every feature upon which the contract in Bastress v. Chickering, 18 Ill. App. 198, was construed to constitute a sale, is present in this, except the one for advances, by the so-called consignee, of negotiable paper for the goods. In many States such an agreement as this will be upheld in accordance with fits terms, notwithstanding its manifest purpose, but in this State the real substance of the transaction governs.

If any form of words can make the thing that which it is not, it is trifling with the business interests of the public to be critical about phraseology. The law of this State, which puts all transactions of this tendency upon one footing, holding that all sales upon condition that title is not to pass before the purchase money is paid; sales, under the forms of leases; chattel mortgages, with power of disposition by the mortgagor, do, as to the interests of third persons, place or leave the title of chattels in the party in possession thereunder—is a healthy, robust one, befitting an honest community.

Even a judge who does not like it, pays an involuntary, perhaps unconscious, compliment to its merit. See dissent of Judge Bradley, at page 247, in Heryford v. Davis, 102 U. S. 235, and his opinion, at page 678, in Harkness v. Russell, 118 U. S. 663.

There is no danger that the legitimate commission business will be disturbed by his course of decision. The possession of a real agent will be for his principal; by a pretended one, for himself.

Judgment affirmed.


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    Henry G. Abbott v. John B. Brown.

      Guaranty of Note—Construction—■Expenses Assumed—Practice.

    1. A surety earn only be charged within the very terms of his contract.
    2. The guarantor of a promissory note is not regarded in this State as a joint maker.
    3. In the case presented, the expenses assumed by the guarantor w ere' only such as might be incurred in compelling the maker to perform the contract contained in the note. They do not include the expenses incurred in prosecuting the suit upon the guaranty.

      4. In an action on a guaranty, the entire claim of the plaintiff must be presented.
    [Opinion filed March 13, 1889.]
    Appeal from the Circuit Court of Cook County; the Hon.Frank Baker, Judge, presiding. ”
    Messrs. Osborne Bros. & Burgett, for appellant.
    Appellant is entitled to recover from appellee the costs, expenses and attorney’s fees paid and incurred by him in the court below and on the appeals, in the suit against appellee on the guaranty.
    Under the terms of the guaranty, appellee undertook that he would see that the debt evidenced by the note was paid by Me well or himself. While his obligation might be secondary as to the person to pay, yet, as to the fact of payment, there was nothing secondary about it. The liability of appellee to pay the debt evidenced by the note was a primary liability. Dickerson v. Derrickson, 39 Ill. 574, 577; Heaton v. Hulbert, 3 Scam. 489, 490; Voltz v. Harris, 40 Ill. 155, 159; Gridley v. Capen, 72 Ill. 11; Gage v. Mech. Nat. Bk., 79 Ill. 62, 64; Dunnigan v. Stevens, 122 Ill. 396, 403; Luqueer v. Prosser, 4 Hill, 420, 423; Ketchell v. Burns, 24 Wend. 456; Allen v. Rightmere, 20 Johns. 365; Breedy v. Hillhouse, 7 Conn. 523, 528; Boyd v. Moyle, 52 E. C. L. 644, 652.
    Although appellee was in form a guarantor, yet, in fact, his undertaking was not a collateral undertaking, but was an original and primary undertaking to pay a certain sum on .a certain day; and the consideration for that undertaking moved directly to himself from appellant. 1 Edwards’ Bills and Notes, Secs. 315, 325; Luqueer v. Prosser, supra; Dunnigan v. Stevens, supra.

    The words "I guarantee,” in the connection in which they .are used, are equivalent to “I promise.” Luqueer v. Prosser, 1 Hill. 256, 258; Thayer v. Wild, 107 Mass. 449, 452.

