author: Mr. Presiding Justice Gridley

text:
    Edelman Bros., Inc. et al., Appellees, v. Charles Baikoff et al., Appellants.
    Gen. No. 37,729.

      Opinion filed November 27, 1934.
    Kamfner, Halligan & Marks, for appellants; Edwin A. Halligan and Irving Bilton, of counsel.
    Weissenbach, Hartman, Craig & Okin, for appellees ; Harry Okin, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

This interlocutory appeal is prosecuted by seven defendants from an order of the circuit court of Cook county, entered July 13, 1934, granting a temporary injunction against them and five others, based upon the allegations of complainants’ verified bill, filed July 10, 1934. In the order, after reciting that the cause came on to be heard upon complainants’ motion and upon notice to the 12 defendants and they being present in court or represented by counsel, and upon arguments being had, etc., it is adjudged and decreed that defendants (naming them), their officers, agents, employees, etc., and all persons acting under their control, and each of them, be restrained and enjoined, until further order of the court, “from standing upon, using or occupying the public sidewalks in front of their respective places of business on Halsted street, Chicago, or the public sidewalks adjacent or contiguous thereto, for the purpose of selling or seeking to sell articles of merchandise to pedestrians or passersby, or in asking for or soliciting tráde or patronage of any pedestrian or passerby using the aforesaid public sidewalks, and from making, causing, permitting or allowing to be made upon said public street (Halsted street), where defendants or any or either of them are engaged in business, or in such close proximity thereto as to be distinctly and loudly audible upon such public street, any noise of any kind by crying, calling or shouting, for the purpose of advertising any goods, wares or merchandise, or of attracting attention or inviting the patronage of any person to any of the businesses operated by the aforesaid defendants, or any or either of them, and from interfering with or impeding any pedestrian or passerby upon the public sidewalk in front of the places of business of said defendants, or any or either of .them, or the public sidewalk adjacent or contiguous thereto, as prayed for in plaintiff’s complaint.”

And the court further adjudged and decreed that an injunction writ issue as aforesaid, directed to the sheriff to execute and return in due form of law, upon complainants’ filing a bond in the sum of $2,000, with surety to be approved by the court or the clerk (which bond was filed and approved).

In complainants’, bill it is alleged in substance that they sue individually and jointly; that the suit involves a common question as to their respective rights; that by the bill it is sought to avoid a multiplicity of suits; and the defendants are sued as such, jointly and severally, because the charges against them involve the same common questions of law and fact. The respective businesses of the eight complainants, all located in and fronting on South Halsted street, south of West Roosevelt road (or 12th street) and north of West 14th street in Chicago, are then set forth, including the nature, character and extent of each business.

In paragraph 9 of the bill it is alleged that Halsted street is one of the longest streets in Chicago, runs north and south, is one of the main arteries of travel in the city and has for many years enjoyed a reputation as a “great shopping street for all kinds of goods and merchandise ’ ’; that Roosevelt road and 14th street are “heavily travelled east and west streets, and are transfer points from many street car lines operated on Halsted street, Roosevelt road and 14th street”; that Halsted street, between Roosevelt road and 14th street, “is a very busy shopping center,” and the respective places of business of complainants and all defendants are located on Halsted street in that area or center; that the patronage of merchants within that area “is not dependent on persons residing in the immediate vicinity of said businesses, but in a large measure the patronage of complainants and other merchants in said area comes from residents of all sections of the city and adjacent suburbs, attracted by reason of the transportation facilities available and the attractive values offered by the merchants in said area'; and that these patrons and prospective customers must necessarily use the public sidewalks on Halsted street in said area in coming to or going from the respective places of business of complainants.”

In paragraph 11 it is alleged that there was and is in force and effect certain ordinances of the City of Chicago regulating the selling or soliciting of trade on public sidewalks, and defining the unlawful use of such sidewalks and prohibiting the attracting of attention or inviting patronage of any person to any business whatsoever by any noise or crying or calling in audible manner on the streets; and that said ordinances were adopted prior to May 27, 1931, are designated as sections 1008, 1009 and 4194 of the Revised Municipal Code of 1931 of said City, and are as follows:

“1008. Selling or Soliciting Trade on Sidewalks a Nuisance. The practice of salesmen, clerks, agents and solicitors, while standing upon, using or occupying the public sidewalks, in selling or seeking to sell articles of merchandise to pedestrians or passersby, or in asking for or soliciting trade, custom or patronage of any pedestrian or passerby, for any business adjacent, adjoining, contiguous or near any public sidewalk, is hereby declared to be a nuisance, and the owner or proprietor of any such business who shall refuse or neglect to abate such nuisance after being notified in writing so to do by the commissioner of police, shall, on conviction thereof, forfeit and pay to the city a sum not less than $10, nor more than $200, for each and every day he shall refuse or neglect to remove or abate such nuisance.

“1009. Unlawful Use of Sidewalks. It shall be unlawful for any person to stand upon, use or occupy the public sidewalks for the purpose of or in pursuance of asking for or soliciting trade, custom or patronage for any person, firm or corporation whiqh owns or conducts a business adjacent or near any such public sidewalk.

“It shall be unlawful for the owner or owners of any such business, either in person or by or through any salesman, clerk, agent or solicitor, to stand upon, use or occupy the public sidewalks to ask for or solicit trade, custom or patronage for such business.

“It shall be unlawful for any person, while soliciting trade, or attempting to solicit trade, custom or patronage for any such business, to interfere with or impede any pedestrian or passerby upon a public sidewalk.

“Provided, nothing in this section contained shall be construed to include any business operated wholly or entirely upon the public-sidewalk space, under or by virtue of a lawful permit issued therefor.

“Any person, firm or corporation violating any of the provisions of this section shall be fined not less than one dollar nor more than $100 for each offense.

“4194. Calling oe Wares and Using Mechanical Devices eor Advertising Goods Prohibited. No person shall make, or cause, permit or allow to be made, upon a public street, or in such close proximity to a public street as to be distinctly and loudly audible upon such public street, any noise of any kind by crying, calling or shouting, or by means of any whistle, rattle, bell, gong, clapper, hammer, drum, horn, hand organ, mechanically operated piano, other musical instrument, or similar mechanical device or wind instrument, for the purpose of advertising any goods, wares or merchandise or of attracting attention or inviting the patronage of any person to any business whatsoever; provided, that the said restrictions shall not apply to any public alley in the city between the hours of 11 a. m. and 6 p. m.

“Every person who shall violate any of the provisions of this section shall be fined not less than two dollars nor more than $50 for each offense; and such person shall be deemed guilty of a separate and distinct offense for every day during which such person shall continue such violation.”

In paragraph 12 of the bill the names, kinds and places of the respective retail businesses of the 12 defendants are given. All are alleged to be in the block on Halsted street immediately south of Eoosevelt road. And the respective kinds of retail businesses are alleged to be men’s clothing, ladies’ wearing apparel, men’s or women’s shoes, etc. And it is further alleged that none of the defendants operates a business wholly or entirely upon the sidewalk space, under or by virtue of any lawful permit issued by the city authorities.

In paragraphs 13, 14 and 15 of the bill the allegations are as follows (italics ours):

“13. That all of the defendants, so engaged in the businesses and at the addresses aforesaid, for some time past have had or do now have in their employ one or more persons, commonly called ‘pullers,’ engaged in behalf of their respective employers to indulge in the practice commonly called ‘pulling,’ which consists of soliciting trade or patronage on the public sidewalks in front of and adjacent to the places of business of their respective employers, by crying and calling out in a loud audible manner that their respective employers are offering rare bargains, or that a great sale is in progress, and other inducements of various descriptions, in an effort to induce pedestrians, including customers and prospective customers of the respective complainants, using said public sidewalks in said streets, to enter into the stores of their respective employers; that these employees use various methods and devices for making noises in an effort to attract the attention of said pedestrians, using said sidewalks on said streets, and where pedestrians are not impressed with said vocal efforts of said ‘pullers,’ they grab hold of the arm or otherwise take hold of such pedestrians in an effort to cajole or persuade them to enter the stores of their respective employers; that said ‘pullers’ are employed usually because of their glibness of tongue and lung power, and in some instances for their physical strength, better enabling them to take hold of and jostle pedestrians, resulting frequently in the pedestrians resenting interference with their free use of the public sidewalks, and for their resentment these pedestrians are frequently insulted in vile language by said ‘pullers’; and that these practices are indulged in both with respect to men and women pedestrians using said .sidewalks on the streets in said neighborhood.

