author: Mr. Justice Denis E. Sullivan

text:
    The Marine Trust Company of Buffalo, Executor of Estate of Julia T. Sherman, Deceased, Appellee, v. Frank G. Reynolds, Successor Trustee Under the Last Will and Testament of William D. Boyce, Deceased, et al. (Defendants). Appeal of Frank G. Reynolds, Individually and as Successor Trustee Under the Last Will and Testament of William D. Boyce, Deceased, et al., Appellants.
    Gen. No. 41,247.
    Opinion filed February 26, 1941.
    Rehearing denied March 10, 1941.
    West & Eckhart, of Chicago, and Harold L. Richolsoh, of Ottawa, for appellants; Roy O. West and Samuel B. Kraus, both of Chicago, of counsel.

      Urion, Bishop & Sladkey, of Chicago, for appellee; Howard F. Bishop and Jerome J. Sladkey and Robert F. Dewey, of Chicago, of counsel.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Julia T. Sherman, deceased, during her lifetime commenced an action at law in 1935 against her tenant for the breach of two covenants under a 99-year lease. One covenant was for the payment of specific rentals aggregating $8,250 when the suit was instituted, and the other was a covenant to pay taxes by way of additional rental, for the alleged breach of which $59,673.62 was claimed in the complaint. During the pendency of that suit, the plaintiff died and the executor of her estate, the Marine Trust Company of Buffalo, was substituted as plaintiff, and is the appellee in the proceeding before us for review.

Originally, the suit was against three individuals, Frank G. Reynolds, Mary J. Boyce, and Dickinson Bishop, described as successor trustees under the last will and testament of William D. Boyce, deceased. Three years after filing the suit, Foreman State Trust and Savings Bank, a corporation, and Charles H. Al-bers, receiver thereof, were made additional defendants, both individually and as trustees. At the same time, claim was made for additional specific rentals and additional taxes accruing after the institution of the suit, bringing the total claim up to $122,529.66. The form of action was also changed into one seeking equitable relief by way of a money judgment against all the defendants, which judgment it was asked be declared a lien upon the trust property and assets being administered by the trustees, and the new complaint also prayed that the lien be foreclosed and that a receiver be appointed to liquidate as much of said assets as should be necessary to discharge the said judgment. Some months later thirteen additional parties were made defendants, embracing the twelve beneficiaries of the trust under the will of William D. Boyce, deceased, and the guardian of the estates of certain minor beneficiaries.

No point is raised on the pleadings.

The cause was tried by the court without a jury, and resulted in the entry of two judgments or decrees. The effect of the decrees entered by the court after the hearing, was:

(a) To dismiss the defendants, Charles H. Albers, as receiver of Foreman State Trust & Savings Bank, and the said Foreman State Trust & Savings Bank, a corporation, out of and from the said suit;
(b) To find that there is due from the defendants, Frank Gr. Reynolds, Mary J. Boyce, and Dickinson Bishop, individually, the sum of $28,875 and interest thereon, making a total liability of $33,042.70;
(c) To find said Reynolds, Boyce, and Bishop as successor trustees under the will of William D. Boyce and the assets of the trust estate liable for $30,250 for rent, with interest amounting to $4,554.79, and liable for taxes for 1929 amounting to $4,788.90, with interest thereon amounting to $2,057.21, and for taxes for the year 1932 amounting to $4,275.97 with interest thereon amounting to $1,204.40, making such total liability of the successor trustees and the trust corpus $47,131.27;
(d) There is then a judgment order against said Reynolds, Boyce, and Bishop for the aforesaid sum of $33,042.70 and costs and order that execution issue;
(e) The later decree then appointed Ernest H. Lyons receiver to take possession of all of the assets of the trust under the will of William D. Boyce and to liquidate sufficient thereof to pay the aforesaid sum of $47,131.27.

The court further found by its decree that the attempted assignment to G-arry L. Culver was ineffective to operate as an assignment and that it was not bona fide but was colorable, and that the former trustees and the successor trustees continued to exercise domain and control over the premises thereafter.

In setting forth the theory of the defendants, appellants here, it will be noted that it consists of a partial statement of fact, partial argument and an analysis of the evidence. This is rather confusing, but we are setting it forth as it has been presented to us for consideration. It is substantially as follows:

“With respect to the specific rents payable under paragraph Third of the lease and the taxes payable under paragraph Fourth of the lease, which did not become due until after, the assignment of the lessee’s interest to Culver on February 28, 1934, the defendants contend:
“ (a) The predecessor trustee which made that assignment was bound only under privity of estate, which privity was terminated by the subsequent assignment to Culver, and that therefore the said Trustee, and any successor trustees were released from any subsequently accruing obligations of the lessee under the lease. The fact that this assignment may have been made for the sole purpose of terminating such future liability, and that the assignee was financially irresponsible, does not render the assignment ineffective nor prevent the foregoing legal consequences, i.e., termination of future accruing liabilities.
“(b) W. D. Boyce’s gratuitous statement of February 27, 1925, that he would pay subsequent rentals and perform the covenants of the lease, contained in a notice of that date from W. D. Boyce Company to Julia T. Sherman, was without consideration and was ineffective to re-establish the privity of contract which had been terminated by the several previous assignments of the lessee’s interest. Furthermore, even such privity of contract, if it had been recreated, was terminated upon the death of W. D. Boyce. Executors and trustees of deceased lessees stand in a relation of privity, of estate only and not of privity of contract.
“(e) Even though the Boyce Trustees’ obligations at the time of the assignment arose by virtue of privity of contract, such obligations were terminated by the Culver assignment, under the express provisions of paragraph Tenth of the lease which provided that after such an assignment the lessee shall no longer remain personally liable, but only the property itself and the assignee shall be liable for the covenants of the lessee. Upon this issue the defendants further contend that the notice of intention to assign was in strict conformity with the requirements of paragraph Tenth of the lease; that the assignee’s address recited in that notice was his business address; and that the interest assigned was the lessee’s entire interest in the Sherman lease, which was a lease or grant distinct from the Bentley lease, both of which leases or grants were incorporated in the single Indenture of Lease upon which the suit is based.
“(d) With respect to the taxes and the one installment of specific rent which accrued before the appointment of the present successor trustee on June 11, 1934, the defendants contend that trustee’s liabilities are ' personal only; that the successor trustees are not liable for breaches or defaults committed by predecessor trustees, and that the trust assets cannot be reached directly in this case because such relief in equity is available only where the defaulting trustee has become insolvent or is absent from the jurisdiction and would be entitled to indemnification out of corpus of the trust if he personally satisfied the obligations, and that in the present case Foreman-State Trust and Savings Bank, predecessor trustee, would have had no such right of indemnification out of trust assets.
“(e) With respect to all and every part of the taxes claimed, the defendants contend that under paragraphs Twelfth and Thirteenth of the lease it has been expressly provided that such taxes shall become additional rent only if and when paid by the lessor, that no action can lie to recover the same until they have so become additional rent, and that the present claim must fall because the lessor has not yet paid the said taxes or any part thereof. With respect to every part of such taxes the defendants contend further that there has not yet occurred any breach of the lessee’s covenants nnder the lease because the only time provision, contained in paragraph Fourth of the lease, is to pay taxes ‘in apt time to prevent a sale of any part of the said premises therefor,’ and there is no evidence or claim that any part of the said premises has been sold or that there is any threat or imminence of a sale thereof for non-payment of taxes. The defendants further contend that, even if contrary to the express provision above recited, paragraph Fourth should be so construed as to require the lessee to pay taxes before delinquency date, such requirement was waived by plaintiff’s testatrix, Julia T. Sherman, filing objections to the taxes for the years 1931 to 1934, inclusive, all of which objections are still pending.
“With respect to any taxes which upon any theory could have become due prior to the discharge of the executor of the W. D. Boyce estate on September 8, 1930, the defendants contend that the action is barred under Section 70 of the Administration Act because of failure to exhibit the claim to the Probate Court of LaSalle County within one year from the granting of Letters on July 24, 1929.
“ (f) With respect to the rents which became due after the appointment of a Tax Receiver by the County Court on July 24, 1933, and the appointment of a Tax Receiver by the Circuit Court on August 8, 1934, defendants contend that the only proper party to sue for or to recover any such rents (from the tenant who is liable for them) is the County Collector as Receiver, and as to such rents the present plaintiff has no standing in court.”