      “ The contract of guaranty sued upon is, in substance and in legal effect, a promissory note.” Luqueer v. Prosser, 1 Hill. 256; aff’d, 4 Hill. 420, 423; Ketchell v. Burns, 24 Wend. 456; Manrow v. Durham, 3 Hill. 584; 585; aff’d, 2 N. Y. 533, 543, Burnham v. Gallentine, 11 Ind. 295, 298; Dunnigan v. Stevens, 122 Ill. 396, 403.
    A guaranty should be construed most strongly against the guarantor, on the ground that the words of an instrument are to be taken most strongly against the party using them. Mason v. Pritchard, 12 East, 227; Mayer v. Isaac, 6 M. & W. 605, 612; Drummond v. Preston, 12 Wheat. 515, 518; Smeltzer v. White, 92 U. S. 390, 392; Fell on Guaranty (3 Am. Ed.) 130-132.
    Messrs. Osborn & Lynde, for appellee.
    The decisions of the courts of this State clearly recognize that the contract of guaranty is distinct and separate from the contract guaranteed and collateral to it, giving rise to a separate cause of action. Heaton v. Hulbert, 3 Scam. 491; Rich v. Hathaway, 18 Scam. 549; Hance v. Miller, 21 Ill. 636; Dickerson v. Derrickson, 39 Ill. 576; Croskey v. Skinner, 44 Ill. 322; Harwood v. Kiersted, 20 Ill. 373; Sea v. Glover, 1 Ill. App. 338, 339; Clark v. Morgan, 13 Ill. 597.
    The cause of action that arises upon breach of a contract of guaranty is separate and distinct from the cause of action that exists against the principal debtor. Dickerson v. Derrickson, 39 Ill. 577; Sea v. Glover, 1 Ill. App. 338, 339; Clark v. Morgan, 13 Ill. App. 597; Pool v. Roberts, 19 Ill. App. 438.
    The liability of the guarantor depends entirely upon the terms of his agreement, which are strictly construed : “ A guarantor is not liable beyond the express terms of his undertaking.” Hance v. Miller, 21 Ill. 636; Newlan v. Harrington, 24 Ill. 207; Croskey v. Skinner, 44 Ill. 322.
    The agreement in the case at bar was to pay costs, etc., paid or incurred in collecting the note ; the only suit- brought was on the guaranty; and the only costs and attorney’s fees that were paid and incurred were in this action on the guaranty. The liability of the maker, Newell, on the note, and that of Brown on the guaranty, were as separate and distinct as their contracts. To enforce the former, suit should be brought on the note; to enforce the latter, on the guaranty. An agreement to pay attorney’s fees incurred in the one suit does not include attorney’s fees incurred in the other suit.
   Gary, J.

The appellant sued the appellee upon a guaranty, as follows :

“For value received I hereby guarantee the pajunent of the within note at maturity, or at any time thereafter, with interest at ten per cent, per annum until paid, and agree to pay all costs and expenses paid or incurred in collecting the same, including attorney’s fees.
“ J. B. Beown.”

And the note was :

“Chicago, III., July 1, 1876.
“ One day after date I promise to pay to the order of H. G. Abbott two thousand dollars, with interest at the rate of ten per cent, per annum, at First National Bank of Chicago, value received.
“Bjek B. Newell.”

That note was never collected, though before any suit was commenced on this guaranty the appellant had incurred expense in endeavoring, or watching an opportunity, to collect it.

July 3, 1882, appellant sued appellee upon this guaranty, prosecuted the case through the Circuit, this and the Supreme Courts, and at last got the principal and interest of the note itself, presumably with the taxable costs. His claim now is that the guaranty requires the appellee to pay, in this suit, the expenses both of the unsuccessful efforts to collect the note and the successful suit upon the guaranty. As to those first named expenses, if they were a proper charge against the appellee upon the guaranty, for which there is hardly a plausible pretext, they should have been included in the former suit. All the claim the appellant then had upon the guaranty constituted but one cause of action, and could not be split up. Clayes v. White, 83 Ill. 540; Nickerson v. Rockwell, 90 Ill. 460.

As to the expenses of prosecuting the former suit upon this guaranty, it is only by a forced and unnatural construction that they can be held to be within the guaranty. The antecedent of the word “ same ” in the guaranty is the phrase “the within note,” so that the guaranty has the same meaning as if those words were inserted in place of the word “ same,” making the reading, “ agree to pay all costs and expenses paid or incurred in collecting the within note.” The guaranty and the note are separate contracts, and though the payment of either would, as to the holder, extinguish his claim upon the other, this consequence has no effect upon their separate identity. “A surety can only be charged where the case is brought within the very terms of his contract.” National Bank v. Diefendorf, 90 Ill. 396; Brandt on Sur. & Guar., Sec. 79 et seq.

“ The liability of the guarantor depends entirely on the terms of the contract of guaranty.” Croskey v. Skinner, 44 Ill. 321. And a written guaranty is governed by the general rule that a contract in writing can not be varied by parol evidence. Abrams v. Pomeroy, 13 Ill. 133.

• The cases cited from the reports of other States, holding that a guarantor of a note is a joint maker, whatever may he their application to this case, are not in accordance with the settled rule here. Clark v. Morgan, 13 Ill. App. 597.

It is true that the ultimate effect of the guaranty was an undertaking that the debt should be paid, but the form of that undertaking is, that the maker of the note would pay it. The contract is elliptical. The words “ by the maker thereof ” are implied, as if written in after the word “note,” and the expenses assumed are such as might be incurred in compelling him to perform his contract contained in the note itself.

The Circuit Court was right in so holding, and the judgment is affirmed.

Judgment affirmed.


author: Moran, J.

text:
    Louisville, New Albany & Chicago Railroad Company v. Crittenden A. Cox.

      Evidence—Experts—Opinion as to Value of Services.

