text:
    C. B. Postell and A. P. Wright, trading as C. B. Postell & Company, Appellees, v. Joseph Brothers Lumber Company, Appellant.
    Gen. No. 30,580.
    1. Contracts — when abandonment of contract to deliver lumber to consignee designated by buyer not justified by consignee’s rejection of shipment. Where a contract called for delivery by the seller of certain quantities of lumber of a specified grade td a, consignee designated by the buyer, the fact that one consignment of such lumber, although of the grade specified by the contract of sale, was rejected by the consignee on the ground that it was not of the grade, which the buyer had contracted to procure for such consignee, did not justify such seller in refusing to complete deliveries under the contract, the buyer having assumed full responsibility for the rejected consignment.
    2. Contracts — agreement to resume suspended performance of contract as consideration for additional compensation. Where a contract for delivery of certain quantities of lumber to a consignee designated by the buyer was abandoned by the seller solely because of the rejection by such consignee of one shipment under such contract solely on the ‘ground that it did not conform to the specifications of the buyer’s agreement with the consignee, the subsequent agreement of the buyer to pay an advanced price for the balance of the lumber originally contracted for, in consideration of the agreement of the seller- to complete delivery of the balance, was without consideration and void.
    3. Contracts — when, agreement void for want of consideration not ratified partial performance. Where a buyer of lumber, in order to induce the seller to resume deliveries under their contract after the latter’s unjustifiable abandonment- thereof, had agreed to pay the seller an advanced price for the undelivered balance, the fact that the buyer -thereafter paid certain invoices for deliveries made pursuant to the second agreement did not effect a ratification thereof, rendering it. binding although initially void for want of consideration.
    Appeal by defendant from the Municipal Court of Chicago; the Hon. Warren H. Orr, Judge, presiding. Heard in the third division of this court for the first district at the October term. 1925.
    Reversed and cause remanded.
    Opinion filed May 5, 1926.
    Hyman Soboroff, for appellant.
    Herbert A. Schryver, for appellees.
   Mr. Presiding Justice Thomson

delivered the opinion of the court.

The plaintiffs are lumber manufacturers located in the State of Georgia. The defendant corporation is a dealer in lumber, located in the city of Chicago. The defendant company ordered a quantity of lumber of the plaintiffs, to be delivered to John Griffiths & Sons Company, as consignee, at Philadelphia, at a price of $49 per thousand feet board measure. This was covered by two orders, numbered 2675 and 2716, which orders were accepted by the plaintiffs and they commenced shipment of the lumber as called for. The plaintiffs brought this action to recover a balance they claimed to be due on lumber they delivered pursuant to this order, this balance amounting to $936.74. The defendant admitted owing a balance to the plaintiffs amounting to $284.29. Judgment was entered in favor of the plaintiffs for the latter amount and this was paid, and the cause proceeded to trial as to the balance. The evidence was submitted to a jury, resulting in a verdict finding the issues for the plaintiffs and fixing the damages at $652.45. Judgment having been entered against the defendant for that amount, the defendant seeks to reverse it by this appeal.

Five cars of lumber were forwarded by the plaintiffs, in fulfillment of the orders given, and these were paid for by the defendant. Shipments were to be completed within three or four weeks. The first of the five cars shipped and paid for went forward on February 22,1923, and the last of these five ears went forward on April 6, 1923. It appears that the lumber called for by these orders was what is known as No. 1 Common, and apparently the lumber shipped by the plaintiffs was of that grade. When a car, shipped on order 2675, reached Philadelphia, it was rejected by John Griffiths & Sons Company, on the ground that the lumber they had ordered from the defendant company was of a grade referred to in the evidence as No. 1 Common free from sap, and that the lumber shipped in fulfillment of this order was not up to that grade. - When this lumber which the plaintiffs had shipped in fulfillment of their contract with the defendant was not accepted by the defendant’s consignee, the plaintiffs refused to make further shipments on order 2675. As one of the witnesses put it, “We (plaintiffs) did not like this treatment, because they were giving us the bag to hold by rejecting our material that was up to grade, and we refused to fill the order further.”

The record contains a number of telegrams and letters passing between the parties as a result of the situation presented when the lumber shipped by the plaintiffs was rejected by the defendant’s consignee. On April 3,1923, the defendant telegraphed the plaintiffs that the defendant’s representative had wired the defendant from Philadelphia that he had made arrangements with their customer, the consignee, “to accept stock on the balance of our order basing their judgment of the stock unloaded from car four fourteen eighteen. Please rush shipment all possible and wire when you will complete order.” The plaintiffs sent a telegram to the defendant, under date of April 3, referring the defendant to a previous letter and wire sent by the plaintiffs, in which the latter had advised the defendant that if the material they had shipped on this contract was found up to the grade and specifications set forth in the defendant’s orders, the plaintiffs would “not complete this order.” This telegram went on to say that the plaintiffs had found that the car of lumber which the defendant’s consignee had rejected was rejected because the lumber showed some sap; that the order sent to the plaintiffs by the defendant called for No. 1 Common, whereas the contract the defendant had made with John Griffiths & Sons Company called for No. 1 Common free from sap, and the one who had inspected the lumber upon arrival at Philadelphia had rejected it because it included some sap wood. The plaintiffs sent the defendant another telegram on the following day, April 4, apparently in response to the telegram from the defendant dated the previous day, and in this telegram the plaintiffs referred to the telegram they had sent the defendant on the previous day, “stating we would consider this order cancelled if car in question found to grade. Same being this we have considered order cancelled. This decision final. ’ ’ Apparently, in reply to the telegram last mentioned, the defendant wired the plaintiffs on the same day, April 4, saying, “our customer has agreed to accept stock as shipped. Further than this, you should not be interested in any transaction between our customer and ourselves. We are fully capable of taking care of our own business. We bought No. 1 Common from you and that is all you are expected to ship. If you complete your contract, the rest of the burden of responsibility lies with us. As long as we guarantee payment of stock shipped as per our order and you comply with these orders, then you have fulfilled your contract. We insist that you make arrangements to ship out the balance of our order without any further delay.”

On the same day, April 4, 1923, the plaintiffs wrote the defendant a letter reciting the position they had taken, as outlined in their previous telegrams. In this letter the writer stated that when he learned that the consignee had rejected one of the cars shipped by the plaintiffs on their contract with the defendant he went to Philadelphia and saw the lumber contained in this car and found that it was up to the grade specified by the defendant in its orders to the plaintiffs, and pointing out that the car had been rejected, not because it did not come up to that grade, but because it was not of the grade which had been specified in the contract the defendant made with John Griffiths. & Sons Company, and that there would have been no rejections if the defendant had specified in its contract with the plaintiffs the same grade which they had agreed to furnish, according to the terms of their contract with John Griffiths & Sons Company. The plaintiffs then repeated their position as previously stated in their telegrams where they had advised the defendant that if they found the rejected stock up to the grade called for by the orders given them they “would consider this order cancelled, which we have done, * * * owing to the circumstances that have presented themselves in this transaction, we are washing our hands of same. ’ Again on April 5,1923, the defendant wired the plaintiffs stating further that they were wiring again “to make it emphatic at this time that we bought strictly number one common Long Leaf Yellow Pine from you and you agreed to sell and ship same for us. Regardless of any differences that we may have with our customer this is our obligation and it is up to us and not yon to adjust our matters with' them. You obligated yourself to ship this lumber as called for by our order * * *. Unless you wire within twenty-four hours from date that you will agree to ship balance of our order we will go out on the open market rebuy same and institute suit against you to recover any damages that might be incurred in the repurchase of same. This ' is our final decision. ’ ’ On the following day the plaintiffs replied to the defendant’s telegram of April 5, 1923, the substance of this telegram being a confirmation of the position the plaintiffs had already taken, and advising the defendant that so far as the plaintiffs were concerned, the defendant’s orders were cancelled.

The evidence further shows that a representative of the defendant then went down to Georgia and had some conference with the plaintiffs and finally told them that the defendant would be willing to pay the plaintiffs an additional $2 per thousand feet for the balance of the lumber ordered, if the plaintiffs would ship it, and the plaintiffs agreed to ship the balance of the lumber at that increased price. This arrangement was covered by an agreement in the form of a letter addressed to the plaintiffs and signed by the defendant, in which the defendant agreed to pay $51 per thousand feet on their order No. 2675, for No. 1 Common Southern Yellow Pine (the same grade called for by the original order). At the bottom of this letter is an acceptance in writing signed by the plaintiffs. The plaintiffs shipped the balance of the lumber under the so-called new agreement of April 12,1923, and sent invoices to the defendant at the new price of $51 per thousand feet, and a number of these invoices were paid by the defendant, and on others the defendant remitted for only 80 per cent of the amounts called for.

At the close of all the evidence, the court instructed the jury that “for all the lumber shipped under the new or modified agreement entered into by and between the plaintiffs and the defendant, dated April 12, 1923, the plaintiffs are entitled to recover at the rate of $51 per thousand feet.”

