author: Mr. Justice Murphy

text:
    In re Estate of Robert J. McIlrath, Deceased. Arthur McIlrath et al., Petitioners, v. Mary B. McIlrath, Respondent.

      Opinion filed June 4, 1934.
    Rehearing denied August 27, 1934.
    D. L. Duty, C. H. Thompson and Lloyd H. Melton, for petitioners.
    Miley & Combe and Kane & Scott, for appellee.
   Mr. Justice Murphy

delivered the opinion of the court.

Appellants, hereinafter referred to as petitioners, filed their petition in the estate of Robert J. Mellrath, deceased, which estate was in administration in the county court of Saline county. The petitioners, 18 in number, are a part of the residuary legatees under the will of said deceased, and the respondent is the surviving widow.

The petition was filed under sections 81 and 82, chapter 3, Cahill’s Statutes, 1Hf 82 and 83, and prayed that the respondent be cited to appear before the court to- be' interrogated concerning certain property alleged to belong to said estate and to settle the title and rights of the parties to such property.

.The case was appealed to. the circuit court and on a trial there with a jury, the court, at the close of all the evidence-, granted respondent’s motion for a directed verdict. Judgment was entered on the verdict and petitioners perfected their appeal to this court.

The question presented involves the title to $57,542.50, which was, at the time of the death of Robert J. Mellrath, on deposit in a savings account in the First Trust and Savings Bank of Harrisburg. For a proper consideration of the points raised, it is necessary to consider, with other facts, the terms of a post-nuptial contract between said decedent and respondent, his will and the terms upon which said deposit was made and the origin of the funds constituting the deposit.

Robert J. Mcllrath and respondent were married November 17, 1913. She was then 48 and he was 69 years old. December 5,1914, they entered into a post-nuptial contract which recited that Robert J. Mcllrath had considerable estate, consisting largely of personal property, which he had accumulated prior to their marriage, that he desired to so dispose of his estate so that after his death, his wife would have sufficient to support her in comfort during her life and that he could make such disposition of the remainder as he might desire. By the fourth clause, it was agreed that their residence property, a lot in Harrisburg, the household furniture and $10,000 in money would be sufficient to maintain and keep her for the remainder of her life after his death. The sixth clause is as follows:

“Sixth: It is therefore mutually agreed by and between the said Robert J. Mcllrath and the said Mary Mcllrath, that the said Robert J. Mcllrath will not dispose of his estate during his life except by will, but will keep the same for the maintenance and comfort of bim and his said wife so long as they shall live as husband and wife, and will provide by his last will and testament that his said wife, shall have their home above described, the household goods and the sum of Ten Thousand Dollars which shall be payable before the remainder of the estate shall go to the payment of other legacies.

“That the said Mary Mcllrath agrees that if her said husband shall not dispose of his said estate but will keep the same for their maintenance and comfort during the time they are husband and wife, and will by Ms last will and testament give to her the home and household goods above described and the sum of Ten Thousand Dollars in money, in consideration thereof, she will accept the same in full for all that may be due her under the statute of the State of Illinois; and hereby consents and agrees with her said husband in consideration aforesaid, that her said husband may dispose of the remainder of his estate as he may desire and that she will not in any manner interfere with any disposition he may make of the remainder of his estate. ’ ’

May 2, 1916, Robert J. Mellrath executed his will which gave to respondent the property she was to have under the post-nuptial contract, except it does not refer to the household furniture. After providing for certain charitable bequests of $5,000, all the residue was bequeathed to certain collateral heirs of whom the petitioners are a part. Testator died June 30, 1932. The executor named in the will died before testator died. Respondent filed a petition to probate the will and nominated George O. Davenport as administrator with the will annexed. The will was admitted to probate.

The major part of the money in the savings account was interest, dividends and income from personal property, all of which belonged to deceased and the greater part of which had been accumulated by him after the date of the post-nuptial contract.

The savings account was opened in said bank January 5, 1927, and at that time Robert J. Mellrath and Mary Mellrath signed a contract as follows:

“We hereby agree to the By-Laws, Rules and Regulations of this Bank. It is hereby expressly agreed with

First Trust and Savings Bank of Harrisburg, Illinois,

that all moneys deposited with said bank by either or both of the undersigned shall be placed by said bank to the credit of us jointly, and may be withdrawn from, or paid out by said bank upon the request or order of both or either of us and that upon the death of either of us, the survivor shall have the absolute right to withdraw or be paid all moneys not then withdrawn.

Name E. J. Mellrath

Name Mary B. Mellrath”

The account was opened on said date with a balance of $38,000. This total was the proceeds of a check for $1,500 and two interest bearing certificates of deposit. Each of these certificates was payable to Eobert J. Mellrath and Mary Mellrath.

From the time the account was opened to the date of the death of said deceased, there were three withdrawals aggregating $2,030.88. It does not appear who made the withdrawals. The account was increased by the adding of interest every six months and the making of other deposits. All deposits were made by deceased.

The account pass book was kept in the deceased’s safety deposit box in said bank and was there at the time of his death. Deceased and his wife both had access to the box and after his death, she presented the pass book to the bank and caused the whole account to be transferred to her name.

In 1919, the legislature amended the statute in reference to joint tenancies or joint ownership of personal property with the right of survivorship, and by the proviso to section 2, chapter 76, Cahill’s Statutes, if 2, it is provided, “that when a deposit in any bank or trust company transacting business in this State has been made or shall hereafter be made in the names of two or more persons payable to them when the account is opened or thereafter, such "deposit or any part thereof or any interest or dividend thereon may be paid to any one of said persons whether the other or others be living or not, and when an agreement permitting such payment is signed by all said persons at the time the account is opened or thereafter the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payments so made.”

In Illinois Trust & Savings Bank v. VanVlack, 310 Ill. 185, the court in construing said proviso said, “It provides particularly for the right of survivorship, when a deposit in a bank shall be made in the names of two or more persons when- an agreement permitting payment to any one of such persons, whether the other is living or not, was signed by all the persons at the time the account was opened or afterward.”

Respondent’s rights in this deposit are created by virtue of the contract she and deceased signed with the bank at the time of opening the account. Her rights therein are not determined by the rules controlling joint tenancy or tenancy in common, nor by the rules governing gifts inter vivos.

Evidence admissible to prove or disprove an intention of a donor in the making of a gift inter vivos would have no bearing upon the questions involved in a proceeding to set aside a deposit agreement with provision for the right of survivorship. Evidence as to who had control of the bank pass book is not material in this case. Reder v. Reder, 312 Ill. 209. Petitioners concede deceased’s signature is attached to the contract and that the legal effect of it was to create a joint account which was payable to the survivor but they, contend that it was not the intention of deceased to have entered into a contract which gave respondent as survivor the whole of the deposit. In other words, they contend deceased misunderstood the legal effect of the contract. To sustain their contention that the contract was invalid, petitioners could have attacked the validity of its execution on the same grounds any similar contract might be attacked, such as fraud, undue influence or mental incapacity, but a mistake in law as to the legal effect of a contract actually signed and fairly entered into is not grounds for avoidance,

“If an agreement or written instrument expresses the thought and intention which the parties had at the time and in the act of concluding it, no relief, affirmative or defensive, will be granted with respect to it upon the assumption that their thought and intention would have been different if they had not been mistaken as to the legal meaning and effect of the terms and provisions by which such intention is embodied or expressed, even though it should be that their intention would have been different if they had been correctly informed as to- the law.” Holbrook v. Tomlinson, 304 Ill. 579, 584.

