author: Mr. Justice Scanlan

text:
    Continental Illinois National Bank and Trust Company of Chicago, Appellee, v. J. R. Cardwell et al., Defendants. J. R. Cardwell, Appellant.
    Gen. No. 38,495.

      Opinion filed November 10, 1936.
    Rehearing denied November 24, 1936.
    Moses, Kennedy, Stein & Bachragh, of Chicago, for appellant; Robert Bachragh and Eugene R. Thorrens, of Chicago, of counsel.
    Blum & Jacobson, of Chicago, for appellee; Henry "S. Blum, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

J. R. Cardwell, defendant, appeals from a judgment in the sum of $97,036.31 entered against him on plaintiff’s motion for summary judgment in an action upon a written guaranty. The defendant filed written objections to the motion. The motion was heard on the verified complaint, an affidavit of Carl I. Johnson (a vice president of plaintiff bank), defendant’s verified amended answer, and counter affidavits made by defendant and E. R. Thorrens, one of his attorneys. Defendant, upon filing his appearance in the cause, demanded a jury trial and before judgment was entered renewed the demand.

The complaint alleges that Rush C. Butler (a codefendant who does not join in this appeal and against whom judgment was taken by default for want of appearance) executed and delivered to plaintiff three certain notes, as follows:

Date Maturity Amount

July 16, 1934 October 15, 1934 $125,031.75

July 30, 1934 October 15, 1934 1,854.54

Nov. 13, 1934 December 13, 1934 1,060.00

(said notes are fully set forth in the complaint); that defendant Cardwell on October 11, 1929, for good and valuable consideration received by him, executed and delivered to plaintiff bank his continuing guaranty, which is in words and figures as follows:

“For Value Received and in consideration of advances made or to be made, or credit given or to be given, or other financial accommodation afforded or to be afforded to Rush C. Butler (hereinafter designated as ‘Debtor’), by Continental Illinois Bank and Trust Company (hereinafter called the ‘Bank’), from time to time, the undersigned hereby guarantees the full and prompt payment to said Bank at maturity and at all times thereafter of any and all indebtedness, obligations and liabilities of every kind and nature of said Debtor to said Bank (including liabilities of partnerships created or arising while the Debtor may have been or may be a member thereof), howsoever evidenced, whether now existing or hereafter created or arising, whether direct or indirect, absolute or contingent, or joint or several, and howsoever owned, held or acquired, whether through discount, overdraft, purchase, direct loan or as collateral, or otherwise; and the undersigned further agrees to pay all expenses, legal and/or otherwise (including court costs and attorneys’ fees), paid or incurred by said Bank in endeavoring to collect such indebtedness, obligations and liabilities, or any part thereof, and in enforcing this guaranty. The right of recovery, however, against the undersigned is limited to one hundred thousand Dollars ($100,000), plus interest on all loans and/or advances hereunder and all expenses hereinbefore mentioned.

.“In case of the death, incompetency, dissolution, liquidation or insolvency (howsoever evidenced) of, or the institution of bankruptcy or receivership proceedings against said Debtor, all of said indebtedness, obligations and liabilities then existing shall, at the option of the Bank, immediately become due or accrued and payable from the undersigned. All dividends or other payments received from the Debtor, or on account of the debt from whatsoever source, shall be taken and applied as payment in gross, and this guaranty shall apply to and secure any ultimate balance that shall remain owing to said Bank.

“This guaranty shall be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect until written notice of its discontinuance shall be actually received by said Bank, and also until any and all said indebtedness, obligations and liabilities existing before receipt of such notice shall be fully paid. The death or dissolution of the undersigned shall not terminate this guaranty until notice of any such death or dissolution shall have been actually received by said Bank, nor until all of said indebtedness, obligations and liabilities existing before receipt of such notice shall be fully paid.

‘ ‘ The liability hereunder shall in no wise be affected or impaired by (and said Bank is hereby expressly authorized to make from time to time, without notice to anyone), any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or other disposition of any of said indebtedness, obligations and liabilities, either express or implied, or of any contract or contracts evidencing* any thereof, or of any security or collateral therefor. The liability hereunder shall in no wise be affected or impaired by any acceptance by said Bank of any security for or other guarantors upon any of said indebtedness, obligations or liabilities, or by any failure, neglect or omission on the part of said Bank to realize upon or protect any of said indebtedness, obligations or liabilities, or any collateral or security therefor, or to exercise any lien upon or right of appropriation of any moneys, credits or property of said Debtor, possessed by said Bank, toward the liquidation of said indebtedness, obligations or liabilities, or by any application of payments or credits thereon. Said Bank shall have the exclusive right to determine how, when and what application of payments and credits, if any, shall be made on said indebtedness, obligations and liabilities or any part of them. In order to hold the undersigned liable hereunder, there shall be no obligation on the part of said Bank, at any time, to resort for payment to said Debtor, or other persons or corporations, their properties or estates, or resort to any collateral, security, property, liens or other rights or remedies whatsoever.

“All diligence in collection or protection, and all presentment, demand, protest and/or notice, as to any and everyone, of dishonor and of default and of nonpayment and of the creation and existence of any and all of said indebtedness, obligations and liabilities, and of any security and collateral therefor, and of the acceptance of this guaranty, and of any and all extensions of credit and indulgence hereunder, are hereby expressly waived.

“The granting of credit from time to time by said Bank to said Debtor in excess of the amount to which the right of recovery under this guaranty is limited and without notice to the undersigned, is hereby also authorized and shall in no way affect or impair this guaranty.

“No act of commission or omission of any kind, or at any time, upon the part of said Bank in respect to any matter whatsoever, shall in any way affect, or impair this guaranty.

“Said Bank may, without any notice whatsoever to any one, sell, assign or transfer all of said indebtedness, obligations and liabilities, or any part thereof, and in that event each and every immediate and successive assignee, transferee, or holder of all or any part of said indebtedness, obligations and liabilities, shall have the right to enforce this guaranty, by suit or otherwise, for the benefit of such assignee, transferee or holder, as fully as if such assignee, transferee or holder were herein by name specifically given such rights, powers and benefits; but the said Bank shall have an unimpaired right to enforce this guaranty for the benefit of said Bank, as to so much of said indebtedness, obligations and liabilities that it has not sold, assigned or transferred.

“This guaranty shall be construed according to the laws of the State of Illinois, in which State it shall be performed by the undersigned.

“This guaranty and every part thereof, shall be binding upon the undersigned, and upon the heirs, legal representatives, successors and assigns of the undersigned, and shall inure to the benefit of said Bank, its successors, legal representatives and assigns.

‘ ‘ Signed and Sealed by the undersigned, at Chicago, Illinois, this 11th day of October, 1929.

“ok jrw

“J. B. Cardwell (Seal) ”
WRV

The complaint further alleges that Isabelle Crilly Butler, on November 15, 1932, executed and delivered to plaintiff her continuing guaranty (which is set forth verbatim); that plaintiff is the successor to Continental Illinois Bank and Trust Company and the legal holder and owner of the three notes and of the said guaranty; that the said notes have become due by their terms and there is due and owing to plaintiff from defendant Cardwell the sum of $130,990; that defendants promised to pay said sums and that although requested have failed to do so, and the complaint prays for judgment. The verified answer of defendant Card-well, a document of 23 pages, sets up, according to defendant, 15 separate defenses. According to plaintiff it sets up 53 defenses. We will refer hereafter to the defenses relied upon by defendant.

Defendant states that he executed the guaranty at the request of his friend Rush C. Butler; that about October 10,1929, Butler called at defendant’s office and stated to him that he was developing some very valuable properties in Indian Hill and would require $100,000; that he would need that sum for a year; that he had asked plaintiff bank for a loan for that amount but it refused to make Mm such loan for more than three months without a guaranty; that Butler asked defendant if he would be willing to guarantee this $100,000 loan with plaintiff bank for one year, provided that he, Butler, put up $250,000 worth of collateral with the bank to secure the loan; that defendant told Butler he would guarantee the obligation for one year; that the next day defendant called at plaintiff bank and saw John R. Washburn, vice president of the bank, in regard to the Butler loan matter; that defendant, who knew Washburn in a social way, told the latter that he would guarantee the loan for one year with the understanding that collateral was to be back of it; that Washburn then stated, “Your understanding is correct”; “Sign tMs and I will fix it up”; that witness said, “What is this?” to which Washburn responded, “That is a guarantee of Butler’s $100,000.00 loan for one year”; that when the loan for $100,000 matured in 1930 he consented to an extension for one year because Washburn assured him that there would be no extension beyond October 11, 1931, and that Butler would be required to pay the loan by that date. Washburn died March 7, 1933. On February 9, 1934, Cardwell called at plaintiff bank in response to a request by it for payment under his guaranty. In defendant’s amended answer he avers that after a conversation between two representatives of the bank and defendant on that date the said representatives made the following memorandum of record:

“Mr. L. S. Ford and the writer have had a conversation with J. ft. Cardwell concerning his guaranty on the obligation of Rush C. Butler. This is a conclusion of several telephone conversations and also a discussion which we had in September last at which we brought to Mr. Cardwell’s attention the fact that we would probably have to have recourse on him to the extent of some portion of his guaranty. He now states that he believes this guaranty should be cancelled for three reasons:

“ (1) That his original transaction with Butler and John R. Washburn called for a one year carry, on our part. Mr. Cardwell states that in the fall of 1930, Mr. Washburn called him, indicated that Butler wanted a year’s further extension and further indicated that the assets traced were well over $100,000. Cardwell states that he demurred, but upon further conversation with Butler, agreed to a one year’s extension. Inasmuch as in the fall of 1931, when the second year had expired, he heard nothing more from either Butler or Washburn, he feels that he had reason to believe that the debt had been taken care of.