The only question presented on this appeal is whether the plaintiffs are entitled to recover from the defendant the increase of $2 per thousand feet, which was specified in their so-called new agreement of April 12,1923. In support of this appeal the defendant contends that there was no consideration for its promise to pay the increased price and therefore that such promise is not binding. On the contrary, the plaintiffs’ position, in support of the judgment appealed from, is that inasmuch as they canceled the original order here involved, and the defendant was then in a position where it was obliged to either resort to litigation, under the original contract, or, if they chose to, enter into a new agreement with the plaintiffs, and they chose the latter course rather than the former, the new contract is binding and based on sufficient consideration. In support of that position the plaintiffs rely upon Bishop v. Busse, 69 Ill. 403; Cooke v. Murphy, 70 Ill. 96; Commercial Car Line v. Anderson, 224 Ill. App. 187; Scanlon v. Northwood, 147 Mich. 139, and United Steel Co. v. Casey, 262 Fed. 889. In our opinion Bishop v. Busse, Cooke v. Murphy, and Commercial Car Line v. Anderson, supra, may be distinguished from the case at bar, on the facts. The same is true of United Steel Co. v. Casey, supra. In all of those cases, after the original contract had been entered into, there was a material change in existing conditions, which (at least in the first two cases referred to), was not contemplated by the parties at the time the contracts were made, and these changed conditions were such that the party who had undertaken to do- certain work for a specified compensation was certain to suffer a substantial loss, and for that reason that party notified the other that he would not proceed with the work under the contract but would abandon it, whereupon, the other party stated that if he would fulfil the contract he would undertake to pay more money, and it was held in each of those cases that there was sufficient consideration to support the promise to pay the additional.amount. No such situation is presented by the facts in the case at bar. No situation arose which involved new facts making it burdensome for the plaintiffs to furnish the lumber contracted for. The conditions existing at the time the agreement of April 12 was entered into were precisely as they were at the time the original contract was entered into, except that the consignee of the lumber purchased by the defendant under this contract with the plaintiffs had rejected one of the cars shipped, although it was up to the grade ordered by the defendant, on the ground that it was not up to the grade which the defendant had agreed to deliver to the consignee. So far as the parties to this case are concerned, that position of the consignee, of course, had nothing to do with the situation. As the defendant put it repeatedly in communications to the plaintiffs, any such situation was a matter for the defendant to adjust with its consignee. The plaintiffs had only to deliver the lumber called for by their contract with the defendant, and the defendant kept assuring the plaintiffs that upon their doing so the defendant would make the payments called for by the contract. In such a situation the plaintiffs were without a justifiable ground for canceling the defendant’s order and refusing to make further deliveries.

So far as the law in Illinois is concerned this question has arisen in a number of other cases in which the element of some unforseen difficulty, arising to make performance of the contract more burdensome, has not been involved, and the rule laid down in these cases has been the opposite of that announced in Bishop v. Busse and Cooke v. Murphy, supra; Loach v. Farnum, 90 Ill. 368; Phœnix Ins. Co. v. Rink, 110 Ill. 538; Havana Press Drill Co. v. Ashurst, 148 Ill. 115, 136; Davidson v. Burke, 143 Ill, 139; Goldsborough v. Gable, 140 Ill. 269; Nelson v. Pickwick Associated Co., 30 Ill. App. 333; Moran v. Peace, 72 Ill. App. 135; Reeves Pulley Co. v. Jewell Belting Co., 102 Ill. App. 375; Strange v. Carrington, Patton & Co., 116 Ill. App. 410.

The foregoing cases all follow the rule that it is no consideration for one to promise to do what he is already under legal obligation to do. After stating that rule in Moran v. Peace, supra, this court said:

“What was said by the Supreme Court in the case of Bishop v. Busse, 69 Ill. 403, to the effect that an agreement between an owner and a contractor changing the amount to be paid for building a house under a written contract previously made, was based on a good consideration, where the contractor having stopped work and declined to complete his contract previously made, agreed, if the owner would pay an increased price that he would then proceed with his work, must be considered as in conflict with the latter, as well as previous decisions of the same court, and therefore overruled by the later cases above cited. ’ ’ Phœnix Ins. Co. v. Rink, supra; Havana Press Drill Co. v. Ashurst, supra. In a number of the later cases in this court, which we have cited, Moran v. Peace has been referred to with approval and followed. In Strange v. Carrington, Patton & Co., supra, it was said that: “It is a well-recognized general rule that the agreement of a party to perform an obligation already binding on him, cannot form a consideration for an undertaking by the other party to perform another act. ’ ’ (Citing cases.) “Tested by this rule, it would seem that the agreement by appellee’s agent to advance $2,000 and to grant an extension of time, was a mere gratuity — an undertaking by it to oblige the performance by appellant of an act he was already bound to perform. As a consideration for this alleged promise, appellant was not bound to deliver any more grain, nor of a better quality, nor at any other time or place, nor at a less price, nor had any substantial and unforeseen difficulty arisen to prevent the performance of his contract.

“Bishop v. Busse, 69 Ill. 403, and Cooke v. Murphy, 70 Ill. 96, are cited as sustaining appellant’s contention that the evidence was competent upon the ground that the mutual promises of the respective parties formed a sufficient consideration for what' is termed the substituted agreement. If the cases cited cannot be said to have been overruled by, or to be in conflict with, the other cases above mentioned, the facts in the cases upon which the holdings were predicated, were different from the facts in the case at bar, and the cases are readily distinguishable. ’ ’ The court then proceeds to distinguish the cases, on the ground that in the case then before the court no attempt had been made to terminate the original agreement, as in the cases cited.

In Board of Education of Villa Grove Tp. High School Dist. No. 231 v. Barracks, 235 Ill. App. 35, the rule laid down in Bishop v. Busse and Cooke v. Murphy, supra, was not followed even though it did appear that unforseen conditions had arisen making the performance of the contract more burdensome. See also I Williston on Contracts, ¶¶ 130, 130a; 6 Am. & Eng. Ency. of L. (2nd Ed.) 750; L. R. A. 1915 B 37; 9 Cyc. 349.

However, under either line of decisions to which we have referred, we are of the opinion that the plaintiffs are not in a position to recover as it appears that no conditions had arisen which may reasonably be said to have made it more burdensome for them to carry out their original undertaking when the new agreement was entered into.

It is urged further by the plaintiffs in support of the judgment appealed from that the defendant ratified the new contract by making payments on invoices rendered on a basis of the increased price stipulated in the so-called new agreement of April 12. In our opinion that contention is not sound. We are unable to see how one conld be bound by a so-called ratification of an agreement which was not binding in the first place because it lacked consideration. A similar contention was made in several of the cases cited above and was held not tenable. Loach v. Farnum, supra.

For the foregoing reasons, we are of the opinion that the promise of the defendant to pay the additional $2 per thousand feet was without consideration and therefore void. We are, therefore, further of the opinion that the trial court erred in instructing the jury to the contrary and in refusing the instruction submitted by the defendant, in which it was sought to have the court instruct the jury that if they believed from the evidence that the material undertaken to be delivered under the second contract was, in substance, the same material as undertaken to be delivered under the first contract, and if the consideration for the second undertaking was merely to deliver the material which they were obligated to deliver under the first contract, then there was no consideration for the second undertaking. The record shows that the defendant did not move for an instructed verdict at the close of all the evidence.

The judgment will be reversed and the cause remanded.

Judgment reversed and cause remanded.