Respondent in answer to the petition for a citation said she had the amount of the deposit and claimed it as her own by virtue of said deposit contract. The contract provided for by statute and regular on its face made a prima facie case for respondent and the burden was then on petitioners to prove that the contract had been entered into under such circumstances as to vitiate it. Riggs v. Powell, 142 Ill. 453.

Petitioners further contend that the deposit contract and the rights created thereunder in favor of respondent are in some way controlled and affected by the provisions of the post-nuptial contract.

The post-nuptial contract had one primary purpose, namely, to make ample provision for the wife if she should survive. As to the balance of any estate, deceased reserved the right to dispose of it as he might choose. He did not contract that such was to be given or devised to petitioners. He could give it to charity or dispose of it to any person he might select, including his wife. Respondent covenanted in said contract that in the event of his death before hers, she would take the property specified in the contract in full for all that would be due her under the statute of this State; that is, she would take the benefits provided for in the contract in lieu of all that any statute would give her as surviving widow. Her rights in the deposit are created by contract and not by reason of any statute which makes provision for interest of widows in their husband’s estate and therefore she did not by the post-nuptial contract bind or estop herself from taking the benefits under the deposit contract. By the post-nuptial contract, she further covenanted that her husband might dispose of the remainder of his estate as he might desire. There was nothing in such covenant that would estop her from taking the remainder or a part thereof, if her husband should elect to give it to her. The effect of the post-nuptial contract was that she could not be forced to take less than the contract awarded, but it did not prevent her from taking more if her husband gave it to her.

The deceased in the exercise of the right reserved in the contract to dispose of the remainder of his estate elected to divide it in two ways. By the residuary clause of the will he made provision for the petitioners, and by the deposit contract he disposed of the deposit. By the making of the will, petitioners had no right in the residue of his property; he could change or destroy the will or dispose of the residue of his estate in any way he might elect.

There was nothing in the post-nuptial contract or will that prevented deceased from contracting in reference to the deposit and there is nothing in either of said instruments that in any way affects the rights of respondent in said deposit or that constitutes her a trustee holding a fiduciary capacity in reference to said bank account and the fact that she signed the petition to probate the will would not constitute an election to take the provision under the will and post-nuptial contract to the exclusion of the benefits under the deposit contract.

The sole question for the trial court to determine on respondent’s motion for a directed verdict was whether there was any evidence bearing upon the validity of the deposit contract, which, assuming its truth, fairly tended to prove petitioners’ contention in reference thereto. Libby, McNeil & Libby v. Banks, 209 Ill. 109; Chicago & N. W. Ry. Co. v. Dunleavy, 129 Ill. 132.

The deposit contract was signed by deceased in the bank in the presence of George O. Davenport, an officer of said bank. He is the only witness testifying to its execution. He testified in this hearing to a state of facts that would tend to prove the contract was signed voluntarily and was fairly entered into, while by way of impeachment, it appeared that the witness had made statements when not under oath and had testified to facts in the county court which would tend to prove that deceased’s signature was attached to the contract under circumstances where he did not know what he was executing. This and other discrepancies appearing in his testimony does under the facts in this case lead us to the conclusion that the court erred in directing the verdict for the respondent.

For the reasons assigned, the judgment of the circuit court is reversed and the cause remanded.

Reversed and remanded.


source: Caselaw Access Project

license: Public Domain

text:
    F. B. Miller Agency, Inc., Appellee, v. The Home Insurance Company et al., Appellants.

      Opinion filed June 4, 1934.
    Rehearing denied August 27, 1934.
    Hicks & Folonie, Ceaig & Craig and John L. Kagy, for appellants.
    June C. Smith, Wham & Wham and Hugh V. Murray, Jr., for appellee.
   Mr. Justice Murphy

delivered the opinion of the court.

F. B. Miller Agency, Inc., hereinafter referred to as plaintiff, instituted in the circuit court of Marion county its action of trespass on the case against 11 insurance companies and 11 individuals. With the exception of defendant John O. Bolin, all the individuals were alleged to be the State or special agents, respectively, of said companies. Bolin was the purchaser of the property which was the subject of this controversy. At the conclusion of all the evidence, plaintiff dismissed as to Bolin and certain other individual defendants. Judgment was entered against all the companies and five of the individuals. They all join in this appeal and will be hereinafter referred to as defendants.

The declaration upon which the case was tried consisted of four counts. The first charged that the plaintiff was the duly authorized agent of the defendant companies to solicit, execute and issue their respective contracts or policies of insurance in the City of Centraba; that as compensation, it was to receive a percentage of the premiums; that in connection with said business, the plaintiff was possessed and the owner of certain books, records, lists of the dates of expiration of the policies of insurance, commonly known as ex-pirations; that May 12, 1932, the defendants, contriving and intending to injure plaintiff’s business, wrongfully and maliciously, did take and carry away from said plaintiff the said records and memoranda and converted them to their own use.

The second count charged substantially the same acts of conversion and intent to injure plaintiff’s business as the first count but further charged that after the conversion on May 12, defendants wrongfully published and declared to the public and to the insurance customers of the plaintiff that all of plaintiff’s agencies had been sold to John O. Bolin and that persons holding policies issued by plaintiff’s agency should look to the Bolin Agency for further insurance service.

The third count charged a conspiracy to damage and destroy plaintiff’s business and that by virtue and in consequence of the conspiracy, the defendants terminated plaintiff’s authority to represent them as their agent, wrongfully and maliciously converted to their own use certain property being the same property described in the first count, and published to the public and the customers of the plaintiff the same matters as charged in the second count.

The fourth count was the same as the third, except that it was alleged as an additional consequence of the conspiracy, the defendants did after the conversion of the property wrongfully and maliciously complain to the State Insurance Department that the plaintiff and its officers were unfit and not qualified to engage in the insurance business and not entitled to a license as required by law and that by reason thereof plaintiff was hindered and delayed in procuring a license.

The defendants filed the general issue plea and each of the defendant companies filed two special pleas; one denied that any of the individual defendants, except' their own agent, was their agent and the other plea denied plaintiff’s agency and ownership of the property.

Trial was had before the court and resulted in a finding and judgment against all the defendants for $16,500, which included $8,275 punitive damages.

The evidence shows that F. B. Miller started writing insurance under and pursuant to agency contracts in 1907 and continued until the business was transferred to the plaintiff company at the time of its incorporation, July 7, 1930. R. F. Niblo entered Miller’s employ in 1921 and devoted all his time to the business until the incorporation of plaintiff’s company. During Niblo’s employment the earned commissions rose from $500 in 1921 to $10,000 in 1930.

Plaintiff company was incorporated with a capital stock of $20,000, with 200 shares. F. B. Miller and wife owned 198 of the shares, Niblo one and Florence McCawley, an employee in the office, one. There was never any change in the ownership of the stock. The power granted in the charter was to act as agent for insurance companies and to solicit and write insurance of all kinds.

At the time of incorporation, F. B. Miller transferred to the corporation in payment of stock, furniture and fixtures, $6,000,- accounts receivable $14,318.48 and insurance agencies and insurance business $13,581.46. The company assumed certain- obligations of the business.

Miller was president, Niblo vice president, and Florence McCawley, secretary-treasurer. After the incorporation, the business was conducted along the same general lines as before, and the agency contracts which Miller had held with the defendant companies were transferred to the corporation. Niblo continued in active management of the business.

The commissions collected by Miller for the years 1927-1929, inclusive, were approximately $9,000 per year; for 1930, the commissions were $10,299; 1931, $4,992.02 and the first three months of 1932, $834.21.