“ (2) He mentions that at one time he had $125,000 to invest and in talking to Mr. Washburn indicated to him that the safety of the principal was the first consideration. Subsequently there was sent to him Mr. Warren Illiek of the Continental Illinois Company, who sold him securities, including Chilean bonds, on which it was necessary for him to take a very substantial loss.

“ (3) The Grigsby-Grunow Company, in which he was interested as a stockholder, owed this bank $1,000,000 and demanded its money. As a result, he and others made advances to the Grigsby-Grunow Company, he to the extent of $250,000, which money he con-' tends directly benefited us.”

On April 17, 1934, defendant sent the following letter: “Mr. Chris M. Smits, Vice President,

“Continental Illinois National Bank & Trust Co.,

“231 South LaSalle Street,

‘ ‘ Chicago, Illinois.

“Dear Mr. Smits:

“In October, 1929, your bank loaned to Mr. Bush C. Butler the sum of $100,000 on a note due in one year. I guaranteed the payment of the loan.

“When the note became due in October 1930, one of the officers of your bank called me into his office and stated that if I would agree to an extension of the loan for one year, no further extensions would be granted and Mr. Butler would be required to pay the loan at the end of the year. I did not desire to permit any extension and so informed your officer. However, he assured me that he had checked Mr. Butler’s collateral and that the same was worth considerably more than the obligation it secured. He urged me to extend the time for Mr. Butler to pay this note for one more year so that Mr. Butler might preserve as much of the collateral as he could. I finally yielded to his earnest solicitation and consented to another year’s extension, that -is, until October, 1931, with the distinct understanding, however, that no further extensions would be made and that Mr. Butler’s obligation would be paid at the expiratioif of the extended period. Tour officer promised me that the matter would be taken care of along those lines and in my presence made a written memorandum to the effect that no further extensions would be granted and that Mr. Butler’s note must be paid at the end of the extension in October, 1931.

“Now your bank is demanding a statement from me.

“From the time that I had this conversation with your officer with reference to this extension, I heard absolutely nothing about Mr. Butler’s obligation for almost three years, at which time I was informed that the officer had not kept his promise to enforce collection from Mr. Butler in October 1931 but had, on the contrary, given Mr. Butler a number of extensions; had never taken any steps against Mr. Butler to enforce the collection of the note when the same became due in October 1931, and worst of all, had never communicated with me or notified me that the bank was still looking to me under my guaranty to take care of this account. Indeed, your officer knew that I believed that the Butler note had been paid in full. He stated to Mr. Butler himself that I believed the note had been paid. The very fact that I was permitted to go along under that belief for a period of two years shows either. that the bank regarded my liability on the guaranty as terminated or it was a deliberate intent on the part of your bank, through its officer, to mislead me.

“I have had at all times the greatest confidence in your bank and in your organization. I feel that my confidence in your bank has been most woefully abused by some of the officers thereof. This is true not only in connection with the transaction involving Mr. Butler’s note but in some other matters which I now want to call to your attention.

“In July, 1930, I had $135,000 on deposit in my account in your bank. It was my desire to preserve this principal for the purpose of meeting obligations maturing in October 1931. Above all else, I wanted safety of principal. The income from the investment did not mean so much to me but the safety of the principal meant everything. I went to the same officer of your organization in July 1930 and told him my situation, going into considerable detail in connection therewith. I told him that I wanted to invest $135,000 and that I was willing to rely entirely upon the judgment of your organization in making the investment. I told this officer that I knew nothing about bonds and that I was perfectly willing to turn my $135,000 over to him and let him, on behalf of your organization, invest the same for me in such a way that I would be assured of the principal when I needed it in October 1931.

“Your man told me that your bank would be glad to make the investment for me and that I could depend upon it, that, as he expressed it, ‘we will sell you some bonds, and what we sell you will be as good as gold. ’ Your organization took my $135,000 and delivered to me in place thereof German Government 5%% bonds and Chilean 6% bonds. Since then I have been informed that as I told your bank that I wanted to have the money available to meet obligations coming due in October 1931, that as bankers, your organization should not have sold me these bonds even if they had been good because they were long term bonds. What your bank should have sold me was a short term investment which could readily have been converted into cash at the time in October 1931 when I would need it.

“What happened to these bonds, it is unnecessary for me to tell you. Suffice to say that my loss on these two issues was over $100,000 in cash.

“What makes this situation even less palatable than it would otherwise have been is the fact that a short time ago I was informed by a man who was associated with your organization at the time these bonds were sold to me, that it was well known among the officers of the bank that these bonds were not a sound investment. I was also told that your bank has a great number of these bonds on hand and wanted to unload them; that I came along just about that time and they were unloaded on me. I have also been told that at the time your bank sold the German bonds to me it was maintaining the market for these bonds. Some time ago I read in the papers that one of the federal judges in the East found that where a pool was maintaining a market for a certain stock the members of the pool were liable for fraud to a buyer of the stocks.

“In view of the loss that I sustained on these bonds, it is quite conceivable that for that reason your officer hid from me the fact that the Butler note had not been paid.

“I have had one other major sad experience with your bank. On June 24, 1930, your bank was carrying certain loans made to Grigsby-Grunow Company, amounting to over $1,000,000. The Grigsby-Grunow Company, of which I was a director, needed capital to carry on its business. Your bank notified me, as well as officers of the company, that the bank would call these tremendous loans unless Mr. Grigsby, Mr. Grunow and I loaned to the company a certain amount of money. It was agreed between the officers of your bank and ourselves, as individuals, that if we would lend the money to Grigsby-Grunow Company as individuals, our individual loans would be on a parity with the bank’s loan and that if any money were collected on the loans made to Grigsby-Grunow Company, there should be no priority either for the bank or for ourselves. In other words, your bank promised that, if we would individually loan the money required to Grigsby-Grunow Company, we would share and share alike with the bank on a pro rata basis as to all moneys collected from that Company by the bank as well as by us individually. Having confidence in the good faith of your officers, we individually loaned the Grigsby-Grunow Company money. My proportionate share of the amount loaned was $250,000.00.

“In violation of your bank’s agreement with me as an individual, the bank collected the amount due to it in full. My loss on this transaction, directly traceable to my faith in your organization and the bad faith shown on the part of the bank, was $250,000.

“I am not anxious to resort to technicalities and counterclaims as a defense to your claim against me. Neither, however, am I going to sit back quietly and without complaint while this guarantee is outstanding. I feel that this is a matter that does not belong in the courts. This is a matter of fair dealing between your bank and myself. You have a remedy against Mr. Butler. Sue him forthwith and take judgment against him and collect it. Also go after the collateral. In equity and good conscience you should cancel my guaranty.

“I have been badly used by your bank because of misplaced confidence in one of your officers. It seems to me that my faith in your organization has already cost me enough money.

“I shall be interested to hear what your views are upon this subject in the light of the facts as I have given them to you in this letter.

“Very truly yours,
“(Signed) J. B. Cardwell.”

After this letter was received there were two extensions of the Butler indebtedness, one on May 29, 1934, .and the other on July 16, 1934.

Defendant states his theory of the case as follows:

“A summary judgment before trial by jury should not have been entered against the defendant where he had meritorious defenses, some of which raised questions of fact, and, where he also had substantial counterclaims.

“It is the theory of the defendant, J. R. Cardwell, in support of his principal defenses (Nos. VIII and IX):

“(1) That he, the defendant, as an accommodation guarantor, was discharged from liability, by reason of the renewals or extensions, or payment (by new notes) of the existing indebtedness, without the knowledge or consent of the guarantor, after discontinuance of the guaranty, which was revocable.

“ (2) That discontinuance of the guaranty, by notice, ended plaintiff’s authority, under the provisions of the instrument, to grant renewals and extensions; that such renewals or extensions granted to the principal, without authority of the guarantor, released him.

“3. The provision in the guaranty, relied on by plaintiff:

1 ‘ ‘ This guaranty shall be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect until written- notice., of its discontinnance shall be actually received by said Bank, and also until any and all said indebtedness, obligations and liabilities existing before the receipt of such notice shall be fully paid. ’

did not require defendant to pay the existing indebtedness of the principal before he could, by notice, require the plaintiff to discontinue the guaranty as to future transactions. Said provision merely means that the existing claims of the plaintiff, under the guaranty, shall remain in force (unless paid, renewed or extended,) even after discontinuance of the guaranty.

“4. In any event, where the plaintiff accepted a new note, or notes (after notice of discontinuance of the guaranty) in payment of the then existing indebtedness, said quoted provision was either complied with or immaterial, inasmuch as the liability under the guaranty (the existing indebtedness of the principal) was so paid by the principal’s new notes.”

Defense VIII, set up in defendant’s answer, reads as follows:

“That defendant by letter and oral notice on and before April 17, 1934, terminated the guaranty, as to all transactions thereafter between plaintiff and Rush C. Butler; that the notes set forth in the complaint evidenced transactions subsequent to said notice of termination; that on July 16, 1934, after such notice of termination of the guaranty, plaintiff accepted from Rush C. Butler the $125,031.75 note set forth in the complaint, in payment and discharge of all notes previously executed by Rush C. Butler, and surrendered to Rush C. Butler all such notes previously executed by Rush C. Butler, marked ‘Paid.’ ”

Defense IX, set up in that answer, reads as follows: “(As an alternative to Defense VIII.) That plaintiff twice granted binding’ extensions of time of payment, or renewals, of the indebtedness of the principal, Rush C. Butler, for a definite period of time, without the knowledge or consent of this defendant, subsequent to the. termination of the guaranty; that the $125,031.75 note, sued on in the complaint, evidences "such an extension or renewal. Wherefore the defendant was discharged from liability. ’ ’

Plaintiff states its theory as follows:

“1. That because of the express language of the guaranty, Cardwell’s letter and oral statements, even though considered effective to terminate or discontinue the guaranty, did not deprive the Bank of its right to renew or extend Butler’s obligation without impairing or prejudicing its rights against Cardwell.