Taylor and O’Connor, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Thomson

license: Public Domain

text:
    Bessie Miller, now known as Bessie Cohen, Appellee, v. Lake View State Bank, Appellant.
    Gen. No. 30,658.
    1. Banking — sufficiency of evidence to support verdict on issue as to forgery -of indorsement of payee’s name. In an action against a bank to recover the value of a check alleged to have been cashed on a forged indorsement of plaintiff’s signature as payee, verdict for plaintiff held not manifestly against the weight of the evidence as to the question of the alleged forged indorsement.
    2. Banking — when evidence in action against bank cashing check on forged indorsement not inadmissible as too remote. In an action against a bank to recover1 the value of a check alleged to have been cashed on a forged indorsement of plaintiff’s name as payee, wherein plaintiff testified to an appropriation of the proceeds of the check by her father-in-law and his refusal to return the same to her, testimony of a conversation between plaintiff’s father and the father-in-law respecting the latter’s intentions in the matter of accounting to plaintiff was not too remote for admission in evidence.
    3. Evidence — admissibility of pasted fragments of ledger sheet bearing item relevant to issues. In an action against a bank to recover the value of a check alleged to have been cashed on a forged indorsement of plaintiff’s name as payee, wherein plaintiff testified to an appropriation of the proceeds of the check by her father-in-law and his refusal to return the same to her, a sheet of paper upon which plaintiff had pasted the pieces of a torn-sheet admittedly taken from her father-in-law’s ledger, bearing an item dated as of the date when the check was alleged to have been taken from plaintiff’s pocketbook, and in the handwriting of plaintiff’s husband, purporting to record the investment in the father-in-law’s business of a sum corresponding to the face of the check, was properly admitted in evidence.
    4. Harmless and prejudicial bbbob — improper exclusion of answer to specific question on ground of incompetency of witness where answer excluded could not have affected result. Where in an action by a divorced woman involving her alleged separate property, defendant called her former husband as a witness, but the court, upon objection to his competency, refused to permit him to answer the first) question asked, stating that he would be permitted to testify only as to a conversation concerning which plaintiff had testified, and the witness was not further interrogated, defendant was not prejudiced, although it was error to refuse to allow the witness to answer the specific question asked, since the answer thereto could not have affected the result.
    5. Saving questions for review — objection to one point in oral charge in municipal court action as preserving objections to other points not separately objected to. Objections to specific portions of an oral charge in an action -in municipal court are not saved fon review by the making of a specific objection, on the trial, to another portion of such charge.
    6. Banking — duty of payee of check to notify bank cashing same upon forged indorsement of fact of forgery. Where no business relations existed between the payee of a check and the bank which cashed it upon a forged indorsement of her signature, such payee was under no duty to notify the bank of the fact that the check had been stolen from her and her name forged thereon.
    7. Banking — when payee of check not estopped by laches from recovery of value from bank cashing same upon forged indorsement of her signature. Where the payee of a check was under no duty to notify the bank which cashed it upon a forged indorsement of her signature, of the fact of such forgery, she was not estopped to recover the value of such check from the bank by reason of the fact that she delayed to seek such recovery until after the bank was unable to have recourse against the person for whom it cashed the cheek.
    O’Connob, J., dissents.
    Appeal by defendant from the Municipal Court of Chicago; the Hon. John J. Lupe, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1925.
    Affirmed.
    Opinion filed May 5, 1926.
    Litsinger, Healy & Reid, for appellant.
    Benjamin B. Morris, for appellee.
   Mr. Presiding Justice Thomson

delivered the opinion of the court.

The plaintiff, Bessie Miller, brought this action against the defendant bank to recover the value of a check for $2,500, which she claimed the bank had cashed on an indorsement of her name, she being the páyee in the check, which endorsement was a. forgery. The issues joined were submitted to a jury, resulting in a finding in her favor for $2,500. To reverse that judgment the bank has perfected this appeal.

The plaintiff’s maiden name was Bessie Silverstein. In October, 1920, she married Benjamin F. Miller. The latter was in the employ of his father, Isadore E. Miller, who was the' proprietor of Miller’s Department Store. On the occasion of her marriage, her father, Solomon Silverstein, presented her with a check for $2,500, drawn upon Foreman Bros. Banking Co. This check was dated October 3,0, 1920. The plaintiff and her husband were absent from the city on their wedding trip for about a week, and it is her contention that shortly after their return — she says on the 9th, 10th or 11th of November — she discovered that someone had taken this check out of her pocketbook, and a little later she discovered further that someone had indorsed the check in her name, and that below that indorsement on the check appeared the further indorsements :

“Miller’s Department Store
“B. F. Miller.”

and that in that form the check had been deposited in the account of the department store, in the defendant bank. She contends further that when she made this discovery she spoke to her father-in-law, Isadore Miller, about it and demanded that he return to her the proceeds of this check, and that he said he would do so, but asked her to wait until after the holidays, and that she agreed to wait until then, but he failed to return the money as he had agreed to do. She further contends that she requested the return of this money a number of times after that but that it has never been returned to her. The bank contends that soon after the return of the plaintiff and her husband from their wedding trip they were in the store of her father-in-law, where the plaintiff as well as her husband were employed, and there had a conversation with the plaintiff’s father-in-law, in the course of which the plaintiff produced the check which she said she had received from her father and that she then said, in substance, that she and her husband were living in a furnished apartment and would not have occasion to use the money at once, but that when they went to housekeeping they would buy what they needed and draw on the proceeds of this check, and that she then handed the check to her father-in-law, apparently for the purpose of having him bank it and keep the proceeds to the credit of herself and her husband until they should have occasion to charge items against it at the time they went to housekeeping; that her father-in-law at that time called her attention to the fact that the check was not indorsed, and that she replied: “Let Bennie indorse it for me”; that her husband then took the check and indorsed her name upon it, at her request and direction, and also added the other indorsements above referred to, whereupon, on November 11, 1920, the check was deposited in the defendant bank to the credit of Miller’s Department Store. It is the defendant’s further contention that subsequently the plaintiff’s father-in-law furnished the plaintiff and her husband all the furniture and household goods they needed to start housekeeping, together with a lot of clothing, and that many of these articles came from the stock of Miller’s Department Store and others were purchased from different concerns in the city of Chicago and charged to Miller’s Department Store, and that all of these items were charged against the plaintiff’s credit which was created at the time this check was deposited with the defendant bank.

In the fall of 1923, the plaintiff instituted divorce proceedings against her husband, Benjamin F. Miller, which later resulted in the divorce of these parties. After her divorce the plaintiff made a demand on the defendant bank for the amount they had credited to Miller’s Department Store on this check, basing her claim on the ground that her indorsement thereon was a forgery. The defendant not only contends that the indorsement was not a forgery, as we have above set forth, but also that the plaintiff is precluded from recovering the amount of this check from the bank, by reason of laches, and in this connection the defendant’s contention is that for a considerable period after the transaction in question Isadore Miller and Miller’s Department Store carried substantial deposits with the defendant bank, and if plaintiff had advised the bank within a reasonable time, of her claims that her indorsement on this check was a forgery, the bank could have protected itself and collected the amount of the check from Isadore Miller, but that now Miller’s accounts have been closed and he has gone out of business and that they will now find it difficult, if not impossible, to reimburse themselves, if they should be held liable to her.

In support of its appeal the defendant contends that the verdict of the jury and judgment of the court are against the manifest weight of the evidence, so far as the question of the alleged forged indorsement is concerned. There is much conflicting evidence in the record and in our opinion it would be impossible for this court to say, from such evidence, that the verdict and judgment are against the manifest weight of the evidence, on that issue. In support of its position that the indorsement of the plaintiff’s name on this check was authorized by her and that the check was delivered by the plaintiff to her father-in-law, the proceeds of it to be kept by him to the credit of herself and her husband until such time as they went to housekeeping, Isadore Miller testified to that effect and also that when the plaintiff and her husband went to housekeeping in the spring of 1921, much of their furniture, as well as clothing, was purchased from different concerns in Chicago and charged to Miller’s Department Store, and that these various items were debited to the account of the plaintiff and her husband on which this deposit of $2,500 had previously been credited, and that these debits totalled more than the $2,500. In support of this testimony the defendant introduced in evidence over 40 invoices, being the invoices of different concerns in the city of Chicago for articles of clothing and furniture sold to Miller’s Department Store, all of which Isadore Miller testified were things purchased for the plaintiff and her husband and charged against the $2,500 credit, which had been created in" favor of the plaintiff and her husband by the deposit of the check in question. The defendant also introduced two ledger sheets, purporting to show the account of “Name — Mr. and Mrs. B. F. Miller. Address — 861 Fletcher Street,” with Miller’s Department Store. These sheets were, taken from the ledger of the store. The account consists of a series of debit items but the alleged credit item of $2,500 does not appear. Isadore Miller testified that he made up this account of Mr. and Mrs. B. F. Miller in his ledger from day to day, and that he made the entries in the ledger as he received the bills. It is not surprising that the jury refused to believe that testimony, if they made a careful examination of these exhibits. It is admitted that the plaintiff and her husband were living in a furnished apartment on Bromptón Place in the city of Chicago from the time they were married in the fall of 1920, until about May 1,1921. Although this account in the ledger of the Miller Department Store, in the name of Mr. and Mrs. B. F. Miller, gives their address as 861 Fletcher street, at which address they did not live prior to May 1,1921, the account contains a number of items dated prior to that time, the earliest of which is December 4, 1920. Nor does this account show that the items could have been entered in it as Isadore Miller testified, for they do not appear in chronological order so far as the dates are concerned. After several items dated in May, 1921, there is one dated in April of that year, and after several in September, 1921, appear others in May and June of that year, and after some as late as February, 1922, there is one of January, 1921, and one in March, 1921. ¡No evidence was submitted to the effect that mistakes had been made in noting any of these debits. Although it is contended that all the vouchers submitted represented purchases which were made for the plaintiff and her husband through Miller’s Department Store, the amounts of which were to be charged against the credit created by the check in question, the record shows that many of these vouchers are dated prior to the date of the check. The vouchers referred to represented purchases from Marshall Field & Co., on September 29 and 30, 1920, and October' 8, 13, 14, 18 and 26, 1920, all of which purchases were very apparently made before any credit could have been created on the books of Miller’s Department Store, as a result of the deposit of this check, for they were made before the date of the check. The only witnesses who gave testimony in support of this theory were Isadore Miller and his wife, both of whom clearly were interested in the outcome of this case. It is true that the plaintiff’s theory of this case rests for the most part upon her own testimony with corroboration as to some matters in the form of testimony given by her father, and they also were interested in the outcome of this case. It is also true that the record shows some apparent inconsistencies in the testimony of the plaintiff, but with these apparent inconsistencies in the record, some on one side and some on the other, this court may not lightly disregard the great advantage the jury had in observing the various witnesses as they gave their testimony. They had the advantage of a number of the earmarks of truth which the physical observance of the witnesses affords, of the benefit of which we are deprived.

