text:
    Earl B. Williamson, Trustee of the John J. Schwartz Baking Corporation, Bankrupt, Appellant, v. Herbert N. Powell, Administrator with the Will Annexed and Trustee of the Last Will and Testament of Margaret Farney, Deceased, Appellee.
    Gen. No. 7,857.
    Heard in this court at the October term, 1927.
    Opinion filed August 15, 1928.
    Rehearing denied January 28, 1929.
    George J. Jochem, for appellant.
    E. A. Agard and Adsit, Thompson & Herr, for appellee.
   Mr. Presiding Justice Jones

delivered the opinion of the court-

This is a suit in chancery brought by Earl B. Williamson, trustee in bankruptcy of the estate of John J. Schwartz Baking Corporation, against Herbert N. Powell, administrator with the will annexed and trustee of the estate of Margaret Farney, deceased, and others.

Margaret Farney in her lifetime was one of the incorporators of the baking corporation and subscribed for 50 shares of the capital stock at $100 per share. She paid in but $3,000, and only 30 shares of stock were issued to her. Henry K. Meyer subscribed for 20 shares, but paid in only $1,000 and 10 shares of stock were issued to him. The suit was instituted to recover the amount of the unpaid subscriptions, but the Meyer subscription is not involved in this appeal. The corporation continued to operate until March, 1920, when it was adjudged a bankrupt.

Margaret Farney died testate on February 2, 1922. Appellee was appointed administrator with will annexed of her estate and qualified as such on July 18, 1922. An inventory of the estate was filed and approved. On July 16, 1923, being two days less than one year from the appointment of the administrator, appellant filed a claim in the county court against said estate for $2,000 on account of the unpaid stock subscription of Margaret Farney.

The bill in chancery was filed September 1, 1923,' or more than one year from the date of the letters of administration. It is based upon section 53 of the Corporation Act, Cahill’s St. 1925, ch. 32, jf 53, which provides for the bringing of suits in equity by creditors-of a corporation to enforce the payment of delinquent stock subscriptions. The decree found that Margaret Farney was indebted to complainant in the sum of $2,000, and because the suit was brought more than one year after the date of the letters of administration, it was ordered that the claim be paid only out of assets of the estate which had not been included in the inventory filed by appellee.

We think the order limiting the payment of the claim to assets not inventoried was erroneous. Section 70 of the Administration Act, Cahill’s St. 1925, ch. 3, IT 71, provides that all demands against the estate of a decedent “not exhibited” within one year from the granting of letters shall be barred unless the creditors shall find other estate of the decedent not inventoried or accounted for. Appellee contends that under the provisions of section 53 of the Corporation Act, a suit by the creditors of a corporation to recover for unpaid stock subscriptions can be maintained only in a court of equity, and that the county court is without jurisdiction to entertain or allow a claim of this kind; that inasmuch as the bill in chancery was not filed until more than one year had elapsed after the granting of letters in decedent’s estate, the decree of the circuit court was correct; and that the filing of the claim in the county court, within the limitation period, cannot be invoked in aid of the suit in the circuit court.

No question of the complainant’s right to institute the suit as the representative of the creditors is raised. Both parties to this controversy, with different objects in view, and by different processes of reasoning, claim that the jurisdiction of the circuit court was exclusive. The only question necessary to be determined in this case is whether the exhibiting of a claim in the county court within the limitation period is sufficient to remove the bar of the statute, so that a claim established by suit in another court, instituted more than one year after the appointment of the administrator, should be paid in due course of administration, or paid only out of assets not inventoried.

In order to remove the bar of the statute it is not necessary for a suit or action to be brought upon a claim within a year from the granting of letters. The requirement is that the claim be exhibited within that time. The proceeding provided by statute for the presentation and allowance of claims against estates of decedents is in no proper sense a suit or proceeding at law or in chancery. The mere fact that a claim is contested, so as to necessitate a trial, does not have the effect of converting the proceeding into a suit or proceeding at law. (Grier v. Cable, 159 Ill. 29.) The filing of a claim against an estate with the clerk of the county court within the limitation period is an exhibition of the claim within the meaning of the statute, so as to take it out of the limitation. (Roberts v. Flatt, 142 Ill. 485; Wallace v. Gatchell, 106 Ill. 315; Barbero v. Thurman, 49 Ill. 283, 284.)

It was formerly provided by section 116 of the Statute of Wills (chapter 109, Rev. St. 1845) that the manner of exhibiting claims might be by serving a notice of the. claim on the executor or administrator, or by presenting him the account, or filing it in the court of probate. In Wilding v. Rhein, 12 Ill. App. 384, an administrator, while that statute was in force, made his final report and was discharged by the county court. Suit was afterwards instituted in the circuit court against him by the payee of a note executed by the decedent. It appeared by the pleadings that the note was never presented to the county court, but within the limitation period was presented to the administrator. The court held that the exhibition of the claim to the administrator was sufficient to prevent the bar of the limitations from running against it. The pertinent facts in that case are analogous to those in the case at bar, and the principle there announced should be controlling here. It is the exhibition of the claim that removes the bar of the statute. Under the present statute the exhibition of the claim must be by filing it in the county court. That was done by appellant within the limitation period, and it was error to decree that the amount be paid only out of assets not included in the inventory. The order should have required the amount of the claim to be paid in due course of administration. The decree is reversed and the cause remanded with directions to modify the decree in conformity with the views herein expressed.

Reversed and remanded with directions.


source: Caselaw Access Project

author: Mr. Justice Jett

license: Public Domain

text:
    Republic Company of Rockford, Illinois, Defendant in Error, v. City of Rockford, Plaintiff in Error.
    Gen. No. 7,884.
    Heard in this court at the February term, 1928.
    Opinion filed September 4, 1928.
    Rehearing denied January 28, 1929.
    Stanton E. Hyer and Carl A. Swenson, for plaintiff in error.
    William L. Pierce and Charles W. Ferguson, for defendant in error.
   Mr. Justice Jett

delivered the opinion of the court. This is a writ of error prosecuted by the City of Rockford, a municipal corporation, plaintiff in error, with a view of reversing a judgment obtained against it by the Republic Company for $7,000, alleged to have been caused by the decay of a storm sewer, causing the flooding of the building occupied by the Republic Company, and damaging its equipment, property and stock.

The declaration consists of one count. It is charged that on the 13th of June, 1926, the City of Rockford, plaintiff in error, was possessed of, and had control of a certain storm water sewer, on the south side of east State Street, in the City of Rockford, along and in front of the premises of the defendant in error, and that said storm sewer was made of certain tile pipe, two feet in diameter, and consisted of sections laid together; that the sections were approximately three feet in length; that said sewer discharged into the Rock River.

It is further charged that while the city was so possessed, and had control and supervision of said sewer, and under the obligation to use such care and supervision, it suffered and permitted the said sewer and certain of the sewer pipes, of which the same was constructed, to become and remain in an unsafe and dangerous condition, and that a certain section or sections of the sewer pipe, with which the same was constructed, had become and were broken, disintegrated, decayed and cracked, immediately in front of the premises of the defendant in error; that said defective and dangerous condition of the said sewer pipe had existed for about two years prior to the 13th of June, 1926, and that on several occasions during the said two years, the City of Rockford, by and through its superintendent of sewers, its mayor, and city engineer, had had actual notice and knowledge that the said sewer was in a defective condition; that the said plaintiff in error carelessly and negligently suffered and permitted said sewer to remain and exist in such dangerous and defective condition; that on the 13th of June, 1926, during a rainstorm said defective section of sewer pipe gave way, and was broken by the action of the water in and around the same, and that the great force of the pressure of the water being discharged therein was forced through and into the basement of the building occupied by the defendant in error, where it operated a newspaper, printing and publishing establishment, and did great damage and injury to said plant, machinery and equipment, tools, instruments, merchandise and stock on hand.