“2. That even though Cardwell’s letter be construed to be a notice of termination or a discontinuance of the guaranty, the notice was, under the terms of the guaranty, ineffective without the payment of the indebtedness then existing.

“3. That Cardwell’s letter is not a clear and unambiguous notice of termination or discontinuance and hence it is not effective for that purpose.

“4. Construing Cardwell’s letter and his oral statements a demand to sue, the Bank’s failure to sue upon such demand, because of the express language of the guaranty, does not release Cardwell on his guaranty.

“5. That the conversations between Cardwell and Washburn claimed to have taken place at the time of the signing of the guaranty do not amount to fraudulent representations.

“6. That the original loan made to the UphamReynolds Syndicate was legally enforceable by the Bank even though approved by Waldeck. Even though it were otherwise, the loan to Butler of $21,616.69 to discharge his obligation to the Upham-Reynolds Syndicate was a lawful loan, legally enforceable against Butler and Cardwell.”

Defendant contends that “by reason of the two extensions of time, or renewals, granted by plaintiff to Rush C. Butler of his obligation to plaintiff, once on May 29, 1934, and again on July 16, 1934, after notice of revocation of the guaranty, defendant was discharged from all liability upon his guaranty.” Upon the oral argument counsel for defendant stated that this contention involved their most vital defense. To repeat the language of the guaranty dealing with the right of the bank to renew or extend Butler’s obligation :

“The liability hereunder shall in no wise be affected or impaired by (and said Bank is hereby expressly authorized to make from time to time, without notice to anyone), any . . . renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or other disposition of any of said indebtedness, obligations and liabilities, either express or implied, or of any contract or contracts evidencing any thereof, or of any security or collateral therefor.”

Under this provision the right of the bank to grant renewals or extensions without such action affecting defendant’s liability under the guaranty is clear. To escape the effect of the provision defendant states: “But such permissive provision was not operative at the time of the extensions or renewals in May and July, 1934, for the reason that such authority to make extensions and renewals had been withdrawn by the guarantor on or before April 17, 1934, by his notice of revocation of the guaranty.”

The language in the guaranty that bears upon the alleged revocation reads as follows:

“This guaranty shall be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect until written notice of its discontinuance shall be actually received by said Bank, and also until any and all said indebtedness, obligations and liabilities existing before receipt of such notice shall be fully paid.” (Italics ours.)

Even if defendant’s letter could be construed as a notice of revocation, such notice without the payment of the indebtedness then existing was under the express language of the guaranty not sufficient to terminate it. To revoke or discontinue the guaranty requires (1) the receipt by the bank of a written notice of discontinuance, and (2), “and also until any and all said indebtedness, obligations and liabilities existing before receipt of such notice shall be fully paid.” The conjunction “and,” followed by the word “also,” makes the intent of the provision absolutely clear. Defendant, in support of his contention that he did not have to pay the indebtedness in order to revoke the guaranty, cites the principle of law that the undertaking of a surety is to be strictly construed and his liability is not to be extended by construction, but we are unable to see how that principle applies to the clear and unambiguous language of the guaranty now under consideration. The rule cited by defendant is not intended to relieve a guarantor of liability by a nullification or emasculation of the plain language of the guaranty. In Mamerow v. National Lead Co., 206 Ill. 626, 632, the court said:

“If a guaranty is clear in its terms it must be interpreted and construed according to the language used; ‘that is to say, the parties must be presumed to have meant that which their language clearly imports. It is not what one of the parties may have intended, but what is shown by the contract to have been the intention of both parties. Peoria Savings, Loan and Trust Co. v. Elder, 165 Ill. 55.”

Even if defendant had the right to revoke the continuing guaranty without payment of the Butler indebtedness to the bank, his letter of April 17 is not a notice of revocation. Indeed, defendant recognizes in the letter that the guaranty was outstanding, and he expresses the opinion that “in equity and good conscience you should cancel my guaranty. ” As we interpret the letter it was not intended as a notice of revocation. Defendant charges in it that he lost over $350,000 through the fraudulent conduct of the bank in connection with several bond transactions and through its bad faith and violation of its agreement in connection with the Grigsby-Grunow matter, although none of these alleged transactions had anything to do with the Butler, loan and the guaranty. Defendant states in the letter that the instant claim (one founded upon a written guaranty, taken in the ordinary course of banking business) “is a matter that does not belong in the courts,” and he plainly intimates that if the bank presses its claim he will resort to counterclaims which will involve charges of fraud and bad faith against the bank. The record shows that defendant is connected with numerous important business enterprises and is accustomed to large transactions with banks. If he desired to revoke his guaranty he should have so stated in his letter. This he did not do. Apparently understanding that a notice to revoke, without the payment of the then indebtedness, would avail him nothing, he resorted to threats. In Lanusse v. Barker, 16 U. S. (3 Wheaton’s Rep.) 101,143, the Supreme Court of the United States says:

“Nothing could be more inconsistent with that candor and good faith which ought to mark the transactions of mercantile men, than to favor the revocation of an explicit contract, on the construction of a correspondence nowhere avowing that object. It was in the defendant’s power to have revoked his assumption, contained in the letter of the 9th, at any time prior to its execution, but it was incumbent on him to have done so, avowedly, and in language that could not be charged with equivocation.”

But defendant further contends: “In.the event that a fair construction of the guaranty requires payment of past indebtedness as a condition precedent to revocation the condition was performed by plaintiff’s acceptance of new notes in payment of Butler’s old notes.” It will be noted that this contention is based upon the assumption that defendant’s letter of April 17, 1934, to the vice president of plaintiff bank, constituted a revocation of the guaranty. Our holding that it did not would be a suEcient answer to the contention, but aside from that holding, there is no real merit in the contention. In defendant’s brief it is stated: “We submit that the records of the plaintiff bank, together with the admissions of plaintiff, thus demonstrate that the bank accepted in payment of all indebtedness, liabilities and obligations of Bush 0. Butler existing prior to April 17, 1934, the date of revocation, the July 16th, 1934 $125,031.75 note, upon which plaintiff sued herein; that that new note constitutes a new indebtedness, of Butler.” The lengthy argument in support of the instant contention centers upon the Bush C. Butler account in plaintiff’s ledger. That account and the undisputed facts set up in the affidavit of Carl I. Johnson, a second vice president of plaintiff bank, show that the note for $125,031.75 executed by Bush C. Butler on July 16,1934, was accepted by plaintiff in renewal of the obligation due from Butler to plaintiff bank on that date; that no money or other consideration was paid or delivered to plaintiff by Butler or anyone on his behalf at the time of the delivery of the renewal note, nor at any other time, as a consideration for the extension of the obligation ; that it is the practice pursued by plaintiff in the conduct of its business upon the delivery to it of renewal or extension notes to redeliver to its customers the extended obligations, marking the same “Paid” with a stamp. Defendant argues that the use of the word “Paid” by the bank shows that it considered the old note paid and. that the new note constituted a new indebtedness. We are justified in taking judicial notice of the fact that it is the practice of banks when they take a renewal note to mark the surrendered note paid. The general rule is that where a note is given merely in renewal of another note and not in payment, the renewal does not extinguish the original debt nor change the debt except that it postpones the time for payment. The case of Gay v. Ward, 67 Conn. 147, cited by defendant in support of the instant contention, is not in point under the facts. Here the money lent to Butler upon the execution of the guaranty has never, in fact, been paid. Judgment was taken against Butler by default. Ño cash was paid by way of principal or interest to the bank at the time it took the renewal note in question, nor at the time it took the renewal notes of March 17, 1934. The loan of $100,000 was reduced, by payments, to $92,500. This sum, with the accrued interest, is the amount of the judgment in this ca^e. To avoid any confusion in respect to'-the note sued upon, for $125,031.75, executed by Butler on July 16, 1934, we may state that after the original loan of $100,000 had been made to Butler plaintiff made a further loan to him of $21,616.69, and at the time the note for $125,031.75 was executed Butler’s debt to plaintiff, represented by the balance due on the original note, the loan of $21,616.69, some minor items representing advancements by plaintiff.to Butler, plus accrued interest, amounted to $125,031.75, but defendant guaranteed Butler’s indebtedness to plaintiff in the amount of $100,000 only.