On April 1, 1932, the plaintiff company owed approximately $10,000, $4,389.02 of which was due the defendant companies for insurance premiums. It had accounts payable of $9,100, part of which was uncollectible, and owned the same office furniture which it had at the time of incorporation.

Miller was director and president of a bank in Centralia which prior to April 1, 1932, had been placed in the hands of a receiver for liquidation. He was- personally indebted to the bank in a large amount. $5,100 of the plaintiff’s debts were held by this bank but the note evidencing the debt was not signed by the corporate name. The bank held as collateral 105 shares of the capital stock of the plaintiff company. The receiver requested Niblo to sign an affidavit to the effect that said indebtedness was the debt of plaintiff. Miller was in Florida and Niblo sought advice in reference to said affidavit from defendant Coen who was the representative of the Home Insurance Company. He advised Niblo to consult a lawyer and went with him to see one. The lawyer advised Niblo to sign the affidavit but Coen was not satisfied with the advice and suggested they see another lawyer which was done. Defendant Wallace was called into the conference and a general discussion of the financial condition of the plaintiff company was had. That night, with the consent of Niblo, the supplies, expiration records and private memoranda were removed from the office occupied by the plaintiff to a nearby room. Wallace immediately communicated with the representatives of the defendant companies and a meeting of the representatives and Niblo was had April 1 and the action taken in removing the records was fully discussed. Immediately following the removal of the supplies the several agency contracts between the plaintiff and defendant companies were terminated by action of the companies acting through their representatives.

After the removal of the files from the office, it was arranged that Niblo should collect outstanding accounts due the plaintiff and the agents of all the defendant companies agreed that all amounts so collected should be paid to Wallace. At the time of the removal of the files, there was no talk of sale of the property of the plaintiff but the whole object seemed to have been to collect enough of the accounts due the plaintiff to discharge its debts to the defendants, as they say, to save the agency.

A few days after April 1, Wallace made repeated requests of Niblo to collect the accounts and finally it was suggested by him that the business would have to be sold and Niblo made inquiry of various prospective purchasers but to no avail. The parties talking of sale at this time evidently contemplated the sale of the entire assets except perhaps the accounts receivable. Collections made by Niblo between April 1 and May 12 and credits from cancellations reduced the aggregate debt of plaintiff to all the defendant companies to less than $2,000. The greater part of this had been paid to Wallace prior to May 1st.

Wallace on May 7 sold to John O. Bolin for $2,000 all the expirations, records, memoranda sheets and all other records which had been removed from the office on April 1 and on the same day all the records were removed to Bolin’s office. Defendants immediately appointed Bolin their respective agent.

After May 12, plaintiff undertook to continue in the insurance business, holding* the agency of one fire company and a surety and accident company.

Between the dates of May 12 and September 1, seven of the defendant companies wrote the State Insurance Department to the effect that plaintiff was unethical in its practice and unfit to hold a State license and suggested that the department investigate the matter. All of said letters were centered on the same subject matter, namely, plaintiff’s unfitness to act as an agent. The information detailed in the several letters is so similar in wording, composition and manner of presentation that the inference may well be drawn that it was a part of a scheme for concerted action to prevent plaintiff from holding a State license. Miller was summoned before the department to show cause why the license should not be revoked. Interviews were had with Niblo but no licenses were revoked.

The record known in insurance circles as expirations is in effect a copy of the policy issued to the insured, which contains the date of issuance, name of the insured, expiration, amount, premiums, property covered and terms of insurance. This is made by the agent at the time of the issuance of the policy on a blank form furnished by the company. A copy of the same is sent to the company. Plaintiff claims that in addition to said record there were certain memoranda made at the time of the solicitation of the business which referred to matters that were not included in the above and were private in their nature; that they were attached to the so-called expiration record and included in the transfer to Bolin. Defendants do not deny the existence of such memoranda, but those defendants, who were present when the records were removed from plaintiff’s office, testified that they did not see the same. It is evident that the expiration record and the memoranda substantially cover the same subject matter and would be used for the same purpose and we will therefore treat them as one and refer to them as expirations.

It is conceded that defendants had the right to revoke the agency of plaintiff at any time. There is no evidence of any contract or agreement between the parties covering the ownership of said expirations.

Plaintiff claims to be the owner of the expirations while the defendants contend that the ownership is regulated by custom. The custom contended for by defendants is that the agent owns the expirations so long as there is no default in his contract with the company; that by said custom, he is in default if he does not make remittance to the company of the premiums within 45 days from the last day of the month in which the insurance was written and that when such default occurs, the title of the expirations becomes the property of the company.

To prove this custom, defendants introduced the testimony of six witnesses who are engaged in the insurance business in various parts of the State. All testified that the premiums were due to the company within said 45-day period. Each of them testified on direct examination that there was in Illinois in 1932 and for several years prior thereto, a custom that expirations belonged to the agency until the agent defaulted in his payments to the company. On cross-examination, four of these witnesses testified that if the company sold the expirations for more than the amount due it* from the agent, such balance belonged to the agent. One witness was not interrogated on that subject on cross-examination. The sixth witness, defendant Wallace, testified on cross-examination that the surplus from the sale of the expirations belonged to the agent, less expenses incurred by the company in making the sale. The custom covered by the testimony of these witnesses on direct examination would vest in the company upon default of the agent an absolute title to the expirations, while the evidence given on cross-examination would create in the company a secret lien with the right of sale, with the balance, if any, to be paid to the agent. It could not be both. Such evidence does not tend to establish a custom. Furthermore, none of these witnesses either in direct or cross-examination has testified to a statement of facts that would prove that the custom was so universal and had such uniformity and antiquity that it could be presumed that the parties contracted in reference to it.

A custom or usage to become binding upon the parties must have antiquity as well as uniformity and universality. Crawford v. Clark, 15 Ill. 561. It must appear that it has been uniformly acquiesced in for such a period of time that it is presumed that the parties had it in mind at the time of making the contract and that they entered into the contract intending that such custom or usage was a part thereof. Dixon v. Dunham, 14 Ill. 324; Bissell v. Ryan, 23 Ill. 566. A custom is not established by proving that it was either one of two things. Neither could a custom be established by proving that it was one of two things and that one party had the option to declare which one of the two it would accept. Federal Reserve Bank of Richmond v. Malloy, 264 U. S. 160. A custom should be established by the testimony of several witnesses. Bissell v. Ryan, supra.

For a long period of time plaintiff company and its predecessor, F. B. Miller, had not observed the custom of making remittance of premiums to the defendant companies within the 45-day period. The payments were remitted and accepted by the companies covering periods from 45 to 120 days from the date of the issuance of the policy. Proof of payment in such manner over such a period of time destroys the presumption that the parties contracted with reference to the custom.

Under the principles announced in the foregoing authorities, the evidence in this record falls short of establishing a custom controlling the ownership of these expirations.

No case has been cited and we have been unable to find any where the ownership of' insurance expirations has been under consideration in the courts of review of this State. Where the matter has been a subject of judicial termination in the courts of other jurisdiction, it has often been decided upon facts applicable to that particular. In Alliance Ins. Co. v. City Realty Co., 52 F. (2d) 271, the court found that the custom contended for by the defendants in this case had been established by the evidence and the default of the agent being conceded, awarded the expirations to the company; in Arrant v. Georgia Casualty Co., 212 Ala. 309, 102 So. 447, the court held that the contract of agency in that case controlled the ownership of ex-pirations ; in Whitney v. Whitney, 27 Ky. L. Rep. 1197, 88 S. W. 311, the court in a contest between partners directed the sale of the expirations as a part of the-partnership assets; in In re Chapman (D. C. W. Dist. Ky.), 50 F. (2d) 252, the court held in a bankruptcy matter in a contest between the bankrupt agent and the companies that the company had failed to prove a custom as to ownership of expirations and that the expirations were assets of the agency.