To the declaration the City of Rockford pleaded the general issue. It will be observed that the action is based upon alleged negligence in the maintenance, supervision and repair of the sewer, and in permitting the sewer to become and remain in a defective and dangerous condition, with full knowledge, thereof. The evidence shows that there was a defect in the sewer pipe, in front of the premises of the defendant in error. Defendant in error called the superintendent of sewers of the plaintiff in error and his assistant as witnesses, and they testified that from six months to a year, possibly longer, before the sewer pipe burst, they discovered that there was a defect in one of the sewer pipes in front of the building of the defendant in error; that one of them crawled into the sewer and found this defect about 20 or 25 feet from the mouth of the outlet, which was in the exact place of the section that burst at the time of the flooding of the building.

They further testified that they talked with the business manager of the defendant in error and others, who showed them where water was coming in through the stone wall next to the sewer on a level with a broken sewer pipe, and running into the basement of defendant in error’s premises.

It further appears from the evidence of one of the employees of the city that there was a leak in the section of the sewer pipe at this location, on the south side of the inner wall about half way up, and that there was a crack about 10 inches in length, and was large enough to stick an ordinary match through, at the time when they made the examination. The city engineer of the plaintiff in error testified that he had notice on one or more occasions from some of the officials of the defendant in error, that they were having trouble with the water coming into the basement from a point opposite the position of the storm water sewer, in the street. The evidence shows that the defendant in error had notified the city of the conditions at different times, covering a period of approximately two years before the flooding of the premises occurred.

The evidence clearly discloses the fact that an injury was occasioned to the premises and property occupied by the defendant in error, by reason of the sewer pipe becoming broken, decayed and cracked, and that this condition was known to the plaintiff in error.

The question now arises as to whether or not the city is liable, by reason of the alleged negligence, in the maintenance, supervision and repair of the sewer, and in permitting it to become and remain in a defective and dangerous condition.

A number of reasons are assigned for a reversal of the judgment. No complaint is made of the action of the trial court in the giving or refusing of instructions.

It is contended that the defendant in error was guilty of contributory negligence; that the court erred in the admission and rejection of evidence, and in passing upon the competency of certain witnesses to testify as to various items of alleged damage and loss occasioned by the flooding of its premises, as charged in the declaration; that the flooding of the basement, and the damage done thereby was occasioned by an alleged unprecedented rainstorm, which created a peril, over which the city had no control, and for which it was not responsible.

So far as this record discloses, it is conceded that the municipality had adopted and installed a general system of storm water sewers in the City of Rockford.

One of the principal arguments for a reversal of the judgment is that the court erred in denying the motion, made by plaintiff in error, to direct a verdict. It is also insisted that the verdict is against the manifest weight of the evidence. The record discloses that some two years prior to the time of the alleged injury water came into the basement of the building occupied by the defendant in error. It is disclosed that the plaintiff in error had notice of this fact; that the plaintiff in error had notice that a section of said sewer drain contained a crack, through which a match could be inserted; that from time to time the drain in question would become more or less stopped up on account of the ice and other material gathering in the same, and that plaintiff in error had notice thereof. It was stipu- . lated at the trial that the rain in question, at the time said sewer broke, was unprecedented, some four and one-half inches of rain having fallen in a very short time, and was a greater rain than had fallen, so far as the record discloses, in the same length of time, in said city. In this state of the record, plaintiff in error contends that the damage to defendant in error was caused by an act of God, therefore the city is not liable.

It is the contention of the defendant in error that while the city would not be liable for an act of God, yet, if an unprecedented rain, such as this was shown to have been, coupled with negligence on the part of the city, which approximately contributed to causing the injury to defendant in error, in that event, the rain would not be a defense, even though it be held to be the act of God.

It is the duty of a municipality, after it has adopted and installed a general system of storm water sewers, to use reasonable care to keep the sewer in a reasonably safe condition of repair, and a failure to do so will make the municipality liable. City of Rock Island v. Gingles, 217 Ill. 185; City of Chicago v. Seben, 165 Ill. 371-379. It is the rule that while the legal obligation of the City to construct gutters and grade and pave streets is one voluntarily assumed, yet, when the city constructs these improvements, affecting'the welfare of the public, it then becomes the duty of the city to see that they are kept in repair. City of Chicago v. Seben, 165 Ill. 371, 379-380; City of Alton v. Hope, 68 Ill. 167.

A municipality is liable after it has constructed a general sewer system, whether storm water or sanitary, to use materials that are not defective, to keep general supervision over such sewers and to see that they do not decay or get out of repair, and to use reasonable diligence to repair the same, or to restore defective parts. City of Fort Wayne v. Coombs, 107 Ind. 75, 7 N. E. 743. In Welfelt v. Illinois Cent. R. Co., 149 Ill. App. 317, the court quoting from the case of the City of Fort Wayne v. Coombs, supra, which was a suit for personal injuries, caused by a defective sewer, the trial court permitted appellees to prove that there was a break in the sewer about 100 feet from the point where the break occurred which caused the injury for which a recovery was sought and the Supreme Court of Indiana, in reviewing the judgment of the lower court, said: “This evidence was competent, in connection with the other testimony in the case, for the purpose of charging the city with knowledge, as well as for the purpose of showing that the materials used were defective, or the work of construction was not well done, and also for the purpose of showing that the sewer had, by reason of time and use, got out of repair.”

Where the attention of a municipality has been legally called to a defective condition of the streets or sewers, and the municipality has either inspected or repaired the defects, and the work is done in a defective manner, or a city, upon notice, neglects to make repairs, and an injury occurs, the liability of the municipality is conclusive. Bouillon v. City of Greenville, 233 Ill. App. 500-501.

Notice to the mayor, the superintendent of streets, the superintendent of sewers, where such officers exist, of defective or dangerous conditions of the streets or sewers, is ample notice to the municipality to make it liable for the damage resulting to persons injured or damaged by defects. Looney v. City of Joliet, 49 Ill. App. 621; s. c., 159 Ill. 471.

If there is any intervening human agency, which contributes to cause the damage, it cannot be considered as caused by an act of God. If a municipality permitted a sewer, 'with knowledge of defective condition, to remain without repair or replacement, and an injury occurs to abutting property, by being flooded or otherwise damaged, then the mere fact that an unprecedented rainstorm also occurred, and the combined act of God and the negligence of the municipality occasion an injury, the city is liable. Welfelt v. Illinois Cent. R. Co., 149 Ill. App. 317-326; Sandy v. Lake St. El. R. Co., 235 Ill. 194, 202; Wald v. Pittsburg, C., C. & St. L. R. Co., 162 Ill. 545.