The theory of the plaintiff appellee is set out under the title, “Propositions to Meet Alleged Errors and to Sustain Decree,” and is substantially as follows:

(1) That the trial court’s finding of fact that the assignment was not bona fide, that it was colorable, and that it was ineffective as an assignment, is amply supported by the evidence and should be sustained.
(2) That the attempted assignment did not conform to requirements of the lease and did not purport to assign lessee’s entire interest.
(3) That the said lessee’s interest was physically and legally incapable of division.
(4) That the present trust estate is liable for the defaults of the predecessor trustee on account of the insolvency and dissolution of the predecessor and because of the wording of the will.
(5) That the taxes are recoverable without a tax sale having been held and that they are recoverable without the lessor having paid the same.
(6) That the appointment of a tax receiver under the Skarda Act does not in any manner deprive the plaintiff of its remedies under the lease.

The evidence in this case shows substantially the following:

That the building in question was located at 28-30 North Dearborn street and consisted of 12 stories; that the ground upon which the building was built was leased from two different parties and said building had approximately a 20 foot frontage for each part, but the building covered the entire frontage; that the assignment covered number 28 North Dearborn street; that the elevators in said building were located on one side thereof, and the boilers and other paraphernalia necessary for the maintenance of an office building was located on the other side of said building. The north half of the fee of this property was- owned by Mary J. Boyce.

On the question of the assignment of the lease, the evidence shows that the alleged assignee Culver was a former employee of W. D. Boyce Co., but that at the time of the assignment he was out of employment and was looking for a position; that he was without financial responsibility and at the time of the assignment he still used the office of W. D. Boyce Co. for his personal use, the dictation of letters and for conferences regarding the termination liability had at different times; that Reynolds talked with Culver a few weeks or “it might have been a few months” before the assignment. Many of the facts were developed from either the defendant Reynolds or from Culver, who stated he desired to help the defendant and who admitted he was in Mr. Kraus’s office prior to the trial and “threshed over” some of the points raised in the previous hearing. When the proposition of assignment was first broached to Culver, nothing was told him about the rental obligations, the condition of the taxes or the liabilities he would be assuming. He did not go through the premises at any time prior to the assignment and was not familiar with the nature or condition of the building. The lease was never delivered to him either before or after the assignment and he had never read it in detail. He knew there was no income from the premises and that he could not pay rent and he took no active interest in connection with the management or maintenance of the premises, either before or after the assignment, nor in connection with the taxes or rentals. Any inquiry which came to him, after the assignment, regarding a possible sale of the premises, was sent to Mr. Reynolds; that this was a letter which Culver received at Little Rock, Arkansas, and inclosed with a letter of his own to Mr. Reynolds. Reynolds suggested to him that he give Mr. Kraus, attorney for the trustee, a power of attorney, which power of attorney Mr. Reynolds sent to him to be executed at Little Rock. He executed the power of attorney and then sent it back to Reynolds. Apparently, no question was asked by Culver about the reasons for such power of attorney, but it was signed by Culver and returned to Reynolds. The purported assignment was concluded about 10:30 in the evening of February 28, 1934. Shortly after the supposed delivery of the assignment on February 28, 1934, Reynolds testified that late that same night he started thinking about the assignment and thought he had made a mistake and would be criticized. He called or saw Kraus the next morning and “thought we ought to try to hold on to it somehow” and thought he should be in a position to get the property back.

The evidence further shows that early the following morning Culver saw Reynolds, was directed to Kraus’ office, and either before or after recording the assignment, executed an option back to the trustees, for which it was agreed that he, Culver, would be paid $500, $100 of which was then paid and $400 paid later by the present trustee. During the arrangements and execution of this option Mr. Culver, Mr. Kraus and Mr. Reynolds were present.

The evidence further shows that the purported assignment related to the trustee’s interest in the south half only of the premises, the fee to which was owned by the plaintiff’s testate, and did not assign or attempt to assign the north half, the fee to which was owned by Mary J. Boyce, defendant herein, although there was a single unit building covering the whole of said premises, neither half of which could be operated in any manner without the other half. The insurance policies or the sublease were not assigned to Culver. "When there was an application for a lease for one or two floors of said premises after the supposed assignment, it was Mr. Reynolds who discussed this with Mr. Miner. The alleged assignment to Culver was delivered by Culver back to Mr. Reynolds some time after he received it, so he had neither the lease nor the assignment and Culver did not recall having received any papers, documents, subleases, or policies of any kind in connection with the assignment. lie paid no rent or any taxes nor made any repairs and had nothing to do in the way of management. He had no attorney in connection with the assignment, option or power of attorney. He testified, “Specifically what property was covered by the assignment I do not know.” No notice of the supposed assignment was given to the tenants. After the execution of the so-called option to the Foreman State Trust & Savings Bank, as trustee, the balance of the $400 was paid by the latter for the option which was to run for 3 years.

Having considered the foregoing evidence, the trial court made a finding as follows:

“ ... fourth, that on February 28, 1934, Foreman-State Trust and Savings Bank, as Trustee of an estate under the Will of W. D. Boyce, deceased, attempted to make a written assignment of the unexpired portion of said lease as it appertained to the Sherman tract to one Garry L. Culver, and that said attempted assignment was ineffective and not bona fide but was colorable and that said Foreman-State Trust and Savings Bank, as Trustee, continued thereafter to exercise dominion and control over the said premises; . . .

We think this finding by the trial court was fully justified by the evidence.

At the time of the trial and also on appeal, plaintiff contends:

1. That said purported assignment was entirely colorable, not bona fide, and that the old successor trus tees continued to control the property thereafter.
2. That the said attempted assignment was ineffective because it purported to assign only one half of the lease, and this could not be done because (a) the premises were physically incapable of such division; (b) the context of the lease indicates it was considered a unit and could not be assigned except in its entirety.

The contentions of appellees, we think, were amply proven and particularly in view of the fact that the sole purpose of the defendant in making the assignment was to avoid liability and that the lease was assigned to a wholly irresponsible assignee who did not take possession of the property. Defendants do not contend nor do they attempt to show that the trial court’s finding in this regard was erroneous or as to whether or not the assignment was merely colorable and not bona fide or against the manifest weight of the evidence. There is a presumption on appeal in favor of the finding of fact made by a trial court. Cohen v. Schimberg, 165 Ill. App. 170. In the absence of a finding of fact by a jury, the court’s finding of fact is equivalent thereto. Fifth Ave. Library Society v. Cavanaugh, 186 Ill. App. 123; Sumner v. Elgin Condensed Milk Co., 87 Ill. App. 217. The findings of the court will be sustained unless they are wholly unsupported by the evidence. Town of Bois D’Arc v. Convery, 255 Ill. 511.