There are also a number of alleged procedural errors of which the defendant complains. During the cross-examination of Isadore Miller, counsel for the plaintiff asked him whether or not, in a certain conversation which was referred to, the plaintiff’s father had said to the witness, “Mr. Miller, why do you have my daughter working here while she is in a family way? "Why don’t you give her the money hack on that check?” and also whether or not he had replied, “I will give her the money back.” This question was objected to, the objection overruled and the witness answered: “I never said anything of the kind and I was never asked anything from anybody about the check.” Later, the plaintiff’s father testified, over defendant’s objection, that he did have such a conversation with Isadore Miller, in which he asked those questions and in which Miller made the answer above noted. In our opinion, in view of all the circumstances, it may not reasonably be said that either part of that conversation was so remote as. not to be the proper subject of inquiry.

Another matter of which the defendant complains is the action of the trial court in admitting, over its objection, a certain ledger sheet which had at one time been a part of the records of Miller’s Department Store. It purported to be a sheet from the ledger, according to Isadore Miller’s own testimony, showing the account of his son, the plaintiff’s husband. The plaintiff testified that she noticed a number of torn pieces of paper in the waste paper basket in the home of her parents-in-law, and she recovered these torn pieces of paper and put them together, pasting them on another sheet of paper, and this was the ledger sheet in question. This sheet contained an item dated November 8 (no year), and the item read, “Invest in the business of Miller’s Department Store, $2,500.” In support of its contention, counsel for defendant argue that there is not a word of evidence as to the circumstances under which this entry was made or as to what item the $2,500 referred to. In our opinion the court did not err in admitting this ledger sheet in evidence. Isadore Miller admitted that it was a sheet from the ledger of Miller’s Department Store; that it was in his son’s handwriting; that he had seen a sheet like this before “in the big book,” but that when he saw it in the book it “was not pasted like that,” but that it was a page in that book and that this page was stolen out of the book. The date, November 8, corresponds to the time the plaintiff testified this check was taken from her pocketbook by some one, without her knowledge, and indorsed with her name, also without her knowledge or authority. She was married on October 31, and she testified she and her husband were away for a week and that the theft of this check occurred just after their return. According to. that testimony, she and her husband returned from their trip on November 7, and the theft of this check occurred between that time and November 11. Another matter which is pertinent on this question is that Isadore Miller was asked on cross-examination whether his son had any interest in the business of Miller’s Department Store and he answered that he had none. In view of this situation we consider that this evidence was admissible.

The defendant called the plaintiff’s former husband, Benjamin F. Miller as a witness and asked him one question, which was, “Did Bessie Miller give you some checks after she was married?” At this point counsel for the plaintiff objected to the competency of this witness and the court sustained the objection, saying that he, the witness, could be permitted to testify on only one subject — a conversation as to which the plaintiff had already testified. Counsel for the defendant did not ask the witness any further questions, merely remarking: “Well, I just want to offer to let him testify and I will save the point. ’ ’ In our opinion this witness was competent to testify on at least some subjects but not on all subjects. Cahill’s St. ch. 51, ¶ 5. This case involved the alleged separate property of the plaintiff. The only question asked this witness was, in our opinion, a proper one, and the witness should have been permitted to answer it. But the ruling on this question may not properly disturb this judgment. Counsel for the defendant did not press the question presented by the objection to this question, so far as the ruling on this question was concerned but said, “I just want to offer to let him testify.” The general question of the competency of the witness could not be ruled upon, apart from some specific question put to the witnesses, for on some subjects he clearly was incompetent, while on others, he was competent.

Other alleged procedural errors complained of by the defendant have to do with the court’s instructions. The court charged the jury orally. As to the objections thus raised it is sufficient to say that under the rules of the municipal court of Chicago, which have been supplied by additional record, filed in this court, pursuant to leave granted on motion of the plaintiff, objections to the giving or refusing of oral instructions to the jury must be specific and must be made immediately upon the conclusion of the charge and before the jury retires. The record in the case at bar shows that in the course of the charge, to the jury, counsel for the defendant made only one objection. Counsel does not now rely upon the part of the charge then objected to, but the objections urged in this court consist of three other specific matters, no one of which was made the subject of any objection in the trial court. That being the situation, any alleged error of the trial court, in connection with the charge to the jury, is not now properly before us.

Finally and chiefly, the defendant contends that the plaintiff may not recover in this case because she, by her conduct following the discovery of the alleged forgery, ratified the indorsement, waived any alleged conversion of the check by the bank and elected to look to Isadore Miller for the return of her money and in effect treated it as a loan, and relied upon his promise to pay the money hack to her. In support of this proposition the defendant has called oun attention to a number of cases, and among them Hughes v. Neal Loan & Banking Co., 97 Ga. 383; Bank of Montreal v. Dewar, 6 Ill. App. 294, 115 Ill. 22, 26; Neal v. First Nat. Bank of Lebanon, 26 Ind. App. 503, 60 N. E. 164; Rothschild v. Title Guarantee & Trust Co., 204 N. Y. 458; States v. First Nat. Bank, 203 Pa. 69; and Continental Nat. Bank of Chicago v. Metropolitan Nat. Bank of Chicago, 107 Ill. App. 455. In our opinion none of these cases is applicable to the situation with which we have to deal in the case at bar. In Hughes v. Neal Loan & Banking Co., supra, it appears that the plaintiff sued the defendant to recover the amount of a check drawn to her order, the defendant having cashed the check on the forged indorsement of her name, and it appears further that after the check had been cashed, the plaintiff treated the matter as a loan between herself and the person who had cashed the check. In that case she accepted $1,000 in part payment, from the one who had cashed the check, and took his note for the balance. The same situation was presented in the case of Bank of Montreal v. Dewar, supra, except that in that case nothing had been paid the plaintiff on account. In the case at bar the fact that the plaintiff did not press the matter against her father-in-law but agreed to wait until after the holidays, at the time she says she demanded the return of her money, when she discovered in November that the check had been deposited in the account of Miller’s Department Store, and the fact that she may have waited beyond that time, does not establish the fact that she converted the transaction into a loan. We are unable to find any evidence of her having done anything that would warrant such a conclusion. In Neal v. First Nat. Bank of Lebanon, there was a direct business relationship between the plaintiff and the defendant bank, for the forgeries there involved were of the plaintiff’s own checks, as maker, drawn upon his account in the defendant bank. In the case at bar that is not at all the situation. Here the plaintiff, had no business connection or contact of any kind with the defendant bank. Moreover, in the case last referred to the forgeries were by the plaintiff’s wife and she had drawn many checks on his account throughout a long period of time and signed his name to them with his authority, and all those checks were cashed by the defendant bank with the plaintiff’s approval. Then the plaintiff’s wife drew several checks on her husband’s account, to which she signed his name without authority, and when these checks came through, he took his wife to task for her actions with regard to them, but he made no complaint toi his bank, and the court held that by such conduct, so far as his bank was concerned, he had acquiesced in the cashing of the checks. In Rothschild v. Title Guarantee & Trust Co., the defendant made a loan on the security of a bond and mortgage purporting to be executed by one Caroline Strauss, but such execution was a forgery. About a year later Caroline Strauss discovered that her name had been forged to these documents by the procurement1 of her son who had negotiated the loan and received the proceeds of it, and subsequently, with her check, she caused to be paid to the defendant trust company, out of her own funds, two installments of interest which had become due on the mortgage. The court held that by so doing she had ratified the entire transaction. Later, Caroline Strauss died and the executrix of her estate sued the defendant trust company, alleging the forgery of the bond and mortgage and seeking to recover their value, and the court held that there could be no recovery. There is no analogy between that situation and the one presented in the case at bar, where it is not shown that the plaintiff has done anything involving the defendant bank, which may be said to have been a ratification of the indorsement of her name on the check in question. In States v. First Nat. Bank, the forgery involved was the forgery of the name of a payee named in a draft which the plaintiff purchased from the defendant bank, and it was held that when the plaintiff learned of this forgery he owed a duty to the bank, from which he had purchased the draft, to notify them of it. - Here again, we have a direct business connection between the parties. In Continental Nat. Bank of Chicago v. Metropolitan Nat. Bank of Chicago, supra, there was involved a draft for $33, drawn on the Continental National Bank by the First National Bank of St. Paul to the order of one Harper. This draft was raised to $3,300, by some one and was then presented to the drawee bank and certified by it, at which time that bank charged the $3,300 on its books to the St. Paul bank. After the draft had been so certified, Harper deposited it with the American Trust & Savings Bank and that bank credited-his account with the amount and he drew against that credit. The American Trust & Savings Bank then deposited the draft in its account with the Metropolitan National Bank and received credit for the amount of the draft. The latter bank then sent the draft through the clearing house and it found its way back to the Continental National Bank, which bank paid the $3,300 to the Metropolitan National Bank. Four years later the Continental Bank demanded the amount of the draft from the Metropolitan Bank and such demand being refused, the Continental Bank sued the Metropolitan Bank. It was shown that the Continental Bank discovered that the draft had been raised from $33 to $3,300, four days after it had certified it, but it did not notify the Metropolitan Bank of its discovery of this fraud or make a demand for the return of the money until four years thereafter. In holding that there could be no recovery by the Continental Bank, the court held among other things that that bank owed a duty-to the Metropolitan Bank to notify it of the situation promptly upon its discovery and having failed to do that it could not recover in an action brought some years later. Again, we have a case where the plaintiff had dealt with the defendant in connection with the paper involved, and their relationship was such as to involve a duty from the one to the other because of that relationship. In the case at bar the plaintiff had had no dealings with the defendant bank of any kind.