“14. That many of said pedestrians, using the sidewalks in front of and adjacent to the respective premises of defendants, are persons who have come into the neighborhood for the purpose of trading with one or more of the complainants, and others are persons desirous of trading with one or more of complainants or other merchants in the neighborhood; that they are entitled to the free and unmolested use of the public sidewalks; that defendants’ acts and doings, by and through their said servants and employees, constitute a nuisance and are violative of the rights of the public in general and particularly of the complainants; that numerous customers and prospective customers and patrons of the respective establishments operated by complainants have complained of the unlawful practices of the respective defendants, and because thereof have refused to come into said area wherein are located the respective places of business of complainants, and have on account thereof refused and still do refuse to come into and purchase merchandise from the establishments respectively conducted by complainants, and on account thereof the respective complainants have lost a large number of sales, business and profits which would have accrued therefrom; that such acts of defendants cause and are causing great cmd substantial damage to the property values and the property rights of complainants; that the injury to complainants is different in kind and degree from that suffered by the general public, in that such unlawful practices by defendants divert patronage from the neighborhood in question and from the complainants in particular; that defendants ’ said acts are destructive of the property rights of complainants and cause them irreparable damage and injury; and that such damage is incapable of computation and cannot be compensated for in an action at law.

“15. That said practices of defendants are indulged in daily, are constant and continuous and are occurring with such frequency that the prosecution of any of the defendants, and their servants and employees, for specific violations of said city ordinances would not afford adequate relief to complainants, and to undertake such prosecutions would occasion only a multiplicity of suits; and that defendants and each of them threaten to continue such unlawful acts, and a continuance thereof will result in substantial damage to the respective complainants and deprive them of profits that would otherwise accrue to them.”

In paragraph 16 it is further alleged that complainants, tog-ether with “most of the merchants in said neighborhood,” have exhausted all efforts of persuasion to induce the defendants to desist and stop their said practices; that they have sought relief by petitioning the commissioner of police of Chicago to abate the practices, declared by said ordinances to be a nuisance; that on March 22,1934, a petition to that end was presented to said commissioner (photostatic copy of the petition is attached to the bill, marked “Exhibit A” and made a part thereof); but that despite complainants’ protest and efforts to have defendants desist from their unlawful practices, the latter are still continuing to indulge in them. The petition is signed by a large number of merchants in said neighborhood (including some of the complainants), is addressed to said commissioner, is dated March 22,1934, and is as follows:

“We, the undersigned, representing a majority of the business men of the Halsted-Boosevelt District in Chicago, hereby protest against the illegal and unethical practice of ‘pulling’ and ‘street hawking’ which has recently become prevalent in this district, We respectfully direct your attention to sections 1008 and 1009 of the City Ordinances, which specifically prohibit this practice and instructs the Commissioner of Police in the manner of enforcement. Unless prompt and vigorous action is taken to suppress violations of these ordinances in this district, every self-respecting shopper will be driven away and the effect will prove ruinous to many business concerns of this section. We trust you will give this matter your immediate attention and use every means within your command to enforce the law and abolish this most serious nuisance completely and permanently from the district. Please be assured of our fullest co-operation in any request you may make. ’ ’

In the prayer of the bill complainants asked for the issuance by the court against defendants, their agents, employees, etc., of both a temporary and a permanent injunction, enjoining them from doing the acts and indulging in the practices, substantially as stated in the court’s temporary injunction order in question as first above mentioned.

It is first contended by counsel for defendants that the court erred in issuing the temporary injunction because the bill does not allege sufficient facts showing-violations of the three sections (above set forth) of the Revised Municipal Code of the City of Chicago. After reviewing the bill, and particularly paragraphs 13, 14 and 15 thereof, we find no merit in the contention. Furthermore, we are of the opinion that the bill states such facts as prima facie warrants relief by injunction against a private nuisance, being committed by defendants to the injury of complainants in their trade or business. In 46 Corpus Juris, pp. 646, 647, sec. 3, it is said: “With respect to the scope of then-injurious effect, nuisances are spoken of either as public or private or both. ... A private nuisance is one that affects a single individual or a determinate number of persons in the enjoyment of some private right not common to the public. . . . The distinction between public and private nuisances lies in the difference of the rights affected thereby. A nuisance is public because of the danger or injury to the public. It is private only because the individual as distinguished from the public has been or may be injured.

. A public nuisance does not furnish grounds for an action either at law or in equity by an individual who suffers an injury which is common to the general public. But a nuisance may be both public and private at the same time if it, at the same time, affects the general public and also inflicts upon a private individual some special injury that is not inflicted upon the general public. An individual who sustains an injury peculiar to himself may have relief against a public nuisance.” In Wahle v. Reinbach, 76 Ill. 322, 325, one of the well recognized doctrines in equity is. stated to be that “where the injury resulting from the nuisance is, in its nature, irreparable, as, when loss of health, loss of trade, destruction of the means of subsistence, or permanent ruin to property will ensue from the wrongful act or erection, courts of equity will interfere by injunction, in furtherance of justice and the violated rights of property.” (See, also, Wente v. Commonwealth Fuel Co., 232 Ill. 526, 533.) And in 32 Corpus Juris, p. 155, sec. 209, it is said: “Since the right to carry on a lawful business without obstruction is a property right, acts committed without just cause or excuse, which interfere with the carrying on of complainant’s business and destroy his custom, his credit, or his profits, do an irreparable injury and authorize the issuance of an injunction.”