In the case of Springer v. Chicago Real Estate L. & T. Co., 102 Ill. App. 294, the court in its opinion at page 300, said:

“In the present case it appears that notwithstanding the making and recording of an assignment of the lease by Springer, he has continued and still is in control of the premises. . . . Such continued control, collection and payment, as well as the absence of evidence showing that Harris has ever done anything more than to receive the assignment, give his note for $500 therefor and in a short time receive it back, tends to sustain the finding of the chancellor in this regard.” In that case the assignor remained liable.

At the risk of prolixity, we shall again state the claims of the parties. As we view the contention of the parties here, in the last analysis, it is as follows: The defendants contend that having the right of assignment of said lease, they cannot be deprived of this right by the fact that the assignee is of meager financial standing and that their motive in making the assignment is not a factor which may be considered. On the other hand, the plaintiff claims that in order that the assignment be binding on anyone, it must be a valid, bona fide transaction and not a colorable, deceptive transfer of mere form and having no substance. We do not believe the evidence before us shows a valid, subsisting assignment was in reality made, but, on the contrary, it was merely colorable as the trial court so found. Consequently, the defendants were not relieved of the obligations of the said lease and their actions did not release them from the obligations relative thereto and they must be held to be still liable under its terms, the same as though no transfer were attempted to be made.

Many other questions are raised, a discussion of which is unnecessary and would add to this already lengthy opinion. If the transfer of the lease was merely colorable and not bona fide, then there was no transfer. This appeal is from a court of equity, which court having found that the so-called assignment of the leases was not in legal contemplation really made but only in form to an irresponsible person for an ulterior purpose, namely, to escape liability, and that, therefore, said lease was a mere form and not of substance, there appears to be no way in which the contentions of appellant can now be sustained.

For the reasons herein given the decree of the superior court is affirmed.

Decree affirmed.

Hebel, P. J., and Burke, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Arthur Rubin, Appellee, v. Metropolitan Life Insurance Company, Appellant.
    Gen. No. 41,358.
    Opinion filed February 26, 1941.
    Rehearing denied March 10, 1941.
    Hoyne, O’Connor & Rubinkam, of Chicago, for appellant ; Nathaniel Rubinkam, and William A. Cannon, and James F. Flanagan, both of Chicago, of counsel.
    McKenna & Harris, of Chicago, for appellee; James J. McKenna and Louis Gershon, of Chicago, of counsel.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Defendant Metropolitan Life Insurance Company bring this appeal from a judgment entered in the municipal court of Chicago in favor of the plaintiff Arthur Rubin for the sum of $1,152 and against defendant. Suit was brought to recover on an insurance policy issued on the life of Morris Goren, in which policy plaintiff was named as beneficiary.

Plaintiff’s statement of claim alleges that plaintiff is the beneficiary under an insurance policy issued on or about September 17, 1935, by the defendant, pursuant to an application which was dated June 24, 1935; that the insured Morris Gloren died on March 18,1937, while said policy was in full force and effect and that plaintiff as beneficiary is entitled to $1,000, the face amount of the policy.

In its affidavit of merits defendant admits the issuance of the policy and alleges that the policy was issued pursuant to an application which is attached to and made a part of the policy. In said application Morris Gloren stated in response to questions therein asked, that his then condition of health was good, that he had not been sick, that he had no physical or mental defect or infirmity; that he had never been told that he had heart trouble; that he had no “usual medical attendant”; that he never had had bronchitis, cancer, tumor or disease of the heart; that he had not been attended by a physician during the last 5 years; that he had not been treated within the preceding 5 years at any dispensary, hospital or sanitarium. Morris Gloren signed a certificate at the end of his application, stating that he had read the above answers before signing it and that they had been correctly answered and that they were full, true and complete.

Defendant avers that, as a matter of fact, Morris Gloren had received prior medical treatment and was not in good health on the date of the application; that the above answers and representations contained in the application were false and untrue; that such representations were material to the risk, and had the defendant known the true condition of health and prior medical treatment of the applicant, it would not have issued the policy; that the policy was therefore void and the liability of the defendant was only for the amount of premiums paid on the policy, which were tendered to plaintiff.

As a further defense defendant alleges that between the date of the application, June 24, 1935, and the date, of the issuance of the policy, September 17, 1935, Morris Coren had received medical treatment and that during said period there was a material change in his condition of health. That during said period his ailment had been diagnosed as cancer of the stomach and that it was the duty of the applicant to disclose to the defendant such material change in his condition of health and the medical treatments which he received between the date of the signing of the application and the issuance of the policy which he had failed to do. That by reason of his failure to disclose the material change in his condition of health and medical treatment received, the policy is void and the liability of the defendant is limited to the amount of premiums paid.

Plaintiff’s theory of the case is that the sound health of the insured upon the date of the application is the only requirement and whether or not he had received any medical treatment was a question of fact for the jury, also that the insured truthfully answered the questions and was in sound health upon the date of the application and upon the date of the issuance of the policy.

The defendant contends that as a matter of fact the insured was not in sound health on the date of the application, which he subsequently found out before the issuance date of the policy when his doctors diagnosed his “pain in the stomach” as cancer or ulcer of the stomach, and that the policy sued upon is void.

Defendant also contends that as a matter of law it was the duty of the applicant to disclose to the insurer the material change in his condition of health and to disclose to the insurer the medical treatments which he received between the date of the signing of the application and the issuance of the policy.

The errors relied on for reversal are:

1. The trial court erred in refusing to grant the defendant’s motion for a directed verdict at the close of all the evidence.
2. The judgment and verdict are contrary to the law and evidence, and contrary to the manifest weight of the evidence.
3. The court erred in overruling defendant’s motions for a judgment notwithstanding the verdict, for a new trial and in arrest of judgment.

The evidence in this case shows that Morris Coren, the insured, made an application for life insurance with the Metropolitan Life Insurance Company and in that application stated that he lived at 453 West North avenue, Chicago, Illinois, and.that he had resided at that address for 4 years; that he was born in Russia, June 29,1882, and that his age according to his nearest birthday was 53 years; that he was a married man and that his occupation was owner of a Suit and Shoe Store at 618 Maxwell street where he sold suits and shoes; that the application for insurance was signed by the insured on June 21,1935, and the policy was issued to him in September, 1935, for ordinary life insurance in the amount of $1,000.

The evidence further shows that the beneficiary named in said policy was his stepson Arthur Rubin whose age was set forth in the application of insurance as 32 years and whose address was given as 1271/2 North Central avenue.

The evidence further shows that among the other material questions asked the insured, was the following:

“Have you been attended by a physician during the last five years ? If yes, give name of complaints, dates, how long sick, and names of physicians. No.”

In addition to making* that reply, applicant represented that his condition of health was good and that he did not have a cancer and that he had not been attended by a physician. It further appears that the policy when issued in September, 1935, had attached to it a copy of the application which was made a part of the policy by a provision of the policy, reading* as follows :

“This Policy is issued in consideration of the Application therefor, copy of which Application is attached hereto and made part hereof. ’ ’

Dr. Gaberman testified that he first "treated the applicant in October, 1933, and later in October, 1935. This statement of Dr. Gaberman was not denied by plaintiff’s witnesses.