_ If the municipality was negligent, as alleged in the declaration, and such negligence proximately caused alone, or concurring with the act of God, caused an injury, it is liable. Quincy Gas & Electric Co. v. Schmitt, 123 Ill. App. 647-655, 656. When the effect, the cause of which is to be considered, is found to be in part, the result of the participation of man, whether it be from active intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it were, and removed from the operation of the rules applicable to the acts of God. Mueller Grain Co. v. Chicago, P. & St. L. R. Co., 200 Ill. App. 347-349, 350.

We are therefore of the opinion, from what is disclosed by the record, and the law arising the'refrom, that it was a question of fact for the jury, as to whether the damages to the defendant in error were chargeable to the negligence of plaintiff in error in not keeping its sewer in a proper state of repair, after having notice of its defective condition, and that the finding is not against- the manifest weight of the evidence, and the court did not err in refusing the peremptory instruction.

It is also insisted by plaintiff in error that the court erred in its ruling on the admission of evidence. The objection most seriously urged by the plaintiff in error is to the testimony of the witness Pollard, who was the principal witness to testify to the damages claimed to have been sustained by the defendant in error. It is said that the court allowed him too much latitude in referring to a certain list that he had, in order to refresh his memory. The record discloses that the witness Pollard had been connected with the defendant in error company continuously since January, 1908; that his relation to said company was that of business manager; that in his capacity as business manager, he had done all of the purchasing of machinery, equipment and supplies for the said newspaper company for 15 years.

The evidence shows that the defendant in error was printing and publishing 12,000 or more papers daily. The witness Pollard testified that he was acquainted with the various items of machinery, equipment and supplies that entered into the publishing, printing and supplying of the newspaper; that he knew the fair cash market value, purchase cost and expense of producing all of the machinery and equipment for publishing such a newspaper.

The record discloses that the printing press in this establishment cost $55,000 and was purchased under the direction of the witness Pollard; that there were seven modern linotype machines and one monotype in the basement at the time of the flooding, and these machines were all purchased by and under the direction of Pollard, and he was thoroughly familiar with the cost of the machinery, and with the cost of the equipment connected with these machines. His testimony discloses the fact that he was acquainted with, and had purchased, or superintended the purchase of all of the electric motors that operated the various machines in the plant; that he was familiar with and knew the various scale of wages that was being paid for the different classes of labor employed in the business; that he knew the scale of wages paid under union labor rules, to the various classes of labor employed, and that he took wage schedules into consideration in determining the value of the labor performed by men called in, and men used overtime after the accident, in the rehabilitation, cleaning up and re-establishing of the business.

It was on the testimony of the witness Pollard, as to the amount of damages sustained, on which the jury based its findings. Wé have examined the evidence as found in the abstract and the cases cited by the respective litigants, bearing upon the objection made by the plaintiff in error, to the testimony of the witness Pollard. The rule is that while a witness can only testify to such facts as are within his knowledge and recollection, he is permitted to refresh and assist his memory by the use of a written instrument, memorandum or entries in a book, and it is not necessary that the writing should have been made by the witness himself, or that it should be an original writing, nor that the writing thus used should itself be admissible in evidence, provided that after inspecting the record he can speak to the facts from his own recollection. Scovill Mfg. Co. v. Cassidy, 275 Ill. 462-472; Walsh v. Chicago Rys. Co., 303 Ill. 339-345.

It is competent to show that a party interested in the business, with knowledge of the character and value of the property, had made a list of the goods which he knew he had in the store, which were so completely destroyed that they could not be identified, and the list of the goods as made up, while possibly not competent in evidence, should be permitted to be used to refresh the witness’ recollection. Even where the witness could not remember all of the details at the time of the trial, but testified that he knew it to be true and correct, he lays such a foundation as to entitle the list to be used to refresh the witness’ recollection. St. Onge v. Hartford Fire Ins. Co., 204 Ill. App. 127-137.

All that is required to make the items in a memorandum competent is proof that the items contained therein were made recently with reference to the events, and that the party making them knew them to be correct, and that the party for whom they were made and who testified concerning them knows from his own knowledge, and from knowledge obtained in connection with the matter over which he has supervision, that they are true. O. S. Richardson Fueling Co. v. Seymour, 235 Ill. 319-323.

In considering the contention of plaintiff in error that the court erred in admitting testimony on the part of defendant in error, it is proper to keep in mind that the objections of plaintiff in error are general in character and do not specifically state, in many instances, the grounds of the objection made, and in a number of instances the testimony of the witness with reference to the damage done to" the various articles in said building, were not objected to.

On the whole, we are of the opinion that we would not be warranted in reversing the judgment on account of the ruling of the court on the admissibility of evidence.

We are not unmindful of the fact that the plaintiff in error did not offer any proof bearing upon the amount of damages sustained by the defendant in error, but did make the following admission, “Of course the water, debris, and the like, flooding into the basement of the newspaper building, did great damage to the machines, stock, supplies, etc.”

We have examined the errors that were in any manner discussed by plaintiff in error, and we conclude therefore that no reversible error was committed and the judgment of the circuit court of Winnebago county should be affirmed, which is accordingly done.

Judgment affirmed.


text:
    E. J. Bunge, Appellant, v. Carl E. Kirchhoff et al., Appellees.
    Gen. No. 7,802.

      Heard in this court at the April term, 1927.
    Opinion filed December 20, 1928.
    Rehearing denied January 28, 1929.
    Charles W. Hadley and Cassels, Potter & Bentley, for appellant; George C. Bunge, of counsel.
    Kirkland, Fleming, Green & Martin, for appellees; Robert N. Golding and Allan W. Cook, of counsel.
   Mr. Justice Jett

delivered the opinion of the court. In an action of assumpsit brought by E. J. Bunge, appellant, to recover the purchase price for 25 shares of stock of the Chicago Manifold Company and attorney fees, under the Illinois Securities Act, Cahill’s St. ch. 32, 254 et seq., a jury rendered a verdict in favor of the defendants, appellees here, upon which judgment was entered and the appellant brings the record to this court, for review, by appeal.

For the purposes of this opinion appellant will be called “plaintiff” and appellees, “defendants.”

The first count of the amended declaration charges that the stock in question was a Class “D” security and had not been qualified for sale; that the stock was purchased by the plaintiff on April 16, 1923, as a result of a solicitation of the defendants, Baughman and Kirchhoff, who were officers and directors of the defendant corporation; that the stock was sold to plaintiff in violation of the provisions of the Securities Act, and that although the plaintiff had tendered back the stock, the defendants had refused to accept it or to refund to the plaintiff the purchase price thereof. The additional count was like the first, except that the shares of stock therein mentioned were alleged to be Class “C” securities, under the Illinois Securities Act, Cahill’s St. ch. 32, ¶ 254 et seq.

The defendants, Baughman, Kirchhoff and the Chicago Manifold Company, in addition to the general issue, filed three special pleas. The first special plea denied that the stock was a Class “D” security, and alleged that it was a Class “B” security, under the Illinois Securities Act; the second special plea alleged that the plaintiff had not elected to declare the sale of stock void, but had affirmed such sale and had accepted the profits from the ownership of such stock, with full knowledge of the matters set forth in the first count of the declaration; the third special plea alleged that the plaintiff, with full knowledge of all matters set forth in the amended declaration, had entered upon the discharge of all the duties of a stockholder in the defendant corporation, and thereby had ratified and confirmed the sale, and had waived any right he might have had to rescind the same or declare it void. Upon the thus formed issues the trial was had.