It is secondly contended by counsel that the court erred in issuing the temporary injunction because it appears from the face of the bill that complainants have an adequate remedy at law. We cannot agree with the contention. Counsel do not state in their brief what particular remedy at law would be adequate. And we think it obvious from the allegations of the bill that prosecutions by the City of Chicago against the defendants, or some of them, for violations of the ordinances would not necessarily abate the nuisances, and that if they are not abated complainants will suffer irreparable injury. What is meant by the term “irreparable injury,” authorizing the interposition of a court of equity by way of injunction, is stated in Wahle v. Reinbach, supra, where, quoting from Wood on Nuisances, it is said (76 Ill. p. 326): “By irreparable injury is not meant such injury as is beyond the possibility of repair, or beyond possible compensation in damages, nor necessarily great injury or great damage, but that species of injury, whether great or small, that ought not to be submitted to on the one hand or inflicted on the other; and because it is so large on the one hand or so small on the other, is of such constant and frequent recurrence, that no fair or reasonable redress can be had therefor in a court of law.” In Newell v. Sass, 142 Ill. 104, 116, it is said that the term “irreparable injury,” as used ñi the law of injunctions, “does not necessarily mean that the injury is beyond the possibility of compensation in damages, nor that it must be very great. And the fact that no actual damages can be proved, so that in an action at law the jury could award nominal damages only, often furnishes the very best of reason why a court of equity should interfere in a case where the nuisance is a continuous one.” In Christie Street Commission Co. v. Board of Trade, 92 Ill. App. 604, 605, 606, it is said: “If the intervention of a court of equity be warranted by the necessity of protection to civil rights or property interests, then the mere fact that incidental thereto a crime or statutory offense must be enjoined, will not operate to deprive the court of its jurisdiction.” And in Oehler v. Levy, 234 Ill. 595, 602, it is said: “It has been repeatedly held by this court that where the legal right of a complainant in a bill for an injunction is clearly shown, and the unlawful use of the defendant’s property which injured the complainant’s property is clearly settled, the complainant will be granted relief without a prior determination in a suit at law that the defendant’s use of his property constitutes a nuisance. ’ ’ And we think that the holding’s and decision in Donovan v. Pennsylvania Co., 199 U. S. 279, may here be referred to as being much in point. That litigation was commenced in the IT. S. Circuit Court at Chicago by the Railroad Co. filing its bill to enjoin defendants from soliciting the custom, at the Railroad Co.’s station at Chicago, of incoming passengers for cabs, carriages, express wagons and hotels within said station and from congregating upon the sidewalks in front of, adjacent to, or about the entrances, and there soliciting such custom. A temporary injunction was granted (116 Fed. 907). On appeal to the U. S. Court of Appeals for the Seventh Circuit the temporary injunctional order was affirmed, as somewhat modified. (120 Fed. 215.) Subsequently a final decree was entered in the circuit court in conformity with said modification of the Circuit Court of Appeals, which decree was afterward affirmed by the latter court, and the cause reached the Supreme Court upon writ of certiorari sued out by the defendants (199 U. S. 285, 286), where said decree of the Court of Appeals also was affirmed (p. 305). From the statement of the case, preceding the opinion of the Supreme Court, it appears that the Railroad Co. had commenced the suit against defendants, who were hack drivers, etc., for the purpose of protecting it in the enjoyment of certain claimed rights and privileges in respect of its passenger station and depot grounds. That it was alleged in the bill (pp. 283, 284) that defendants “daily gathered in numbers from 8 to 20 men at a time, in rows and groups, upon the sidewalk in front of its main entrance, entered the company’s station at its main entrance by twos and threes at a time, without plaintiff’s consent and against its express objection, and in loud and boisterous voices and manner solicited incoming passengers and baggage for their vehicles; that defendants by their numbers and noisy calls harassed and annoyed passengers, sometimes forcibly laying hold of them when leaving the station in order to secure their patronage, to the annoyance and confusion of passengers and to the injury and damage of plaintiff; that the number of defendants, upon the arrival of each train at the entrance and within the station, soliciting business, had become so great that, by their boisterous actions and obstruction of the sidewalk and the interior of plaintiff’s station without its consent; they had in large part deprived plaintiff of its lawful property right in the street frontage and of the free and full use of its station and property, and thereby created and continued a private nuisance damaging to plaintiff’s property, depriving it of the full, lawful, beneficial use of its station and street frontage and of the main entrance thereto and had prevented and now daily prevent it from securing to passengers a free and uninterrupted passage from and to its station and to arriving and departing trains; and that by such acts of defendants great and substantial damages were inflicted upon plaintiff’s property different in kind and degree from that suffered by the general public, incapable of computation and which could not be compensated at law.

“That defendants have asserted the right — and acted upon that claim and assertion — to enter the station of plaintiff at all times in such numbers as suited their purposes, to remain there and occupy such portions of the station as they saw fit in soliciting the custom of incoming passengers regardless of the consent or regulations of plaintiff or the use to which its property is lawfully devoted, and to the prejudice of its duties and business as a common carrier, and by their actions have largely deprived plaintiff of the control of its property, to its irreparable loss and damage..”

It further appears that to the bill defendants filed an answer, putting in issue its material allegations, and insisting upon their legal right to have their vehicles in the public street in front of the company’s station, and to go upon plaintiff’s depot grounds or into its station as well as to stand upon the sidewalk in front of the main entrance to the station for the purpose of soliciting the business of incoming or outgoing passengers; and that the motion for the temporary injunction was heard upon the pleadings and upon affidavits filed by the respective parties. A portion of the opinion of the Supreme Court is as follows (pp. 304, 305):

“When, therefore, licensed hackmen and cabmen, at appropriate times, placed their vehicles in the public street, next to the sidewalk, in front of the company’s passenger house, they did not violate the regulations established by the city council. Nor, so far as the plaintiff is concerned, did they violate such regulations, when, leaving their vehicles in the public street, at the appointed places, they stood near by them for a reasonable time upon the sidewalk awaiting the coming of passengers from the station house. What they could not legally do — what the final decree properly forbade them to do — was to congregate upon the sidewalk in front of, adjacent to or about the passenger house, so as to interfere with the ingress and egress of passengers. Of course, any use of the sidewalk in whatever way that would unnecessarily or unduly obstruct and interfere with passengers in their going or coming would be inconsistent with the rights of such passengers, as well as an infringement of the right of the company as abutting property owner to have, by its agents and employes, for the purposes of its business, reasonable access to and from the sidewalk and the public street.

“It only remains to inquire as to the competency of a court of equity to give the railroad company the relief it sought. The defendants insist that equity cannot properly interfere. But the inadequacy of a legal remedy in such a case as this one is quite apparent. According to the record the attempt of the defendants, despite the objections of the company, to use its station house and depot grounds for the purpose of meeting passengers and soliciting their patronage, was of constant, daily, almost hourly occurrence. The case was one of a continuing trespass, involving injury of a permanent nature. A suit at law could only have determined the particular wrong occurring on a particular occasion, and would not reach other wrongs of like character that would occur almost every hour of each day, as passengers arrived at the station of the company. The same state of things existed in reference to such use of the sidewalk in front of the passenger station as unduly interfered with the rights of passengers arriving and departing. Only a court of equity was competent to meet such an unusual emergency, and by a comprehensive decree determine finally and once for all the entire controversy between the parties — thus avoiding a multiplicity of suits and conserving the public interests. No remedy at law would be so complete or efficacious as a suit in equity in such a case as this one.”

It is lastly contended by counsel for defendants in the present case that the court erred in issuing the temporary injunction “for the reason that it appears from the bill that complainants could not have the relief as prayed.” Their main argument in support of the contention is that the bill “failed to aver special damage to complainants or their property, the character of which is different in kind and degree from that sustained by the general public. ’ ’ In developing their argument, after admitting that “persons dealing with complainants are entitled to the free and unmolested use of the sidewalks,” they further state in their brief that “since the acts of defendants show no injury to the property, health or the personal convenience of complainants, but are rather charged to be a disturbance and annoyance to the exercise of a public right, it seems clear that the sole remedy is by a public prosecution ; in brief, the use of public sidewalks, free from obstruction, is not a personal right, but is rather a privilege which one enjoys in common with every other person, and, while we may assume that the injuries to complainants are larger in measure from other business proprietors, yet the injuries to all are of the same general character.” In view of the well pleaded allegations of fact contained in complainants’ bill (which are to be taken as true upon this appeal) and considering numerous decisions of the courts of review in this State, we are unable to agree with the contention or arguments of counsel. As we read those allegations, the gist of them is that defendants’ daily and continuous unlawful acts, as set forth in the bill, are specially injurious to complainants in their trade and business and in the established good will of their customers; i. e., in their property rights. In McDonald v. English, 85 Ill. 232, 236, it is said: “We regard the rule as well settled, that for any obstruction to streets, not resulting in special injury to the individual, the public, only, can complain. Where, however, the obstruction is such that a public prosecution is authorized, and, at the same time, an individual has been specially injured thereby, as well as where the act has been private and an offense against the individual, solely, he may maintain an action and recover for his special injury. But, in such case, the special injury is the gist of the action, and, unless it is alleged and proved, there can he no recovery.” And in Hoyt v. McLaughlin, 250 Ill. 442, 446-448, it is said (italics ours):