    1. Before a witness can be permitted to testify to the value of services, it must appear that he knew the usual rate of compensation paid for like services at the time when, and place where, they were rendered. The mere naked opinion of the witness is incompetent.
    2. The admission of improper evidence is cause for reversal, unless the court can see that it had no influence in determining the result.
    [Opinion filed April 3, 1889.]
    Appeal from the Circuit Court of Cook County;’ the Hon. Richard W. Clifford, Judge, presiding.
    This is an action of assumpsit brought by appellee to recover for services alleged to have been rendered to appellant in appearing before the Indiana State Board of Equalization, and aiding appellant’s general solicitor to prevent an excessive valuation of appellant’s property for purposes of taxation. As to the value of the alleged services, appellee, as a witness in his own behalf, was allowed to testify as follows :
    Q. “Have you a knowledge sufficient to enable you to give an opinion as to what is a fair and reasonable charge for such services ? ”
    A. “Tes, sir.”
    Q. “ What, in your opinion, was a fair and reasonable charge for the services you claim you rendered for this defendant company ? ”
    Objected to on the ground that the value of the services is for the jury to determine.
    The Court: “The jury must pass on the value of the services. The expert—this witness—gives his opinion as the fair, reasonable and customary charge for the services. Let that be added to the question—the word customary. He says he has had experience in that line of business. If he knows what the services are fairly worth, he can tell.”
    Counsel for Defendant: “ I don’t understand the witness to say he has had any knowledge extending beyond his own experience in the matter as to the customary and reasonable value of such service.”
    The Court: “ The trouble is that it is very hard in a case like this to establish the customary value of services, but the difficulty of proof does not, of course, change the rule of evidence. Let this witness answer the question, what in his opinion, is a fair, reasonable and customary charge, if he knows, for such services as these ? ”
    Witness: “It is not less than §700; between that and 81,000.”
    To all these questions and answers defendant objected and duly excepted.
    On cross-examination the witness stated that he estimated from different elements which he took into consideration what was a fair and reasonable charge for his services, and that he did not know what the customary charge was—that he had it only from outside information what the customary charge would, be—that such outside information was the opinion of the attorney of the road, whom he had asked as to what he ought to get, and who said that for every $1,000 of valuation below $10,000 per mile, which witness should succeed in getting the valuation down, he ought to have $1,000. Therefore counsel for appellant moved the court to exclude all the testimony of said witness on the question oft he value of said services, but the court overruled the motion, and appellant excepted.
    Ho other evidence as to the value of the services was offered on b,ehalf of appellee. The verdict was for plaintiff for $500, and from the judgment thereon the case is brought to this court by appeal, and error in the admission of said evidence as to the value is assigned, as well as other errors.
    Mr. David J. Wile, for appellant.
    If no objection had been made to the testimony its admission would warrant a reversal, upon the authority of Dorsey v. Corn, 2 Ill. App. 534, in which the court reversed a decree for attorney’s fees, when attorneys testified as to what was a reasonable fee instead of what was a usual and customary charge. The court say: “We do not think the evidence sufficient to authorize the allowance made.”
    In Henry v. Hall, 13 Ill. App. 348, the court say: “ The objection is not such as could have been removed by other evidence.”
    See also, Reynolds v. McMillan, 63 Ill. 47.
    The testimony was incompetent, as stated in C. & A. R. R. Co. v. S. & H. W. R. R. Co., 67 Ill. 145, “ upon the ground that it was an opinion covering the very question which was to be settled by the jury. * * * It amounts to nothing more or less than permitting the witness to usurp the province of the jury. * * * It is not competent to ask the opinion of witnesses in such a way as to have it cover the very question to be found by the jury.” * * * And, as though to bring the case on all fours with the one at bar, the court finally say: “ The answers here given, and all of which were improper, constituted the only elements of the verdict and judgment rendered.”

      Messrs. Millard & Smith, for appellee.
   Moran, J.

It is unnecessary to discuss other points made by counsel for appellant, as the one made upon the admission of the evidence of value set out in the statement of facts is well taken, and requires the reversal of the judgment.

Before a witness can be permitted to testify to the value of services, it must appear from his own, or other competent evidence, that he knew the usual value or the rate of compensation paid for like services at the time when, and place where they were rendered. The mere naked opinion of the witness, without knowledge, is never competent evidence on such a question. When he knows the market value or usual rate of compensation, he will be permitted to testify to such value or rate as a fact, and not as an opinion. The testimony of the witness clearly shows that he did not know of any usual or customary rate of compensation for such services as he claims to have rendered, but that he had taken into consideration certain facts and circumstances as elements, and formed an estimate or judgment of the value of the services, which estimate he was permitted to state to the jury. Such an estimate, sworn to before a jury, furnishes them no basis for a verdict. The case of Larmoure v. Caryl, 4 Den. 370, is apt on this jpoint. There the witness, a farmer, who testified that he did not know what clerks in stores usually received, was permitted, against objections, to state what his estimate of the value of the services of such a clerk was. The court said: “ In general, the opinion of a witness is not evidence for a jury, although there are exceptions to the rule. But they ail proceed on the principle that the question is one of science or skill, or has reference to some subject upon which the jury are supposed not to have the same degree of knowledge with the witness. * * * The witness whose opinion was received was not shown to have any means of knowledge on this subject, beyond the range of the jury. * * * The parties were entitled to the judgment of the jury on the value of the services, and how were they rightfully to be aided by the mere opinion of a witness who had no means of information beyond tlieir own? Opinions are to be formed by jurors, but it is the business of the witness to deal with facts.” See also Norman v. Wells, 17 Wend. 136; Fish v. Dodge, 4 Den. 311; and Harris v. Roof’s Executors, 10 Barb. 489, in which last case the admission in evidence of -the opinion of a witness as to the value of a party’s services in attending the Legislature in support of a claim against the State, where the witness testified that he had experience in that kind of business for years, but he never heard of the rate of compensation for such services, or services of that nature, was hold to be error.