In considering the ownership of expirations, we are aware of the underlying principle of agency, that gives to the principal the ownership of lists of customers and other similar data obtained during the agency and of the rule announced in that line of cases which gives the principal the equitable right to enjoin the agent from the use of such lists after the employment has been terminated on the theory that they are trade secrets. In our opinion; the ownership of the expirations is by reason of the peculiar relationship existing between an insurance company and its agent, and the nature of the service the agent is to render, removed from the application of the general rule. The agent may represent several companies engaged in writing the same kind of insurance. The agent solicits the business for the agency rather than for any particular company. In doing so, he acquires knowledge of the client’s insurance needs and many times the amount of insurance to be written on a single risk is in excess of the amount authorized by any company he represents. He divides the risks among the companies in such manner as he may choose. He may so divide it that some of the companies he represents may not receive any part of it. Any company not receiving any part of the risk could have no right or interest in the record or information contained in such expirations. The agent may devote the whole of his time to the benefit of the agency but the ultimate benefits from such service is divided among the several companies he represents. Expirations are acquired and prepared at the expense of the agent. We are of the opinion that under the facts of this case, justice and fair dealing between the company and the agency demands that the agent be declared to be the owner of the expirations.

Defendants’ next contention is that the expirations were sold with the consent of the plaintiff. At times prior to the sale, there were conversations between some of the individual defendants, Niblo and Miller, relative to a sale but in none of such conversations was there anything said or done for or on behalf of the plaintiff that would be binding upon it. Bolin’s name as a prospective purchaser was not suggested and no terms of sale were considered. A few days before the sale at a meeting of the representatives of the defendant companies, W. G-. Wilson, an attorney, was present, representing the plaintiff, and expressly told them they could not sell the agency. The trial court found that no consent was given and the evidence supports that finding.

Defendants also contend that the evidence does not prove a conspiracy as alleged in the third and fourth counts. It is not material since there is evidence proving the allegations of the first and second counts and if the proof supports one count that is sufficient to support the judgment. Furthermore, the allegations of conspiracy contained in the third and fourth counts may be treated as surplusage, since the evidence is sufficient to prove that the defendants committed the other wrongful acts alleged in said counts. Doremus v. Hennessy, 62 Ill. App. 391; Hyman v. Burmeister, 216 Ill. App. 98.

Defendants contend that the advertising notices published by Bolin in the Centralia paper were not binding upon them and. should not be considered in assessing damages.

In addition to the agencies of the defendant companies, the plaintiff represented the Travelers’ Fire, Travelers’ Indemnity, American Surety and the Standard Accident and Surety Companies. When the expirations were removed from plaintiff’s office, the records pertaining to the business of these companies were also removed and when the expirations were sold and delivered to Bolin, these records were included therewith. Wallace knew the Travelers’ Fire had declined to join the other companies and also knew that none of said companies had revoked plaintiff’s agency. The records in reference to the business of these latter companies were kept by Bolin for about 10 days following" the sale. In an advertisement in the local paper of issue of May 16, Bolin listed the names of companies he represented and included therein Travelers’ Fire and Travelers ’ Indemnity. Subsequent advertisements at various' dates to August 31 appear in the record but the'names of these latter companies do not appear therein. Inasmuch as all the companies authorized or ratified Wallace’s actions in making the sale of the expirations and the advertising being a direct consequence of that sale and having been published in the paper at the request of Bolin, who was then the agent of the several defendants, we are of the opinion that their admission in evidence was proper.

It is defendants ’ contention that there is no proof of actual damage and therefore no basis for punitive damages. This action is to recover damages to plaintiff’s business. Damages to an established business caused by intermeddling or by publication of false reports about the business or other similar, wrongful acts, cannot ordinarily be proven with mathematical exactness but that is not required to justify a recovery. All that the law requires by way of proof of damages is that the evidence shall with a fair degree of probability tend to establish a basis for the assessment of damages. Barnett v. Caldwell Furniture Co., 277 Ill. 286; Landis v. Wolf, 206 Ill. 392.

All witnesses, both for the defendants and for the plaintiff, testified that the expirations which were sold had a value. As is usual in such cases, there is a wide variance of opinion as to valuation. The lowest estimate of value fixed by defendants ’ witness was $3,000, while plaintiff’s evidence was $25,000. The written opinion the trial court rendered is printed in the abstract. It shows that the court found the fair market value of this entire agency and of all the property to be $15,000, but that the part remaining* had some value and that the actual damage after giving credit for the amount received from the sale of the expirations, which was applied on plaintiff’s debts, was $8,225 and added punitive damages to make a total judgment of $16,500. The trial court’s finding of actual damages is within the range of the testimony and is supported by the weight of evidence and should be sustained. Moore v. David J. Molloy Co., 222 Ill. App. 295, 298; People ex rel. Drainage Com’rs v. Chicago & E. I. Ry. Co., 258 Ill. App. 535, 540; MacCracken v. First Nat. Bank of Wheaton, 204 Ill. App. 20, 21.

The acts of the defendants disclose a wilful and wrongful disregard of plaintiff’s rights and the finding of the lower court that the defendants were actuated by malice is supported by. the evidence. Punitive damages were properly assessed. Drohn v. Brewer, 77 Ill. 280, 284; Sherman v. Dutch, 16 Ill. 283; Johnson v. Camp, 51 Ill. 219.

The record in this case is voluminous and other points have been urged by the defendants but after a careful examination of the same, we are satisfied that such points are without merit, that the evidence fully supports the findings of the circuit court and that the judgment should be affirmed.

Judgment affirmed.


author: Mr. Justice Stone

text:
    William E. Vick, Appellee, v. Illinois Banker’s Life Association of Monmouth and Illinois Banker’s Life Assurance Company, Appellants.

      Opinion filed June 4, 1934.
    Rehearing denied August 27, 1934.
    Borden & Melburg and Dewey & Cummins, for appellants.
    C. S. Miller, for appellee.
   Mr. Justice Stone

delivered the opinion of the court.

This suit in assumpsit was brought by appellee on three insurance policies issued by appellant, Illinois Banker’s Life Association of Monmouth, Illinois, to Flora L. Vick, now deceased, of Karnak, Illinois. The first of these policies was No. 40117 and was for $2,000. The second, No. 53150, was in all respects the same as the first except it was for $1,500. The third was issued with the same assured and the same beneficiary, was numbered 101845 and was for $2,000. Bach of these provided for the amount of premium to be paid, fixed the terms of payment thereof and provided that it should lapse on failure to pay the premium in accordance therewith.

The first two of these policies provide that upon satisfactory proof that the assured has become totally and permanently disabled from any cause (the result of crime or attempted crime excepted) and would thereby be continuously prevented for life from doing any labor, or the prosecution of any kind of business, then the association would pay to the assured upon due and sufficient proof, one-half of the face of the policy and the remains to the beneficiary at the death of the assured, the policy having been continued in force. These policies further provided that proof of disability must be furnished the association within six months after the commencement of the total and permanent disability. The third policy provided for payment to assured because of total and permanent disability brought about by accident, one-half of the amount of said policy in lieu of all other benefits and on surrender of said policy.