“An unlicensed dram-shop or saloon is declared by law to be a nuisance. . . . Can such a nuisance be abated at the suit of a private person? The answer to this question depends upon whether an individual has suffered special damage different from that suffered by him in common with the public. The rule is well settled by the decisions of this and other States that a public nuisance will not be enjoined at the suit of a private person unless the nuisance causes such person a special and particular injury distinct from that suffered by him in common with the public at large. In cases where no private or special injury is caused to an individual an action to abate the nuisance must be instituted by or in the name of the public. But a public nuisance may also be a private nuisance. (Wood on Nuisances, sec. 674,) as where the property of an individual is injured in a manner special to him and different from the injury to the public. An injury to the public, in the sense here used, is such an injury as excludes or hinders all alike in the enjoyment of a common right. The question whether a private person has suffered such special injury or damage is not to be determined by whether he, alone, has suffered damage or whether others in the same vicinity have been injured also. If an individual has suffered special damage to his property from the nuisance, his right to maintain a bill to enjoin it is not affected by the fact that the property of others has been injured by the same cause. (Wylie v. Elwood, 134 Ill. 281, 286.) This question has been the subject of frequent adjudication, and, according to the great weight of authority, if the allegations of the bill here make a case against appellees of conducting a dram-shop without a license, the special damage alleged is sufficient to authorize maintaining the bill. In Wesson v. Washburn Iron Co., 95 Mass. 95, the court said (p. 103): ‘The real distinction would seem to be this: That when the wrongful act is, of itself, a disturbance or obstruction only to the exercise of a common and public right, the sole remedy is by public prosecution, unless special damage is caused to individuals. In such case the act of itself does no wrong to individuals distinct from that done to the whole -community. But when the alleged nuisance would constitute a private wrong by injuring property or health or creating personal inconvenience and annoyance for which an action might be maintained in favor of a person injured, it is none the less actionable because the wrong is committed in a manner and under circumstances which would render the guilty party liable to indictment for a common nuisance.’ ”

Counsel for defendants, in arguing their instant contention, lay considerable stress upon the holdings and decision in Pittsburg, Ft. W. & C. Ry. Co. v. Cheevers, 149 Ill. 430, wherein our Supreme Court, adopting the opinion of the Appellate Court for the First District (44 Ill. App. 118), affirmed the judgment of that court, which in turn had affirmed a final decree of the circuit court of Cook county, dismissing for want of equity the Railroad Co.’s bill for an injunction, somewhat similar to that finally sustained by the decision of the United States Supreme Court in the subsequent Donovan case, supra (199 U. S. 279). We have carefully considered the facts in the Gheevers case (as disclosed from the opinion) and believe they are to be distinguished from those alleged in complainants’ bill in the present case.

Our conclusion is that in the present case the circuit court did not err in entering its interlocutory order appealed from of July 13, 1934, granting the temporary injunction against defendants as first above mentioned. Accordingly, the order is affirmed.

Affirmed.

Scanean and Sullivan, JJ., concur.


source: Caselaw Access Project

author: Mr. Justice Scanlan

license: Public Domain

text:
    Midland Oil Company, Appellant, v. Packers Motor Transport, Inc., Defendant. Advance Transportation Company, Appellee.
    Gen. No. 36,983.

      Opinion filed November 27, 1934.
    Rothman & Mintz, for appellant.
    Mayer, Meyer, Austrian & Platt, for appellee; Frederic Burnham, David F. Rosenthal and .Jacob X. Schwartz, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

This is an appeal by Midland Oil Company, a corporation, plaintiff in an attachment-garnishment proceeding, from a judgment against the garnishee, Advance Transportation Company, a corporation, in the sum of $205.

On July 19, 1932, plaintiff commenced an attachment-garnishment suit against Packers Motor Transport, Inc., a corporation (hereinafter called defendant), as defendant, and Advance Transportation Company, a corporation (hereinafter called garnishee), as g’arnishee. The attachment issue was tried without a jury, the attachment was sustained, and there was a finding and judgment against defendant in the sum of $5,236.24. Defendant prayed an appeal but never perfected it. In the answer filed by garnishee to interrogatories it admitted it was indebted to defendant in the sum of $205. Plaintiff contested garnishee’s answer. In a trial by the court on plaintiff’s contest of the said answer there was a finding against garnishee on its answer in the sum of $205, and judgment was entered for that sum for the use of plaintiff. Plaintiff contends that the trial court erred in not entering judgment for $5,253.45 for the use of plaintiff.

Garnishee has filed a motion in this court “to strike from the bill of exceptions and the abstract filed in the above cause, that portion of the bill of exceptions from pages 50 to 124, both inclusive, and that part of the abstract of record from pages 7 to 18, both inclusive.” It appears that the bill of exceptions from pages 50 to 122 relates to certain proceedings before Judge Gray upon the attachment issue, and that pages 123 and 124 relate to proceedings before Judge Greer upon the same issue. These parts of the bill of exceptions are not certified by said judges, and no excuse is shown for the absence of such certification. The garnishment issue was tried by Judge McKinlay, and it appears that after the trial and judgment, but before the presentment of the bill of exceptions, Judge McKinlay resigned as an associate judge of the municipal court, and the instant bill of exceptions was presented to Judge Brooks, who certified the same as acting chief justice of the municipal court. There are incorporated in the bill of exceptions signed by Judge Brooks what purport to be stenographic reports of alleged proceedings had before Judge Gray and Judge Greer in the attachment proceedings. Assuming, for the sole purposes of this motion, that duly certified bills of exceptions in the proceedings before Judges Gray and Greer in the attachment matter might have been properly incorporated in the instant bill of exceptions, nevertheless, Judge McKinlay, if he had continued on the bench, would have had no power to incorporate in the bill of exceptions the stenographic reports of the alleged proceedings before Judges Gray and Greer, nor would he have had the power to certify to the said proceedings unless there appeared in the record some legal reason for the failure of those two judges to certify to the respective portions of the attachment proceedings which were heard before them, and the record is barren in that regard.

“Where different parts of the case are heard by two judges, each must authenticate the proceedings by bill of exceptions as to those matters heard by bim. ’ ’ (Taylorville Sanitary District v. Nelson, 334 Ill. 510. See also Staunton Coal Co. v. Menk, 99 Ill. App. 254, and People v. Rice, 238 Ill. App. 460.) It is settled law in this State that where a bill of exceptions is signed by a judge other than the one who heard the proceedings covered thereby, a legal excuse for such procedure must appear in the record, otherwise the bill will be stricken. Plaintiff makes but a feeble effort in opposition to the instant motion. It argues that in determining the motion we must give force to the stipulation between plaintiff and garnishee “that the original bill of exceptions and stenographic report filed in the above entitled cause, instead of a copy thereof, shall be certified and incorporated in the transcript of record in said cause.” This stipulation was signed on July 14, 1933, and the bill of exceptions was not presented to Judge Brooks until July 18, 1933. We find nothing in the stipulation that authorized plaintiff to put into the bill of exceptions in the garnishment proceeding the alleged proceedings before Judges Gray and Greer, and in this connection it must be remembered that garnishee was not. a party to the attachment proceedings. Upon the trial of the garnishment issue the plaintiff made no effort, by motion or otherwise, to make the stenographic reports of the attachment proceeding a part of the record in the garnishment proceeding. If any alleged evidence in the attachment proceeding would have been competent and relevant in the garnishment proceeding, there was a proper way to present it. We find no merit in the contention of plaintiff that garnishee was guilty of laches in not making the motion to strike at an earlier day. The instant motion of garnishee must be granted and it is accordingly so ordered.

Plaintiff contends that “the sale herein is fraudulent and void as to the plaintiff for failure to comply with the Bulle Sales Act.” In support of this contention plaintiff relies upon the following part of section 1 of the Bulk Sales Act (Cahill’s Ill. Rev. St. 1933), ch. 121a, par. 1:

“ ... That the sale, transfer, or assignment in bulle of the major part or the whole of a stock of merchandise, or merchandise and fixtures or other goods and chattels of the vendor’s business, otherwise than in the ordinary course of trade and in the regular and usual prosecution of the vendor’s business shall be fraudulent and void as against the creditors of the said vendor, . . . unless the said vendee shall at least five days before taking possession of said goods and chattels and at least five days before the payment or delivery of the purchase price, or consideration of any evidence of indebtedness therefor, in good faith, deliver or cause to be delivered or send or cause to be sent personally or by registered letter properly stamped, directed and addressed, a notice in writing to each of the creditors of the vendor named in said' statement or of whom the said vendee shall have knowledge, of the proposed purchase by him of the said goods and chattels and of the price, terms and conditions of such sale . . .