The difficulty of proving the customary value of such services as are claimed for here does not warrant a departure from the proper rule. All the facts of the services can be proved to the jury, and by aid of their own knowledge and judgment, they may determine from matters of fact what the damages should be. Norman v. Wells, supra; Head v. Hargrave, 105 U. S. 45.

This evidence admitted comeé clearly within the objection stated by our Supreme Court in C. & A. R. R. Co. v. S. & N. W. R. R. Co., 67 Ill. 143, that it permitted the witness to usurp the function of the jury.

The admission of improper evidence will always be cause for reversal, unless the court can say that it had no influence in determining the result.

For error of admitting said evidence, the judgment must be reversed and the case remanded.

Reversed and remanded.


text:
    Robert R. Clark v. Adolph Fick.

      Landlord and Tenant—Action for Lent—Conflict of Evidence.

    1. Where conflicting evidence is so evenly balanced that it would support a verdict for either party, the verdict of the jury is conclusive.

      2. In an action io recover rent for lands alleged to have been held by the defendant under a lease, this court affirms the judgment for the defendant, the evidence being conflicting and there being no error in the exclusion of evidence or giving of instructions.
    [Opinion filed March 13, 1889.]
    Appeal from the Superior Court of Cook County; the Hon. Joseph E. Gary, Judge, presiding.
    Mr. Wm. A. Montgomery, for appellant.
    Mr. J. P. W. Brown, for appellee.
   Moran, J.

This was. an action of debt brought by the appellant against appellee to recover rent for certain lands which it was alleged appiellee held of appellant under a lease. Appellee denied that lie leased the land or occupied it during the year for which the rent was claimed. There was a sharp conflict of evidence upon the issue made, but such conflict was settled by the verdict in favor of appellee.

The first error assigned is that the verdict is clearly against the evidence. We have considered the' evidence, as detailed in the record, and are of opinion that said assignment of error can not be sustained. The case is one in which the jury would have been warranted in finding in favor of appiellant, and where, if they so found, this court would not be authorized to set aside the verdict for want of support in the evidence, but it can not be said that the verdict, as found, is not supported by the evidence, or that it is manifestly against the weight of evidence. The case is one of nearly evenly balanced conflicting evidence, and in such cases the verdict of the jury is alwaj's conclusive, unless some error of law was committed by the court upon the trial in the admission or exclusion of evidence or in instructions to the jury.

We have considered the errors of law assigned by counsel in relation to the instructions given for the defendant, and to the exclusion by the court of evidence offered in rebuttal by appellant, and we are of opinion that in neither point was the court in error. The case was fairly submitted to the jury, without any error, and the judgment- must be affirmed.

Judgment affirmed.


author: Garnett, P. J.

text:
    Franklin J. Follett et al. v. Henry J. Edwards et al.

      Replevin—Carriage—Lease—Conversion—Demand.

    1. Any distinct act of dominion' wrongfully exerted over another’s property in denial of his right, or inconsistent with it, is a conversion.
    2. The attempt by the lessee of a carriage wrongfully to sell and mortgage such property amounts to a conversion thereof.
    3. bio demand on the bailee is necessary after such conversion.
    [Opinion filed March 13, 1889.]
    Appeal from the Superior Court of Cook County; the Hon. Joseph E. Gaby, Judge, presiding.
    Messrs. Knickerbocker & Holdom, for appellants.
    Messrs. Fairchild & Queeny, for appellees.
   Garnett, P. J.

On April 20, 1887, a written contract was made by one Chase with appellees in these terms: “Received of H. J. Edwards & Son$ one coupe carriage on hire, at one dollar per day, to be returned on demand, with the privilege of purchasing upon payment of six hundred and twenty-five dollars (8625) on demand of H. J. Edwards & Sons.” Chase had the carriage taken at once to the livery stable of appellants, agreeing to pay them §15 per month to wash and take care of it. At the same time he informed appellants that he had bought the carriage. He sent one man to examine the carriage for the purpose of selling it to him. From another party he sought to borrow money, offering a chattel mortgage on the carriage as security. Mo part of the rent or purchase money was ever paid. Early in May, appellees, ascertaining that Chase was about to remove to Mew York, demanded the property of appellants, and exhibited to them the written contract above set forth. Appellants asserted that they had charges against the property, and refused to deliver it. Appellees then sued out a writ of replevin, but before it could be served appellants had delivered the carriage to Chase, and it was not taken under the writ. On the trial before the court without a jury, a judgment in trover was rendered against appellants for the value of the carriage, which this appeal seeks to reverse.