Defendant contends that “plaintiff’s false and fraudulent representations to the guarantor as to the nature, duration and termination of the guaranty constitute a complete defense to the defendant.” Defendant claims that he signed the guaranty without reading it because John R Washburn, then a vice president of the plaintiff bank, told him that it was a one-year guaranty for a $100,000 loan and that it was not necessary for him to read the guaranty nor the fine print provisions in it; that he regarded Washburn as a truthful and dependable man and a responsible bank officer and signed the guaranty without reading it upon the said representations. As we have heretofore stated, Washburn died March 7, 1933. On February 9, 1934, defendant called at plaintiff bank in response to a request by it for payment under his guaranty. In his amended answer he avers that after a conversation between two representatives of the bank and himself o.n that date, the representatives of the bank made a memorandum of record of his three reasons why the guaranty should be canceled, and he sets up the memorandum. In none of the three reasons did the defendant claim that Washburn made false representations to him at the time of the signing of the guaranty. It will be further noted that in defendant’s carefully prepared letter of April 17, 1934, in which he warned the bank of the nature of the defense he would make if it sued him under the guaranty, he made no claim that he signed the guaranty without reading it because of false representations made to him by Washburn; nor does he mention Washburn in the letter. All that defendant states therein as to the making of the guaranty is: “In October, 1929, your bank loaned to Mr. Rush C. Butler, the sum of $100,000 on a note due in one year. I guaranteed the payment of the loan.” He does state in the letter that in October, 1930, he consented to another year’s extension of Butler’s note, “with the distinct understanding, however, that no further extensions would be made and that Mr. Butler’s obligation would be paid at the expiration of the extended period. ’ ’ During his examination in respect to the alleged extension the following occurred: “ Q. Did you understand that if the loan was not paid within that year, or at its maturity by anybody, and the collateral was not adequate, that you would be liable on your guarantee? A. I did. Q. Did they ask you to sign any other papers at that time? A. No. Q. So that it was your understanding that if the Butler obligation was not paid by October, 1931, and the collateral was not adequate, you would be liable on the guarantee that you signed in 1929? A. Yes, sir.” Defendant concedes that the written guaranty was not changed upon its face nor by any other instrument, in October, 1930, nor at any other time. The defense involved in the instant contention is an afterthought made possible by the death of Washburn. The alleged false representations are put into the mouth of a man who could not deny them. The undisputed evidence shows that Ruth Curriden was Washburn’s secretary, that she was the only person other than Washburn who occupied the latter’s room during 1929 and 1930, and that she died on September 18, 1934. Approximately a year after the death of Washburn and six and one-lialf months after the death of Ruth Curriden the instant defense was first asserted by defendant, and then in an amended answer. Defendant admits that Washburn and he were the only parties to the alleged conversation. It is contended that even though defendant’s testimony in respect to the alleged false representations is contradictory, nevertheless, he was entitled to a jury trial upon that issue, though we might think, upon the whole evidence, that the defense was “a sham.” We recognize the principle of law involved in the contention and have stated certain transparent facts for the purpose of showing the real character of the defense and that the case is not one where plaintiff took unfair advantage of defendant.

Plaintiff contends that under section 4 of the Evidence Act the testimony of defendant as to the alleged false representations was not competent. The pertinent part of the section reads as follows:

“. . . And in every action, suit or proceeding a party to the same who has contracted with an agent of the adverse party — the agent having since died— shall not be a competent witness as to any admission or conversation between himself and such agent unless such admission or conversation with the said deceased agent was had or made in the presence of a surviving agent or agents of such adverse party, and then only except where the conditions are such that under the provisions of sections 2 and 3 of this act he would have been permitted to testify if the deceased person had been a principal and not an agent.”

Defendant concedes, as he must, that if Washburn and he were alone at the time of the alleged misrepresentations plaintiff’s contention would be sound because of the death of Washburn, but he argues that the testimony was competent because he testified that the conversation with Washburn was had in the presence of another “surviving agent” of plaintiff. Defendant’s direct testimony in respect to the “other surviving agent” is as follows: When he arrived at Washburn’s office, in October, 1929, the guaranty was ready for signing; that there was a young lady in the office at the time, probably Mr. Washburn’s secretary; that he did not know her and would not be able to recognize her; that he thinks she was “within earshot” at the time he and Washburn held their conversation. During his direct examination the following occurred: “Q. So, with respect either to your first or your second conversation, you would not state positively and of your own knowledge that there was anybody present other than you and Mr. Washburn? A. That is true.” The cross-examination of defendant by his counsel took place at a later session, during which cross-examination defendant testified that there was a young lady present; that she was sitting about 10 feet from Wash-burn and defendant while they were talking. Questioned again by plaintiff’s attorney, defendant stated that the woman was sitting at a typewriter desk working at “some papers, figures,” that she appeared to be employed on some papers that were before her; that she was not facing defendant and Washburn and that she did not join in the conversation in any way. Section 4 certainly contemplates that the proof must show that the surviving agent either took part in the conversation or, at least, heard it. If it be assumed that this woman was an agent of plaintiff, within the meaning of the statute, nevertheless it does not appear from defendant’s testimony that she heard what was said between defendant and Washburn. Moreover, the evidence shows clearly that the only person save Wash-burn who occupied Washburn’s office at the time was Ruth Curriden, who was also deceased at the time of the hearing. But defendant contends that plaintiff waived any question as to the competency of the evidence in question by examining defendant in respect to the conversation. This contention lacks merit. Defendant does not claim.that plaintiff’s counsel asked the witness to give the conversation or any part of it. When counsel for plaintiff examined defendant on direct, it appears that he carefully avoided asking him for the conversation or any part of it. As plaintiff states, the questions upon direct were intended to bring out who were present at the time of the alleged conversation and for the sole purpose of enabling plaintiff to show that there was no witness to the alleged conversation now living, save defendant. We think that the contention of plaintiff that defendant’s evidence as to the alleged false representations was, under section 4 of the Evidence Act, Ill. State Bar Stats. 1935, ch. 51, Ü 4, not competent, is a meritorious one.

Plaintiff contends that defendant, under the particular facts of the instant case, should be precluded from relying upon the alleged fraudulent misrepresentations upon the additional ground that no special relations existed between him and plaintiff which entitled him to rely upon the representations as to its terms; that he, an able and experienced man, had full opportunity to read the guaranty, and his conduct constituted such neglect as precludes him from raising the instant contention. Undoubtedly there are numerous cases supporting plaintiff’s position, although there are also cases in which the courts, under certain states of fact, have refused to allow the defendant’s negligence to be interposed. Defendant cites such cases as Gunning Co. v. Cusack, 50 Ill. App. 290, and Security Trust & Savings Bank v. Telford, 211 Ill. App. 149, in support of his position that negligence cannot be predicated upon failure to read a document as against a party guilty of fraudulent misrepresentations as to its contents. In the Gunning case the signer of the agreement could not read English, and it was claimed that the agreement was misread to him. In the Security Trust <& Savings Bank case the defendant was unable to read the writing by reason of age and failing sight, and it was claimed that the contents of the writing Avere misrepresented to him. There are other cases similar to the two cited. The pleadings and testimony show that defendant is a man of very large means, a manufacturer of railway supplies, president of the Cardwell Westinghouse Company, director in the Diamond T Motor Company, director in the Grigsby-Grunow Company, and “connected Avith the Acme Card System Company, the Cardwell Manufacturing Company and Cardwell Securities Company. ’ ’ He was accustomed to dealing with banks in business matters involving very large sums of money. Butler, not the bank, asked him to sign the guaranty, and he understood, when he went to the bank, the nature and import of the instrument that he was to sign. If the doctrine of negligence can ever be invoked where fraudulent misrepresentations are alleged, the instant case would seem to be one for its application. That it would be dangerous for banks to loan money upon written guaranties if the instant defense were to prevail, is evident. However, we do not deem it necessary to decide the instant contention raised by plaintiff. Ñor do we deem it necessary to pass upon the additional contention of plaintiff that the alleged false representations do not constitute false representations Avitbin the meaning of the law.

Defendant contends that the action of the trial court in granting a summary judgment deprived him of his right to a trial by jury,o because there was involved a dispute as to three material facts. Upon the oral argument defendant’s counsel conceded that two of the alleged questions of fact involve only questions of law. We have considered the remaining alleged question of fact and find that it does not present any question of fact upon which a jury would be warranted in finding the issues for defendant.

While defendant, as a part of his amended answer, filed counterclaims against plaintiff, as he threatened in his letter of April 17,1934, he would do, he does not in his “errors relied upon for reversal” refer to the subject of counterclaims, nor does he in his argument raise any question in reference to counterclaims.

We have patiently and carefully considered the points presented by the able and ingenious lawyers for defendant. In our opinion the judgment of the circuit court should be affirmed and it is accordingly so ordered.

Judgment affirmed.

John J. Sullivan, P. J., and Friend, J., concur.


source: Caselaw Access Project

author: Mr. Justice McSurely Mr. Justice O’Connor

license: Public Domain

text:
    Arthur Lavigne, Appellee, v. Chicago, Milwaukee, St. Paul and Pacific Railroad Company, Appellant.
    Gen. No. 38,812.

      O’Connor, J., dissenting in part.
    Opinion filed November 12, 1936.
    Rehearing denied November 30, 1936.
    M. L. Bluhm and Bruce S. Parkhill, both of Chicago, for appellant; C. S. Jefferson, of Chicago, of counsel.
    Ryan, Sinnott & Miller, of Chicago, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff, while employed as a switchman by defendant in its G-alewood yard in Chicago, took hold of a grab iron on the front end of a freight car; the iron pulled out, throwing him to the ground, injuring him; he brought suit and had a verdict for $45,000; defendant appeals from the judgment for this amount.

The complaint was in two counts. The first alleged that plaintiff, employed by defendant, was engaged in switching certain cars in interstate commerce and transportation in a switch yard of defendant; that defendant was subject to the Federal Employers’ Liability Act, Ill. State Bar. Stats. 1935, ch. 114, fifí 321-329, and the Federal Safety Appliance Acts; that in violation of the appliance acts a grab iron became defective and loose, and by reason thereof plaintiff was thrown from the car and injured.

Defendant answered, denying that plaintiff and defendant were engaged in interstate commerce at the time of the accident.

The provisions of the Federal Employers’ Liability Act in so far as they are pertinent are as follows: “Every common carrier by railroad while engaging in commerce between any of the several States or territories . . . shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce.” “Engaged in interstate commerce” has been held to mean, “engaged in interstate transportation or in work so closely related to it as to be practically a part of it.” Shanks v. D. L. & W. R. Co., 239 U. S. 556. It is a prerequisite to liability of a railroad under the Liability Act that both it and the employee be actually engaged in interstate commerce at the time of the injury. Gidley v. Chicago Short Line Ry. Co., 346 Ill. 122.

Were plaintiff and defendant at the time of the accident engaged in interstate commerce as claimed by plaintiff, or in intrastate commerce as claimed by defendant?