The stipulation of facts reads as follows:

‘‘It is hereby stipulated by and between the plaintiff Midland Oil Company, a corporation, and the garnishee, Advance Transportation Company, a corporation, parties to the above entitled suit, by th'eir respective attorneys, that for the purposes of the plaintiff’s contest of the answer of Advance Transportation Company as garnishee, the following shall be taken as facts in the case and that this stipulation may be introduced in evidence by either of the parties hereto and shall be received as evidence upon the hearing on the contest of said garnishee’s answer:

“1. That on July 12, 1932, a written contract dated July 12, 1932, was entered into between Packers Motor Transport, Inc., an Illinois corporation, as Seller, and said Advance Transportation Company, a corporation, as Purchaser, and James A. Hannah, as a party to said contract. An Original of said contract is hereto attached marked Exhibit ‘A’ and by reference made a part hereof.

“2. That on July 12, 1932, contemporaneously with the execution of the purchase contract above referred to, said Advance Transportation Company received from said Packers Motor Transport, Inc. an affidavit dated July 12, 1932, signed by James A. Hannah, as president of the Seller corporation, purporting to be in compliance with the Bulk Sales Law of the State of Illinois and setting forth what is therein stated to be a full, accurate and complete list of the creditors of said Packers Motor Transport, Inc., their addresses and the amounts owing to each of said creditors as of the date of said affidavit. The name of Midland Oil Company, the Plaintiff herein, is in said affidavit shown as a creditor for the sum of $4266.53. Said affidavit is attached hereto marked Exhibit ‘B’ and by reference thereto herein made a part hereof.

“3. That on July 13, 1932, the Purchaser in good faith caused to be sent by registered letter, properly stamped, directed and addressed, a notice in writing to each of the creditors (including Midland Oil Company), of whom the purchaser had knowledge or were named in the said affidavit of the Seller by its president. That the said notice in writing was in words and figures as shown on copy thereof attached to the affidavit of Herman E. Friedrich, an attorney for the Seller, which affidavit together with the list thereto attached, is hereto attached marked Exhibit ‘C’ and by reference thereto herein made a part hereof.

“4. That the notice so sent to Midland Oil Company, the plaintiff herein was mailed by registered mail on Wednesday, July 13, 1932, addressed to plaintiff at the address given in the said affidavit of said James A. Hannah, arrived in Chicago on July 14, 1932, and was received by Midland Oil Company on July 15, 1932.

“5. That the said attachment suit in which said Advance Transportation Company was served as garnishee was begun on July 19, 1932, and that Advance Transportation Company as garnishee was served on July 19, 1932 at 11:30 A. M.

“6. That except as to the facts herein set forth, which are to be taken as admitted by the parties hereto for the purposes of the above suit, either of the parties hereto shall have the right to introduce any other admissible evidence bearing upon the issues involved.”

Exhibit A, attached to the stipulation and by reference made a part thereof, is a contract dated July 12, 1932, between defendant as seller and garnishee as purchaser, and James A, Hannah (hereinafter referred to as Hannah), whereby, in consideration of one dollar and other valuable considerations and the mutual agreements contained, the parties agree, in substance, as follows:

“Seller does hereby sell, transfer, set over and assign all its right, title and interest in and to certain equipment located at 4125 Emerald Avenue, Chicago, Illinois, listing eight semi-trailers, certain office furniture and equipment, also listing certain office equipment located in its Milwaukee office, and in its Indianapolis office, also a certain account receivable in the sum of $450.00.

“Seller represents said property is free and clear of liens and encumbrances except such as are herein specifically assumed by the purchaser and seller warrants its title to said property.

‘ ‘ Seller -agrees and does assign all of its right, title and interest in and to its certain contracts with so-called owner-drivers.

“Seller does hereby assume and pay any amounts due and owing to any of said owner-drivers as of midnight, July 15,1932, and shall be entitled to collect and receive any amounts due and owing from said owner-drivers. That as of midnight, July 15,1932, said buyer shall begin its operations under said several contracts with the owner-drivers.

“Purchaser agrees to pay the sum of $3,000.00 in cash and assumes and- agrees to pay the following notes payable, listing 11 creditors, aggregating the sum of $8,716.91. Buyer agrees to indemnify and save harmless the seller from all loss, payment or damage of any kind by reason of the failure of the said purchaser to pay said notes.

“Seller and Hannah jointly and severally agree not to engage in the' trucking or hauling business for a period of two years from date of this contract within certain named states.

“Parties agree that for the purpose of prorating adjustable items respecting rent, salaries, and earnings, midnight of July 15, 1932, is hereby designated as the time for prorating the same, that all revenues and expenses of any truck dispatched before such time and until it shall have returned to Chicago premises and completed its cycle shall accrue to the seller and all revenue thereafter accruing shall belong to the purchaser ; that the rent for the month of July, 1932, the garage in Chicago and the offices at Indianapolis and Milwaukee has been paid and will be prorated as of July 15, 1932, and the seller hereby assumes and agrees to pay all bills incurred prior to midnight of July 15, 1932. In the event as of midnight, July 15, 1932, seller for any reason is unable to make complete delivery of title and possession to all of the property and chattels described herein, then- at the option of the purchaser this contract shall be null and void and of no force and effect.

“It is understood that any amount due from such proration to either of the parties shall be payable in cash immediately after July 15,1932.

“Parties agree to notify the Commonwealth Edison Company and the Illinois Bell Telephone Company, the Indiana Bell Telephone Company and the Wisconsin Bell Telephone Company to render final bills to the seller as of midnight, July 15, 1932, and to bill purchaser for all charges thereafter.

“Purchaser assumes and agrees to pay all rents for the aforesaid garage and Indianapolis and Milwaukee offices accruing after midnight, July 15, 1932. Seller agrees to pay salaries and wages of all employees (not including owner-drivers) to and including July 16, 1932.

“It is understood and agreed that the seller does hereby sell, assign, transfer and deliver to the purchaser the business and good will of said seller in and to the business now operated by the seller.

“Seller represents and guarantees that the list of creditors delivered to the purchaser concurrently herewith is a true, accurate and complete list of all creditors of the seller as of daté hereof.

“In consideration of $1.00 and other good and valuable consideration Hannah does hereby guarantee that the representations, covenants and agreements hereinabove set forth with reference to liens and mortgages against said property are true and agrees to indemnity and save harmless the purchaser from all claims, demands, damages or loss of any nature which may accrue to or be suffered by the purchaser by reason of any liens or incumbrances on said property or chattels.

“Parties mutually agree that the payment of the cash by the buyer shall be made to Bottum, Hudnall, Lecher, McNamara & Michael, Milwaukee, Wisconsin, and executed copies of this contract together with assigned owner-driver contracts shall be deposited by the seller with Howard A. Brundage, Chicago, Illinois, who shall be escrowees for the parties hereto to be held until Tuesday, July 19, 1932, at which time the exchange of money and contracts between said escrowees shall be made and purchaser shall take possession of the property and chattels above listed.

“Parties mutually agree that within said five-day period the seller will furnish to the purchaser a certified copy of a resolution of its Board of Directors authorizing the execution of this contract, also a certified copy of a resolution of its stockholders approving and ratifying said sale and purchaser shall furnish a certified copy of a resolution of its Board of Directors approving and authorizing the execution of this contract.

‘ ‘ Contract signed by Packers Motor Transport, Inc., Advance Transportation Company and James A. Hannah.”

Exhibit B, an affidavit of James A. Hannah, president of defendant, recites:

“ ... that he is the President of Packers Motor Transport, Inc., an Illinois corporation, which is this day selling certain of its property to Advance Transportation Company, a Wisconsin corporation.