The evidence disclosed that the defendants, Baughman and Kirchhoff, were directors of the defendant company, and president and vice president, respectively. The Chicago Manifold Company is an Illinois corporation organized in 1920 for the purpose of manufacturing, selling and distributing stationery supplies and the conducting of a general stationery and printing business. In the spring of 1923 Baughman and Kirehhoff solicited the plaintiff to purchase stock in this company and at the suggestion of Kirehhoff, the plaintiff visited the factory several times, and on April 16, 1923, after some negotiation, purchased 25 shares of stock, giving his check for $2,500 to Baughman, and received by mail a stock certificate dated April 10,1923. This stock had never been qualified for sale under the statute and had never previously been issued by the company. The check in payment thereof was made payable to the corporation, and was by it indorsed and duly paid by the bank upon which it was drawn. Several months thereafter Kirehhoff advised plaintiff that the capital stock of the company had been increased and in compliance with Kirchhoff’s request plaintiff indorsed his original certificate and received in lieu thereof a certificate dated December 27, 1923. This second certificate is identical with the first except it disclosed that the capital stock of the company was $150,000 instead of $100,000. On April 24, 1923, at a special meeting of the stockholders of the company, the capitalization of the company was increased and the plaintiff, being at that time a stockholder, executed a waiver of notice of this meeting and, subsequently, executed and delivered to Kirehhoff, at his request, proxies to represent him and vote his stock at the annual meetings held on January 18, 1924, and January 16, 1925. The company paid no dividends and plaintiff becoming dissatisfied, in the spring of 1925, indorsed his certificate of stock in blank, tendered it to Baughman and demanded the return of his investment. This was refused and thereupon he instituted this suit.

Section 3 of the Securities Act, Cahill’s St. ch. 32, if 256, classifies securities into four general divisions, viz:

(1) Securities, the inherent qualities of which assure their sale and disposition without the perpetration of fraud, which, shall be known as securities in Class £A’;
££(2) Securities, the inherent qualities of which, or in the nature of one or both parties to the sale thereof, assure their sale and disposition without the perpetration of fraud, which shall be known as securities in Class £B’;
££ (3) Securities based on established income, which shall be known as securities in Class £C’;
“(4) Securities based on prospective income, which shall be known as securities in Class £D.’ ”

It is conceded that this stock is not a Class “A” security and if it is a Class ££B” security the judgment should be affirmed but if it is either Class ££C” or Class ££D” security plaintiff is entitled to recover.

Section 5 of the Securities Act, Cahill’s St. ch. 32, tf 258, provides that securities in Class ££B” shall include (1) an insolated sale by a bona fide owner; (2) Capital stock of a corporation when sold by it among its stockholders; (3) Securities when sold by or to any bank, trust company, insurance company, or building and loan association; (4) Securities when sold to any corporation or broker or dealer in securities and, (5) Securities when sold or offered for sale at any judicial sale or at public sale by auction.

As originally passed section 5 read that securities in Class ££B” shall comprise certain enumerated securities. In 1921 the word £comprise” was eliminated and in its stead the word ££include” was substituted and it is suggested by the defendants this change is significant; that the words-££comprise” and ££include” are not synonymous and that section 5 is not meant as an exclusive enumeration but in order to determine whether a particular transaction is exempt from the requirement of prior qualification, the test is not whether the transaction is included within the enumeration contained in section 5 but whether (1) the inherent qualities of the security or (2) the nature of one or both parties to the sale, thereof, make likely their sale and disposition without the perpetration of fraud.

Section 3, Cahill’s St. ch. 32, If 256, classifies securities and is based not only on the securities themselves but on the persons who deal in them, and the circumstances under which the transactions take place. Stewart v. Brady, 300 Ill. 425, 437. The expression “inherent qualities” refers to the character of the securities and the expression “assure their sale and disposition without the perpetration of fraud” refers to the assurance from their character that they are not likely to be the subject of fraudulent transactions. Stewart v. Brady, supra.

Section 3, Cahill’s St. ch. 32, ff 256, classifies and gives the legislative reason why certain securities are subsequently enumerated and placed in the several classifications. Fraud may or may not intervene in the sale of every security and the nature of one or both parties to the sale of any security might be shown tó be such as to, assure the absence of fraud in such sale, but there are no securities, the inherent qualities of which assure their sale and disposition without fraud, nor are there persons who might be parties to a sale of securities, whose nature is such as to assure the absence of fraud. There may be securities other than those enumerated in section 5, Cahill’s St. ch. 32, ff 258, that may come just as much- within the legislative reason as those which are there enumerated but the legislature did not see fit to include them. The word “include” used by the legislature in the revision of 1921 of the Security Act has, in our opinion, the same meaning as “comprise” used in the original act. The word “include” may be employed as meaning to comprise. 31 C. J. 395 and cases there cited. And the term “comprise” is frequently used synonymously with “include.” Farmers’ Nat. Bank v. Cook, 32 N. J. L. 347; 12 C. J. 310. In our opinion no particular significance is to be attached to the fact that in 1921 the legislature substituted the word “include” for the word “comprise” in its revision of this act, but taken in connection with the entire act it is apparent that these words are used synonymously and it was the intention of the legislature to create a fixed and definite classification of securities and to permit, without prior qualification, the sale of securities known as Class “A” securities as defined in section 4, Cahill’s St. ch. 32, If 257, and to permit the sale of Class “B” securities as defined in section 5, without prior qualification but to prohibit the sale of all other securities unless first qualified as Class “C” or Class “D” securities. The statute has made a definite and fixed classification of the securities which it has defined. Stewart v. Brady, supra.

If the construction contended for by the defendants was adopted, it would be impossible for an issuer or dealer in securities, prior to offering stock for sale to determine whether the law required him to qualify such securities or whether they would be exempt from qualification as Class “B” securities. All stocks and other securities are divided into four general classes by this act and these several classes are fully defined by the act. Plot v. Chartrand, 237 Ill. App. 117. The only exemption from the requirement of qualification is found in sections 4 and 5 and it therefore follows that only such securities as are therein named are exempt and the stock here sold not being there enumerated must be held to be either a Class “C” or a Class “D” security.

It is next insisted by the defendants that the plaintiff waived his right to avail himself of the benefits secured to him under section 37, Cahill’s St. ch. 32, if 290, by executing a waiver of notice of a special stockholders’ meeting called for the purpose of increasing the capital stock of the company, by exchanging his stock certificate and by executing proxies for the annual meetings held in January, 1924, and January, 1925; that by so doing appellant, not being ignorant of the true situation of the condition of the company, elected to become a stockholder and cannot now be permitted to rescind the sale and recover the purchase price of this stock.

Prior to instituting this suit plaintiff tendered his stock certificate to the defendants and demanded a return of its purchase price. It would not be expected of anyone that he would elect to treat a sale of stock as void until he had discovered it was not profitable for him to retain it. Section 40, Cahill’s St. ch. 32, K 293, provides that all civil actions to recover money based upon any provision of this act must be commenced within five years after the commission of the act complained of. This statute is penal in character and its provisions are intended as a punishment to those who engage in disposing of stock or securities in violation of the act. The plaintiff was by statute given five years to institute this suit, and there is nothing disclosed in this record which can be held to work an estoppel or waiver.