The facts in the case at bar are very similar to those which were presented in Lindenthal v. Northwest State Bank, 221 Ill. App. 145. There the plaintiffs were a group of partners doing business under the name and style of H. M. Lindenthal. A number of checks had been sent in to them by their customers, drawn to the order of H. M. Lindenthal, and one Durchslag, the cashier of the partnership, indorsed the name of the payee on these checks, without authority, deposited them in the defendant bank and withdrew the proceeds of the checks from that bank and used the money in the purchase of real estate. Later Durchslag confessed his embezzlement. Within a month of these forgeries the partners discovered them and they procured the conveyance of the real estate to them. It was incumbered with a mortgage and the equity of the real estate fell short of the amount of the defalcation. After 21 months the partnership sued the bank which had cashed these checks and recovered a judgment for their amount. Upon appeal of the bank to this court, the judgment was affirmed. It was urged that the plaintiffs had waived any right of action they had against the bank because of their delay in bringing suit. As to such contention the court said: “This contention is based upon alleged negligence in appellees’ failure to give appellant prompt notice of such forgeries after receiving knowledge of them. It seems sufficient to say that as no business relation whatever existed between the parties and knowledge of the forgeries did not come to appellees before use of the proceeds as aforesaid, no duty to give notice was due from appellees to appellant. (Hamlin’s Wizard Oil Co. v. United States Exp. Co., 265 Ill. 156, 162.)

“Nor can it be said that the doctrine of estoppel is applicable for when appellees first heard of the forgeries the proceeds had already been used in the purchase of said real estate so that their ‘silence induced no act and did no wrong. ’ (Hamlin v. Sears, 82 N. Y. 327.) Nor does it appear from the evidence that appellant would have been in any better position had it received notice of the forgeries, for at no time thereafter does it appear that Durchslag had any property with which to indemnify it. ‘Without showing some injury by reason of the delay, the defendant cannot use it as an estoppel against plaintiff.’ (Murphy v. Metropolitan Nat. Bank, 191 Miss. 159; A. Blum Jr.’s Sons & Co. v. Whipple, 194 Mass. 253, 13 L. R. A. [N. S.] 211.)”

As in the Lindenthal case, so in the case at bar, the doctrine of estoppel is not applicable, but for a different reason. If the plaintiff owed the defendant bank no duty to notify it of this alleged forgery, then the question of whether her knowledge of the forgeries came to her before it became impossible for the bank to have reimbursed itself, if it had had notice of the forgery, becomes entirely immaterial. We have already pointed out that the plaintiff had had no contact or business relations with this defendant in any way and that she owed the defendant no duty to notify it that her name had been indorsed on the check in question without her knowledge or authority. The plaintiff will not be estopped by her silence or failure to notify the defendant of the forgery of her indorsement, unless the circumstances are such as to place her under a duty to speak and she nevertheless refrains from doing so and thereby has led the bank to believe in the existence of a state of facts, in reliance upon which the bank has acted to its prejudice. 16 Cyc. 681. Lloyd v. Lee, 45 Ill. 277; Vail v. Northwestern Mut. Life Ins. Co., 192 Ill. 567. In the latter case the Supreme Court said: “When an estoppel is claimed by reason of silence * * * it must be silence when there is a duty to speak * *

In Hamlin’s Wizard Oil Co. v. United States Exp. Co., 265 Ill. 156, the plaintiff sued the defendant to recover the value of a number of money orders payable to the order of the plaintiff, which had been cashed by the defendant for one Walsh, an employee of the plaintiff, who had forged the latter’s indorsement on the orders. The Supreme Court held that while it could “scarcely be doubted that the plaintiff was grossly negligent in the management of its affairs ’ ’ in not having discovered what Walsh was doing long before they did, still “under the law as declared by all the authorities that fact was not a defense,” because the plaintiff owed the defendant no legal duty by reason of the relations between them, to exercise care in dealing with its checks and drafts and money orders, so far as the safety of the defendant was concerned.

For the foregoing reasons, the judgment of the municipal court is affirmed.

Judgment affirmed.

Taylor, J., concurs; O’Connor, J,, dissents,


author: Mr. Justice O’Connor

text:
    The People of the State of Illinois ex rel. Robert E. Crowe, State’s Attorney, Appellee, v. Louis Lipschultz et al., on appeal of Jeanette Keithly, Appellant.
    Gen. No. 30,463.
    1. Equity — when objection to want of replication too late. An objection to the taking of evidence in support of a bill, based upon the ground that no replication has been filed, comes too late where first made when the case is reached for trial.
    2. Equity — waiver of objection based upon absence of replication by subsequent participation in introduction of evidence. Where the answer to a bill was not made under oath and was filed without notice, and defendant, after his objection to proceeding with the trial, on the ground that no replication had been filed, was overruled, participated therein by offering evidence, defendant could not be heard to complain, on appeal, of the want of a formal replication, especially where, in course of the trial, complainant, by leave of court, amended his bill and defendant answered, but did not then object because a replication was not thereafter filed.
    3. Fbostitution and pandering — sufficiency of service of notice preliminary to injunction abating premises as nuisance. There was a sufficient compliance with the requirement of Cahill’s St. ch. 38, H 149, providing for personal service of a preliminary notice upon the owner of premises upon which a house of ill-fame is sought to be abated as a nuisance, to give jurisdiction to issue a preliminary injunction, although such owner was not personally served, where the evidence showed that a diligent but unsuccessful effort was made to locate such owner, and counsel who entered her appearance testified that he did not know where she could be found, it being obvious from the evidence that such owner was purposely keeping her whereabouts unknown.
    4. Prostitution and pandering — when joinder of alleged tenants of premises used as house of ill-fame not prerequisite to decree against owner. Where the evidence in support of a bill to abate as a nuisance premises upon which a house of ill-fame was being conducted warranted the finding of the court that the owner of such premises knew that they were being so used, a decree abating such nuisance pursuant to Cahill’s St. ch. 38, If 152, was warranted, notwithstanding alleged tenants of such premises were not made parties to the suit, where the evidence showed diligent but unavailing efforts by complainant to ascertain who was conducting such house of ill-fame, and did not clearly show that the premises were in fact under lease to anyone.
    5. Appeal and error — waiver of right to appeal from decree abating premises as nuisance by filing statutory bond to procure partial vacation of decree. The fact that one whose premises have been closed by a decree under the act for abatement of houses of ill-fame, Cahill’s St. ch. '38, f 148 et seq., has filed a bond as provided by paragraph 155 thereof to procure a partial vacation of the decree, does not preclude him from contesting on appeal that part of the decree finding the place to be a nuisance subject to abatement under such act.
    Appeal by defendant from the Circuit Court of Cook county; the Hon. Francis S. Wilson, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1925.
    Affirmed.
    Opinion filed May 5, 1926.
    John H. Buck and Rankin & Lustfield, for appellant; Ode L. Rankin, of counsel.
    Robert E. Crowe, State’s Attorney, for appellee; Frank Peska, Assistant State’s Attorney, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

By this appeal the defendant seeks to reverse a decree entered against her in the circuit court of Cook county on the 16th of July, 1925, the decree having been entered in the suit brought under the act of June 22, 1915, Cahill’s St. ch. 38, ¶ 148 et seq., known as the Abatement Act.