“Affiant further states that to the best of his knowledge and belief, the attached list is a full, accurate and complete list of the creditors of said Packers Motor Transport, Inc., their addresses and the amounts owing to each as near as may be ascertained, as of the date hereof; and that this affidavit is furnished in compliance with the Bulk Sales Act of the Statutes of the State of Illinois.”

Attached to this affidavit is a list of 54 accounts payable creditors aggregating the sum of $11,776.44, including the name of plaintiff as a creditor in the sum of $4,266.53; also 14 notes payable creditors aggregating the sum of $10,516.91. Exhibit C, an affidavit of Herman E. Friedrich, recites:

“In Be Purchase of Assets of Packers
Motor Transport, Inc., an Illinois Corporation,
Bt Advance Transportation Company,
a Wisconsin .Corporation.
“Herman E. Friedrich, being first duly sworn, on oath deposes and says that he did on this 13th day of July, 1932, forward by registered mail deposited in the post office of the United States at Milwaukee, Wisconsin, on said date, in an envelope properly sealed and addressed to each and every of the following alleged creditors of Packers Motor Transport, Inc., at the addresses therein respectively noted, per list attached hereto, marked Exhibit ‘A,’ with postage duly prepaid to cover both general and registered postage, an identical, full and complete copy of the within and attached notice to creditors, marked Exhibit ‘B,’ one said notice in each and every of said envelopes; that this affidavit is made for the purpose of showing that the revised statutes of the State of Illinois for 1932, particularly Section 1, Chapter 121-A thereof, have been and thereby were fully complied with.” Attached to this affidavit is a list of 66 accounts and notes payable creditors, which includes plaintiff’s name, and a notice to creditors of defendant, as follows:
“July 12, 1932.
“To the creditors of Packers
Motor Transport, Inc.:
“You and each of you are hereby notified that the undersigned, pursuant to a certain contract between Packers Motor Transport, Inc. and the undersigned, proposes to purchase the good will, business and a major portion of the goods and chattels of said Company upon the payment of Three Thousand Dollars ($3,000) in cash and the assumption of certain indebtedness, aggregating Nine Thousand Five Hundred Sixteen and 91/100ths Dollars ($9,516.91) and the assumption of all of its contracts with its owner drivers. Said company agrees not to enter into the same line of business it is now in in competition with the undersigned for a period of two years.
“This notice is given to you pursuant to Section One, Chapter 121-A, of the Illinois Revised Statutes.
“Very truly yours,
“Advance Transportation Company,
“By G-. J. Lindner, Secretary.”

Plaintiff contends “that it was the intention of our legislature to give creditors not less than five days within which to protect their interest. The time, therefore, should be figured, not from when the notice is mailed to the creditors, but from when the creditors received the notice. In this cáse the notice was received by the plaintiff on July 15, 1932, as stipulated by the parties, and if the sale was closed on July 19th, as contended by the garnishee, it would give the plaintiff four instead of five days’ notice.” Garnishee contends that the statute does not absolutely require a delivery of the notice to creditors five days before payment is made to the seller, but that it provides, in the alternative, that the “vendee shall at least five days before the payment ... of the purchase price . . . in good faith . . . send or cause to be sent . . . by registered letter, properly staimped, directed and addressed, a notice in writing . . . The stipulation of facts states “that on July 13, 1932, the Purchaser in good faith caused to be sent by registered letter, properly stamped, directed and addressed, a notice in writing to each of the creditors (including Midland Oil Company), of whom the purchaser had knowledge or were named in the said affidavit of the Seller by its president,” and “that the notice so sent to Midland Oil Company, the plaintiff herein, was mailed by registered mail on Wednesday, July 13, 1932, addressed to plaintiff at the address given in the said affidavit of said James A. Hannah, arrived in Chicago on July 14, 1932, and was receivéd by Midland Oil Company on July 15, 1932.” Plaintiff states that the precise question involved in the instant contention has not been passed upon by the reviewing courts of this State and that the holdings on the question in other jurisdictions are not of much aid, as the language of our statutes is entirely different from that of the other states. Plaintiff cites no authority in support of its instant contention, but it argues that if we adopt garnishee’s interpretation of the section such interpretation would aid and encourage fraud because a notice to creditors who might be located in certain parts of the United States would not reach them until after the expiration of five days. The Bulk Sales law is in derogation of the common law and must be strictly construed, and we have no power to read into the law a requirement not strictly within its terms. It is for the legislature to remedy defects, if there be any, in the law.

Plaintiff contends that the notice is insufficient, under the statute, because, it argues, the act requires that the notice should list the goods and chattels purchased. The statute, as we read it, does not require such listing in the notice.

Plaintiff also contends that the notice fails to give the names of the creditors whose indebtedness the buyer is assuming and the amounts due to each. The statute makes no such requirements. The necessary requirement is that the creditor be notified of the “price, terms and conditions” of the sale. Under the stipulation of facts it appears that garnishee, on July 13, 1932, sent, by registered letter, a notice in writing to each of the creditors, including plaintiff, “containing a full, accurate and complete list of the creditors of the vendor, their addresses and the amounts owing to each as near as may be ascertained.”

We find no real merit in the contention that there is a discrepancy between the purchase price stated in the notice and the purchase price stated in the contract, and that the notice, therefore, is in this respect fatally defective and insufficient. The specific sum stated in the notice is $9,516.91, but the notice also provides that the purchaser assumes all of the contracts of the seller with its owner-drivers and agrees to assume certain other obligations that might be due and owing as of July 15, 1932, such as rents and employees’ salaries, and there is nothing in the record to show that the aforesaid items did not make up the difference between $8,716.91 and $9,516.91. Indeed, plaintiff, in its argument in support of the instant contention, is forced to use testimony alleged to have been given at the hearing of the attachment issue.

There is no merit in plaintiff’s further contention that the evidence fails to prove that the $3,000 was paid on the 19th. It appears that during the trial of the garnishment proceedings the following occurred: “The Court: In this case the money was paid over and the deal was consummated prior to the service of the summons, was it? Mr. Rothmann (attorney for plaintiff): Two hours before. Mr. Schwartz (attorney for garnishee): Two hours before.” This plain admission of counsel for plaintiff, is binding upon it. But plaintiff argues that its counsel, at the time of the admission, could not have known when the $3,000 was paid and that the admission must be considered as amounting to no more than an admission that the garnishee claimed that the money was paid before the service of the garnishment, and plaintiff argues from certain alleged testimony that has been stricken from the bill of exceptions that the proof fails to show when, if ever, the $3,000 was paid. In view of the admission of counsel for plaintiff it was not necessary for garnishee to offer proof as to the time of the payment. Had plaintiff withdrawn the admission a different situation might have been presented.

Plaintiff further contends that the evidence tends to show that defendant moved out of its place of business and the garnishee moved into said premises on July 15, 1932, and that such action by garnishee was clearly in violation of the Bulk Sales law. In support of this contention plaintiff cites certain testimony alleged to have been heard on the trial of the attachment issue, but even if we were allowed to consider such evidence we would hold that it was insufficient to support plaintiff’s instant contention.

Plaintiff contends that “in still another respect is the sale herein in violation of the Bulk Sales Law, not perhaps of the letter, but surely of the spirit thereof”; that “from the record herein, it appears that the defendant was indebted in the sum of $22,293.35 to sixty-eight creditors, the plaintiff being one of the largest”; that “by the terms of the sales contract between the defendant and garnishee, eleven creditors were paid in full to the extent of $9,500 of the purchase price, being the debts assumed by the garnishee”; that “only the $3,000 cash payment was left to take care of debts in the sum of $12,793.35 due to fifty-seven creditors.” In support of the instant contention plaintiff argues that “the provision in the sales contract with reference to the assumption of certain debts by the garnishee is fraudulent in letter, spirit and purpose and contrary to the very purpose and intent of the Bulk Sales Law which is to protect all creditors.” In support of its contention plaintiff cites Mattoon Grocery Co. v. Stuckemeyer, 326 Ill. 602, but that decision, in our judgment, does not support plaintiff’s contention. A general rule governing bulk sales laws is that a preference of some creditors over others is not prohibited where the parties to the sale have complied in all respects with the express terms of the Bulk Sales Law. (See 27 C. J. 883; WardS McGowen Grocery Co. v. Franklin, Stiles & Franklin, 18 Ala. App. 619, 93 So. 205; Bailen v. E. P. Badger Import Co., 99 Neb. 24, 154 N. W. 850, 852.)