The accident occurred shortly after five o’clock p.m. on August 3, 1932; before that time a string of about 27 ears had been brought by another crew from a “wash” track and 18 from another “wash” track to what is called the “staker lead” track; the cars were all empties and had been washed and cleaned on the tracks from which they were brought. Plaintiff was a member of conductor McCloskey’s switch crew and went to work at five o ’clock p. m.; his work was to pull out the pin from the cars as they were switched from the lead track onto the switch tracks. The tracks run east and west and the engine was attached to the west end of the 45 cars on the lead track. The conductor, McCloskey, chalked them for the respective switch tracks on which they were to be placed; for the reason that so large a number of cars could not be conveniently handled by the switch engine, the string of cars was cut by McCloskey, leaving about 30 cars attached to the engine and the remaining 15 cars standing on the lead track; the crew then proceeded to swatch the 30 cars on their respective tracks as indicated by the chalk marks on the cars; none of these 30 cars was then engaged in interstate commerce.

Plaintiff claims that six or more of the 15 cars standing on the lead track were engaged in interstate commerce; we shall later discuss this.

The crew first undertook to “kick” the last three cars of the 30 onto switch track 15; the engine pulling the 30 cars moved up the lead in a westerly direction, plaintiff riding on the third car from the rear; the engine then backed eastward onto track 15 for the purpose of kicking the easterly three cars onto this track. Plaintiff testified that he was hanging onto the grab, iron on the front end of the fourth car with one hand, trying- to work the pin lifter on the other car with the other hand, when the grab iron pulled out and he was thrown to the ground, receiving the injuries in question.

There is no conflict in the evidence as to plaintiff’s work or duties when he was injured, and the facts established by the undisputed evidence present what was characterized in Efaw v. Industrial Commission, 200 Wis. 137, as “a troublesome question of law.”

It is not claimed that either the car from which the grab iron was pulled loose or any of the other cars among the 30 were engaged in interstate commerce at the time of the injury. If the duties of the crew were confined to the handling of these cars there could be no doubt but that defendant and plaintiff were not engaged in interstate commerce at the time.

But plaintiff argues that after the crew had finished switching the 30 cars it would then proceed to the 15 cars standing on the lead and switch them to their respective tracks; that six of these cars were “carded” for Linwood, Iowa; that the work of the crew to which plaintiff belonged was the distribution of the entire 45 cars as a unit, including the distribution of the cars carded for a destination outside the State.

Defendant cites a large number of cases stressing the point that it is the nature of the employment at the time of the injury that determines the character of the transportation as interstate or otherwise. In Illinois Cent. R. Co. v. Peery, 242 U. S. 292, a conductor on a train engaged in interstate traffic returned on a train in which there were no interstate -cars. It was held that he was not at the time of the injury engaged in interstate traffic. In Erie R. Co. v. Welsh, 242 U. S. 303, it is said, “the true test is the nature of the work being done at the time of the injury, and the mere expectation that plaintiff would presently be called upon to perform a task in interstate commerce is not sufficient to bring the case within the act. Illinois Cent. R. Co. v. Behrens, 233 U. S. 473-478.” In Middleton v. Southern Pac. Co., 61 F. (2d) 929 (cert. denied 289 U. S. 736) it was held, “that the work which one is actually doing at the time of the injury, and not the work which he expects to do, determines whether he is engaged in interstate commerce, . . . and that the mere expectation that one previously, but not presently, engaged in such commerce, would in the immediate future return to it, is not sufficient to bring the case within the act. ... It has been repeatedly held that the true test is the nature of the work actually being done at the time of the injury, not what the employee might do, or was expecting” to do later.” In Southern Ry. Co. v. Pitchford, 253 Fed. 736, the plaintiff was employed in cleaning and icing” cars both intrastate and interstate; he was injured while preparing* to load ice into a box to be placed in the cars in the course of icing; the first cars he would have iced had he not been injured were interstate cars. It was held that the employee at the time he was injured was not engaged in interstate commerce, the court saying, “It is immaterial that the plaintiff’s last previous work may have been cleaning an interstate car, or that his next work would certainly have been icing* an interstate car from the ice box.” In Gidley v. Chicago Short Line Ry. Co., 346 Ill. 122, the employee was engaged as a switchman in the yard of the defendant, switching* both interstate and intrastate cars; his duties required him to ride a short distance on the engine, which struck a spout of a coal chute near the track, and plaintiff was injured. The court held that to recover under the Federal Employers ’ Liability Act the employee must show that at the time of the injury he was engaged in interstate commerce or with its instrumentalities, and that this was not done by showing that in the yard both intrastate and interstate shipments were handled; that the question was not what the employee had expected to do, “but what he was doing* at the time he was injured — i. e. whether or not at that particular time he was engaged in interstate commerce or in work so closely related thereto as to be practically a part of it. ” The opinion cites a very large number of supporting* cases and suggests that the engine on which the employee was riding* was not attached to any interstate car at the time of the injury, and held that the plaintiff was not employed in interstate commerce at this time. See also Erie R. Co. v. Welsh, supra, and Illinois Cent. R. Co. v. Behrens, supra, to the same effect.

Plaintiff, also, cites a number of cases tending to support his theory that the work in which plaintiff was engaged was not confined to the 30 intrastate cars, but also included the remaining 15 cars; that his crew was to break up the entire 45 cars and this first movement of cutting off the westerly 30 cars was the first step in breaking up the entire string of 45 cars; that the operation must be viewed as a whole, citing Davis v. Dowling, 284 Fed. 670; Stottle v. Chicago, R. I. & P. Ry. Co., 321 Mo. 1190; New York C. & H. R. R. Co. v. Carr, 238 U. S. 260; Louisville & N. R. Co. v. Parker, 242 U. S. 13; Reap v. Hines, 273 Fed. 88; Baltimore & O. R. Co. v. Flechtner, 300 Fed. 318; and Roberts, Federal Liabilities of Carriers, vol. 2, sec. 743. These cases cited by plaintiff are largely concerned with a continuous string or “drag” of cars coupled up, some of which are interstate and some intrastate cars; in the process of switching these an employee would be working on one intrastate car and the next car would be interstate. Under such circumstances it might well be held that the employee was engaged in interstate transportation or work so closely related thereto as to be practically a part of it.

In the instant case the 30 cars, upon one of which plaintiff was injured, were wholly separate and apart from the 15 cars remaining on the lead track. It requires a somewhat strained construction to say that plaintiff, while working on this separate unit of 30 intrastate cars, was engaged in interstate transportation because at some later time, when his work on this unit was completed, his crew would switch the remaining 15 cars. At least we find no cases in the books where under such circumstances it has been held that the employee when so injured was engaged in interstate transportation.

Defendant contends that none of the 15 cars on the “staker” lead was engaged in interstate transportation. Plaintiff contends the evidence shows that six of these cars were destined for Linwood, Iowa, and a number for the Continental Can Company to be sent outside the State.

Before the 45 cars were placed on the lead track, and while they were still on the wash tracks, an inspector of defendant inspected them and classified them for commodity loading; he entered in a book a notation showing the class of loading that each car was fitted for; one notation would be, “rough freight loading”; another, “for grain loading,” and like notations. Another man following classified the cars for distribution to the switch tracks; cards were attached to the cars indicating their possible use with reference to the character of loading; this man said that when he carded these cars for Linwood, Iowa, he did not know they would go there; that the cars might be sent some place else; that there was a cement plant at Linwood, and the inspector first classified these six cars for Linwood as cars suitable for hauling cement, which the Linwood plant might order; that this meant the cars were to be saved for the cement industry at that place.

There is no evidence in the record that when these cars were carded for Linwood the defendant had any order for cars to be sent there. The general car supervisor testified that the cards were placed on the cars for the convenience of the switching crew, and if there is no order for them they are either carded “hold” or carded so they will move in the general direction of where they may be sent; that no empty car is sent out unless there is issued an “empty car slip bill.”

Five of the six cars carded for Linwood, Iowa, were not moved there but were later moved to points in Illinois. Plaintiff contends that one of the cars did go to Linwood, Iowa, and that this characterizes the movement of the entire “drag” of 45 cars as engaged in interstate transportation. After plaintiff was injured this Linwood car was moved from the lead track onto a switch track; an “empty car bill” was issued when on this switch track; the car was then sent to another switch yard, then to a third track and then to the yard in Bensonville where it was incorporated in a train destined for Linwood, Iowa, which left for that point the day after the accident. Defendant does not make up trains in its Galewood yard.

In Missouri Pac. R. Co. v. Industrial Commission, 348 Ill. 355, an empty car was being moved from St. Louis, Mo., to the coal fields of southern Illinois; it was billed under an empty car waybill. It was held that this billing did not confine the trip and use of the car to the terms of the waybill; that in being sent to Illinois the trainmaster was merely anticipating a future need and the car was “drifting” — waiting to be assigned to service. In Rogers v. Canadian Nat. Ry. Co., 246 Mich. 399 (cert. denied 280 U. S. 554), it was held in effect that a movement of empty cars does not necessarily predetermine their use, which may be controlled by the owner road, and that until their use is determined the cars are not engaged in interstate commerce in any movement of them in switching or placing on side tracks in the meantime. Grigsby v. Southern Ry. Co., 3 F. (2d) 988 (cert, denied 268 U. S. 704) held that the fact that one of seven switch cars was subsequently billed as an interstate car does not tend to make the switching operation interstate. See also Jarvis v. Chicago, B. & Q. R. Co., 327 Mo. 428.

Bearing in mind that the carding of these Linwood cars was for the convenience of the railroad, that there were no orders from the Linwood cement, plant for empty cars, that any or all of the six cars carded for Linwood could be sent elsewhere and that five of them were so ordered, and that the one car which went to Linwood, Iowa, was not billed for that point until after the accident and did not leave until the following day, we are of the opinion that at the time plaintiff was injured none of the six cars carded for Linwood was engaged in interstate commerce.