On November 19, 1929, The Illinois Banker’s Life Association and the Illinois Banker’s Life Assurance Company entered into a contract whereby the association transferred to said company its risks, and the policies issued by the association were reinsured by the company.

On May 7, 1929, Flora L. Vick submitted to the association claim for total and permanent disability under the first two policies, in the sum of $1,500. In her affidavit in connection with the claim she swore that she became totally and- permanently disabled on May 1, 1928. The company denied liability on this claim. Flora L. Vick died June 4, 1932. On October 21, 1932, William E. Vick, beneficiary in all three of the policies, made claim for the amounts provided therein. On November 18, 1932, appellant, Illinois Banker’s Life Association, declined to pay said claims on the ground that said policies had lapsed for nonpayment of premiums. Thereafter, on December 8, 1932, Wm. E. Vick brought this suit.

The declaration sets forth the three policies in haec verba and alleges full compliance by Flora L. Vick and appellee of all conditions which they were to perform and a refusal to pay by the appellants. To the amended declaration, appellants pleaded forfeiture for nonpayment of premiums. To these pleas appellee replied denying lapses of the policies and alleging that under the claim of total and permanent disability filed by Flora L. Vick in May, 1929, under the first two policies there was sufficient money in the hands of appellants to pay all instalments due on the three policies. Appellants demurred to these replications but the court overruled the demurrer. Appellants then filed rejoinders alleging that due and sufficient proof of total and permanent disability was not submitted and that no money with which to pay premiums under the provisions of said policies was due.

The jury returned a verdict in favor of appellee in the sum of $5,491.94. The court ordered a remittitur of $1,883.05, which was file’d by.appellee. After overruling a motion in arrest of judgment, the court awarded appellee judgment against appellants in the sum of $3,608.89. To reverse said judgment this appeal is prosecuted.

A motion was made to dismiss this appeal first because a clerical error had been made in entering the judgment. We extended the time for appellants in order that they might apply to the trial court to have this mistake corrected. The correction was made and record thereof certified' to this court. The motion also alleged that appellants had failed to furnish an abstract in compliance with rule fourteen. The abstract furnished was a poor excuse for an abstract, but the same rule, the violation of which appellee complains, tells him exactly what to do in such cases.

Another mistake was made this time by appellee in the use of the word “plaintiff” instead of “assured” in his replication. He claims that he asked leave of the court to amend said replication by changing this word but the record does not disclose that any leave was given. He asked that such leave be given here, which we are inclined to give in so far as we can without actually changing the record as it went to the jury._ _ ■

_ It is difficult to conceive of as many mistakes being made in the trial of one lawsuit as were made in this. We have, however, brushed all these aside in so far as we could without doing violence to the rules of orderly procedure. We may say, though, that counsel owe to an appellate court the duty of presenting a record in such form that it may be understandingly read without wading through a maze of doubt as to what was done and what was intended in a given matter. Were these policies properly declared lapsed? If they were, this lawsuit is ended. They undoubtedly were lapsed, unless, as appellee claims, there was money in the hands of appellants belonging to the assured which appellants could and should have applied to the payment of such premiums on these policies as was necessary to keep them alive.

Forfeitures are not favored in Illinois and will not be upheld in contracts for insurance if by reasonable construction such result can be avoided. Bolton v. Standard Life Ins. Co., 219 Ill. App. 177; Glassman v. Lescht, 318 Ill. 128. This is the law of the State but this does not mean that courts are to put unreasonable interpretations upon insurance contracts and thus deprive insurance companies of substantial rights inuring to them under the law, their charters and their contracts. No assessments were paid by the assured or by appellee after July, 1929. In May of that year the assured had made her claim for total and permanent disability. On May 29th of that year said claim had been denied. This left an open question whether appellants had funds in their hands belonging to the assured. The assured seemed to take for granted that appellants were indebted to her. It seems that it would have been the part of wisdom to have kept on paying her assessments until it was finally determined whether the company was indebted to her. This she did not do. But, assuming that the company was indebted to her as she claims, could the appellants have paid the delinquent premiums out of it and were they obligated so to do? Counsel rely on Supreme Lodge v. Meister, 204 Ill. 527. That was a case in which a double payment of premiums had been made leaving an excess in the hands of the company, which was premium money and which the company was bound to apply for that purpose.

To hold with the contention of appellee in this case is to hold that any money in the hands of an insurance company from any source belonging to the assured must without regard to the terms of the insurance contract or the wishes of the assured be applied to the payment of delinquent premiums so as to prevent lapse. We do not find warrant for this position in any authority which has come under our examination. On the other hand we are of the opinion that the late case decided in the United States Supreme Court, Williams v. Union Central Life Ins. Co., 291 U. S. 170, 78 L. Ed. 711, finally determines appellee’s contention adversely to him.

There was a forfeiture of these policies and the trial court erred in overruling appellants’ demurrer to appellee’s replications. It is true that appellants did not stand by their demurrer, but elected to plead further, but our holding that there can be no recovery under these policies makes a demurrer to the replications an effective way of making operative said holding.

The judgment is reversed and the cause remanded to the circuit court with directions to that court to sustain the demurrer to appellee’s replication.

Reversed and remanded with directions.


text:
    Fred J. Heeren and Katie C. Heeren, Defendants in Error, v. Delbert H. Smith and Avis M. Smith, Plaintiffs in Error.

      Opinion filed June 4, 1934.
    Rehearing denied August 27, 1934.
    James O. Miller and Henry B. Baton, for plaintiffs in error.
    Springer & Springer, for defendants in error.
   Mr. Justice Stone

delivered the opinion of the court.

Plaintiffs in error purchased a farm from the defendants in error on April 24, 1928, paying $5,000 in cash, and giving a mortgage to the Woodriver National Bank for $5,500, the balance of the purchase price. The mortgage contained a clause for accelerating the original five-year maturity upon default in the payment of interest or taxes. Plaintiffs in error made the payments called for until 1932, when they defaulted in the payment of interest and taxes. On November 7, 1932, defendants in error, assignees of the mortgage, filed a bill to foreclose the mortgage in the circuit court of Madison county, Illinois.

Plaintiffs in error answered, admitting the material allegations of the bill and asserting independent matters of defense, and also filed a cross-bill.

On exceptions to the answer, the circuit court struck out all. the matters set up as defense. The court also sustained a demurrer to the cross-bill. Plaintiffs in error elected to abide by their answer and their crossbiH.

They now insist, as to the answer, that it' sufficiently alleged defenses of merit, and that the exceptions to it are invalid because they describe the matter attacked by reference to page and line only. So far as the technical objection is concerned, we agree that the method of describing allegations only by line and page of a particular copy of an instrument is likely to lead to confusion, and is not commendable, but it does not seem to us that we should reverse this decree upon that ground, when it is clear to the parties, and to us that the circuit court struck all allegations of defenses from the answer, and the technical point seems to be first made in the reply brief filed here.

The matters urged in the answer as defense to the foreclosure on the defaulted debt are:

(1) The assignment from the Woodriver Bank to the defendants in error is void for uncertainty in that it contains a guaranty of payment and an assignment without recourse. Whatever may be the uncertainty as to the liability of the assignor on its guaranty in case of default, we do not think' that the validity of the assignment is affected.

(2) No notice was ever given by mortgagees of the exercise of the option in the mortgage to declare the whole sum due upon default. In the absence of a provision in the mortgage requiring personal notice of the election, the filing of the foreclosure bill is sufficient notice of the election. Curran v. Houston, 201 Ill. 442, on 446.