On March 18,1925, the people on the relation of the State’s attorney of Cook county filed a bill against Louis Lipschultz and the defendant Jeanette Keithly, wherein it was alleged that certain premises known as the Harlem Tavern and located at No. 4225 Harlem Avenue in Stickney, Cook county, Illinois, had been used during the period from July 30, 1924, to the date of the filing of the bill, for the purposes of lewdness, assignation and prostitution, contrary to the provisions of the Act of June 22, 1915, that on the 20th of October, 1924, a formal notice required by the statute was served on the defendant Lipschultz, advising him that the property was being used in violation of the statute; that since the service of that notice the nuisance had not been abated, but on the contrary, the premises were still being used in violation of the statute. It was further alleged that Lipschultz owned the premises and that the defendant Keithly had some interest in the property, the exact nature of which was unknown to the State’s attorney, and that the whereabouts of Keithly was also unknown and upon diligent inquiry, could not be ascertained; that the premises were in possession of some unknown persons whose names could not be ascertained. Lipschultz, Keithly and the unknown tenants were made parties defendant and the prayer of the bill was that the defendants be required to answer, but not under oath, the answer under oath being expressly waived, and that the persons having control and management of the premises be perpetually enjoined and restrained from maintaining or permitting the nuisance upon the premises and that the premises be closed for one year and the furniture sold, as provided by law. A summons was issued against the defendants, but it was returned not found by the sheriff, he being unable to find any of the defendants.

On May 9,1925, Lipschultz and Keithly filed a joint and several answer wherein Lipschultz denied that he owned the premises; that they had been used contrary to the statute and that a formal notice was served on him on the 20th of October, 1924. Both defendants denied that they knew anything about the conduct of the premises and the defendant Keithly denied that she had any interest in them. The case went to trial before the chancellor on the 23rd of June, 1925, and during the progress of the trial, on June 26, 1925, complainant, by leave of court, amended the bill of complaint and set up that on the 24th of December, 1924, the defendant, Lipschultz and his wife conveyed the premises by warranty deed to William Lewis, who thereafter on the 7th of January, 1925, conveyed the premises to the defendant Keithly. It was further alleged that the whereabouts of the defendant, Keithly, “in any part of the United States is unknown to your relator,” and that upon diligent search and inquiry, her present whereabouts could not be ascertained. On the same day Lipschultz and Keithly filed a joint and several answer to the amendment wherein Keithly admitted that she was the owner of the premises described, but denied that she had any knowledge of the improper use of the premises, except as alleged in the bill and denied that she ever conducted any business on the premises, but averred that the premises were rented and occupied by one Frank Smith. During the trial the suit was dismissed on motion of the complainant as to the defendant Lipschultz and the unknown tenants so that the only defendant that remained was Jeanette Keithly.

On July 16, 1925, after hearing the evidence, the chancellor entered a decree, wherein it was found that the material allegations of the bill were true and proved; that service of summons had not been had on the defendant, Keithly, but that her appearance had been entered by her solicitor. The court then found that the notice required by section 2 [Cahill’s St. ch. 38, ¶ 149] of the act had been served on Lipschultz; that the premises in question had been used for the purposes of lewdness, assignation and prostitution and that the defendants had wholly failed to abate the nuisance. The court further found that diligent search had been made to ascertain the whereabouts of the defendant, Keithly, within the United States, but without success; that the defendant, Keithly, knew prior to the filing of the bill that the premises in question were being used for the; purposes of prostitution and that she wholly failed to abate the nuisance; that the premises were used for such purpose in an open and notorious manner and was common knowledge to the public; that the general reputation of the place for a long period of time preceding the filing of the suit was bad and known to be a place where prostitution was practiced and permitted. It was decreed that the defendant Keithly and all other persons be perpetually restrained by the writ of injunction from maintaining or permitting such nuisance in the premises in question and that the premises remain in the custody of the court for one year; that the sheriff sell the furniture in the premises and close the premises for a period of one year. From the decree the defendant, Keithly, prayed and was allowed an appeal. On July 24, 1925, she filed her abatement bond in accordance with the provisions of section 8 [Cahill’s St. ch. 38, ¶155] of the act in question and four days later filed her appeal bond, perfecting her appeal to this court.

A great deal of evidence was offered on behalf of the relator, tending to show that the premises in question had been openly and notoriously used for prostitution purposes prior to and subsequent to the filing of the bill. Some argument is made by counsel for the defendant in the brief to the effect that the evidence fails to show that the premises in question were used for the purpose of prostitution contrary to the statute, but on the oral argument, this position was practically abandoned by counsel for the defendant and indeed the evidence is so overwhelming that it shows beyond all reasonable doubt that the premises were used openly and notoriously contrary to the statute and no legitimate argument could be made to the contrary.

When the case was reached for trial counsel for the defendant called the attention of the court to the fact that no replication had been filed, and, therefore, it was improper to proceed with the trial of the case and that the averments of the answer should be taken as true. The court stated that no replication was necessary and proceeded with the trial and thereafter both parties introduced evidence. The defendant now contends that the action of the court was erroneous, because section 29 of the Chancery Act [Cahill’s St. ch. 22, 29] provides that after a replication is filed, the cause shall be deemed at issue and stand for hearing, or in default of filing such replication, the cause may be set for hearing upon bill and answer in which case the answer shall be taken as true and no evidence shall be received. We think it was too late to raise the question upon the trial. Section 28 of the Chancery Act [Cahill’s St. ch. 22, [[28] provides that a replication shall be filed within four days after a notice has been given that an answer has been filed. No such notice was given. Moreover, during the trial, complainant, by leave of court, amended the bill and the defendant answered and no question was then raised that a replication was not thereafter filed. The answer was not under oath. It, therefore, amounted to no more than an ordinary pleading at law against which the complainant was at liberty to prove his case as in an action was offered by both sides. Trenchard v. Trenchard, at law. Chambers v. Rowe, 36 Ill. 171. Furthermore, the case was not heard upon bill and answer, but evidence was offered by both sides. Trenchard v. Trenchard, 151 Ill. App. 215. In these circumstances the defendant will not now be heard to complain that a formal replication was not filed.

Defendant further contends that the notice required by section 2 of the Abatement Act [Cahill’s St. ch. 38, ¶ 149] was not given to the owner of the premises, Jeanette Keithly, and, therefore, the court was without authority to enter the decree. Section 2 of the Abatement Act provides for the giving of a notice prior to the issuance of a temporary injunction to restrain the nuisance. It further provides that such notice should be served upon the owner or agent five days before application is made for such temporary restraining* order, but that this is not necessary where it appears that diligent inquiry has been made to ascertain the whereabouts of such owner, without success. The evidence discloses that a search was made for Jeanette Keithly, but that her whereabouts was unknown; directories were searched and an investigation was made at the premises in question and in the surrounding neighborhood and her whereabouts could not be ascertained. Moreover, during the trial counsel for the defendant was called as a witness for complainant and he testified that he had entered her appearance, but had not seen her and did not know where she could be found. In these circumstances, we think the requirements of the statute were fully met. It is obvious from a reading of the evidence that the defendant, Jeanette Keithly, was purposely keeping her whereabouts unknown. Complaint is also made that the lessees or tenants were not made parties defendant, and the defendants offered evidence tending to show that the premises in question were leased and were being conducted by one Frank Smith; that he had obtained a retail beverage license from the village of Stickney to conduct the business of a retail beverage dealer from July 1, 1924, to April 30,1925, in the village of Stickney. The place where the business is to be conducted is not specified. A witness for the defendant testified that he was employed by Frank Smith as a bartender, but upon examination he did not know where Smith could be found, other than that he was conducting a summer resort some place in Michigan. The evidence further shows that a number of investigators, on behalf of the complainants, called at the place of business, but were unable to obtain any information as to who was conducting the business. It is perfectly apparent that the owner Keithly and the person who was conducting the premises whether Keithly or somebody else, were keeping under cover. In these circumstances, we think the court was fully warranted in finding that' Jeanette Keithly knew that the premises were being used for the purpose of prostitution and,therefore, the decree was warranted, it not being clearly shown that there was a tenant occupying the premises.

We have passed on the merits of the case, but counsel for the relator contends that the defendant is not in a position to question the decree, because after the decree was entered, the defendant under the statute filed a bond, which prevented the closing of the premises for one year as the decree provided, and that the defendant having accepted the benefits of the decree, she is now estopped from questioning it here. We are unable to concur with this contention. Section 8 of the Abatement Act [Cahill’s St. ch. 38,1(155] provides that after a decree has been entered finding the place to be a nuisance within the meaning of the statute and decreeing that the building be closed for one year, the owner may file a bond with sureties to be approved by the clerk in a sum of not less than $1,000 nor more than $5,000, conditioned that the owner will immediately abate such nuisance and prevent such a nuisance from being established or maintained in the premises during a period of one year and, in that event, the court shall vacate that part of the decree ordering that the building be closed. In this case such bond was filed, but we think this ought not to prevent the defendant from questioning the decree, which finds the place to be a public nuisance contrary to the provisions of the statute. If the court has been in error in finding the place to be a nuisance, the defendant ought to have this corrected in a court of review, and this too without having the premises closed for a year. The proceeding is entirely statutory and we think a careful reading of the entire act warrants the construction we have placed upon it.

For the reasons given, the decree of the circuit court of Cook county is affirmed.

Affirmed.