The cars carded for the Continental Can Company were not eng*aged in interstate commerce at the time of the accident. That company ordered freight cars from the Belt Railway of Chicago, which in turn ordered these cars from several carriers, including the defendant railroad; the cars in question were delivered to the Belt Railway, which delivered them to the Can Company. The traffic manager for the Continental Can Company testified that when he ordered a car he did not know where it would go; that it was the practice of his company, upon receiving empty cars for loading, to load them with cans and place them on “hold” tracks, ready to be shipped out upon receipt of orders; their destination depended upon the orders received; sometimes these cars would stay on the “hold” tracks of the Can Company from ten to twenty days; the witness explained that during the time of the corn pack it was necessary to build up a supply of cars on the “hold” tracks so that when orders came in his company would be able to supply them; one of these cars was thus billed to Big Stone City, Minn., but this was not billed out until August 8, five days after the day upon which plaintiff was injured; another of these cars was loaded and billed out on August 6 to Plattsmouth, Nebraska.

In Chicago Junction Ry. Co. v. Industrial Board, 277 Ill. 512, where the switching movement in which plaintiff was injured was of fifteen cars, no particular one or more of them then designed for an interstate shipment, it was held that plaintiff was not engaged in interstate commerce when injured, the court saying that the movement of the string of cars by the switching crew of which plaintiff was a member “was a local movement, and as none of these cars had at that time been selected to participate in an interstate shipment,” the employee was not engaged in interstate commerce. To the same effect are Geraghty v. Lehigh Valley R. Co., 70 F. (2d) 300; Rice v. Baltimore & O. R. Co., 42 F. (2d) 387; Shauberger v. Erie R. Co., 25 F. (2d) 297; Baldassarre v. Pennsylvania R. Co., 24 F. (2d) 201; and Carey v. New York Cent. R. Co., 250 N. Y. 345. Cars thus held, subject to possible orders from outside the State, are not engaged in interstate commerce. Carey v. New York Cent. R. Co., supra, and cases above cited.

Applying the law announced in the cases cited to the facts before us, we are of the opinion that at the time plaintiff was injured he was not engaged in interstate commerce or transportation or in work so closely related thereto as to be practically a part of it.

Both parties say in their brief that where the essential facts concerning plaintiff’s employment are not in controversy it becomes a question of law for the trial court and the question should not be submitted to the jury as one of fact. At the conclusion of plaintiff’s case and again at the close of all the evidence defendant moved the court to instruct the jury that plaintiff could not recover under the first count of his complaint. These motions were denied. This was error which calls for reversal of the judgment.

The second count of the complaint alleges that at the time in question plaintiff was employed in switching cars moved by the defendant in intrastate commerce and transportation in its switch yard in the city of Chicago; that therefore plaintiff became subject to the Federal Safety Appliance Acts, that in pursuance of his duties a grab iron became loose and by reason thereof plaintiff was thrown upon the ground and injured. Defendant answered this count, admitting that both plaintiff and defendant were engaged exclusively in intrastate commerce and transportation at the time of the accident, and averring that the rights of the parties are fixed exclusively by the Workmen’s Compensation Act of Illinois, Ill. State Bar Stats. 1935, ch. 48, U 201 et seq. Defendant argues that for this reason the second count does not state a cause of action. Four decisions of the Supreme Court of the United States are cited in support of defendant’s position in this respect.

Moore v. Chesapeake & O. Ry. Co., 291 U. S. 205, was an action by an employee injured while engaged in intrastate commerce, caused by a violation of the Federal Safety Appliance Acts. After a discussion of the Appliance Acts the court recognized that their violation by defendant caused the injury and gave the plaintiff a right of action, but this right “was left to be enforced . . . according to the applicable statute.” Fairport, P. & E. R. Co. v. Meredith, 292 U. S. 589, held that the Safety Appliance Acts impose absolute duties upon railway carriers, creating rights in favor of such injured persons as come within their purview, “but the right to enforce the liability which arises from the breach of duty is derived from the principles of the common law.” Gilvary v. Cuyahoga Valley Ry. Co., 292 U. S. 57, involved injuries to an employee by reason of a violation of the Safety Appliance Acts while engaged in intrastate commerce employment in Ohio; defendant contended that plaintiff’s remedy was under the Ohio State Workmen’s Compensation Act; the court sustained this position, holding that while the Safety Appliance Acts prescribe duties of the carrier, the right to recover damages sustained by an injured employee through the breach was “according to the applicable statute,” citing cases. The very recent case of Tipton v. Atchison, T. & S. F. Ry. Co., 56 Sup. Ct. 715, involved injury to a switchman in California due to a defective coupling upon a freight car employed in intrastate commerce. It was again said that the Safety Appliance Acts impose an absolute duty upon an employer and prescribe penal sanctions for the breach. The opinion reaffirmed the rule that these acts leave the regulation of any action to recover damages to the law of the State where the injury occurred. The opinion went on to say that California, where the accident happened, was at liberty to afford any appropriate remedy for breach of the Safety Appliance Acts, and that she might, as she had done, prescribe workmen’s compensation in lieu of a common law or statutory action for disability for breach of the duty imposed.

Plaintiff cites Kenna v. Calumet, H. & S. E. R. Co., 284 Ill. 301, and Anderson v. Chesapeake & O. Ry. Co., 352 Ill. 561, as holding that an employee injured in intrastate commerce has, by reason of the Safety Appliance Acts, a common law right of action, exclusive of the State Compensation Act. It must be conceded that these cases are in point. However, an examination of the opinions in these cases shows that they rest upon the assumption that a violation of the Federal Safety Appliance Act gives the employee a right of action. In fact, virtually this language is found in the Anderson case. But examination of the decisions of the Supreme Court of the United States, above cited, shows clearly that, as construed by that court the Safety Appliance Act did not give a rig'ht of action to an employee. While prescribing certain duties of the employer, it did not attempt to lay down rules governing actions for enforcing rights, and such rights are left to the local State law where the injury was suffered. Where there is a conflict between the State courts and the Federal courts as to the interpretation of a Federal statute, the Federal courts will prevail.

The Illinois Workmen’s Compensation Act (Ill. State Bar Stats. 1935, ch. 48, jfff 201-236) is in lieu of the common law action for disability arising from a breach of the duty imposed by the Federal Safety Appliance Act in intrastate commerce. By section 6 of the act it is provided that no common law or statutory right to recover damages for injury sustained by any employee while engaged in the line of his duty “other than the compensation herein provided, shall be available.” By section 3, subpar. 3, the act is made automatically applicable to common carriers, and in Hochspeier v. Industrial Board, 278 Ill. 523, and Goldsmith v. Payne, 300 Ill. 119, it was recognized that common carriers are automatically subject to the act.

Plaintiff argues that the Kenna and Anderson cases must be understood as interpreting the Illinois Compensation Act so as to exclude from its operation employees of interstate railway carriers who may sustain injuries caused by violation of the Federal Safety Appliance Act. We do not so read these opinions. In Faber v. Industrial Commission, 352 Ill. 115, decided after the Kerma case, it was held in broad terms that the Workmen’s Compensation Act takes the place of the right at common law and takes away all such causes of action from an employee. No exception is made in favor of an employee injured by reason -of a violation of the Safety Appliance Act.

It follows from the cases latest decided by the Supreme Court of the United States that as plaintiff was engaged in intrastate commerce at the time he was injured by reason of the violation of the Safety Appliance Acts, his only remedy is under the Workmen’s Compensation Act of Illinois.

At the conclusion of plaintiff’s evidence and again at the conclusion of all the evidence defendant asked the court to instruct the jury to find for the defendant as to this second count. This motion was overruled. This was reversible error, as under the Supreme Court cases above cited the second count did not state a cause of action.

Defendant presents certain alleged errors with reference to instructions given to the jury and rulings on the admissibility of evidence. We do not think it necessary to discuss these except to note that in our view of the case the giving of instructions submitting to the jury the second count of the complaint was reversible error.

Defendant argues that the verdict of $45,000 is so excessive as to indicate it was the result of passion and prejudice on the part of the jury. There is impressive evidence supporting this point.

Plaintiff testified that when the grab iron came loose he fell against a switch stand and for a time was unconscious ; he walked about 200 feet to an automobile and was taken to a hospital; on examination the surgeon found on his left side a superficial abrasion about one-half inch in diameter and a similar abrasion on the left arm near the wrist; X-ray pictures were taken, with negative results; plaintiff complained of soreness in his back but the attending physician was unable to find any objective signs of injury; he was brought to the court room in a wheel chair; it is claimed that he is “utterly paralyzed.” There was testimony that he had no organic lesion but was suffering functionally. Several doctors thought he was suffering from hysteria and that the disposal of this litigation would have a tendency to cure his condition.

As we are of the opinion that plaintiff cannot maintain either of the counts of his complaint, we make no further comment on his physical condition or the amount of the verdict.

For the reasons stated the judgment is reversed.

Reversed.

Hatchett, P. J., concurs. O’Connor, J., dissents in part.

Dissenting Opinion.