(3) The mortgage was made in the name of the bank to enable defendants in error to evade taxes and so defendants in error do not have clean hands. There is no charge that taxes were evaded, and this is not a transgression against plaintiffs in error. See Carpenters’ Union v. Citizens Committee, 333 Ill. 225, on 238.

(4) That “Complainants falsely and fraudulently represented that the land was all tile drained, and that it had good and sufficient drainage, while in truth and in fact, 10 acres of said land is not drained at all, and in wet seasons, is entirely worthless, all of which was well known to complainants, and was not known to defendants.”

We think the court properly sustained exception to this statement as a defense, because it is vague and uncertain. What 10 acres are in the pleader’s mind? Does he refer to one tract of 10 acres, or 10 tracts of one acre each? Is the 10 acres not drained because there is no tile in it, or because tile does not operate? Would tile benefit the 10 acres? Is there damage? What is the damage ? Is the 10 acres worthless in wet seasons for want of tile ? Is a representation that land is all tile drained an assertion that tile was laid in the place or places the pleader has in mind? When was the want of tile discovered by plaintiffs in error ?

The answer says that plaintiffs in error first defaulted in 1932 on an obligation given in April, 1928, not because any offset existed against their debt, but because they were unable to pay.

(5) The answer alleges that “At the time when the parties hereto were negotiating for the purchase of complainants’ said 54 acre'farm, defendants concluded for fear that they might lose the cash payment, then also lose the farm, they would be unable to purchase at the price of $10,500.00, demanded by complainants, whereupon the complainants, to close the deal and to induce defendants to buy, falsely and fraudulently, to get the $5,000.00, and then reclaim the farm, then and there agreed and promised that if defendants would buy at that price that in the contingency defendants concluded that the price was too high and the debt more than they could bear, they, complainants, would take back the farm so that defendants need have no fear of losing the $5,000.00, and then lose the farm too.” This is followed by an allegation that after September, 1932, defendants in error “were asked to take the farm back. ’ ’

While it is difficult to ascertain whether the plaintiffs in error seek to allege fraud or breach of contract in respect to the alleged agreement to take back, no difficulty results in the decision of the case. If the plaintiffs in error seek to show fraud, no grounds for relief are presented. The alleged representations are promissory and are not representations of fact.

“A promise made with an affirmative intent not to perform cannot be made the basis of an action for fraud. (Keithley v. Mutual Life Ins. Co., 271 Ill. 584; Grub v. Milan, 249 Ill. 456.) While the statement of a matter in the future, if affirmed as a fact, may amount to a fraudulent misrepresentation, it must amount to an assertion of a fact, and not to an agreement to do something in the future. Miller v. Sutliff, 241 Ill. 521; Day v. Fort Scott Investment Co., 153 id. 293; Gage v. Lewis, 68 id. 604; Pomeroy’s Eq. Jur. Sec. 877.” Bielby v. Bielby, 333 Ill. 478, 485.

If the plaintiffs in error seek to show breach of contract the statute of frauds prevents their showing the contract to permit rescission, for the alleged agreement refers to the sale of an interest in land. The contention of plaintiffs in error that, to permit the statute to be invoked here would be to enable the defendants in error to perpetrate a fraud, cannot prevail, because as we have stated above, the alleged deceitful promises do not constitute fraud. Neither can the agreement be taken out of the statute of frauds upon the theory of part performance for the reason that all the acts in this case are perfectly consistent with the written contract. “To take a parol agreement for the conveyance of real estate out of the Statute of Frauds on account of part performance all acts performed thereunder must be referable to the contract.” Keller v. Joseph, 329 Ill. 148, on 156. We find nothing in this case to establish that any act done is referable only, or at all, to the alleged oral contract.

The alleged agreement in this case amounts to an agreement to rescind the sale contract and the mortgage in case they become unbearable, and is therefore in contradiction of the terms and meaning of the written contracts. The parol evidence rule is therefore involved. The case of Lanum v. Harrington, 267 Ill. 57, is in point. The court there said in reference to an alleged agreement by which a vendor agreed not to crowd the vendees for payment under a contract for deed and agreed to take payment out of one vendee’s share in the other’s estate (on pp. 63, 64):

“By accepting the bond for deed appellants made its terms and conditions their contract with appellee, and it was not possible for the parties to so change its terms by parol agreement that appellee could not compel the payment of any part of the amount' contracted to be paid, but on the other hand was bound to make one of appellants a gift of the whole amount due upon his death.”

Plaintiffs in error also assign as error the fact that there was no rule taken requiring them to make further answer. We are of the opinion that the rule does not apply in this case for two reasons. First, plaintiffs in error elected to abide by their answer. Second, the rule does not apply to those cases where the portions of the answer which remain after the court has sustained exceptions, neither deny nor avoid material allegations of the bill. Yates v. Continental Ins. Co., 207 Ill. 512, 515; Dillinger v. Dillinger, 140 Ill. App. 6, 8.

The cross-bill of plaintiffs in error is based solely on the agreement to repurchase or permit rescission, quoted above, and prays that defendants in error be required to elect between taking back the farm, and allowing recoupment to plaintiffs in error of any loss through the purchase of the land. In support of the cross-bill, Dunlap v. Pierce, 336 Ill. 178, is relied on for the position that one induced by fraudulent representations to sign a note and mortgage may wait until action of foreclosure is instituted, and claim recoupment of damages in the foreclosure proceeding. Counsel for plaintiffs in error insist that they do not ask rescission, but the forcing of an election upon their adversaries which will give them either rescission or recoupment, and that the cross-bill sufficiently alleges a fraudulent representation to bring them under the protection of the Dunlap case, supra. Supposing, without agreeing', that there is a substantial distinction between the demand made by plaintiffs in error, and a demand for performance of an oral promise to permit rescission, we think the cross-bill does not state a case for relief under the authority cited.

The representation relied on in the Dunlap case was a statement, false in fact, that the land involved had actually sold in the immediate past, for a sum more than twice its actual value. This is clearly a false representation of fact. It clearly distinguishes the case at bar from the Dunlap case, and in our opinion the allegations of the present cross-bill fall under the rule of the Bielby case, supra. In the Dunlap case, supra, as we read it, recoupment of various claims was denied by the Supreme Court upon the same ground we have stated elsewhere in this opinion, that the existence of damage, and the relation of any damage to the representation complained of, was too much left to conjecture.

For the reasons here given, we are of the opinion that the decree of the circuit court of Madison county ought to be, and it is hereby, affirmed.

Affirmed.


author: Mr. Presiding Justice Wolfe

text:
    Joliet Trust and Savings Bank and George Woodruff, Trustees Under the Last Will and Testament of Lewis E. Ingalls, Deceased, v. Esther E. Ingalls et al. George Woodruff, Trustee Under the Last Will and Testament of Lewis E. Ingalls, Deceased, and Myra H. Peale, Appellants, v. William L. O’Connell, Receiver of Joliet Trust and Savings Bank, and Edward J. Barrett, Auditor of Public Accounts of the State of Illinois, Appellees.
    Gen. No. 8,817.

      Opinion filed August 8, 1934.
    Rehearing denied September 11, 1934.
    Arthur J. Hughes, for appellants; Frank Michels, of counsel.
    Egbert E. Haley, for appellees.
   Mr. Presiding Justice Wolfe

delivered the opinion of the court.