Dr. Frederic Tice testified that he had been practicing since 1894; that according to his records he examined Morris Goren on July 26, 1935 at the Washington Boulevard Hospital; that his examination consisted of the usual methods and some vascular findings, some cardiac findings, but mostly symptoms indicative of some gastric disturbance; that said Goren complained of severe pain in the top part of his stomach and said he had been having the complaint for 3 months; that a fluoroscope examination was made at the hospital by him on August 6,1935, according to his record, which is an examination which can be made by means of the X-ray, without taking pictures. This witness had with him a record in his handwriting which was made by him on the day he examined said Morris Goren and the witness stated that it was a record of his findings from his diagnosis and his findings from the X-ray, the fluoroscope and said witness explained that in diagnosing by means of the fluoroscope it is necessary that the patient have an empty stomach and the patient is then given barium in milk and with the aid of the fluoroscope one can see through the body. Said witness further testified that at that time a diagnosis was made of a duodenal ulcer, which is an ulcer of the outlet to the stomach; that he could see the ulcer in the fluoroscopic examination and that according* to his records he examined Goren again on August 19th, which was only a physical examination, and that Goren returned to his office again on October 18th, when another examination was made which was a tentative diagnosis of gastric carcinoma, cancer.

Dr. Tice further testified that there is no way to determine from a medical standpoint when the onset of that condition occurred; that it is his policy always to tell the patient exactly what he believes, regardless, in every case.

The insured died on March 18, 1937, after having been operated on for carcinoma of the stomach. It is quite apparent that the statement by the insured that he had not consulted a doctor within a period of 5 years, was untrue. That being so, it deprived the defendant of an opportunity to consult the doctors who had attended the insured and thereby find out as to said insured’s physical condition. We do not think a valid, enforceable contract could be based upon such misrepresentations and misstatements.

There are many parallel cases and authorities which could be cited upholding this contention, but we do not think it necessary. Suffice it to say that we do not think the evidence submitted justified the jury in returning the verdict in favor of plaintiff and against defendant.

Defendant admitted that it owed plaintiff a sum equivalent to the amount paid to said company by the insured as premiums which was $91.62 and offered to pay said amount to plaintiff. We are of the opinion that the verdict of the jury and the judgment entered thereon should have been for the amount of the premiums paid to said insurance company by the insured, namely, $91.62.

For the reasons herein given the judgment of the municipal court is reversed and judgment -is entered here in favor of plaintiff for the sum of $91.62.

Judgment reversed and judgment here.

Hebel, P. J., and Burke, J., concur.


text:
    Darwin Shapiro, Minor, by Bessie Shapiro, His Mother and Next Friend, Appellee, v. City of Chicago, Appellant.
    Gen. No. 41,381.
    Opinion filed February 26, 1941.
    Barnet Hodes, Corporation Counsel, for appellant; L. Louis Karton, Alexander J. Resa, Sydney R. Drebin and J. Herzl Segal, Assistant Corporation Counsel, of counsel.

      Barasa, Rinella & Barasa, of Chicago, for appellee; Bernard P. Barasa and Joseph Barbera, of CMcago, of counsel.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Darwin Shapiro, a minor, by Bessie Shapiro, his mother and next friend, brought suit against the City of Chicago because of personal injuries alleged to have been received by plaintiff through the negligence of defendant in permitting an attractive nmsance to remain in a public alley. The cause was tried before a judge and jury which resulted in a verdict in favor of plaintiff for $10,000 and against the defendant City of Chicago, from which judgment defendant brings this appeal. Motions of defendant for a directed verdict, for a new trial and in arrest of judgment were denied.

Plaintiff contends that the City of Chicago is liable for the injuries sustained by plaintiff on the ground that it negligently permitted an attractive nuisance to be and remain in a public alley and on a lot or opening adjacent to said alleyway.

Defendant contends that a municipality is not liable for injuries sustained by plaintiff due to the presence of an attractive nuisance on private property extending for a slight distance over a public way; and that the city’s nonexercise of a police power to abate a nmsance does not render it liable to tort to the plaintiff for the injuries sustained by him.

No point is raised on the pleadings.

It appears that for a period of approximately three and a half weeks prior to July 30, 1937, the date of the accident, a 1927 Chrysler coupe was parked on Burling street, a street which runs north and south in the City of Chicago and is immediately east of Halsted street; that at the northwest corner of Webster and Burling street is a large vacant lot; that Webster avenue runsN east and west at 2200 north, and Belden avenue is the first east and west street north of Webster; that said parked automobile remained on Burling street for nearly a week; that said automobile had a ripped top which was down, one tire was off and three tires were flat.

It further appears that there is some dispute as to whether there was a cap on the gasoline tank of the automobile; that boys who customarily played ball in the large vacant lot at the corner of Burling and Webster streets drove the car onto Webster after a mechanic started the automobile for them; that the boys left the automobile there for 3 or 4 hours while they played ball and then several of them pushed the car into the alley between Halsted street and Burling street and the front end of it extended into the vacant lot in the rear of 2211 North Halsted street; that the car was left there facing west; that because of the hilly condition of the vacant lot the boys had been unable to push the car completely out of the alley, but that the rear end of the automobile extended into the alley; that the automobile remained there for a period varying from four days to two and one-half weeks and that there was gasoline in the tank of said automobile.

It further appears that while the automobile was on Burling street, Police Squad Car No. 141 drove up and one of the officers warned the children to keep away from it as it was a stolen car.

An officer on auto detail testified that on July 27th, he found the automobile parked in front of 2201 Bur-ling street and made a report of it to stolen auto detail directing them to tow the car away and junk it; that he did not see the car after that and never saw the car in the rear of the Halsted street premises.

Testimony was offered showing the automobile was parked on Burling street and during the time it was parked in the vacant lot in the rear of 2211 North Hal-sted street children played around the car.

The owner of the premises at 2211 North Halsted street, Otto Kreuzer, testified that about July 26,1937, he telephoned the Hudson avenue police station and reported the automobile and asked that it be removed and that he again telephoned the following day.

G-eorge Klein, a witness on behalf of plaintiff, testified that Kreuzer telephoned the police station and reported the car at least two weeks before July 30, the date of the accident, and asked that said automobile be removed.

The evidence shows that Darwin Shapiro who on July 30, 1937, was a child 6 years of age, was playing-in the vacant lot heretofore referred to, with a boy named Donny Tripto; that Donny Tripto found a package of paper matches in a can and he lighted one of them and threw it into the gasoline tank of the abandoned automobile, which was practically in the public alley; that said tank contained some gasoline and an explosion resulted which set plaintiff’s clothes on fire and he sustained the injuries of which he now complains.

The evidence further shows that plaintiff was taken to St. Joseph’s Hospital where he remained for 3 weeks; that he sustained first and second degree burns on the left side of his body, the left side of his neck and part of his face, arms, forearms and hands and that from 30 per cent to 35 per cent of the total body area was involved in these burns; that plaintiff was treated for burns and for shock ánd that after he returned to his home the doctor saw plaintiff twice at his home and later several times at his, the doctor’s office; that Dr. Kratz’ bill for services was $147.

The evidence further shows that in December, 1937, plaintiff had an irregular shaped scar on the right side of the chest, covering the region of the pectoralis major muscle almost up to the shoulder, about six inches long and about an inch and a half wide; a scar on the medial surface of the upper arm about five inches long; that there were smaller scars on the abdomen and the left side of the chest, the legs and ear, the right hand and fingers and some scars on the lower back region; that he had several large areas of skin devoid of pigment; that the pectoralis major was atrophied and there is a limitation in the freedom of the shoulder motion. Dr. Malone testified that the condition was permanent.