Holding as we do that the lower court erred in denying plaintiff’s motion for a directed verdict at the close of all the evidence it would follow, inasmuch as he is entitled to recover his attorney fees, that this case should be remanded for another trial. Plaintiff, however, in his written brief and argument submitted to the court, waives this unliquidated item and requests the court to enter judgment here for $2,500. The defendants oppose this on the ground that plaintiff’s knowledge of the affairs of the company, his acquiescence in his purchase as shown by his affirmative acts as a stockholder constitute sufficient evidence to warrant the submission of the case to a jury for its determination of the question whether plaintiff elected to be a stockholder or a creditor. These facts we have held cannot, as a matter of law, preclude plaintiff from maintaining this suit and recovering the amount paid by him for the stock purchased. The defendants are in no position to complain if the judgment entered herein is less by the amount of attorney fees than it would have been had the peremptory instruction tendered by plaintiff been given.

The record authorizes us to render judgment here. Handley v. Drum, 237 Ill. App. 587-596. The judgment of the circuit court is reversed and judgment for the plaintiff is entered in this court against the defendants for $2,500.

Judgment reversed and judgment here.


author: Mr. Justice Boggs

text:
    Gerda Morgan, Administratrix of the Estate of Fred Morgan, Deceased, Appellant, v. Rockford, Beloit & Janesville Railway Company, Appellee.
    Gen. No. 7,963.

      Heard in this court at the October term, 1928.
    Opinion filed January 2, 1929.
    Knight & Swenson, for appellant; James A. Penny, of counsel.
    Hall & Dusher, for appellee.
   Mr. Justice Boggs

delivered the opinion of the court.

An action on the case was instituted by appellant against appellee in the circuit court of Winnebago county to recover for the death of her intestate, resulting from a crossing collision.

The declaration, as originally filed, consisted of five counts, the last of which was withdrawn by appellee. The first count charges general negligence. The second count charges the failure of appellee to have proper lights on the front of its interurban car, and the operation of the same at “excessive speed, to wit, forty miles an hour.” The third count charges knowledge on the part of those in charge of said car that the crossing where the injury occurred was a much-traveled crossing, and that, with such knowledge, they operated said car at an excessive rate of speed, with its headlight closed, after dark. The fourth count charges a failure to blow a whistle, etc.

To said declaration, appellee filed a plea of the general issue. A trial was had, resulting in a verdict and judgment in favor of appellee. To reverse said judgment, this appeal is prosecuted.

The record discloses that appellant’s intestate, with appellant, his wife, were on August 14, 1927, riding in company with Frank Potter and his wife. Mr. Potter and appellant’s intestate were riding in the front seat. Potter was driving the car, sitting on the left, and appellant’s intestate sitting to his right. Appellant and Mrs. Potter were riding in the rear seat. At about 7:30 to 8 o’clock in the evening, the occupants of said car were driving in a northerly direction on Second Street in the unincorporated village of Love’s Park, which said street is adjacent and parallel to appellee’s right of way. Sidney Avenue crosses appellee’s track and Second Street at right angles. When the occupants of said automobile reached Sidney Avenue, they turned east to cross said track. Said automobile was struck by said interurban car, which was proceeding north on said track, and appellant’s intestate was fatally injured, dying a few hours thereafter.

Counsel for appellant refers to said village as “thickly populated.” There is no evidence whatever with reference to the size or the population of said village. There is no evidence with reference to whether or not Sidney Avenue is a much-traveled street. One witness on the part of appellee testified that the traffic was heavy on Second Street, and this is the only evidence in the record in this connection.

While other ertors are assigned, the only errors taken up in the argument of counsel for a reversal of said judgment are the giving of appellee’s first, third, twelfth, fourteenth, fifteenth, sixteenth and seventeenth instructions. In passing on these instructions, we will consider them in the order in which counsel for appellant have taken them up in their brief and argument.

It is first contended that the court erred in giving appellee’s instruction No. 17. Said instruction is as follows:

“The Court instructs the jury that the crossing in question, being outside the limits of any incorporated town, city or village, that the defendant’s interurban car in approaching and passing over said crossing had the right of way over the automobile in which the deceased, Fred Morgan, was riding and if you believe from the evidence that Fred Morgan, in approaching said crossing, saw, or by the exercise of ordinary care, caution, diligence and prudence on his part, would have seen the defendant’s interurban car approaching said crossing and if the jury further believe from the evidence that if said Morgan had looked and had seen said car he could have caused the driver of the automobile to stop before going on said crossing, then, and under such circumstances, the law made it the duty of the said Fred Morgan to look and if he saw said interurban car, to warn the driver of the automobile to slacken the speed or stop said automobile so as to permit the defendant’s interurban car to pass oyer said crossing ahead of said automobile.”

The principal criticism of this instruction is that it informs the jury that appellant had the right of way over the automobile in question. This being an unincorporated village, said instruction stated a correct principle of law in this connection and the court did not err in giving said instruction. St. Louis, A & T. S. R. Co. v. Manly, 58 Ill. 300-305; Toledo, W. & W. Ry. Co. v. Jones, 76 Ill. 311-316; Chicago, B. & Q. R. Co. v. Damerell, 81 Ill. 450-453; Newell v. Cleveland, C., C. & St. L. R. Co., 261 Ill. 505-511; Williams v. Pennsylvania R. Co., 235 Ill. App. 49-55.

In Newell v. Cleveland, C., C. S St. L. R. Co., supra, the court at page 511 says:

“Where a railroad train and a person traveling on the highway each approaches a railroad crossing at the same time, it is not the duty of the company to stop its train, but it is the duty of the traveler, in obedience to the known custom of the country, to stop and not attempt to pass in front of the advancing train.”

The same rule that applies with reference to a steam railroad line applies to an interurban in matters of this character. Roy v. East St. Louis S Suburban Ry. Co., 119 Ill. App. 313-316; Kammann v. St. Louis & N. Ry. Co., 173 Ill. App. 277.

The criticism as to instructions number one and fourteen is that the court informed the jury that appellee was not under the law limited to any particular rate of speed in the operation of its car.

Said instructions stated the law correctly, and the court did not err in giving the same. Partlow v. Illinois Cent. R. Co., 150 Ill. 321-325; Passwaters v. Lake Erie & W. R. Co., 181 Ill. App. 44-47.

It is contended as to appellee’s third, twelfth and fifteenth instructions, that the court erred in instructing the jury that it was the duty of appellant’s intestate to exercise ordinary care and caution, etc., to prevent a collision and injury to himself. While instruction number fifteen is possibly not as carefully guarded as it should have been, said instruction stated correct principles of law, and taken with the series of instructions given, appellant was not prejudiced by the giving of the same.

It is also insisted that the court erred in giving appellee ’s sixteenth instruction, the complaint being that it stated to the jury “that the motorman had a right to assume that the automobile would stop to allow his interurban car to pass,” the principal objection being to the use of the term “assume.” This instruction states a correct principle of law and the court did not err in giving the same. Chicago, R. I. & P. B. Co. v. Austin, 69 Ill. 426-429; Chicago, B. & Q. Ry. Co. v. Sack, 129 Ill. App. 58-62; Casey v. Chicago & E. I. R. Co., 152 Ill. App. 441-443; Storm v. Cleveland, C., C. & St. L. Ry. Co., 156 Ill. App. 88-93.

It is insisted on the part of appellee that, whether or not any of the objections to the instructions in question are, well taken, the record fails to disclose that appellant’s intestate was in the exercise of ordinary care for his own safety, just prior to and at the time in question.