On April 20, 1934, George Woodruff, as trustee, under the last will and testament of Lewis E. Ingalls, deceased, and Myra H. Peale, beneficiary, under said will, filed their petition in the circuit court of Will county in which they alleged that the Joliet Trust and Savings Bank, together with George Woodruff, were the trustees appointed by the last will and testament of Lewis E. Ingalls, deceased. The petition alleged that on October 5, 1913, Lewis E. Ingalls of Joliet, Illinois, departed this life and left a last will wherein he made various bequests, and devised and bequeathed the rest and residue of his estate to the Joliet Trust and Savings Bank and George Woodruff, in trust. The petition alleges that the Joliet Trust and Savings Bank and George Woodruff qualified as trustees under said will in December, 1913; that the Joliet Trust and Savings Bank and George Woodruff continued to act as such trustees until February, 1932, when the Joliet Trust and Savings Bank became insolvent and was closed by the auditor of public accounts; that J. E. Morrison was appointed receiver of said bank; that on March 11, 1932, an order was entered appointing the First National Bank of Joliet as cotrustee with George Woodruff to succeed the Joliet Trust and Savings Bank; that the First National Bank of Joliet was subsequently closed by the comptroller of the currency and on November 29, 1933, was discharged as trustee of said estate, by the circuit court of Will county; that since that date the petitioner, George Woodruff, under an order of said court in said cause proceeded to act as sole trustee of said estate; that on April 13, 1932, the Joliet Trust and Savings Bank by J. E. Morrison, its receiver, filed its account and report as such trustee in said proceedings ; that said report was heard by the court April 23, 1932, and an order was entered approving the said report, and released the Joliet Trust and Savings Bank from further liability and responsibility as trustee and it was discharged. The order also provided that J. E. Morrison, as receiver, as aforesaid, was especially released and discharged from all responsibility and liability herein.

The appellants charge that there is deposited with the auditor of public accounts in the trust départment, $150,000 to secure the trust funds in the hands of the Joliet Trust and Savings Bank and that appellants are entitled to a first lien on this account.

The petition charges that during the time the Joliet Trust and Savings Bank acted as trustee of the estate, it as such trustee paid out large sums of money to itself, on purchases of securities on behalf of the said trust estate, which were the property of the Joliet Trust and Savings Bank, upon which the said Joliet Trust and Savings Bank made large profits, all of which was in violation of the duty of said bank as such trustee; that said purchases constituted breaches of said trust and were undertaken by it in unlawful disregard of its duties and obligations as such trustee, all of which said acts of the Joliet Trust and Savings Bank were concealed from the circuit court of Will county by said bank and were not known to said court on April 23, 1932, when the report of the said bank was approved, or on May 9, 1932, when the order was entered discharging' the said Jdiet Trust and Savings Bank and its receiver from all obligations and liabilities of said trust estate; that all of the said transactions were concealed from the court by said bank in the various reports by said bank in said proceedings. The petition further charges that the Joliet Trust and Savings Bank concealed these facts concerning such matters from the petitioner; that these facts did not become known to either of them until April 3, 1934; that the petitioners by said petition rescinded such ‘transactions as are set forth in said petition, upon the repayment to George Woodruff as trustee of the estate of all the moneys paid by the said Joliet Trust and Savings Bank as trustee of said estate to itself individually for securities mentioned in said petition, and offered to return to the receiver of the Joliet Trust and Savings Bank said securities.

The petition sets forth that on February 2, 1934, J. E. Morrison resigned as such receiver of said bank and thereupon William L. O’Connell was appointed to succeed him. The petition states in detail various transactions of which the petitions complain. It is disclosed therein that the Joliet Trust and Savings Bank individually sold to itself as trustee special assessment bonds aggregating the amount of $76,000 and notes secured by trust deeds upon real estate aggregating $63,000; that practically all of said securities are in default and of doubtful value; that a large portion of the real estate mortgages were upon vacant land that provides no income whatever by which taxes and interest could be paid; that the Joliet Trust and Savings Bank made large profits to itself upon the sale of said securities to the said trust estate. The petition sets forth in detail the transactions of the bank as trustee which the petition charges were unlawful and a fraud upon the trust estate. The petition prays that the order of the court discharging the J diet Trust and Savings Bank as trustee of said estate be vacated and set aside and that the court decree that the sale of the various securities described in the petition be declared illegal and a fraud upon the rights of the beneficiary of said estate; that the petitioners be granted leave to rescind the sale of said securities. They pray for an order requiring William O’Connell, as such receiver, to repay George Woodruff, trustee of said estate, all moneys received by said bank from the said trust estate by the sale of said securities, and ask for an accounting of the amount due said trustee, and for an injunction against the receiver and the auditor of public accounts restraining them from paying out any money.in their hands of the Joliet Trust and Savings Bank ór due said bank until further order of the court.

The defendants, Edward J. Barrett, auditor of public accounts of the State of Illinois, and William L. O’Connell, receiver of the Joliet Trust and Savings Bank, filed a motion to dismiss the petition because Georg'e Woodruff was cotrustee of this estate. They state that Myra H. Peale, cestui que trust, was given notice of the time and of the place and was actually represented in court at the time of the hearing of the report in the circuit court of Will county, in this estate; that by order of the court the report was approved and the bank was discharged of all liability. In support of this motion, Robert E. Haley, counsel for defendants, filed an affidavit setting forth the facts in which he claimed that all of the beneficiaries under the trust, had due notice of the hearing of said report. The case came before the court for hearing April 26, 1934, and an order was entered dismissing the petition. The court also denied the motion of petitioners for the issuance of an injunction as prayed for in said petition. Exceptions were taken to the entries of these orders and the case has been brought to this court on appeal for review.

The motion to dismiss the petition takes the place of a demurrer and all facts well pleaded in the petition are taken as true. This petition alleges in positive terms that the Joliet Trust and Savings Bank, while acting as such trustee, purchased from itself, securities that the bank had and made large profits to itself in such transactions. In the early case of Miles. v. Wheeler, reported in 43 Ill. 123, our court in discussing a similar question uses the following language: “There is really no room for controversy as to the main question. It is perfectly manifest, from the facts stated above, that the name of Alexander was used merely as a means of passing the title of the land to Miles; that the sale to Alexander was simply color-able ; and that the transaction was really a purchase by an administrator at his own sale. This the law forbids. Thorp v. McCullom et al., 1 Gilm. 614; Dennis v. McCagg, 32 Ill. 444; Michoud v. Girod, 4 How. 553. In this last case the Supreme Court of the United States gave this question a very searching examination, reviewing the authorities both in the common and civil law. In that case an executor, as in this an administrator, became the purchaser, through the interposition of a third person, of real estate belonging to the deceased, and sold at public sale. The court laid down the salutary rule that this is fraudulent per se-, and that it matters not that the sale was at a public auction, for a fair price, and made through the medium of a third person as the bidder, and to whom the executor or administrator conveys. It avails nothing to show that the intentions of the trustee were honest, and that there was no fraud in fact. It is one of those cases in which the law will not permit a trustee to palter with his own conscience. It shields him from all temptation by the inflexible rule that he cannot buy. The plain and sufficient reason is that the interests of the buyer and seller of the same property are necessarily antagonistic, and the only safe rule is one which-absolutely forbids a trustee to occupy two positions inconsistent with each other.”