Mo demand on Chase was necessary. By his wrongful acts in attempting to sell and mortgage the property, his right as lessee was terminated, and he became guilty of conversion. “Any distinct act of dominion wrongfully exerted over one’s property in denial of his right, or inconsistent with it, is a conversion.” Cooley on Torts, 448.

In Loescham v. Mackin, 2 Stark. 311, it appeared that the plaintiff, a maker of pianos, hired an instrument to Brown by the month; that Brown sent it to the defendant, an auctioneer, to be sold, and the latter, on plaintiff’s demand, refused to deliver it unless he was paid certain expenses which had been incurred. The court-held that Brown, by sending the piano to be sold, was guilty of a conversion, and that the auctioneer, in refusilar to deliver the property to the owner unless his expenses were paid, was also guilty of conversion. “The action of trover being founded on a conjoint right of property and possession, any act of the defendant which negatives, or is inconsistent with such right, amounts in law to a conversion. It is not necessary to a conversion that there should be a manual taking of the thing in question by the defendant; it is not necessary that it should be shown that he applied it to his own use. Does he exercise a dominion over it in exclusion or in defiance of the plaintiff’s right? If he does, this is in law a conversion, be it for his own. or another person’s use.” Liptrot v. Holmes, 1 Kelly (Ga.) 381; see also Dodge v. Meyer, 61 Cal. 420, 421; Boyce v. Brockway, 31 N. Y. 490; Rembaugh v. Phipps, 75 Mo. 422; Tapley v. Forbes, 2 Allen, 20.

If it be the correct rule, as stated in The University v. The Bank, 96 N. C. 280, that conversion consists in an act inconsistent with the owner’s right, and that bare words will not do, here we have both words and acts of Chase. By his words he claimed to be the owner, and by his acts of trying to sell the carriage he exercised an act of dominion that belongs rightfully to none but the owner.

The bailee, it is true, can not set up a paramount title of a third person as a defense against the action of the bailor, unless expressly or impliedly authorized to do so by the owner. But if the latter demands the property of the bailee before he parts with the goods, and the bailee yields to the demand, he is protected against all claims of the bailor. Schouler on Bailments, 119, 120; Hutchinson on Carriers, Secs. 404-408.

Hence, no injustice is done to appellants by the application of the rule as to conversion. They were aware of all the material facts and chose to decide for themselves that Chase had the better right, and they must abide the unpleasant consequences.

The judgment is affirmed.

Judgment affirmed.

Gary, J., took no part in this case.


author: Per Curiam.

text:
    David Blumenfeldt v. John Haisman.
    Malicious Prosecution—Probable Cause—Evidence Res Oest®.
    In an action to recover damages for malicious prosecution in causing the plaintiff’s arrest, what took place at the time of, and during the disturbance in connection with, the arrest, is material on the question of probable cause.

      [Opinion filed March 13, 1889.]
    Appeal from the Circuit Court of Cook County; the Hon. Rollin' S. Williamson, Judge, presiding.
    Mr. B. M. Shaffner, for appellant.
    Mr. J. M. Beverley, for appellee.
   Per Curiam.

Judgment for 8100 against appellant in a suit by appellee for malicious prosecution, is the subject of this appeal. Appellant contends that the court erred in admitting improper evidence. We find, however, that the evidence was part of res gestee. Ha ism-m was arrested on complaint of Biumenfeldt’s wife, and several other parties were proven to have taken a more or less conspicuous part. What took place at the time of and during the disturbance was material on the question of probable cause, and the admission thereof was necessary to an intelligent judgment in the case.

We are not prepared to say that the finding of want of probable cause was produced by a misconception of the evidence. Mor do we perceive any fault in the instructions.

The judgment is affirmed.

Judgment affirmed.


text:
    Silas Q. Perry v. James H. Pearson et al.

      Sales—Corporate Stock—Fraud—Rescission—Bill for Relief—Ratification.

    Upon a bill for rescission, or for an accounting for stock of a corporation sold by the complainant to one of the defendants under circumstances alleged to have been fraudulent and oppressive, this court, reviewing the evidence, holds that the complainant, with full knowledge of the facts and all his rights, ratified the sale of such stock, and that he can not now complain thereof, upon a bill for relief in the nature of an accounting.

      [Opinion filed March 13, 1889.]
    Appeal from the Superior Court of Cook County; the Hon. Henby M. Shepard, Judge, presiding.
    Mr. Thomas Dent, for appellant.
    Messrs. W. W. Farwell and John N. Jewett, for appellees.
   Gary, J.

This is a very voluminous case, hut the principle upon which it must be decided is a very short one. It is that the appellant, with full knowledge of all the facts and of all his rights, has ratified the contract which he made with appellee Pearson, of which he now complains.