The evidence further shows that after plaintiff came home from the hospital, boils broke out all over his body; that he did not sleep nights; that when he did sleep he had to sleep on his hands and knees because he could not lie on his hack and that he was in constant pain; that since the accident he has nightmares and wakes up during the night screaming and scratching the scars; that he is very nervous and fidgety, does not sleep or study well; that before the accident he studied well, was not fidgety or nervous and never had nightmares.

The evidence further shows payment to the nurses in the sum of $80 and hospital bill for $46.05.

There does not seem to be much dispute as to the facts. It is conceded that the abandoned automobile caused the injury to the plaintiff; that said automobile had been upon the public streets and public alley in the City of Chicago in the neighborhood herein described, for several days or possibly a week and that the abandoned automobile and its condition had been reported to the police authorities and therefore the City had ample notice thereof. There is little doubt that this abandoned automobile was an attractive nuisance as we can conceive of no one thing which would be more attractive to the mind of a child than an abandoned automobile which could be operated.

The evidence affirmatively shows that during all the time the automobile remained in the neighborhood where it had been abandoned, children were attracted to it and were almost constantly playing on or around said automobile. As we have heretofore stated the city had both actual and constructive notice that this abandoned automobile was in the alley at the location aforesaid, but they did nothing to remove this nuisance.

A case very similar to the instant case is that of Fleming v. City of Chicago, 260 Ill. App. 496, in which case an abandoned truck chassis was permitted to remain in an alleyway in the rear of 657 West 63rd street in the City of Chicago. There was some difference of opinion as to the length of time the truck was in the alleyway prior to the date of the accident, but the testimony showed that the police had been notified by telephone that the truck chassis was' upon the highway, about a month before the accident. Plaintiff a child of 7 years, in company with other boys, was playing on the truck in question, and while the truck was going down an incline, plaintiff fell off and was injured. This court in affirming a judgment for plaintiff, at pages 503, 504 and 506, said: “The evidence indicates that for a period of time the abandoned chassis was upon the highway. Not only that, but the evidence tends to .show that the agents of the defendant were notified, and that on February first of the same year, two Chicago policemen examined it. The city had not only constructive but actual notice of this abandoned truck chassis. The question therefore is, Was this instrumentality such an attractive nuisance on the public highway as to attract children, and dangerous to the safety of the child riding on it? It must be admitted that children of tender years playing upon a public street, as they lawfully may play, would be more likely to be attracted by an abandoned truck chassis upon a public highway than if it had been located upon private property. Flis v. City of Chicago, 247 Ill. App. 128. It is the duty of the municipality to abate such a nuisance after it has notice, and failure to do so would make it liable for such negligence where a child was allured and attracted, and who from childish instinct was drawn into danger and injured through no fault of its own, and where the child was exercising that degree of care and caution required by law.

“The accident to the boy in the instant case, and consequent injury, would not have happened but for the failure of the defendant to abate this nuisance, which was the result of carelessness on the part of the city. The city must be held liable, provided of course plaintiff minor was in the exercise of ordinary care for his own safety, such as is required by law.”

In the instant case defendant contends that it is not liable because only a portion of the automobile was in the alley and that defendant would have been required to enter upon private property in order to remove the automobile and it would thereby be exercising police power which would amount to a governmental function, consequently the city cannot be held liable in tort for failure to so act. The evidence in this case shows that the owner of the property, upon which property the front part of the abandoned automobile was located, had requested on two occasions that the defendant remove the automobile from the alley at the rear end of his premises. It is apparent, therefore, that, even; if it were necessary that defendant enter the lot in order to remove the automobile from the alley, it could have been done by defendant without exercising its police powers, since it had the owner’s permission to enter the lot in question, and considering the position of the automobile in the alley, it is quite obvious it could have been removed therefrom without the slightest necessity of encroaching upon private prop erty. It has been held by the Supreme Court of this State that the removal of such an obstruction from the streets and alleys of a municipality is strictly a corporate function for which the city may be held liable, if negligent.

In the case of Roumbos v. City of Chicago, 332 Ill. 70, a girl 4 years of age was sitting at the edge of the sidewalk on the lower step of a stairway leading to the street. A street sweeper, employed by defendant city set fire to a pile of trash on the curb about 5 or 6 feet from where the child was sitting, and then went away. The wind blew the flame across the sidewalk, set fire to the child’s dress and she was so badly burned that she died the same day. A verdict for plaintiff was returned on the charge that defendant city negligently started the fire and negligently left it unguarded. The city in that case contended that the charges complained of came within the definition of a governmental function. The court in deciding this point in favor of plaintiff, at pages 82, 84, said:

“It is argued that the city was acting under the police power for the preservation of the public health by causing the streets to be cleaned. The language of the Court of Appeals of New York in an action brought against the city of New York to recover damages for the death of a child run over and killed by an ash-cart of the cleaning department of the city is a fitting answer to this argument: ‘The fact that the discharge of this duty might incidentally benefit the public health did not make the acts of the commissioner of street-cleaning a public function. It is clear upon principle and authority that the city of New York in the ordinary and usual care of its streets, both as to repairs and cleanliness, is acting in the discharge of a special power granted to it by the legislature, in the exercise of which it is a legal individual, as distinguished from its governmental functions, when it acts as a sovereign.’ (Missano v. City of New York, 160 N. Y. 123.) The United States circuit court of appeals for the eighth circuit, in answer to the same argument, said: ‘ . . . Nevertheless the overwhelming’ weight of authority is to the effect that the superintendence and care of the streets and alleys of a city, and all that directly pertains thereto, are peculiarly in the class of municipal duties for the neglect of which the city, in its corporate character, is liable.’ ”

“In this State the care of the streets and sidewalks, their lighting and maintenance, have always been held to be the corporate functions of the municipality, and the municipality has been held liable for the negligence of its employees in the performance of those functions which has resulted in injury to others. There is no difference in kind between these functions and the cleaning of the streets. All are provided for by the same statute in the same terms, and the same rule of liability should apply to all. ’ ’

In the instant case defendant takes a position which is not supported by the evidence and from such wrong premise argues that the defendant is not liable. Defendant has not favored us with any authorities which support its contention.

Defendant complains that the court erred in refusing to give two instructions. One has but to read these instructions to determine that they were not only confusing by their terms, but would not aid the jury in deciding the issues presented to them. We believe the court committed no error in refusing to give the instructions of which defendant complains.

Defendant further contends that the verdict of the jury, upon which the court entered judgment, is excessive. We cannot agree with defendant in this regard. Plaintiff, a boy 6 years of age, was scarred and injured for life. The pain, suffering and injury, which he endured at the time of the accident and for months thereafter, will never be entirely eradicated either from his memory or from his physical appearance, but will continue on throughout his entire life and the normal, natural human existence to which he should have been entitled will not be his. In this case we believe the judgment of the trial judge and a jury of twelve men would be better than that of a reviewing court, as the trial judge and the jury were in a position to see the witnesses and hear them testify and could better judge as to their credibility. There is no evidence of prejudice or passion and we can find no reason for disturbing the judgment.

For the reasons herein given the judgment of the circuit court is affirmed.

Judgment affirmed.

Hebel, P. J., and Burke, J., concur.


text:
    People of the State of Illinois ex rel. William G. Barclay, Appellee, v. West Chicago Park Commissioners et al., Defendants. Chicago Park District et al., Appellants.
    Gen. No. 41,426.