Thomson, P. J., and Taylor, J., concur.


text:
    Mary L. Pillsbury, Appellee, v. Patrick H. Early, Administrator of the Estate of John Early, Deceased, Appellant.
    Gen. No. 30,503.
    1. Former adjudication — decree denying specific performance for want of proof of agreement as bar to subsequent action based upon same alleged agreement. Where a bill for specific performance of an alleged parol agreement to bequeath property to complainant resulted in a decree dismissing the bill upon the ground that complainant had failed to prove the making of the alleged agreement, such determination was a bar to a subsequently filed claim by complainant against the estate of the alleged promisor, based upon the identical alleged parol agreement.
    2. Former adjudication — necessity for consideration of evidence in former, suit before determining whether decision res adjudicata of issue in subsequent suit. It is not a prerequisite to determina- - tion whether the decision in a chancery suit is res adjudicata of an issue in a subsequent action at law, that the evidence in the former suit be introduced in the subsequent action, where it appears both from the pleadings and from the opinion of the court on review that such issue was in fact decided in the former suit.
    3. Appeal and error — necessity of remand where judgment reversed on ground of former adjudication, but decree in former suit not part of record. While a judgment for a claimant against an estate must be reversed where it appears that an issue going to the foundation of such claim has been decided adversely to claimant in a former suit between the same parties, where the court has erroneously excluded in the second suit, the decree in the former suit, and there was no motion by defendant, at the close of the evidence, for a directed verdict, the cause must be remanded.

      Appeal by defendant from the Circuit Court of Cook county; the Hon. Kicet-tam Scanlan, Judge, presiding. Heard in the third division of this court for the' first district at the October term, 1925.
    Reversed.
    Opinion filed May 5, 1926.
    John S. Hummer, for appellant; Cyrus Heren, of eounsel.
    Earl J. Walker, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

On January 26, 1921, Mary L. Pillsbury, who will hereinafter be referred to as plaintiff, filed her claim in the probate court of Cook county against the estate of John Early, deceased. There seems to have been a nominal hearing and the claim was allowed for $100. An appeal was taken to the circuit court of Cook county, where there was a trial before a judge and a jury and a verdict and judgment for $7,500 was rendered in favor of plaintiff, and the administrator, who will be hereinafter referred to as the defendant, prosecutes this appeal.

The record discloses that plaintiff’s claim as filed in the probate court was in the form of a declaration on the common counts and it was alleged inter alia that John Early, the deceased, at the time of his death was indebted to plaintiff for work done and services performed and the damages were laid in the sum of $15,-000. The record further shows that on May 3, 1920, Mary L. Pillsbury, the plaintiff, filed her bill of complaint in the superior court of Cook county for specific performance wherein she alleged that John Early, the deceased, in 1907 agreed, by parol, that if she would go and live on his farm, located in Franklin Park, and take care of his elderly parents and himself, the farm would be given to her at his death and that in addition to the farm, the plaintiff was to receive one-half of the stock and the produce of the farm. She further alleged in her bill that she went to Franklin Park and took care of the parents and of John Early until the latter died in January, 1920; that he died testate, devising the farm to one of his nieces and bequeathed to plaintiff the sum of $2,000 and other property. The prayer of the bill was that the parol agreement be specifically performed and the farm conveyed to her. The defendants answered the bill and admitted that John Early, the deceased, in his lifetime owned certain real estate located at Franklin Park; that he died testate, the will having been probated in the probate court of Cook county; that he devised the real estate in Franklin Park to one of his nieces and that he bequeathed $2,000 to Mary L, Pillsbury, plaintiff. The answer denied that Early, the deceased, had entered into the parol agreement as plaintiff alleged in her bill. It further appears from the record that there was a trial of the chancery suit on the merits and a decree entered dismissing the bill for want of equity. From this decree, Mary L. Pillsbury prosecuted an appeal to the Supreme Court where the decree of the superior court was affirmed. Pillsbury v. Reidy, 304 Ill. 420.

On the trial of the claim before the circuit court a great deal of evidence was introduced by both parties, the jury was instructed and they returned their verdict in favor of plaintiff for $7,500, In this court a number of points are urged why the judgment should be reversed, but in the view we take of the case, it will be only necessary for us to consider one of them, and that is, that the decree rendered by the superior court of Cook county dismissing the bill for specific- performance for want of equity and the affirmance of that decree by the Supreme Court is conclusive and a bar to the further prosecution by plaintiff, because the matters involved on the hearing of the specific performance suit are the same as those involved on the hearing before the circuit court, the evidence being substantially the same. .In both cases Mary L. Pillsbury based her claim on the alleged parol agreement between her and John Early in 1907, and if there were no such agreement, her claim must fail. The Supreme Court in affirming the decree of dismissal entered in the specific performance case (304 Ill. 420) goes into the evidence introduced in that case rather fully and the facts stated in that opinion are in substance the same as the facts adduced before the circuit court in the case before us. After discussing the evidence in the specific performance case, the Supreme Court said (p. 424):

“On the question of the existence of a contract the evidence is sharply conflicting. In this class of cases, where the one with whom the contract is alleged to have been made is dead, the court should use care in determining the existence of such contract. The chancellor heard the witnesses in open court and is better able to judge their credibility than we. From a review of the entire record in the case we are unable to say that the chancellor should have found that the contract claimed by the bill herein existed. In addition, it does not appear with definite clearness just what property was to be included in this contract.” From a consideration of the opinion of the Supreme Court and the foregoing quotation therefrom, it is clear that the Supreme Court held that Mary A. Pillsbury had failed to prove that a parol agreement had been entered into between her and John Early as she there contended. The Supreme Court further held as an additional reason for affirming the decree that there was no certainty as to the property there involved.

But counsel for plaintiff contends that whether the question decided in the chancery suit was the same as that decided by the jury in the case before us can only be determined by a consideration of the evidence adduced in the chancery suit and that since the evidence in the chancery suit was not introduced, on the trial in the circuit court, it cannot be said that the question decided in the chancery suit was the same as the question presented to the jury. With this contention we cannot agree. Where some controlling fact material to the determination of both of the causes has been adjudicated in a former suit by a court of competent jurisdiction, and the same fact is again at issue between substantially the same parties, its adjudication in the first cause will be conclusive of the same question in the latter suit. And whether the cause of action or the ground of defense is the same in the two causes, may appear from the pleadings in the first cause, but if the pleadings are general and not specific, evidence must be introduced to show what was determined in the first cause. Wright v. Griffey, 147 Ill. 496; Louisville, N. A. & C. Ry. Co. v. Carson, 169 Ill. 247; Rubel v. Title Guarantee & Trust Co., 199 Ill. 110.

In discussing the latter question the Supreme Court in the Wright case, supra, said (p. 500):

“Ordinarily the pleadings in the former suit, when introduced, will show what was within the issue tried and determined therein. A fact or question is no less at issue, or within the conclusive effect of the verdict and judgment, because the averments of the declaration and traverse are general. The difference between cases where the issue is thus general, and those where it is limited, by the pleading, to a single point, is, that the matter which appears by the mere inspection of the record in the latter, must in the former be established by evidence. Parol evidence of what occurred upon the former trial and what was actually decided is always admissible in such cases.’-’ In the Rubel case the court said (p. 114):

“It is clear from the authorities that where a judgment is pleaded or offered in evidence in bar of a claim, and it is uncertain from the record what was adjudged at the time the judgment was entered, parol evidence is admissible to show what matters were in controversy, what testimony was given and what questions were submitted to the court for its determination at the time the judgment was entered. * * * But such evidence will never be received for the purpose of impeaching or contradicting the record. In Gray v. Gillilan, 15 Ill. 453, on page 455 it is said: ‘Where the cause of action or- ground of defense, or other matter, appear upon the face of the record, no proof is admissible; but where they do not, witnesses may be called to identify the parties, the cause of action or defense, or other matter litigated. ’ ”

From the foregoing authorities it is clear that where a question has been judicially determined in a court of competent jurisdiction and the question thus determined appears from the face of the pleadings, in a subsequent suit which involves the same question no evidence is admissible in the latter proceeding to determine what was decided in the former, except the pleadings in the former. And where it appears in the second proceeding that the matters involved have been formerly adjudicated, such adjudication is conclusive and a bar to the second suit.

In the case before us, plaintiff could" not recover unless she proved by competent evidence that a parol agreement had been entered into between her and John Early and since that question was adjudicated in the chancery suit, as appears from the opinion of the Supreme Court and from the pleadings, that question is no longer open for consideration. But in the record before us, although the pleadings in the chancery case were received in evidence, the court excluded the decree rendered by the superior court in that case. This was error, because without the decree itHoes not appear what the determination of the chancery suit was and since the decree was excluded and the defendant did not move, at the close of the evideuce, for a directed verdict, the case must he reversed,

The judgment of the circuit court of Cook county is reversed.

Reversed.