The evidence on the part of appellant is to the effect that said interurban car was being operated at a speed of some 40 miles per hour at the time of the collision; that no whistle was sounded for said crossing, and that the headlight on said car was either dim or was coming on and off as it approached said crossing.

On behalf of appellee, some eight witnesses testified affirmatively that the whistle was sounded. Several of said witnesses testified that the, gong or bell was being sounded; that the car was lighted as it approached said crossing, and that the headlight was on. The witnesses on behalf of appellee fixed the speed of said car at from 28 to 30 miles per hour.

Mrs. Potter testified on behalf of appellant that she did not see the interurban in question until they were within a few feet of the track, and that at that time the automobile was being operated at about 15 miles per hour. Other witnesses testified that when the automobile turned on to Sidney Avenue, it was being operated at a low rate of speed, from six to eight miles per hour. Mr. Potter, the driver of the car, testified that after he had turned on Sidney Avenue, he stopped some eight or ten minutes, and looked up and down said interurban track, and saw no car. He afterwards testified that he did not know just how long he waited before crossing the track. He is the only witness, either for appellant or appellee, who testified that the automobile was stopped before said collision. It is not contended, and the evidence fails to disclose that there were any obstructions to the view of persons crossing appellee’s track on Sidney Avenue.

There is no evidence in the record tending to show that appellant’s intestate said or did anything evidencing the exercise of any care as said automobile approached said crossing. Frank Potter, the driver testified, “The weather was clear. I do not recollect that Mr. Morgan said or did anything.”

Before a party can recover for an injury alleged to have been caused by the negligence of another, he must prove affirmatively the exercise of due care for his own safety. Calumet Iron & Steel Co. v. Martin, 115 Ill. 358-368; Werk v. Illinois Steel Co., 154 Ill. 427-432; North Chicago St. R. Co. v. Cossar, 203 Ill. 608-615; Walters v. City of Ottawa, 240 Ill. 259-266.

Where a person is killed in an accident, and there are no eyewitnesses, proof of due care may be made by evidence tending to show the physical condition of the deceased, and that he was a man of careful habits. That character of proof, was not offered and would not have been proper if offered, for the reason that there were eyewitnesses. The only eyewitness in this connection testified that the deceased said and did nothing. There is therefore no affirmative proof in the record tending to prove due care on the part of appellant’s intestate. The fact that the deceased was not actually driving the automobile in which he was riding, did not excuse him from exercising ordinary-care. Flynn v. Chicago City Ry. Co., 250 Ill. 460-480; Pienta v. Chicago City Ry. Co., 284 Ill. 246-259; Opp v. Pryor, 294 Ill. 538-547; Pence v. Hines, 221 Ill. App. 584-588; Greenstreet v. Atchison, T. & S. F. Ry. Co., 234 Ill. App. 339-344-345. In Opp v. Pryor, supra, the court at page 547, in discussing a question of this character, says:

“It was essential for the plaintiff to prove that she was in the exercise of ordinary care for her own safety in approaching and going upon the crossing, and she was not relieved from that duty because she was riding in an automobile. If she exercised such care any negligence of Ethel Shambaugh could not be imputed to her, but she would be responsible for her own negligence. The plaintiff sat to the right of the driver in front, with a.t least equal opportunity to observe danger and the approach of the train, and being bound to prove the exercise of ordinary care by herself, it was no less her duty than that of the driver to observe and avoid danger, if practicable, and to warn the driver.”

Under the holding of the foregoing cases, appellant wholly failed to prove the exercise of ordinary care on the part of her intestate, and there is therefore no right of recovery.

For the reasons above set forth, the judgment of the trial court will be affirmed.

Judgment affirmed.


author: Mr. Presiding Justice O’Connor

text:
    Victor S. Pearlman & Company, Appellant, v. Lincoln-Belmont Building Corporation et al., Appellees.
    Gen. No. 32,805.
    Heard in the first division of this court for the first district at the June term, 1928.
    Opinion filed January 21, 1929.
    Rehearing denied February 4, 1929.
    Morton A. Mergentheim, for appellant; Theodore Share, of counsel.
    Hall, Spitz & Rooks and Rosenthal, Kurz & Tiedebohl, for appellees; Irvin Rooks, Edward Blackman, Edward R. Tiedebohl and Howard M. Oberndore, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court. '

Complainant filed its bill seeking to foreclose a second mortgage on certain premises. The demurrer of the defendants was sustained, the bill dismissed for want of equity, and the complainant appeals.

The allegations of the bill, so far as necessary to state, are that on March 1,1925, the defendant LineolnBelmont Building Corporation, being indebted to the complainant and other bondholders in the sum of $150,000, made and delivered to the Chicago Title & Trust Company as trustee its deed of trust; that complainant is the owner of seven of these bonds aggregating the sum of $5,000; that default had been made in the payment of two of the bonds and in addition default had been made in the payment of the interest, therefore complainant elected to declare the entire indebtedness of $150,000, secured by the trust deed, due and payable.

Counsel for both parties agree in their briefs that the question for decision turns upon the construction of certain provisions of the trust deed, which provisions are as follows:

“Article 6. It is further covenanted and agreed that in case of default for a period of 30 days in making payment of any of said bonds, either of principal or interest, then the whole of said principal sum secured hereby shall at once at the option ... of the holder of any one of said bonds then unpaid, become due and payable; and in case of default in the performance of any covenant or agreement herein made by the party of the first part (the grantor), . . . and such default continuing for sixty days after written demand by or through the trustee on said party of the first part (the grantor) . . . then the whole of said principal sum hereby secured shall at once, at the option ... of the holder, or holders of twenty per cent (20%) of the bonds herein described then unpaid become due and payable. ’ ’
“Article 8. The foregoing provision for entry, taking possession and operation under the power aforesaid is cumulative, with the ordinary remedy of foreclosure, and upon default being made as provided in this Trust Deed, it shall thereupon be lawful for the party of the second part, and upon the request in writing of the holder or holders of five or more of the then outstanding bonds, it shall be discretionary with the Trustee hereunder to institute a suit for the foreclosure of this mortgage in any court of competent jurisdiction, and upon the request of the holder or holders of a majority in amount, it shall be the duty of the Trustee to institute a suit for foreclosure. . . .”
Article 11. Provides in part that “The exclusive right of action hereunder shall be vested in said Trustee until refusal on its part to act, and no bondholder shall be entitled to enforce these presents in any proceeding in law or in equity until after demand has been made upon the Trustee accompanied by tender of indemnity as aforesaid, and said Trustee has refused to act in accordance with such demand. Said Trustee shall not be bound to recognize any person as a bondholder until his bonds have been deposited with said Trustee and until his title thereto has been satisfactorily established.”

It seems to be conceded in the argument that the allegations of the bill show that complainant had complied with all the provisions of the trust deed, that is, that it is the holder of seven of the bonds in the aggregate sum of $5,000; that there was a default in payment of the principal and interest of two of the bonds; that complainant made due demand and presentment as required by the trustee, and that the trustee declined to file a bill for foreclosure of the mortgage. The court held that under the circumstances disclosed by the bill, as above stated, complainant had no right to maintain its bill to foreclose the mortgage for the reason that such right under the facts disclosed was in the trustee.