      Hebel, P. J., dissenting.
    Opinion filed February 26, 1941.
    Rehearing denied March 10, 1941.
    John O. Rees, of Chicago, for appellants; Martin G. Loeff, David Katz and Harry P. Hensel, all of Chicago, of counsel.
    McInerney & Power, of Chicago, for appellees.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

This cause comes before us on a petition by plaintiff, seeking to compel the Chicago Park District and its commissioners, as additional parties defendant, to carry out the terms and provisions of a judgment entered, against the West Chicago Park Commissioners and its commissioners, together with other officers, which commanded the issuance of a writ of mandamus to reinstate the plaintiff to the position of Assistant Superintendent of Parks and to pay him the salary for said position during the period he was kept out of employment, partly in cash and the remainder at such time as the other former employees of West Chicago Park Commissioners should be paid for the same period of time, and seeking the issuance of a writ of mandamus for such purpose. The original plaintiff has been joined in his petition by one Yirtus Rohm, who claims to be an assignee for value of said claim for salary and who was made an additional party plaintiff on the same day that the order was entered in this canse, commanding the issuance of a writ of mandamus as to the Chicago Park District and its commissioners.

A motion for a summary judgment was made by the plaintiff and assignee which was supported by their affidavit. The defendants, Chicago Park District and its commissioners filed an affidavit of merits thereto.

An order was entered by the trial court directing the issuance of an alias writ of mandamus directed against the Chicago Park District and its commissioners, commanding them to pay to plaintiff and assignee the sum of $6,028, being the balance claimed to be due as the result of the original judgment order in mandamus entered in this cause together with interest at 5 per cent per annum from December 28, 1932. Subsequently, it was ordered that the notice of appeal operate as a supersedeas.

On November 10,1932, the original petition for mandamus was filed by plaintiff, William Gr. Barclay, and was directed to only the West Chicago Park Commissioners, its commissioners and other officers, and at that time the Chicago Park District was not in existence. It is substantially alleged that plaintiff occupied the position in the classified service of Assistant Superintendent of Parks; that he was being illegally kept out of his employment by the employment of temporary appointees under the title of District Supervisors, and prayed for the issuance of a writ of mandamus directed to the original defendants to reinstate plaintiff and assign him to duty, and that defendants be directed to pay to plaintiff any sums due him from the West Chicago Park Commissioners for wages or salary “from the date of reinstatement and reassignment to duty, with the same right to continue in the performance thereof and receive salary therefor as the plaintiff had prior to his unlawful lay-off. ’ ’

The West Chicago Park Commissioners, its commissioners and officers, filed an answer which in substance denied the material allegations of the petition.

On December 28,1932, the trial court entered a judgment order for a writ of mandamus in favor of plaintiff and against West Chicago Park Commissioners, its commissioners and officers, finding the issues in favor of plaintiff, directing the reinstatement of plaintiff to his position and the payment of salaries for the period he was alleged to have been kept out of employment amounting to $12,749.35, in the following manner:

The sum of $6,185.58 in cash for the period from February 28,1930 to June 30, 1931;

The sum $6,563.77 for the period from July 1, 1931 to December 28,1932, at such time as other employees of West Chicago Park Commissioners are paid for said period.

No appeal was taken from this judgment and it is claimed it became res adjudieata.

It is alleged that plaintiff was reinstated by the commissioners of West Chicago Park Commissioners and paid the sum of $6,185.58 in cash, as provided by said decree; that subsequently additional amounts were paid by West Chicago Park Commissioners, bringing the total paid to the sum of $6,720.55, leaving an unpaid balance, as provided in said mandamus judgment of $6,028.80.

Plaintiff’s theory of the case is that the Chicago Park District and its commissioners are successors of and to the West Chicago Park Commissioners and that as such successors are obligated to carry out the terms of the mandamus judgment which was entered against the West Chicago Park Commissioners. That said mandamus judgment was final and binding upon the West Chicago Park Commissioners and therefore final and finding upon their successors, the Chicago Park District and its commissioners. That the Chicago Park District and its commissioners having taken over the assets and property of the West Chicago Park Commissioners therefore assumed and are chargeable with the liabilities, burdens and obligations of the West Chicago Park Commissioners, not in part as contended for by the Chicago Park -District and its commissioners, but in toto.

Defendants’ theory of the case is that the Chicago Park District was not a successor to West Chicago Park Commissioners in so far as the enforcement of any judgment in mandamus against the West Chicago Park Commissioners was concerned; that the commissioners of the Chicago Park District are not the successors of the commissioners of West Chicago Park Commissioners; that when the West Chicago Park Commissioners and its commissioners ceased to exist, the mandamus judgment commanding the performance of certain acts by them also ceased to exist and became null and void; that since said West Chicago Park Commissioners and its commissioners legally ceased to exist, there could be no successors to them in contemplation of law, and that since the commissioners of Chicago Park District were not appointed to and did not fill the positions which were formerly occupied by the commissioners of West Chicago Park Commissioners, they did not become the defendants to the original suit and judgment; that since they did not become defendants to the original suit and judgment and the court lost jurisdiction of 'the judgment after the term expired, the court could not, 7 years later, make them parties to the judgment and order that summons issue as to them; that such act of the court constitutes an act amending the judgment and was beyond the authority of the court; that in addition thereto the court having vacated the judgment as to the president of West Chicago Park Commissioners, it did not remain in existence as to any alleged successor. Furthermore, that the original mandamus judgment only commanded the performance of certain acts on behalf of Barclay, the relator therein; that since Barclay assigned said indebtedness to Rohm, he had no further interest therein and could not enforce the judgment; that said mandamus judgment being personal as to him, the right to relief by writ of mandamus could not pass to the assignee although the indebtedness itself might; that therefore when Barclay assigned said indebtedness to Rohm, and lost all interest therein, the mandamus judgment became of no force and effect and a nullity and no longer enforcible. That the court had no jurisdiction to make Rohm a party to the- cause, in effect party relator, 7 years after the judgment was entered, he not being a party to the original judgment; that the court had no right to make Chicago Park District and its commissioners parties defendant to said judgment without giving them an opportunity to be heard upon the merits and the other issues involved in a mandamus proceeding such as demand, existence of funds, duty to act, etc. The court had no right to command the payment of interest on the alleged amount claimed to be due since the original order did not command the payment of such interest and the theory under which the order in question was issued was that the court was merely carrying out the terms of the original judgment as to the successors. That the court in effect is not enforcing the original mandamus judgment but is, 7 years later, without a hearing on the issues involved, entering a new and entirely different judgment. That the order for payment of interest provides for the payment of interest covering the entire period since the date of the judgment, namely from 1932, despite the fact that the Chicago Park District has only been in existence since 1934;'that the court was without authority to enter a judgment on the motion of plaintiffs for summary judgment by reason of the fact that the following issues of fact were created by the affidavit of the petitioners and the affidavit of merits in reply thereto, namely; the question of demand, the question of laches, the question of the existence of funds with which plaintiff could be legally paid, the question of the duty to act, the question of the power of defendants to act, the question of unreasonable and vexatious delay, when the period of unreasonable and vexatious delay commenced, and the questions of fact as to the merits of the issues involved in the original proceeding, on all of which issues of fact, the defendants, Chicago Park District and its commissioners, were entitled to a trial upon the merits.

The position taken by defendants aside from being inequitable, is set forth at great length. ' It is quite evident that they expect this court to review the judgment which was entered against their predecessor West Chicago Park Commissioners some 8 years ago, and believe that they may now come into court and-take up those questions anew without an appeal.