Thomson, R. J., and Taylor, J„ concur.


text:
    Acorn Lumber Company, Appellant, v. Friedlander Box Company, Inc., Appellee.
    Gen. No. 30,531.
    1. Saving questions fob review — waiver of right to question power of court to vacate judgment by participation in subsequent proceedings. Where a judgment is entered either in a suit in equity or an action at law, and the judgment is subsequently set aside and the cause then heard, both parties participating in the hearing, such participation waives the question as to the right of the court to vacate the judgment.
    2. Cobpobations — liability of corporation formed to continue business of individual, for pre-existing individual debts. Where a corporation is organized to take over and continue a business theretofore conducted by an individual, and such individual conveyed to the corporation all the assets of such business in exchange for stock in such corporation, it is liable to pre-existing creditors of such individual for the amount of his indebtedness to them.
    Appeal by plaintiff from the Municipal Court of Chicago; the Hon. Mathew D. Habtigan and T. H. Mtt.t.er, Judges, presiding. Heard in the third division of this court for the first district at the October term, 1925.
    Reversed and judgment entered in this court.
    Opinion filed May 5, 1926.
    Norman A. Beck, for appellant.
    Robert L, Huttner, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff brought suit against the defendant to recover $344.43, being the price of two lots of lumber sold and delivered to the Friedlander Box Company, not incorporated, plaintiff’s theory being that after the sale and delivery of the lumber, the box company was incorporated and the assets of the box company, not incorporated, were turned over to the corporation in payment of 2,000 shares of stock. The defendant filed an affidavit of merits and afterwards on the 8th day of January, 1925, the matter came on for hearing and the defendant being absent, there was a finding and judgment in plaintiff’s favor for the amount claimed — $344.43. Eight days afterwards the defendant moved the court to vacate the judgment, its motion was supported by affidavit, counter-affidavits were filed, and on January 21, 1925, the court allowed the motion and, the? judgment was vacated. After-wards the cause came on for hearing before the court ¡without a jury and there was a finding and judgment in defendant’s favor and plaintiff appeals.

Plaintiff contends that the court erred in vacating the judgment for the reason that the affidavits in support of the defendant’s motion were insufficient to show that the defendant was diligent and that it had a meritorious defense. This contention is met by the defendant and argument made that the action of the court in setting aside the judgment was justified. But this question is not properly before us, because after the judgment was set aside, the case was set down for hearing and both parties participated in the trial before the court. It has been repeatedly held by this court and by the Supreme Court of this State that where a judgment is entered either in a suit in equity or an action at law, and the judgment is subsequently set aside and the cause then heard, both parties participating in the hearing, such participation waives the question of the right of the court to vacate the judgment. Zandstra v. Zandstra, 226 Ill. App. 293; Herrington v. McCollum, 73 Ill. 476; Weisguth v. Supreme Tribe Ben Hur, 272 Ill. 541; Ringholm v. Fitzgerald, 208 Ill. App. 268.

Plaintiff further contends that the judgment is wrong and should be reversed for the reason that the defendant corporation was organized to take over and continue the business of the unincorporated company, and it accepted all of the assets of the unincorporated company in payment of its capital stock, and, therefore, defendant company is liable for the unincorporated company’s debts. We think this contention must be sustained. The question whether a corporation organized to take over and to continue a business theretofore carried on by an individual or by a partnership and where it issues its stock for the assets, is liable for the debts of such individual or copartnership, has not so far as we are advised been squarely decided by our Supreme Court, and the authorities from other jurisdictions are not in harmony. But we are of the opinion that upon reason and authority, the corporation should be held liable in such circumstances. Du Vivier & Co. v. Gallice, 149 Fed. 118; Andres v. Morgan, 62 Ohio St. 236; Baker Furniture Co. v. Hall, 76 Neb. 88; Reed Bros. Co. v. First Nat. Bank of Weeping Water, 46 Neb. 168; Bremen Sav. Bank v. Branch-Crookes Saw Co., 104 Mo. 425; Hall v. Herter Bros., 90 Hun (N. Y.) 280; Ziemer v. C. G. Bretting Mfg. Co., 147 Wis. 252; 7 R. C. L. 64; 1 Fletcher Cyc. Corp. see. 377; Shober and Carqueville Lithographing Co. v. Kerting, 107 Ill. 344; Lemars Shoe Co. v. Lemars Shoe Mfg. Co., 89 Ill. App. 245; Luce Furniture Co. v. Almini Co., 192 Ill. App. 386; Livingston County Agricultural Society v. Hunter, 110 Ill. 155; Swing v. American Glucose Co., 123 Ill. App. 156.

The record discloses that Ludwig Friedlander for many years was conducting business as the Fried-lander Box Company, not incorporated, at No. 1300 West Lake Street, Chicago; that on or about February 27, 1924, plaintiff sold to Friedlander two lots of lumber, the price of which aggregated $344.43; that shortly thereafter Friedlander became financially embarrassed, and there were several meetings of his creditors, notice of which was given to plaintiff and other creditors, but plaintiff did not attend the meetings; that on or about July 3, 1924, the Friedlander Box Company was incorporated with an authorized capital stock of $25,000 consisting of 2,500 shares of the par value of $10 per share; that Ludwig Fried-lander subscribed for 2,000 shares of the par value of $20,000 and that four other persons subscribed for one share each, having a total par value of $40; that Friedlander turned over to the corporation all of the assets which he had employed in the conduct of his business at the Lake Street address in payment of his subscription of $20,000. The incorporation was after-wards completed, directors were elected, among them being Ludwig Friedlander, and he was afterwards elected president and manager of the corporation and continued to conduct the business substantially as he had done in the past.

Prior to the incorporation, notice was sent by Fried-lander to his creditors, including plaintiff, apparently in accordance with an agreement reached by him with most of his creditors, in which it was stated that the defendant was then being organized as a corporation and that Friedlander proposed to sell to the corporation his property at No. 1300 West Lake Street, including the good will of the business, for which the corporation was to pay Friedlander $20,000 by issuing to him that amount of its stock and the defendant contends that by the giving of these notices, the provisions of the Bulk Sales Law were complied with, and, therefore, the defendant corporation was not liable. The Bulk Sales Law has no application whatever to the case before us and the argument made that it has is inapt. The record discloses, without dispute, that the defendant corporation paid Friedlander nothing for his property which he turned over to' it, but that it issued to him 2,000 shares of its capital stock. The defendant corporation having received all of Fried-lander’s assets for which it paid nothing, it is liable for the debts of the Friedlander Box Company, not incorporated.

In the Du Vivier case, supra, the United States Circuit Court of Appeals held: “A corporation organized by the members of a partnership, to whom all the stock is issued, to take over all of the property of the partnership, and continue its business at the same place is liable for the debts of the partnership, even though they are not expressly assumed.”

In the Andres case, supra, the Supreme Court of Ohio held that where the members of a partnership engaged in business, agreed among themselves to incorporate for the purpose of continuing the business and the firm assets were transferred to the corporation, each partner receiving his aliquot part of the capital stock and all of the property of the firm being transferred to the corporation, the' debts of the partnership became the debts of the corporation, and it was liable therefor whether it expressly assumed the partnership indebtedness or not. The court there said (p. 244): “All that the corporation paid for the property transferred to it was the stock issued in exchange, —simply a metamorphosis of a partnership into a corporation, without any change of individuals; and, unless it assumed the payment of the debts of the firm, there was no> consideration for the transfer of the property, — for the stock without the property represented nothing and was worth nothing. That a corporation, could be formed, and, with its capital, purchase a partnership and its business, without being liable for its debts, unless expressly assumed, is not doubted. But this is not such a case. * * *

“There was in fact no purchase in this case. It, as shown, was simply a change from doing business in one capacity to that of another, — the- same persons changed from partners to corporators; and this distinction reconciles many cases on the subject that might otherwise seem in conflict. * * * Brushing aside the fiction of a legal entity, it is seen that no real change has taken place, and that, in looking to the new formation for payment, the creditor looks to the same persons, possessed of the same property and rights, he contracted with in the first instance.”

In the Baker Furniture Co. case, supra, the Supreme Court of Nebraska held: “A corporation organized for the sole purpose of continuing the business of a partnership firm, which takes over to itself the ownership and control of the assets thereof, thereby assumes the debts of such firm to the extent of the property so received.”

In Luce Furniture Co. v. Almini Co. 192 Ill. App. 386, it was held: “A corporation created to take over the business of another corporation of the same name whose charter had expired, the capital stock of which was paid by the transfer of all the property and assets of the latter, is liable for the unpaid purchase price of goods ordered by the latter prior to the expiration of its charter.” To the same effect is the Hunter case, where it was said (p. 160), “creditors of the institution, whether their claims accrued before or after the reorganization, all stand upon precisely the same footing, and the only way for one to obtain an advantage over the others is by the exercise of superior diligence in the prosecution of his claim to judgment, and thus secure a judgment or execution lien upon the company’s property.” The same rule is true whether the business was originally conducted by an individual or a corporation which individual or corporation afterwards turned over all of Ms or its assets to a new corporation, notMng being paid but stock . in the new corporation. It follows from what we have said, there being no dispute that plaintiff’s claim was due and unpaid, that it was entitled to a judgment.

The judgment of the muMcipal court is reversed and judgment entered in this court in favor of plaintiff against the defendant for $344.43.

Judgment reversed and judgment entered in this court.

Thomson, P. J., and Taylor, J., concur.