Mr. Justice O’Connor

dissenting in part:

I agree that the judgment in this case should be reversed because, under the instructions of the court, the jury was authorized, if it found there was a violation of the Federal Safety Appliance Act, that plaintiff might recover. The Supreme Court of the United States holds that the Safety Appliance Act does not create a cause of action, but where its provisions have been violated the right to recover is ‘1 according to the applicable statute” of the State. Moore v. C. & O. Ry. Co., 291 U. S. 205; Fairport R. Co. v. Meredith, 292 U. S. 589; Gilvary v. Cuyahoga Valley Ry. Co., 292 U. S. 57; Tipton v. Atchison, T. & S. F. Ry. Co., 56 Sup. Ct. 715. Some years before these opinions were rendered by the United States Supreme Court, another division of this court, of which I was then a member, held that where an employee was injured on account of the violation of the Federal Safety Appliance Act, he might recover against his employer, the railroad company, and that our State Workmen’s Compensation Act did not apply. Kenna v. Calumet, Hammond & So. Ry. Co., 206 Ill. App. 17 (affirmed, 284 Ill. 301) but “the decisions of the Federal courts upon this Federal statute, regardless of any decisions or views of the state court upon that subject” control. Day v. Chicago & N. W. Ry. Co., 354 Ill. 469. In the Tipton case the court said (p. 716): “The Safety Appliance Acts modify the enforcement, by civil action, of the employee’s common law right in only one aspect: namely, by withdrawing the defense of assumption of risk.”

I am, however, of opinion that under the evidence in the instant case, the question whether both plaintiff and defendant were engaged in interstate transportation or in work so closely related to interstate transportation as to be a part of it at the time of the accident, was properly submitted to the jury. The jury might properly find that although there was no dispute in the evidence as to the task which plaintiff and the train crew, of which he was one, were performing at the time in question, yet different inferences might legitimately be drawn from such evidence, but it was the jury’s function to draw such inferences. In Moore v. Rosenmond. 238 N. Y. 356, where different inferences might legitimately be drawn from the evidence, one of which showed liability and the other that there was no liability, it was said that the question was for the jury to draw the inferences. Judge Pound in delivering the opinion of the court said (pp. 359, 360): ‘ ‘ They might, on the other hand, if they drew from the testimony the inferences most favorable to defendant, have found that Dollar had abandoned his employer’s business when he picked up Corbin at the Eighty-fifth street garage and that the time was then devoted to a personal spree, until a belated sense of duty inspired them to start back to the garage. It was, however, for the jury to draw the inferences.”


author: Mr. Presiding Justice Stone

text:
    Harry White, Appellee, v. L. W. Baldwin and Guy Thompson, Appellants.
    Opinion filed November 9, 1936.
    Whitnel & Browning, of East St. Louis, for appellants; Hickman & Hickman, of Benton, and B. D. Walker, of counsel.
    John A. Logan, of Benton, for appellee.
   Mr. Presiding Justice Stone

delivered the opinion of the court.

Harry White, plaintiff appellee, originally brought this action in the justice court for damages done to his Ford truck when it was driven by one Sterbis, whom he had permitted to use it, into the side of a moving freight train operated by defendants appellants. From an adverse judgment defendants appealed to the circuit court of Franklin county. The case was tried before the court without a jury and a judgment for $250 was entered against the defendants, for the plaintiff, to reverse which this appeal is prosecuted.

On Saturday evening, December 29, 1934, plaintiff loaned his Ford truck to Walter Sterbis. The truck was to be used by Sterbis to drive to Boyalton to attend a party. Prior to that time Sterbis had driven the truck and was familiar with State Highway No. 148, which led to Boyalton (Abst. p. 8, Bee. p. 48). Highway 148 is concrete and 18 feet wide. It intersects the single-track branch line of the Missouri Pacific at a point near the northwestern outskirts of the city of Zeigler (Abst. p. 5, Bee. p. 34). On the trip Sterbis drove the truck into the middle of a 67-car Missouri Pacific freight train which was then moving in an easterly direction over the intersection. Plaintiff’s truck was demolished and Sterbis sustained injuries of which he soon died. The train crew was at the time unaware of the accident.

At the time of the accident, estimated by the various witnesses to have been between 6:15 p. m. and 7:15 p. m., it was misting rain and a little foggy and dark (Abst. p. 10, Bee. p. 55; Abst. p. 24, Bee. p. 89; Abst. p. 25, Bee. p. 90; Abst. p. 28, Bee. p. 93). The truck driven by Sterbis in a southwardly direction passed around another southbound auto being occupied by Ada Skipper and being driven by Olden Young when the two automobiles were about two or three blocks north of the railroad crossing. The Olden Young automobile was traveling about 35 to 40 miles per hour, and Mr. White’s truck was being driven in excess of 40 miles (Abst. p. 15, Bee. p. 67; Abst. p. 27, Bee. pp. 93, 94). The only evidence as to visibility is a statement by Olden Young (Abst. p. 28, Bee. p. 93) that good lights would have permitted visibility from 125 to 150 feet. When about one block from the crossing Young saw the train passing over the crossing (Abst. p. 28, Bee. p. 94). After coming to a stop at the crossing and making an examination, he discovered the front end of the White truck had run directly into the side of the moving train (Abst. p. 28, Bee. p. 94).

Defendants admit that if they are liable the judgment was not excessive.

The only material controversy at the trial was over the physical surroundings at the crossing. It is admitted by all witnesses that there was a highway disc sign with the letters “R. R.” on it just to the right (west) of the pavement, measured to be about 500 feet from the crossing, and a regular standard statutory cross-arm sign at the crossing. (See defendants’ Exhibits A and B.) It is also admitted that the highway is perfectly straight for a distance of two miles north of the crossing.

Plaintiff’s witness, Otis Gandy (Abst. p. 9, Rec. pp. 50, 51), testified that about 1.00 feet north of the crossing there was a hollow or a dip in the pavement and a southbound automobile must be pretty close to the train before its lights will show the wheels of the passing train.

Plaintiff’s witness, J. E. Clem (Abst. p. 14, Rec. p. 63), testified the hard road runs on a decline until about 40 feet from the tracks when the highway ascends to the level of the tracks, and automobile lights go under a train until about 40 feet from the tracks. Clem also testified that the highway disc sign was about 50 feet, maybe farther, from the crossing (Abst. p. 14, Rec. p. 64). Defendants’ witness’ actual measurement indicated the disc sign was approximately 500 feet, or 169 steps (Abst. p. 20, Rec. p. 79).

Defendants’ witness Short directed the taking of photographs, defendants’ Exhibits A and B (Abst. pp. 23 and 24), and identified them at the trial. He testified that the highway commences an ascending grade about 450 feet from the crossing. There was no dip or hollow in the road closer than that point. Tests made indicated that lights dimmed for courtesy driving illuminated a train 150 feet from the crossing, while lights for distance driving would illuminate a train on the crossing 300 feet away (Abst. pp. 20 and 21; Rec. pp. 79-82).

At the close of all the evidence the court overruled a motion to find the issues for the defendants and entered judgment for the plaintiff for $250.

The question presented by this record is a growing-one in Illinois and is of exceeding importance. Nevertheless, the plaintiff appellee has filed no brief nor tried in any way to assist the court in solving it. It is not our business to argue a litigant’s case for him.

We have examined this record with care and in the absence of any contradiction, of statement, fact or law, are of the opinion that the trial court erred in entering its judgment. Said judgment is, therefore, reversed.

Judgment reversed.


text:
    The People of the State of Illinois ex rel. E. Harold Wineland, State’s Attorney, Appellant, v. E. E. Calhoon, Appellee.
    Opinion filed November 9, 1936.

      E. Harold Wineland, State’s Attorney, for appellant.
    A. N. Tolliver, of Louisville, for appellee.
   Mr. Presiding Justice Stone

delivered the opinion of the court.

The defendant, Clinton Rich, was prosecuted in the county court of Clay county on an information charging him with a violation of the Illinois Liquor Control Act, Ill. State Bar Stats. 1935, ch. 43. He was found guilty by a jury and sentenced by the court on April 20, 1935, to pay a fine of $150 and the costs of court and to stand committed to the county jail of Clay county until the fine and costs were paid. On the same day he was placed in the care and custody of the sheriff of Clay county and imprisoned in jail, and .on May 6th, following, he was released from the custody of the sheriff by an order of the said county court, entered as follows:

“Now, on this 6th day of May, 1935, the Court remits the sum of fifty dollars ($50.00) on the said fine of one hundred fifty dollars ($150.00), leaving the fine as one hundred dollars ($100.00), and remits the cost therein.”

The defendant, Clinton Rich, paid the $100 fine and was released from jail on May 6, the date of the aforesaid order.

The aforesaid order of May 6 was entered without notice or knowledge of the State’s attorney of the said county at that time, who was admittedly the legal representative of the People of the State of Illinois.

The clerk of the county court refused to abide by the order of the court remitting the costs, and from the $100 which was paid to him, he deducted his costs as clerk of the court and the sheriff’s and State’s attorney’s fees and applied the balance on the payment of the fine. The sheriff abided by the said order and released the defendant from jail. Thereafter, the State’s attorney, upon its coming to. his notice and attention that the order of May 6 had been made, requested the court to strike the said order from the record, which was refused.

Thereafter, on the 15th day of May, 1935, this action for a writ of mandamus was filed in the circuit court of Clay county to compel the respondent to expunge the void order of May 6, 1935, from the record of the court, the action being prosecuted by the State’s attorney of the county, in the name and on behalf of the People of the State of Illinois, and the petition being verified by affidavit of the State’s attorney.

The respondent filed a general demurrer to the petition, alleging as a special cause of the demurrer that the circuit and county courts were courts of concurrent jurisdiction relating to the subject of misdemeanors and, therefore, the circuit court had no jurisdiction to grant a writ of mandamus directed to the county court in such a case. The demurrer was overruled and thereafter the respondent was defaulted for lack of an answer. On December 20, 1935, the matter was heard upon the petition, by the trial court, and subsequently the court refused to grant the writ, although it appeared at the hearing that there was no controversy as to the facts of the case.

By the act of overruling the demurrer to the petition for mandamus in this cause, the court held that the petition was good. No answer was filed, so the court heard said petition upon what was tantamount to the admitted facts therein set forth. The trial court held that no good purpose would be served by granting the relief sought. It, therefore, dismissed the petition and struck the cause.