It appears that on or about May 1, 1934, the’> legislature consolidated the park districts in Chicago under the name of the Chicago Park District; (Ill. Rev. Stat. 1939, ch. 105, secs. 333.1, 333.12, 333.13, 333.29, 333.36 [Jones Ill. Stats. Ann. 96.551, 96.562, 96.563, 96.573(5), 96.573(12)]), that for every practical purpose they succeeded to the rights, duties and obligations of the various commissioners of the various parks. People v. Kelly, 357 Ill. 408; Ill. Rev. Stat. 1939, ch. 87, sec. 8, page 2015 [Jones Ill. Stats. Ann. 109:432]; Kocsis v. Chicago Park District, 362 Ill. 24; LePitre v. Chicago Park District, 374 Ill. 184; 38 Corpus Juris, pages 938, 939.

Thereafter the Chicago Park District was made a party and it is contended by the defendant that this was an amendment to the mandamus judgment. Such actions did not constitute an amendment of the alias peremptory writ. Ill. Rev. Stat. 1939, ch. 87, sec. 8, page 2015 [Jones Ill. Stats. Ann. 109.432]; People ex rel. Midland Ry. Co. v. Supervisor of Barnett Township, 100 Ill. 332; People ex rel. Burgeson v. West Chicago Park Commissioners, 275 Ill. App. 387; People ex rel. Callahan v. DeYoung, 298 Ill. 380.

It is quite evident that the judgment of the trial court against the West Chicago Park Commissioners was accepted by them as being final for the reason that after contempt proceedings were instituted against them, said defendants restored Barclay to his position as Assistant Superintendent of Parks and paid to Barclay and Rohm, assignee, the sum of $6,720.55 on the amount awarded to Barclay as and for salary which he would have earned but for his illegal discharge and separation from his position as Assistant Superintendent of Parks. The records show that a partial satisfaction was executed by Barclay and Rohm, assignee, and filed in the office of the clerk of the superior court, and we cannot see how the Chicago Park District can expect to again litigate that question. 1

As is set forth in 38 Corpus Juris at page 937:

“The rule of res judicata applies to the judgment for a peremptory writ of mandamus, and all questions raised or which could have been raised in opposition to granting the writ are concluded by the issue of the writ and cannot be raised again in resisting obedience or in justification of disobedience.”

The next question to be decided is: Did the Chicago Park District succeed the West Chicago Park Commissioners ? In upholding the constitutionality and validity of the act with relation to creating the Chicago Park District, the Supreme Court in the case of People v. Kelly, 357 Ill. 408, at page '415, said:

“The powers expressed in the title imply all incidental authority necessary to enable the new district to operate and make improvements. These functions carry with them the power to levy taxes, to issue bonds, and otherwise, within the provisions of the act, to generally assume the burdens and perform the duties previously imposed upon the twenty-two separate districts.” See also Chicago Park District v. Lat-tipee, 364 Ill. 182.
Defendants in their affidavit of merits admitted that the Chicago Park District is the successor to the West Chicago Park Commissioners, when they stated: “Defendants admit that Chicago Park District, under the statute, was in succession to the West Chicago Park Commission.”

In paragraph 7 of said affidavit defendants admit that salaries were paid to former employees of West Chicago Park Commissioners.

We are of the opinion that the trial court was not in error in making the Chicago Park District a party to this suit by virtue of the Mandamus Act, ch. 87, sec. 8, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 109.432], which reads as follows:

“8. Suit not to abate for death, etc.] §8. The death, resignation or removal from office, by lapse of time or otherwise, of any defendant, shall not have the effect to abate the suit, but his successor may be made a party thereto, and any peremptory writ may be directed against him. ’ ’

In interpreting the foregoing statute, the Supreme Court in the case of People ex rel. Illinois Midland Ry. Co. v. Supervisor, of Barnett Township, 100 Ill. 332, said:

“Where a peremptory writ of mandamus has been awarded against the supervisor of a town, commanding him to execute, in behalf of the town, certain bonds to the relator, and the officer has not obeyed the command of the writ, and his term of office has expired, an alias peremptory writ may properly be awarded against his successor in office, to compel him to perform the acts which the former had been by the first writ ordered to perform. This is but a repetition of the writ against the same party represented by another person. It is not making a new party, or any amendment to the judgment or- record, within any rule not allowing amendments. The duty upon the officer first commanded to execute it, is a continuing duty upon him and his successors in office until it is performed.”

In Moore v. Town of Browning, 373 Ill. 583, the court at page 588, said: “Courts are empowered to require that officers perform all acts which the law requires of them in order to fully secure the rights of the plaintiff or yield him a remedy, and this is true whether the action of such officer be a single act or a series of acts. It is plain that the power of the court to require such acts continues until all are fully performed and full remedy has been meted out to the plaintiff.”

Another point raised by defendant is that the judgment was amended when Virtus Eohm was made a party to the suit, as assignee. This, of course, was done according to the provisions of the statute. Section 54 of the Civil Practice Act (Ill. Rev. Stat. 1939, ch. 110, sec. 178 [Jones Ill. Stats. Ann. 104.054]) covers this point fully and provides for the making of assignee an additional party and for carrying on of the cause or proceeding with the- continuing parties and such new and additional party without' a change in title, and the trial court on June 5, 1940, rightfully entered an order making Virtus Eohm, assignee, an additional party plaintiff to this cause.

It is also claimed by defendants that the entry of the summary judgment against the Chicago Park District, successor to the West Chicago Park Commissioners, was error. By reading the so-called affidavit of merits, it can readily be seen that defendants have set up no substantial triable facts, and under such circumstances, it was the duty of the trial court to enter a summary judgment. In People ex rel. Ames v. Marx, 370 Ill. 264, the Supreme Court so decided, and in the case of Spry v. Chicago Ry. Equipment Co., 298 Ill. App. 471, the court at page 478, said:

“The trial court, of course, must determine from the affidavits filed whether the defendant has interposed a sufficiently good defense to entitle it to defend, but where defendant’s affidavits present no substantial triable issues of fact, the court will grant the motion for a summary judgment.”

The next point raised is whether the court was justified in assessing interest for unreasonable and vexatious delay. On December 28, 1932, the trial court entered the first judgment order for mandamus against the West Chicago Park Commissioners. Since that time they paid one half of said judgment, after they had been cited for contempt of court. The other half which amounts to $6,028.80, they have not paid, although they had ample money on hand with which to pay it and they have paid the other employees of the Park, but they refused to pay the remaining half of the judgment. Chapter 74, par. 2, sec. 2, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 67.02], provides that creditors shall be allowed to receive interest at the rate of five per cent per annum for all moneys withheld by an unreasonable and vexatious delay in payment. We think that statute is applicable to the facts in this case. Cook v. City of Staunton, 295 Ill. App. 111.

Other points are raised but they are not controlling in this opinion.

Having read the record, we are of the opinion that the delays since 1932 in making payment of the amount due in compliance with the court’s order, were both vexatious and unreasonable.

For the reasons herein given the judgment of the superior court is affirmed.

Judgment affirmed.

Burke, J., concurs.