In December, 1882, the appellant and the Pearsons formed a corporation in Michigan, called the Perry-Pearson Company, to conduct a lumber business. They were the sole original stockholders. The capital, §650,000, was divided, §360,000 to Perry, for which he paid by putting in property valued at more than §500,000, on which the new company assumed an indebtedness of more than §150,000; and the Pearsons took §290,000, for which they paid by putting in about §190,000 in property, and undertaking to supply working capital of about §100,000. The company did a losing business for two years. Perry was the manager and holder of the majority of the stock, but had no other resources. Toward the end of the first year the company was compelled to have more money, and a mortgage of a large part of its property was made to the Pearsons to indemnify them for becoming sureties for borrowed money. In the fall of 1884 the outlook was bad. Efforts were made to get a new man, with capital, into ■ the company, but they failed, and negotiations commenced for the purchase by the Pearsons of Perry’s interest in the company, which resulted in the sale by him to them of his interest for §31,500 in property. The appellant complains that the Pear-sons oppressively used the power which the mortgage gave them; that they muttered threats that unless he accepted the terms they offered he would get nothing; that they made a pretense of offering their stock free to anybody who would indemnify them against the debts of the company, with the purpose that the appellant should learn of such offers, and put a low estimate upon his .stock; that the younger Pearson made a false representation as to the quantity of timber on the lands of the company; and that during all the time of the negotiations he was in such bad health and mental distress as disqualified him for the conduct of business with his ordinary ability.

There are two sides to the story upon, which his complaints are founded. As a principle of law, it is undoubtedly .true that the parties owed to each other the utmost good faith. 2 Lindley on Part. 569, and thirty pages following; Thompson v. Meisser, 108 Ill. 359. And that the position of the Pear-sons as mortgagees exposed them to the jealous watchfulness of courts. Jones on Mortgages, Sec. 711; Brown v. Gaffney, 28 Ill. 149.

And yet if the company was fast going to wreck, on the verge of insolvency and a total loss of all assets, the appellant could base no title to relief against the appellees upon the fact, assumed or real, that they had resources outside, and he had not, by which the business of the company might be kept going. Mor is it easy to say that even generosity would req uire them, or that it was consistent with their own safety, to put more money into the losing business of a company from the direction of which, at the next election of a board, they might be wholly excluded by the vote of the appellant, as holder of a majority of the stock.

The plausibility of the appellant's demands, and the impulsive feeling that he ought to have some redress, spring less from the evidence of what took place between the parties in the fall of 1884 than from a consideration of the great profit which the Pearsons made by disposing of the property in January, 1886, when they got a net sum of about §300,000 out of it. Every fact, however, that touches the claim for relief, because of misconduct by the Pearsons, was as well known to the appellant the day he made the sale to them as on the day he filed the bill. In that sale they assumed a very large indebtedness, part of which was his private indebtedness before the formation of the company, and upon another part of which he was personally liable, the two classes together amounting to about §80,000. He took from them a bond t.o indemnify him against those debts. He says that in March, 1885, he began to consider the question of suing the appellees, and in April he had made up his mind to do so, unless justice was done him. Yet he said nothing to either appellee, though he consulted counsel, until, in the following summer, by inquiring both at the bank and of James H. Pearson, he found that his debts, which appellees had assumed, they liad paid. But even then he made no demand for a rescission. His own testimony describes a stormy interview in which he demanded back his property, or a portion of it, but made no offer to do anything himself further than to say, in reply to Pearson’s question whether he wanted to pay the notes of Perry, that Pearson had paid ; that he would pay them if Pearson would give him up his property. And this was idle talk, for he had nothing, and had made no arrangements with anybody for anything with which to pay.

In the trade, James II. Pearson conveyed to appellant the house in which he resided. From November 15, 1884, to May 1, 1885, James H. Pearson paid appellant rent therefor at §75 per month. April 4, 1885, appellant made to Pearson a new lease for the house, the rent being §1,000 for the year ending May 1, 1886, $175 May 1, 1885, and §75 the first day of each month thereafter.

There is more in this conduct of the appellant than mere ladies or acquiescence. It amounts to a positive ratification of the sale by him. Each receipt of rent of the house, month by month, was a repetition of a representation that each was dealing with his own.

Standing by, observant of the appellees carrying and discharging the obligations they had assumed for his deliverance from debt, gaining his freedom by their efforts and at their expense, estops him from questioning the validity of the contract, to perform which, if they needed his encouragement, he gave it abundantly. Bigelow on Estop. 475-6, and the case of Bronson v. Wiman, 8 N. Y. 182, and 10 Barb. 406, where the facts are stated, with an excellent opinion.

It is rather vaguely stated in the brief on behalf of appellant that this suit is for a share of the profits the appellees have made. Ho authority is cited that a vendor can call a vendee to account for profits, where, if the parties could be placed in statu guo, he could not demand a rescission. An account for profits would be upon the theory that the appellees had made profits from the property of appellant. It could be his own only upon the ground that the sale was voidable, and he had elected to avoid it. The decree of the Superior Court dismissing the bill is affirmed.

Decree affirmed.


text:
    Charles MacRitchie et al. v. City of Lake View.