Plaintiff further contends that “the sale herein is fraudulent and void because it was made with intent to hinder, delay and defraud the plaintiff, and the garnishee herein had notice of such fraudulent intent of the seller. ’ ’ Plaintiff argues that the fraudulent intent of defendant was litigated and judicially determined in the attachment proceeding and that “the only question, therefore, is whether the garnishee herein had notice of the fraudulent intent of the defendant,” and further argues that the evidence shows that the garnishee had such notice. The attachment proceeding was between plaintiff and the debtor, defendant. Garnishee was not a party to the attachment proceeding, and had no right to be heard upon any issue therein. Garnishee argues that four different grounds for attachment were alleged in plaintiff’s affidavit for attachment, and that there is nothing in the record to show upon which ground or grounds the court sustained the attachment. But, assuming for the purposes of the instant contention that the judgment in the attachment proceeding determined that defendant was guilty of fraudulent intent, nevertheless, we find nothing in the proceedings in the garnishment hearing that warrants us in holding that garnishee had notice of the fraudulent intent of the seller. Indeed, the stipulation of facts states “that on July 13, 1932, the purchaser m good faith caused to be sent by registered letter” a notice in writing to each of the creditors of whom the garnishee had knowledge or was informed. As garnishee argues, if it “in good faith” caused to be sent the notice to each of the creditors, such conduct is hardly consistent with the theory that it was participating in a scheme of the debtor to hinder and defraud its creditors, for if the garnishee were a party to such a scheme the notice would not have been sent “in good faith.”

Plaintiff further contends that “at the time the garnishment herein was served, the three thousand dollar cash payment as well as the ninety-five hundred dollars thereafter paid out by the garnishee were subject to garnishment.” We have heretofore passed upon the first part of this contention. We find no merit in the contention that the $9,500 thereafter paid out by garnishee was subject to garnishment. When the $3,000 was paid by garnishee to defendant, garnishee had no longer any property or effects belonging to the judgment debtor. By the contract the debts assumed were debts owing to certain creditors of defendant, and the promise of garnishee was to pay the said debts to those creditors. It is the law of this State that where a contract is made for the benefit of a third party, not a party to the contract, the rights under the contract are vested in the third party without the necessity of his assenting to or indicating that he has accepted the benefits thereof. In the instant case a right vested in the creditors whose claims garnishee had agreed to pay. That garnishee thereafter paid all of the creditors whose claims it had agreed to pay is undisputed.

Garnishee contends that “the plaintiff is not entitled to judgment herein, inasmuch as the answer of the defendant disclosed that third parties were interested and the plaintiff did not bring them into the suit.” We have not deemed it necessary to pass upon this contention, nor have we deemed it necessary to consider garnishee’s further contention that “no personal judgment (beyond the $205 admitted to be due in the answer) can in any event be entered against the garnishee herein in the absence of evidence that the stock of goods involved is not still in the garnishee’s possession.”

We have carefully and patiently considered the many contentions raised by plaintiff and have reached the conclusion that there is no substantial merit in any of them.

The judgment of the municipal court of Chicago is affirmed.

Affirmed.

Gridley, P. J., and Sullivan, J., concur.


text:
    Edmund S. Cummings, Appellant, v. Michigan-Lake Building Corporation, Appellee.
    Gen. No, 37,197.
    Opinion filed November 27, 1934.
    Cummings & Wyman, for appellant.
    SONNENSCHEIN, BeRKSON, LaUTMANN, LEVINSON & Morse, for appellee; Herbert M. Lautmann, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

An assumpsit suit brought upon two bonds of $1,000 each and three interest coupons of $30 each, all dated February 1, 1926, executed by defendant and payable to the bearer or his order on February 1, 1933. The trial court found the issues against plaintiff and entered a judgment for costs against him.

The affidavit of merits states that the defense is:

“1. That the bonds sued upon herein, copies of which are attached to the plaintiff’s statement of claim as Exhibits ‘A’ and ‘C,’ are two bonds of a series of 3325 bonds of like tenor and effect, described in and secured by that certain trust deed from Michigan-Lake Building Corporation, a corporation, as mortgagor, to First Trust and Savings Bank, as trustee, dated February 1, 1926, and recorded in the office of the Recorder of Deeds of Cook County, Illinois, on February 18, 1926, as document No. 9183922, which said trust deed is in words and figures as follows, to-wit: (Here follows a copy of the trust deed.) . . ' .

“2. That both of the bonds sued upon herein, together with all the other bonds of said issue, contain the following terms and provisions relating to said trust deed:

“ ‘Both principal and interest are payable in the manner more specifically described in the indenture hereinafter referred to. . . . For a description of the mortgaged property, the nature and extent of the security, and the rights and limitations on the rights of the bondholders, reference is made to said Indenture, to all provisions of which this bond and each coupon hereto attached are subject, with the same effect as if the same were herein fully set forth. . . .

“ ‘Said Indenture and this bond, as well as all of the other bonds secured by said Indenture, are to be taken and considered together as parts of one and the same contract. ’

“3. That by reason of the terms and provisions of said bonds, all of the terms, provisions and covenants of said trust deed inure to the benefit of and are binding upon all of the owners and holders of said bonds and interest coupons secured thereby, including the plaintiff.

“4. That in and by said trust deed, it is provided, among other things, as follows:

“ ‘And It Is Expressly Declared, Covenanted and Agreed that all of said bonds are to be issued, certified, delivered, received and negotiated, and that the said mortgaged property is conveyed to and is to be held and disposed of by the Trustee subject to the following further conditions, covenants and provisions, uses and trusts, and every holder of said bonds and coupons accepts the same subject thereto, that is to say:’

“ ‘Section 6. . Every holder of any of the Bonds and coupons hereby secured (including pledgees) accepts the same subject to the express understanding and agreement that every right of action, whether at law or in equity, upon or under this Indenture, is vested exclusively in the Trustee, and under no circumstances shall the holder of any Bond or coupon, or any number of combination of such holders, have any right to institute any action at law upon any Bond or Bonds or any coupon or coupons, or otherwise, or any suit or proceeding in equity or otherwise, except in case of refusal on the part of the Trustee to perform any duty imposed upon it by this Indenture after request in writing by the holder or holders of at least twenty-five per cent (25%) in principal amount of said Bonds as aforesaid. No action at law or in equity shall be brought by, or on behalf of, the holder or holders of any Bonds or coupons, whether or not the same be past due, except by the Trustee or by the requisite number of bondholders acting in concert under the provisions of this Section for the benefit of all bondholders. ’ . . .