Hebel, P. J., dissents.


text:
    E. G. Arndt, Trustee in Bankruptcy of Chicago Gulf Corporation, Appellant, v. Guy H. Abbott et al., Appellees.
    Gen. No. 41,523.
    Opinion filed February 26, 1941.
    Nash, Ahern, McDermott, McNally & Kiley and Maxwell L. Rubin, both of Chicago, for appellant; Maxwell L. Rubin and Seymour J. Rubin, of counsel.
    Alden, Latham & Young, of Chicago, for certain appellees; William Tracy Alden and Robert T. Drake, of Chicago, and John J. Sherlock, of Cicero, of counsel.
    Irving G. Brown, of Chicago, for certain other appellees.
    Andrew D. Collins, of Chicago, for certain other appellee.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Plaintiff brings this appeal from a judgment entered in the circuit court for costs in favor of defendants and against plaintiff at which time the court granted defendants’ motion to strike the complaint of the plaintiff.

Plaintiff E. G. Arndt, trustee in bankruptcy of Chicago Gulf Corporation, filed his complaint against certain directors of the Chicago Gulf Corporation for alleged illegal and wrongful conduct in issuing shares of common capital stock of the said Chicago Gulf Corporation for an illegal consideration.

The complaint after alleging that plaintiff was appointed trustee and stating his qualifications, in accordance with the provisions of the Bankruptcy Act, that as such all the right, title and interest of the debtor, Chicago Gulf Corporation, is vested in him; that defendants were all duly elected directors of the Chicago Gulf Corporation at the time the complained of acts took place; that a directors’ meeting called pursuant to notice, a resolution was adopted by the board of directors authorizing the sale of 100,000 shares of common capital stock of the Chicago Gulf Corporation to John Taylor Wilson, then president of the corporation, the purchaser Wilson to pay for said stock by giving said corporation his collateral promissory note for the principal sum of $100,000, payable to the corporation on or before 1 year from the date thereof, secured only by the said 100,000 shares of common capital stock of the Chicago Gulf Corporation; that the directors set a value of $1 per share upon said 100,000 shares; that pursuant to the said resolution, the said stock was issued and sold to John Taylor Wilson and the said corporation received in payment thereof the note of John Taylor Wilson payable to the order of the corporation in the sum of $100,000, secured by said 100,000 shares of common capital stock of said corporation; that said note was ultimately paid down by said Wilson to the principal sum of $24,993.14, and on October 14, 1937, in exchange for said note paid down to said sum, John Taylor Wilson executed his collateral note in the sum of $24,993.14, payable to the order of Chicago Gulf Corporation on or before September 2, 1938, secured by 25,025 shares of common stock of said corporation; that said note was paid down to $23,866.77 and that the aforesaid balance remains due and unpaid.

The complaint further alleges that under the applicable Delaware law it was illegal and wrongful for the defendant directors to authorize the issuance of stock for a promissory note secured only by the issued stock and that such action constituted a breach of duty oh the part of the defendant directors; that the Chicago Gulf Corporation by reason of such illegal action on the part of the defendant directors suffered a loss in the sum of $23,866.77, the balance due on said note; that the defendant directors, having authorized the issuance of the stock for the said illegal consideration, are and remain liable to the trustee in bankruptcy of the Chicago Gulf Corporation for the said unpaid balance due and owing on the note, together with legal interest from September 2, 1937 to the date of judgment and plaintiff therefore sought judgment against the defendant directors for the aforesaid amount.

The well-pleaded facts alleged in the complaint were admitted by defendants by lengthy motions to strike, and in addition thereto the defendants also alleged facts which properly belong in an answer.

In plaintiff’s theory of the case, plaintiff relies upon the provisions of the Delaware constitution and statute which forbid the issuance of stock for any consideration other than money, services or property. The plaintiff contends that under these provisions and under the clearly applicable Delaware cases, a promissory note secured only by the issued stock, is not legal consideration for the issuance of stock; that the directors were guilty of illegal acts in issuing stock in exchange for such a note; and that they are personally liable for losses caused by their illegal dealings with the capital stock of the corporation. The plaintiff therefore seeks judgment against the defendant directors jointly and severally for the amount due and unpaid on the note, together with appropriate interest.

In defense, defendants contend: (1) that the shares of stock involved in this case were never issued prior to the payment in full, hence there could be no violation of the constitutional or statutory provisions in the issuance of said stock.

(2) Directors are not personally liable for merely issuing stock in exchange for a note, and, even if they were, no liability could result in this case because no loss was sustained.

For the reasons stated above, the trial court was correct in sustaining the motion to strike the complaint and for dismissing the cause of action.

It appears that the Chicago Gulf Corporation was organized under the laws of the State of Delaware on or about March 24,1930, and the provisions relative to issuing capital stock is set forth in the Constitution of the State of Delaware, article 9, section 3, which states the following:

“No corporation shall issue stock, except for money paid, labor done or personal property, or real estate or leases thereof actually acquired by such corporation.”

Section 14 of the corporation law of the State of Delaware, provides as follows:

“Subscriptions to, or the purchase price of, the capital stock of any corporation organized or to be organized under any law of this state, may be paid for, wholly or partly by cash, by labor done, by personal property or by real property and leases thereof; . . . ”

In Sohland v. Baker, 15 Del. Ch. 431, 141 Atl. 277, it was held in considering sections of the constitution as well as the statutes of Delaware that a note does not constitute valid consideration for the issuance of stock under the provisions of the Delaware statute and constitution. In that case stock was issued in exchange for a promissory note. The note was secured by securities of the corporation which was the maker of the note. In a suit by a stockholder to cancel the stock issued in consideration of the note and for an accounting for the proceeds of dividends paid on such stock, the court granted the relief prayed and held that the note was neither property nor cash within the meaning of the Delaware constitution or statute. See also Washer v. Smyer, 109 Tex. 398, 211 S. W. 985; McCarthy v. Texas Loan & Guaranty Co. (Tex.), 142 S. W. 96; Williams v. Brewster, 117 Wis. 370.

It will be seen from a reading of the complaint and the motion made to strike, that denials were made and issues created by said motion which required a hearing on said issues appearing in this record. In his opinion, the trial judge made a finding that the defendants were acting in good faith. In reply to this finding by the trial judge, it is pertinent to say that a branch of this transaction was before this court in the case entitled, People v. Wilson, 306 Ill. App. 216, wherein defendant Wilson was convicted under the Blue Sky Law for selling to the public the very stock which Wilson maintains was issued by the corporation. In this criminal case, which, of course, is not claimed to be res judicata, the second division of this court in its opinion found:

“That the sale was made by the defendant as a part of a scheme to deliberately and intentionally violate the provisions of the Securities Act was clearly and conclusively proved by the evidence.” In that case this court further found that the sale by Wilson was at a figure in excess of the alleged price which he paid to the corporation for the same stock. Citation of that case was presumably made in the instant case on the allegations of good faith of defendants.

On the question whether or not plaintiff should be permitted to try his case in court on issues duly made, we refer to Ill. Rev. Stat. 1939, ch. 110, par. 166, sec. 42 [Jones Ill. Stats. Ann. 104.042], which reads as follows :

“ (2) No pleading shall be deemed bad in substance which shall contain such information as shall reasonably inform the opposite party of the nature of the claim or defense which he is called upon to meet.”

We think the defendants were duly informed as to the charges made against them and that the court erred in sustaining the motion to strike.

Many other questions are raised by defendants, some of which are pertinent, but inasmuch as this cause must be retried, we refrain from discussing them at this time. Suffice it to say, the trial court should not have sustained the, motion to dismiss and in doing so committed error.

For the reasons herein given the judgment of the circuit court is reversed and the cause is remanded with directions to overrule the motion to strike and enter a rule upon the defendants to answer the said complaint and that the cause be placed at issue and tried in due course.

Judgment reversed and cause remanded with directions.

Hebel, P. J., and Burke, J., concur.