      Municipal Corporations—Public Work—Contract—Guaranty—Construction—Debt on Bond.

    In an action of debt on a bond to secure the performance of a contract to furnish and lay, for a municipal corporation, an iniet-pipe on the bottom of Lake Michigan, connecting with a system of water works, it is held: That the guaranty clause of the contract is not to be so construed as to make the contractors liable for the failure of the work to remain in good condition, by reason of defects in the plan or design, or of the work being done in certain particulars in accordance with the express direction of the city engineer; and that an instruction placing a different construction on the contract is erroneous.
    [Opinion filed March 13, 1889.]
    Appeal from the Superior Court of Cook County; the Hon. Elliott Anthony, Judge, presiding.
    Messrs. Freeman & Walker, for appellants.
    The so-called warranty, “ all of the work to be guaranteed to remain in good condition for one year from date of acceptance,” can only apply to the material and workmanship furuished by the contractors. It did not bind them to anything more.
    If the court had permitted we should have shown that this was the construction placed upon this language in the specifications by the engineer himself, and that he so informed defendants before they bid on the contract. This was competent evidence, and we excepted to the ruling of the court. We believe we were entitled to this evidence, and that its rejection was error, for which the case should be reversed.
    In order to constitute a warranty,- the undertaking must enter into and form an essential element in the consideration of the bargain. Adams v. Johnson, 15 Ill. 845.
    In this case at bar, the consideration paid was only adequate for the material and workmanship actually furnished. Ho additional consideration, no premium was paid, by reason of which these defendants insured the design of the work. The essential element of the consideration was the execution of the work according to the design—not the design itself.
    It has been held'in this State that where an order designates a particular kind of material, as did the contract in the case at bar, if the manufacturer uses the kind of material, the law will not imply a warranty as to its quality or fitness. Shoenberger v. McEwen, 15 Ill. App. 496.
    So, in the case at bar, the law will not imply a warranty as to the fitness of the material or design, unless the intention so to warrant is clearly shown.
    Whether certain words amount to a warranty is a question of- intention, which question may properly be submitted to a jury. Wheeler v. Reed, 36 Ill. 81.
    But in the case at bar, instead of submitting this question to the jury, the court instructed the jury that the words in question were, “ in fact, a guaranty that the contractors would see that the work would remain in good condition for one year from the date of acceptance.”
    How, what constitutes a warranty? Ho precise form of expression is required. But there must be, first, an affirmation óf fact as to the quality or condition of the thing, made at the time of the sale or contract, as an inducement for the purchase or agreement; second, this affirmation must be received and relied on by the purchaser or contractor. 2 Kent Com. 485; Chitty on Contracts, 135; Osgood v. Lewis, 2 Har. & Gil. 495 ; Hawkins v. Berry, 5 Gilm. 36.
    Can it be seriously claimed that the plaintiff here directly or indirectly relied upon the judgment of the contractors in adopting its engineer’s designs for this work ? The contract itself shows that Labe View relied upon the judgment of its own trustees and its own engineer, and did not rely upon the contractors at all. It bound the latter hand and foot. There was, then, no legal warranty by the contractors of the engineer’s designs, at least. Brown v. Edington, 2 Man. & G. 279.
    It is, indeed, open to doubt whether there is a legal warranty by the defendants, even of their own work and material, in view of the fact that the town did not rely on their judgment even for this, but relied wholly upon its own engineer and his inspection and direction. “For if the thing is specifically selected and ordered, then the purchaser takes upon himself the risk of its effecting its purpose.” Parsons on Cont., p. 588. In this case the town, by its specific selection of material and design, took upon itself the risk, according to the doctrine of warranty.
    “ All warranties, however expressed, are open to such construction from snn'ounding circumstances, and the general character of the transaction, and the established usage in similar cases, as will make the engagement of warranty conform to the intention and understanding of the parties; provided, however, that the words of warranty are neither extended nor contracted in their significance beyond their fair and rational meaning.” Parsons on Cont. 576.
    Mr. Hervey H. Anderson, for appellee.
   Moran, J.

This was an action of debt on a bond given to secure the performance of a certain contract entered into by appellants, MacRitchie and Michol, to furnish and lay on the bottom of Lake Michigan an inlet-pipe, to be connected with the Labe View waterworks. The condition of the bond, so far as material to the question in this case, is that the contractors “shall in all respects well and truly keep and perform the said contract in accordance with the terms thereof, and the plans and specifications therein referred to, in the times and manner described; and further, shall indemnify, keep and save harmless the town of Lake View from all liabilities * * * damages and expenses in consequence of granting said contract, or which may in anywise result from the carelessness or neglect of said MacBitehie and ifichol, their agents, employes or workmen, in any respect whatever.”

By the terms of the contract the contractors were to furnish all the material and do all the work required for the complete construction of an inlet-pipe and crib, together with a branch inlet and intake, to be connected with the well of the waterworks, in accordance with the plans and specifications attached to said contract, and made a part thereof. All material used and all labor performed was subject to the inspection and approval or rejection of said engineer, and he had the right, finally to decide all questions arising as to the proper performance of said work, and the work was to be done under his immediate direction and superintendence.