“8. That in accordance with the terms and provisions of the bonds and interest notes sued upon herein and of the trust deed securing the same, as aforesaid, the plaintiff does not now, nor did he at the time of the filing of this suit, have the right to bring this action, or any action upon said bonds and interest notes and that the exclusive right to sue upon said bonds and interest notes was at the time of the filing of this suit and is now vested in said trustee. ’ ’

Plaintiff contends that, under the facts and the law, the lower court should have found for him with judgment for $2,090, and interest at seven per cent per annum from February 1, 1933. The position of defendant-in this court was that “the bonds sued upon and the trust deed referred-to therein are, by the recitals in the bonds themselves, to be taken and considered together as parts of one and the same contract”; that “the trust deed, being part of the same contract with the bond, precludes the bondholder under any circumstances from maintaining this action at law, ’ ’ and that “the limitation upon the bondholders’ right to sue is not affected by determining that the bonds are negotiable.” This position was in accord with the defense set up in the affidavit of merits. In the very recent decision of our Supreme Court in Oswianza v.Wengler & Mandell, Inc., 358 Ill. 302, the court stated that “the rule which plaintiff in error would invoke as to the necessity for reading all terms of one contract into another made at the same time and as a part of the same transaction does not apply to cases of this kind. Sturgis Nat. Bank v. Harris Trust and Savings Bank, supra (351 Ill. 465), and cases there cited.” Since that decision defendant has changed its position and has, by leave of court, filed a “supplemental memorandum,” in which it calls attention to the Oswiansa decision and “submits the following propositions: (a) That the question of negotiability is not involved in this case; (b) That the bond in this case contains appropriate language to incorporate therein by reference the no-action clause of the trust deed, and that under the holding in the Oswiansa case, supra, the judgment of the lower court should be affirmed. ’ ’

Our decision is controlled by the Oswiansa case, wherein the trust deed contained the same provisions as are relied upon by defendant in the instant case, and the bonds contained the following language:

■ “Said trust deed and this bond, as well as all the other bonds aforesaid, are to be taken and considered together as parts of one and the same contract. . . . Both principal and interest bear interest after maturity thereof at the rate of seven per cent (7%) per annum and are payable in the manner described in the trust deed. . . . For a description of the mortgaged property and the nature and extent of the security reference is made to said trust deed, to all of the provisions of which this bond and each coupon hereto attached are subject, with the same effect as if said trust deed were herein fully set forth.”

In the instant case the bonds contain six paragraphs. The second reads as follows:

“This Bond is one of a series of 3325 first mortgage bonds numbered consecutively from l'to 3325, both inclusive, of like form, tenor and effect, except as to denomination, number and time of maturity thereof, amounting in the aggregate to -the principal sum of Two million eight hundred thousand dollars ($2,800,000) payable serially as set forth in said Indenture, the payment of all of which first mortgage bonds, together with the interest thereon, is equally and rat-ably, and without priority or preference of any one first mortgage bond over any other first mortgage bond for any reason whatsoever, secured by an Indenture in the nature of a Trust Deed bearing even date herewith, duly executed, acknowledged and delivered by the Company to the First Trust and Savings Bank, an Illinois corporation, of Chicago, Illinois, as Trustee, and recorded in the Office of the Recorder of Deeds of Cook County, Illinois. Said Indenture also secures the payment of a series of general mortgage bonds, in the aggregate principal amount of Four hundred thousand dollars ($400,000), subject and subordinate to said first mortgage bonds. For a description of the mortgaged property, the nature and extent of the security, and the rights and limitations on the rights of the bondholders, reference is made to said Indenture, to all provisions of which this bond and each coupon hereto attached are subject, with the same effect as if the same were herein fully set forth.” (Italics ours.) In the “supplemental memorandum” defendant contends that the bonds, by reason of the words which we have italicized, “contain appropriate language to incorporate therein by reference the no-action clause of the trust deed, ’ ’ and argues that the Oswiansa case sustains this contention. We do not agree with the contention nor argument. All of the provisions contained in the second paragraph of the bonds have to do with the trust deed and the rights conferred by it upon the bondholders, and the limitations on the rights of the bondholder if he would seek to enforce the trust deed. As stated by the court in Enoch v. Brandon, 249 N. Y. 263, 269, wherein a similar question was involved, a purchaser scanning the bonds would think that the obligor was speaking solely of the security, and “he would interpret the statement that the bonds were secured by and entitled to the benefits and subject to the provisions of the mortgage, as meaning that a foreclosure or other relief might be had thereunder only subject to its provisions.” In the Oswiansa case the court stated that negotiability was not a prime factor in determining whether the plaintiff had a right to sue at law, but that there was no language in the bond which fairly incorporated, by reference, the no-action clause of the trust deed, and that, therefore, the plaintiff, the owner of bonds, had a right to sue at law. In its opinion the court said:

“It follows that if there be read into the bonds in this case the no-action provisions of the trust deed it must be by an appropriate reference found in the bond.

This case resolves itself into the question whether there is in the bond language which may reasonably be said to incorporate therein, by reference, the no-action clause of the trust deed. . . . The language is so phrased and arranged as to strongly indicate that the obligor was speaking solely of the security. The purchaser of these bonds would not be impressed with any other thought. It would not occur to him, from this language, that in case the bonds were defaulted on maturity, as is true here, he might be unable to collect because of some provision in the trust deed limiting his power to sue at law. Enforcement against the security and a suit at law are matters of radically different import, and to'destroy the right to sue at law, a provision of such character in the trust deed must be included in the bond, expressly or by clear reference thereto. Sturgis Nat. Bank v. Harris Trust and Savings Bank, supra (351 Ill. 465); Enoch v. Brandon, 249 N. Y. 263, 164 N. E. 45. . . . The importance of bonds of this character as commercial paper requires that limitation on the right to sue, appearing in another instrument, be so clearly referred to in the bond that the purchaser of the bond will not be deceived but will be notified that he is to look further to know his rights as a bondholder. If a principle of public policy be invoked, it is quite important that in the traffic of bonds the prospective purchaser thereof know from the bond what search of the trust deed or mortgage is necessary in order to learn his rights.

. . . If the common law rights of the holder are to be limited it must be done by appropriate reference in the bond to the provisions of the trust deed or mortgage, that he may have warning that his right to sue in case of default is limited by something not appearing in the bond itself.” (Italics ours.)

In Enoch v. Brandon, supra, the court held (p. 268) that if the meaning is doubtful, the construction most favorable to the bondholder must be adopted. In the instant case the six paragraphs of the bonds were drafted, apparently, upon the theory that the bonds and the trust deed were parts of the same transaction and that the terms of the trust deed would be read into the bonds, but defendant is now forced, by the decision in the Oswiansa case, to give to the words, in the bonds, which we have italicized, a strained and unwarranted interpretation. As stated in that case, “to destroy the right to sue at law, a provision of such character in the trust deed must be included in the bond, expressly or by clear reference thereto.” When the italicized words are considered in connection with the six paragraphs as a whole, it seems, to us, idle to argue that they measure up to the requirements of the rule laid down in the Oswiansa case. We hold that the language in the bond upon which defendant relies, does not include by clear reference the no-action clause of the trust deed.

There is another point in connection with the bond that should be considered in determining the question before us. The record contains a photostatic copy of the bond, which is a facsimile of the original. The provisions in the bond cannot be read by eyes of normal strength without the aid of a magnifying glass. In addition, parts of the provisions are blurred by a large design, an ornamental background in the form of a sunburst. Save as they are contained in the photostatic copy, the bill of exceptions fails to show the provisions of the bond, and it was with some difficulty that we were able to find the italicized words in the photostatic copy, even with the use of a magnifying glass. A careful inspection of the face of the bond leads to the conclusion that its makers did not intend that a purchaser should have a reasonable chance to read the provisions of the bond. If the makers of the bonds intended to take away the important right of a purchaser to sue thereon, and if they also intended to practice common honesty and fair dealing toward the general public, who constitute the great mass of prospective purchasers, the intent to take away the right would have been fairly and plainly stated, and would not have been buried in a mass of words having no direct bearing thereon. The artful manner in which the face of the bond in the instant case is designed is an additional reason why the purchaser was not given a clear warning that his right to sue at law in case of de-. fault was limited by something appearing in the trust deed.

The judgment of the municipal court in the instant case must be reversed, and as the sole defense to the action was that plaintiff had no right to bring an action at law against defendant, judgment will be entered here in favor of plaintiff and against defendant in the sum of $2,356.96, which includes $2,090 principal and $266.96 interest.

Judgment reversed and judgment here in favor of plaintiff and against defendant in the sum of $2,356.96.

Gridley, P. J., and Sullivan, J., concur.