The court thereby assumed a discretion in this case which we are convinced by the greater weight of the authorities it could not lawfully exercise,, however strong the temptation must have been to take the action the trial court did take in a matter which is somewhat trivial to be brought to this court. It is here, however, and since it is here there must be applied to it certain well defined and well established principles of law. The amount involved does not warrant courts from departing from those principles. It is a part of our fundamental law that the Governor alone has the power to grant reprieves, commutations and pardons after conviction, for all offenses, and our Supreme Court has held by all offenses is meant misdemeanors as well as felonies. In the case at bar, a final sentence was pronounced — that is, a fine of $150 and costs of suit, and that defendant stand committed to the county jail until fine and costs are paid. This sentence was not only final, but the defendant had accepted it as such and had begun to serve the sentence imposed. It is true that the jail sentence was conditional upon his paying the fine and was only a means to enforce the payment thereof.

We know of no law in Illinois which gives a trial court the power or jurisdiction to remit fines or parts of fines under these circumstances. By a long line of decisions our Supreme Court has held that where a person has been convicted and delivered to the prison authorities by commitment of the court wherein he was convicted, that court has no power of jurisdiction subsequently to vacate or modify the judgment of the court. (People v. Turney, 273 Ill. 546,113 N. E. 105; People v. Williams. 352 Ill. 227, 185 N. E. 598; People v. Rudecki, 309 Ill. 125, 140 N. E. 832.) We interpret this to mean that the court is powerless after final judgment, even though it be for a fine, to remit or modify that fine, even though the term at which said fine was fixed has not yet adjourned.

It follows, therefore, that the court was without jurisdiction to enter this order, and that said order is, therefore, void. The power to change that fine as indicated above, rests with the Governor of the State under proper application.

A void order may be expunged by mandamus. Since the People, through their State’s attorney, insist upon their technical right in this case, we are of the opinion that they have shown a clear right such as the law demands, for the peremptory writ of mandamus. In People v. Hotz, 327 Ill. 433, it was held “the Court has no discretion in granting a writ of mandamus where it is sought to enforce a provision of the Constitution and the Court cannot abrogate a constitutional requirement on the theory that the public good will not be thereby promoted.”

However loath we may be to reverse this decision, under all the circumstances in the case, we are constrained to the belief that we cannot do otherwise.

The judgment of the circuit court is reversed and this cause is remanded with instructions to that court to award the writ of mandamus.

Reversed and remanded.


text:
    City of Troy, Appellant, v. Joseph Holten, Appellee.

      Opinion filed November 9, 1936.
    James L. Reed and Burroughs, Simpson & Reed, of Edwardsville, for appellant.
    Wm. C. Dunham, of East St. Louis, and J. N. Mc-Clees, for appellee.
   Mr. Presiding Justice Stone

delivered the opinion of the court.

The city of Troy, appellant, on September 8, 1935, passed an ordinance designated as one regulating vehicles carrying foodstuffs, section 1 of which provided: “It shall be unlawful to use or permit the use of any vehicle, including wagons and motor vehicles and vehicles propelled by human power, for the storage or carrying of any meats, poultry, fish, butter, cheese, lard, vegetables, bread or bakery products, or any other provisions intended for human consumption, including beverages and milk, in the city for the purpose of delivering any such foodstuffs to any place in the city for use and consumption or for resale in the city for such purposes, unless a license for such vehicle is first secured and the provisions of this ordinance are fully complied with.”

The ordinance further provided that such license should be $25 annually, the fees therefor to be paid to the city clerk and to be turned over by him to the city treasurer. It also contained regulations as to the sanitation of such vehicles and for inspection of the same, as well as penalties for its violation.

Appellee, Joseph Holten, was arrested before a justice of the peace and charged generally with having violated said ordinance. He was there fined $5 and costs, from which he appealed to the circuit court, where, upon a retrial, the issues were found in his favor. Appellant has prosecuted this further appeal to reverse the judgment of the trial court.

The only question, as agreed by both parties, is the validity of the ordinance, and while the record fails to show whether appellee was charged with failure to secure a license as therein required, or some other provision thereof, both parties have argued the cause as though the failure to secure a license was the violation claimed, and we shall therefore so consider the matter.

Appellee contends that the ordinance contravenes Cahill’s St. 1931, ch. 95a, fí27 (par". 227 of ch. 121, Smith-Hurd E. S. 1931) which is: “No owner of a motor vehicle or motor bicycle who shall have obtained a certificate from the Secretary of State and paid the registration fee as hereinbefore provided, shall be required by any city, village, town or other municipal corporation within the State other than that within which said owner resides to pay any tax or license fee for the use of such motor vehicle or motor bicycle.”

This has been held to be a valid legislative enactment and one 'which precludes a municipality, other than the one in which the motor vehicle owner lives, from imposing upon him any license or tax in addition to the State registration fee. City of Flora v. Borders, 342 Ill. 208.

Appellee, during the period of time involved, was a resident of the city of Collinsville, had paid the State registration fee, and procured from the secretary of state his certificate therefor. He also had a city license for his vehicle from the city of Collinsville, and during the course of his employment made deliveries of foodstuffs in the city of Troy. We infer from the arguments, though it is not contained in the evidence or stipulation, that he did not take out a license in the latter city as required by such ordinance.

That appellant had full authority to regulate the use of vehicles carrying foodstuffs within its boundaries, in such way as to safeguard health or insure their proper sanitation and cleanliness, is thoroughly established as a rule of law in this State. Spiegler v. City of Chicago, 216 Ill. 114. It, however, had no right, under the pretense of police or sanitary requirements, to impose a license fee or tax upon anyone not a resident of the city. Cahill’s St. 1931, ch. 95a, If 27 (par. 227, ch. 121, R. S.), supra.

The power of the city to regulate the conveyance of foodstuffs being admitted, it follows that as an incident thereto that appellant had the power to require a license fee for the vehicles so employed in transporting the same, in order to defray the reasonable expense of such regulation, in the interest of public health and safety. City of Chicago v. Arbuckle Bros., 344 Ill. 597; Kinsley v. City of Chicago, 124 Ill. 359.

It is necessary to determine whether the license fee exacted by sec. 1 of the ordinance was so intended, or whether it was designed to produce revenue. If it was the latter it amounted to a tax, and was within the inhibition of said Cahill’s St. 1931, ch. 95a, ff 27 (par. 227, ch. 121, R, S._).

Sec. 3 of the ordinance requires, among other things, that such vehicles be kept in a clean and sanitary condition, and thoroughly cleaned each day they are used. Sec. 4 provides that a duty rests upon the mayor to make or cause to be made such inspections as are requisite to insure a compliance with the terms of the ordinance. It is thus observed that no stated times for inspection are prescribed, nor the manner of or the extent of the same, it being left solely to the discretion of the mayor to determine when and how the vehicles should be subjected to inspection. Further, the license fee, collectible by the clerk, was by him to be forthwith turned over to the city treasurer where it would become a part of the general city funds.

There is no provision that the license fees should be constituted a separate fund to defray the cost of inspection or enforcement of the ordinance, nor that it was intended to be devoted to such purposes. It seems reasonable to believe that had the city council designed that the fees thus derived from the issuance of such licenses should be devoted to the expense of inspection or regulation, they would in some manner have manifested such intention in the ordinance. The enactment, however, is silent upon the subject.

Sec. 2 reads: “No license fee shall be required for any vehicle used to deliver foodstuffs from any establishment which is licensed and inspected as a food-dealing establishment in the city; but all provisions of this ordinance shall be complied with in connection with such vehicles other than that providing for the payment of the fee.”

"While the court had this case under advisement, the United States Circuit Court of Appeals for the Seventh Circuit handed down its opinion in the case of Jewel Tea Co. v. City of Troy, 80 F. (2d) 366. In that case the identical ordinance which is here involved, was passed upon and held valid. In that case the court said:

“It is clear that if the fee is designed for the purpose of meeting the expense of such inspection and regulation of vehicles in the interest of the public health, it is not assailable as a burden upon interstate commerce.” That is equally true with reference to the statute above quoted; if it is a revenue measure it is in contravention of said statute; if, on the other hand, as said above, it is for the purpose of providing the expense of inspection and so forth, and the carrying out of the ordinance, it is not in such contravention. This ordinance was designated as one regulating vehicles carrying foodstuffs. We cannot say that it is in fact a revenue ordinance merely because the body of the ordinance does not say that it is not.

By amendment the fee of $25 was reduced to $15. We would not be warranted in assuming, and the evidence is not convincing, that this is a larger fee than is necessary for purposes of regulation. Further, the fact, if it is a fact, that all of the fee required is not devoted to the purposes of regulation, does not invalidate the ordinance on the ground that it is a revenue measure. In Clark v. Poor, 274 U. S. 554, passing upon the contention that proceeds of similar fees were not all devoted to the purpose for which they are collected, the United States Supreme Court said:

“It is said that all of the tax is not used for maintenance and repair of the highways; that some of it is used for defraying the expenses of the commission and the administration or enforcement of the act; and some for other purposes. This, if true, is immaterial. Since the tax is assessed for a proper purpose and is not objectionable in amount, the use to which the proceeds are put is not a matter which concerns the plaintiffs.”

Courts will not lightly set aside ordinances any more than they will statutes. Conditions under which the ordinances appear obnoxious to statutes or the Constitution must clearly appear. The presumption is that they comply.

We are of the opinion that the ordinance being designed as a regulatory measure and not a revenue measure, there is not sufficient in this record to establish said ordinance as a revenue measure. That being the chief contention in this case, it follows that we are of the opinion that there is no warrant for holding this ordinance invalid on the theory that it is a revenue measure. The judgment of the circuit court is reversed.

Judgment reversed.