The specifications described the work, the size and material of the pipe, the flexible joints to be placed therein, and specify the number of pipes to be driven along the line of the pipe at such points as may be directed by the engineer and the number of ball and socket joints to be used on the line of pipe, which was to extend from the shore end 2,000 feet into the lake. The specifications also contained this clause : “All of the work to be guaranteed to remain in good condition for one year from date of acceptance.” The engineer of the town drew the plans and specifications, and the work under the contract was entered upon and carried to completion under his actual direction. Twenty flexible ball and socket joints were required by the specifications to be placed on the line of said pipe, but the distance apart or location of said joints was not detailed in any manner, but as the pipe was laid they were placed as the engineer directed, though the location of them was contrary to the judgment of the contractors.

Some months after the work was completed and accepted by the town a break was found in the pipe, and the same was taken up by the town at considerable expense, and to recover the expense so incurred this action is prosecuted on the bond.

On the trial, it was one of appellant’s contentions that the break did not occur by reason of any defect in material or workmanship, but was due to defects in the plan and specifications adopted by the town and its engineer, in the lack of a sufficient number of flexible ball and socket joints to enable the pipe to conform itself to the undulations on the bottom of the lake, which was changed by every severe storm, and that the ball and socket joints that were in the pipe were improperly distributed along it, so that at points where, owing to the distance from the shore and the effect of the waves in moving the sand upon the bottom, they should have been placed at short intervals in the pipe, they were, by the direction of the engineer, placed 150 feet apart, and at other points, where not needed, they were placed close together.

It was the theory of the trial court, however, that the guaranty clause contained in the sj ecifications and hereinbefore quoted bound the contractors for any breaks that might occur in the work within one year from its acceptance, even though such break could not be ascribed to bad workmanship or the use of defective or improper materials. The court, at the request of appellee, instructed the jury that the provision in the specifications whereby the contractors guaranteed that the work should remain in good condition for one year, was, in fact, a guarantee not only that the work should be done in the most workmanlike manner', and with proper materials, but that the contractors would further see that it would remain in good condition for one year from the date of acceptance, and refused to instruct, as requested by appellant, that if the evidence showed that the break in the pipe was not owing to any defective workmanship or material in the execution of the contract by appellants, but was owing to defects in the plans devised by the town engineer and adopted by the authorities of the town for the construction and laying of said pipes, the plaintiff could not recover.

Is the guaranty clause to be so construed as to make the contractors liable for the failure of the work to remain in good condition by reason of defects in the plan or design, or by reason of the work being done in certain particulars in accordance with the express directions of the engineer ?

Ordinarily a contractor who agrees to do work according to the plan and under the direction of an engineer or architect, is not understood to insure the sufficiency of the plan, nor undertake as to the scientific correctness of the specifications or the verbal or written directions. His own skill and the skill and fidelity of his workmen, as well as the sufficiency of the material which he supplies, he is bound for, and there is nothing unreasonable in requiring a guaranty in such a contract that the workmanship and the material furnished by him should stand the test for a certain period of time after the completion and acceptance of the work; but it would certainly be regarded as most extraordinary to find that a contractor had undertaken to warrant the perfection of a plan which is designed by the person for whom he is to do the work, or the wisdom of directions given during the progress of the work by one whom he can not control, but whose orders in the execution of the work he is, by the terms of the contract, bound to obey-Contracts must receive a just and reasonable interpretation.

The guaranty clause in the contract in question must be construed in connection with the entire agreement, and regard must be had to the undertaking of the contractors. True, it is within the power of appellants to insure the plans of the engineer, and to guarantee the work for a year against all defects, whatever their origin; and if such was their intention, as found from the terms of the contract, they will be bound; but before such an unreasonable construction is given to the undertaking it must clearly appear from the language of the instrument, considered in connection with the subject-matte)', that such was their true understanding and intention.

We perceive nothing in the situation of the parties, or in the subject of the contract, which leads us to conclude that such was .the intention, and an interpretation which is just and fair may be given to the whole agreement without giving to the guaranty clause what seems to us to be the singular and unreasonable effect contended for by appellee.

The guaranty that the work should remain in condition, must be applied and limited to the work which appellants had done and the materials which they had furnished, so as to make appellants liable for injuries that might arise from defects therein. All material used and all work done was, by the terms of the contract, subject to the inspection of the engineer; and such being the case, in the absence of the clause in question, and unless some fraud and concealment was shown, the acceptance of the work done and the material furnished under the engineer’s inspection, would have been conclusive as to its quality, as between the parties. The effect of the guaranty was to make appellants responsible for defects in workmanship or material that might affect the condition of the work within a year after acceptance.

The court erred in giving the instruction for plaintiff which was an interpretation to the guaranty clause, differing from that here indicated as correct, and in refusing defendant’s instruction. For such error the judgment must he reversed and the cause remanded.

Reversed and remanded.