As a general proposition the owner of a bond secured by a mortgage or trust deed has a right to institute foreclosure proceedings where there is a default in payment, but it is obvious that this right may be restricted or limited by agreement between the bondholders and that this limitation may be expressed in the trust deed or mortgage. Counsel for both parties concede this to be the law, but the complainant contends that in the instant case its right to file a suit to foreclose the trust deed is not restricted by any provision of the trust deed because it appears from the allegations of the bill that it has complied with all the provisions of the trust deed; that under the terms of the trust deed the owner of any one of the bonds secured by it had the right upon default being made in the payment of a single instalment, principal or interest to declare the entire sum secured by the trust deed due and payable. And counsel for the defendants say that “The sole ground for the decision of the court below was that a majority in amount of the bondholders had not made demand upon the trustee to foreclose. . . . Therefore, the sole question presented on this bill is whether the bondholders holding bonds less than a majority of the amount, but in excess of five in number, have the right to foreclose under the terms of the trust deed, assuming all conditions precedent have been complied with. ’ ’

In support of its contention complainant relies chiefly upon the cases of Citizen’s Bank of Los Angeles v. Los Angeles Iron & Steel Co., 131 Cal. 187, and Farmers’ Loan & Trust Co. v. Winona & S. W. R. Co., 59 Fed. 957. We think neither of these cases is in point. The provisions of the mortgage or trust deed therein involved are not similar to the provisions in the trust deed in the case before us. In these two cases the trust deed contained no provision similar to that contained in article 11 above quoted. That article expressly provides that the exclusive right of action under the trust deed is vested in the trustee until the trustee refuses to act. By article 8 of the trust deed it is provided that the trustee may, at its discretion, institute foreclosure proceedings upon request in writing made to it by the owner or owners of five or more of the bonds. And it is there further provided that if the holder or holders of a majority in amount of the bonds make such a request of the trustee, it shall be its duty to institute foreclosure proceedings. From these provisions it is clear that the holder or holders of bonds have no right to institute foreclosure proceedings unless the trustee wrongfully refuses to do so. It cannot be held that the trustee has so wrongfully refused until the holder or holders of a majority in amount of the bonds request foreclosure. In the instant case, since the complainant owned but $5,000 of the $150,000 of the bonds, the trustee had the right under the provisions of the trust deed to refuse to institute foreclosure proceedings. What remedy, if any, the complainant may have as owner of the $5,000 of bonds we do not decide, except to say that it cannot maintain foreclosure proceedings, as it has attempted to do.

The court did not err in sustaining the demurrer to complainant’s bill and dismissing it for want of equity. The decree of the circuit court of Cook county is affirmed.

Affirmed.

HcSurely and Hatchett, JJ , concur.


text:
    Leo P. Knoerzer, Appellee, v. Eddie Meyer, Appellant.
    Gen. No. 32,849.

      Heard in the first division of this court for the first district at the October term, 1928.
    Opinion filed January 21, 1929.
    Rehearing denied February 4, 1929.
    E. R. Hartigan, for appellant.
    Oscar A. Knitted, for appellee.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

On November 10, 1926, plaintiff brought an action against the defendant to recover $2,400 claimed to be due him for the reason that the defendant did not have title to an automobile which he- sold plaintiff. The defendant was served with a summons on November 13, 1926. He afterwards entered, his appearance and filed an affidavit of merits denying liability. On April 3, 1928, plaintiff filed an amended statement of claim in which he sought to recover the $2,400 mentioned in his statement of claim and in addition to that sum $250 which plaintiff claimed to have paid as attorney’s fees. Afterwards the case was tried before the court without a jury and there was a finding and judgment in plaintiff’s favor for $2,659.89, and the defendant appeals.

Plaintiff alleged in his amended statement of claim that about May, 1925, he was the owner of a certain Lincoln automobile which he traded to the defendant, who was engaged in dealing in automobiles; that the price of the Lincoln automobile, as agreed upon by the parties, was $2,700; that for the automobile plaintiff received from the defendant a Cadillac automobile and $500 in cash; that after the exchange had been made plaintiff made certain repairs on the Cadillac for which he expended $200; that shortly thereafter plaintiff sold the Cadillac automobile to one Maloney, and while it was in Maloney’s possession the United States government took it from him on the ground that it had been stolen from the true owner who resided in Battle Creek, Michigan. It was further alleged that the defendant at the time of the exchange of the automobile did not have title to the Cadillac car and that by reason thereof plaintiff was damaged in the sum of $2,400; that he also suffered damages amounting to $250 on account of attorney’s fees he had been required to pay in a suit brought against him by Maloney in the circuit court of Porter county, Indiana. The affidavit to the amended statement of claim was made by plaintiff’s counsel, in which it was stated that there was a balance of $2,950 due plaintiff from defendant.

Defendant in his affidavit of merits admitted that he had traded a Cadillac machine for the Lincoln, but denied that the parties had agreed upon a value of $2,700 for the Lincoln car. It was averred that the defendant paid plaintiff $500 as part of the transaction, and that it was agreed between the parties that the exchange should be made upon the basis that the Cadillac was of the value of $1,350 and the Lincoln $1,850. Defendant admitted that plaintiff had sold the Cadillac car to one Maloney, but denied any knowledge of the fact that the machine had been taken away from Maloney and returned to its true owner; and it was further averred that defendant purchased the Cadillac car from W. D. Mathis for $1,225, and that defendant was the owner of the car. Liability for $250 attorney’s fees was denied because plaintiff, in the instant case, had taken the position while the case in Indiana was pending that defendant did not own the Cadillac car when the exchange was made, and therefore there was no reason for defending the case in Indiana.

Plaintiff offered evidence tending to support the averments of his amended statement of claim.- Evidence was offered to the effect that at the time of the exchange of the two automobiles the parties agreed that the value of the Lincoln automobile was $2,700 and of the Cadillac $2,200. • Plaintiff also offered opinion evidence as to the value of the two cars at the time of the exchange and the testimony of these witnesses placed the value at about the same amounts as those above mentioned.

The defendant offered evidence to the effect that at and prior to the time of the exchange of the two cars, it was agreed between plaintiff and defendant that $1,850 was the value of the Lincoln car and $1,350 that of the Cadillac car. Defendant also called witnesses who gave testimony to the effect that at the time of the exchange of the automobiles the Lincoln was of the value of $1,850 and the Cadillac $1,350. The defendant also offered to prove by his books of account, kept in the ordinary course of business, that the value of the two cars as agreed upon between him and the plaintiff was as contended for by the defendant, but upon objection these books were excluded. In this we think there was error. Perry State Bank v. Elledge, 99 Ill. App. 307; Wait v. Wenks, 186 Ill. App. 296.

In addition to the evidence above mentioned plaintiff introduced a copy of the judgment rendered against him by the Indiana court, also a receipt showing that he had paid that judgment.

At the close of the evidence the defendant submitted certain propositions of law and findings of fact which he requested the court to hold as the law and to find as the facts in the case. The court marked each of these refused and counsel for the defendant contends that the court should have passed upon the propositions of law and findings of fact. We are unable to understand this contention, • because the record shows that the court did pass upon them by refusing all of them. Three of the propositions of law lay down three different measures of damages. Obviously the three of them could not apply. Only one measure of damages was applicable to the case.