Courts from other jurisdictions have announced a similar doctrine. St. Paul Trust Co. v. Strong, 85 Minn. 1, 88 N. W. 256; Riordan v. Riordan, 216 Iowa 1138, 248 N. W. 21; In re Security Rank & Trust Co. (Minn.), 224 N. W. 235. In the case of Magruder v. Drury, 235 U. S. 106, the Supreme Court of the United States in discussing this question say: “It is a well settled rule that a trustee can make no profit out of his trust. The rule in such cases springs from his duty to protect the interest of the estate, and not to permit his personal interest to in any wise conflict with his duty in that respect. The intention is to provide against any possible selfish interest exercising an influence which can. interfere with the faithful discharge of the duty which is owing in a fiduciary capacity. ‘It therefore prohibits a party from purchasing on his own account that which his duty or trust required him to sell on account of another, and from purchasing on account of another that which he sells on his own account. In effect, he is not allowed to unite the two opposite characters of buyer and seller, because his interests, when he is the seller or buyer on his own account, are directly conflicting with those of the person on whose account he buys or sells.’ Michoud v. Girod, 4 How. 503, 555.

“It makes no difference that the estate was not a loser in the transaction, or that the commission was no more than the services were reasonably worth. It is the relation of the trustee to the estate which prevents his dealing in such way as to make a personal profit for himself.”

From the facts alleged in the petition it is clearly apparent that the Joliet Trust and Savings Bank, acting as trustee for said estate, and purchasing securities from itself, acted illegally. The same is a fraud upon the estate.

The appellees do not seriously contend that the purchasing of these securities was not illegal and a fraud upon the estate but say that the appellants should be barked from maintaining their action as George Wood-ruff as cotrustee and Myra H. Peale, one of the beneficiaries, was fully advised of the investments and the nature thereof. There is nothing in the record to support this contention. The petition positively avers that neither George Woodruff nor anyone interested in the trusk estate had any knowledge of the facts as set forth in-the petition. An examination of the report of .the trustee in said estate discloses all of the securities which they had on hand at the time of the report, but nowhere does it state where the trustee procured these securities. The affidavit of the attorney in support of his motion cannot be considered as evidence, on a motion to dismiss. If the beneficiary under the trust did have notice of the transactions complained of, the same should be raised by an answer to the petition but cannot be raised on the motion to dismiss.

The appellees also contend that the motion to dismiss should be sustained for the reason that the term of court at which the order was entered has been closed and the appellants are barred from raising the question at this time. Here again, it will be noticed that the petition states that neither the beneficiary under the trust nor either of the plaintiffs had notice or knowledge of the fraud practiced upon them until a few days prior to the time they filed their petition to set aside this fraudulent transaction. In the case of White v. Sherman, 168 Ill. 589, 605, the court in discussing the same question used this language: “In order to bind a cestui que trust by acquiescence in a breach of trust by the trustee, it must appear that the cestui que trust knew all the facts, and was apprised of his legal rights, and was under no disability to assert them. Such proof must be full and satisfactory. The cestui que trust must be shown, in such case, to have acted freely, deliberately and advisedly, with the intention of confirming a transaction which he knew, or might or ought, with reasonable or proper diligence, to have known to be impeachable. His acquiescence amounts to nothing if his right to impeach is concealed from him, or if a free disclosure is not made to him of every circumstance which it is material for him to know. He cannot be held to have recognized the validity of a particular investment, unless the question as to such validity appears to have come before him. The trustee setting up the acquiescence of the cestui que trust must prove such acquiescence. The trustee must also see to it, that all the cestuis que trust concur, in order to protect him from a breach of trust. If any of the beneficiaries are not sui juris, they will not be bound by acts charg*ed against them as acts of acquiescence. The trustee cannot escape the liability merely by informing the cestuis que trust, that he has committed a breach of trust. The trustee is bound to know what his own duty is, and cannot throw upon the cestuis que trust the obligation of telling him what such duty is.”

In a later case, Wright v. Simpson, 200 Ill. 56, 63, the court says: “Again, ‘courts of justice have power, on due proceedings had, to set aside or vacate their judgments and decrees, whenever it appears that an innocent party, without notice, has been aggrieved by a judgment or decree obtained against him without his knowledge by the fraud of the other party. Mor is the principle limited in its operation to courts which proceed according to the course of the common law.’ In courts of probate the proper form of proceeding is by petition to vacate the former order, as having been obtained by fraud upon the party and imposition .upon the court. (Pease v. Roberts, 16 Ill. App. 634.) It is undoubtedly true that a decree or judgment, standing unreversed and in force, cannot be called in question or impeached in a collateral proceeding, but the filing of the petition here is not an attempt to avoid the effect of a judgment in a proceeding purely collateral. A judgment, obtained by fraud at a former term of the court can be re-examined and set aside at a subsequent term of the court by the party aggrieved by the fraud. (Edson v. Edson, 108 Mass. 590.) Upon proof of fraud or collusion in the procurement of a judgment such judgment may be vacated at any time. (Freeman on Judgments, sec. 99.) As was said in Pease v. Roberts, supra, a court may ‘protect its own dignity and prevent itself from being made an instrument in the hands of a designing man to accomplish a wrong. ’ ” Fraud vitiates all contracts. In the absence of knowledge of the fraudulent acts, courts will take jurisdiction to relieve the injured party if the same is called to their attention within a reasonable time after the fraud is discovered.

It is insisted by the appellees that the bill should be dismissed because the party who seeks to set aside the transaction on account of fraud and to rescind the transaction should return or offer to return the consideration therefor. The only authority which appellees cite as sustaining this contention is the case of Glen v. Dodson, 347 Ill. 473, in which they quote: “On an election to rescind the consideration must be returned.” The appellants in their petition offer to return to the Joliet Trust and Savings Bank all of the securities in question, upon the payment to them of the amount that is due them. In the case of Taylor v. Taylor, 259 Ill. 524, at page 538, the court said: “In Pomeroy’s Equity Jurisprudence (vol. 6, sec. 688), the author says: ‘In cases of fraud, if the de-' fendant’s act has prevented a complete restoration of the status quo, he cannot, in justice, urge this fact as a defense to the rescission. . . . Neither is a party obliged to return that which he will be entitled to retain even though cancellation be decreed. ’ The author further says that many courts, in dealing with the question of rescission, have completely lost sight of the distinction between the equitable remedy and the legal remedy of rescission, and points out why the rule requiring an offer to place the defendant in statu quo before bringing suit is not of universal application in courts of equity, and says insistence upon it in equitable proceedings would often work a complete denial of justice. The author of the chapter on ‘Cancellation of Instruments’ in 6 Cyc. says there is no little confusion upon this question among cases in the same jurisdiction. After stating that the numerical weight of authority slightly favors the rule that restoration, or an offer to restore, must be made before suit brought, the author says (p. 313) : ‘On the other hand, the courts of many States have held, in numerous well considered cases, that no offer of restoration before bringing suit is necessary. These courts advert to the distinction, so often lost sight of, between the equitable remedy of rescission or cancellation, where the avoidance of the contract, with its indispensable adjunct of restoration, is accomplished by the decree of the court, and legal rescission, where the act of plaintiff in avoiding the contract re-invests him with his legal title or right to sue, and must therefore be accompanied with restitution of the thing'received by him.” To the same effect is Carroll v. Barry Bros. Transportation Co., 118 Ill. App. 230.

It is our opinion that the allegations of the petitioners in which they offer to return the securities to the Joliet Trust and Savings Bank are sufficient, and that this petition states a good cause of action and that the trial court erred in sustaining the motion to dismiss the said petition and denying the petition for an injunction. The order dismissing the petition is hereby reversed and the case remanded to the circuit court of Will county.

Reversed and remanded.