In the trial court plaintiff in his amended statement of claim on which the case went to trial, and from the evidence which he produced, apparently took the position that he was entitled to recover his damages based upon the value of the cars as placed upon them by the parties at the time of the exchange. But in this court he abandons this position entirely and takes the position that the judgment rendered by the Indiana court is conclusive of the amount he was entitled to recover, so far as the value of the Cadillac car was concerned; and that in addition to this amount he was entitled to recover the $200 he spent in repairing the Cadillac car before he sold it to Maloney, and the $250 he claims to have expended for attorney’s fees in the defense of that case. In support of his contention the case of Pinney v. Geraghty, 209 App. Div. 630, 205 N. Y. Supp. 645, is cited.

We think the proper measure of damages plaintiff is entitled to recover in this case is the price he paid for the Cadillac car with interest on such amount, together with necessary expenses in defending the Indiana lawsuit, including attorney’s fees, if the evidence discloses that such fees were properly incurred. We think that this rule of law is supported by 35 Cyc. pp. 479, 480; Globe Refining Co. v. Lancia Cotton Oil Co., 190 U. S. 540.

Defendant contends that the court erred in refusing to receive in evidence certain exhibits offered by him, that error was also committed in admitting over defendant’s objection evidence offered by plaintiff, and that the evidence was insufficient to show that the Cadillac automobile was stolen from its true owner in Battle Creek, Michigan.

In the view we take of the case these contentions are not controlling. That the Cadillac car was stolen and that therefore defendant had no title, is established beyond question. The liability of the defendant is certain and the only question is the extent of the liability. At the close of all the evidence the defendant submitted a proposition of law to the court and requested that it be held as the law in the case. It is: “The court holds as a matter of law that the measure of damages in this case is the amount paid by the plaintiff herein to satisfy the judgment in the case of Maloney v. Knoerzer against said plaintiff in Porter County, Indiana, together with his attorney’s fees expended by him in the defense of that case.” The court denied this request and marked the proposition “Refused.” From this it appears that the defendant admitted liability in the trial court to the extent of the amount that plaintiff had paid to satisfy the Indiana judgment, together with the attorney’s fees expended by plaintiff in that case. Under the authorities above cited we think this was the true measure of damages. In this court the defendant still contends that this measure of damages is the correct one to be applied, and since we agree with him it will be unnecessary to pass upon his other , contentions.

Under the authorities above cited we hold tbat plaintiff was not entitled to recover the $200 which he expended in the repair of the Cadillac, because at the time of the transaction between the parties the defendant had no knowledge that plaintiff intended to expend $200 in the repair of the car, and he therefore would not be liable for this item. The record discloses that plaintiff paid in satisfaction of the' Indiana judgment $2,232.84, and to this must be added the $250 attorney’s fees, making a total of $2,482.84.

The judgment of the municipal court is reversed and judgment will be entered in this court in favor of plaintiff and against defendant for $2,482.84. Each party will be required to pay his own costs in this court.

Judgment reversed and judgment entered in this court.

McSurely and Hatchett, JJ., concur. •


text:
    J. N. Douglass and Bret A. Douglass, Defendants in Error, v. Anton Ullsperger and Maria Ullsperger, Plaintiffs in Error.
    Gen. No. 32,914.
    Heard in the first division of this court for the first district at the October term, 1928.
    Opinion filed January 21, 1929.
    Rehearing denied February 4, 1929,

      Zimmerman & Clark and Robert L. McDougal, for plaintiffs in error; Edward A. Zimmerman and Robert L. McDougal. of counsel.
    Knapp & Campbell, for defendants in error; Paul R Conaghan, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

J. N. Douglass and Bret A. Douglass, the payees of a promissory note dated April 2, 1918, brought an action in debt against Anton Ullsperger and Maria Ullsperger, the makers of the note, to recover a balance of $4,059.97, claimed to be due and unpaid. After-wards by leave of court, plaintiffs filed an amended declaration in assumpsit, claiming a balance due upon the note. The jury was withdrawn and the cause submitted to the court. There was a finding in favor of the plaintiffs and against the defendants for $3,823.85, judgment was entered for this amount, and the defendants prosecute this writ of error.

The facts in brief compass are that on April 1, 1918, the defendants purchased from plaintiffs real estate located in California, where it appears that all parties lived at that time. The purchase price was $21,600 and to secure the payment of $14,200 of the purchase price the defendants executed their two promissory notes, one for $2,200 due on or before February 1, 1919, and the other for $12,000, being the note in question, due on or before January 1, 1923. The notes bore interest at 7 per cent, payable semiannually, and to secure the payment of the notes the defendants executed a mortgage on the real estate. Shortly after the purchase of the property by the defendants and on August 19, 1918, the defendants conveyed the property to John and Jim Zenos. The deed, which the parties seem to agree was a warranty deed, made no mention of the mortgage but on the trial there was some oral testimony to the effect that the Zenoses agreed to pay the mortgage. On February 1, 1919, when the $2,200 note fell due, it was paid by the Zenoses and on June 22, 1921, the Zenoses conveyed the property by warranty deed to Frank L. Powell and Bertha M. Powell, his wife, as joint tenants. The conveyance was made subject to the mortgage of $12,000. Afterwards the Douglasses pledged the mortgage and the $12,000 note with the Mortgage Guarantee Company as collateral to secure an indebtedness of $9,000 which they owed the mortgage company, and on May 27, 1924, the mortgage company filed its bill to foreclose the mortgage in California. The defendants here were made defendants to the foreclosure proceeding and were served by publication. They did not enter their appearance or appear in the cause. There was a decree of foreclosure, the property was sold and a deficiency decree entered. Afterwards the mortgage company delivered back to the Douglasses the mortgage and note showing the deficiency as the balance due on the note, which deficiency is sought to be recovered in the instant case. In its bill of foreclosure, which was verified, it was alleged “that on February 6, 1923, all the parties in interest to said mortgage executed an agreement extending the time of payment of the $12,000 note to January 1, 1926,” and that the interest on the note was raised from 7 to 8 per cent.

The plaintiff J. N. Douglass testified by deposition. He was shown the bill of complaint filed in the foreclosure proceeding and testified he had read it and that the statements contained in it were true and correct.

The defendant Anton Ullsperger testified on the trial that he did not know whether the time of payment of the $12,000 had been extended and that he did not know anything about an extension.

A great many points are made and argued in the briefs but we think they are all immaterial except the contention of the defendants that the time of payment of the $12,000 note was extended without the knowledge or consent of the defendants, and in such circumstances, under the law, they were released from liability. We think this contention must be sustained.

Since the record shows that the time of payment of the $12,000 note was extended long after the defendants had. sold the property, and the interest rate raised from 7 to 8 per cent, and since it further appears that the Zenoses paid the $2,200 note secured by the mortgage after the property had been transferred by the defendants to them, and since it further appears that after the defendants sold the property in August, 1918, and they paid nothing on account of the principal and interest of the mortgage, but that the same was paid by the Zenoses and the Powells, we think the burden was on the plaintiffs to show that the defendants were parties to the extended agreement, and they having failed to do so, the. defendants were released. Moreover, we think the evidence shows that the defendants were not parties to the extension agreement. Anton Ullsperger testified that he knew nothing about a renewal agreement, which is equivalent to saying that he was not a party to it. And when this is taken into consideration with the fact that the defendants had transferred the property in 1918 and the time of the payment of the note was extended from February 6, 1923, to January 1, 1926, we think it appears that the defendants were not parties to the extension agreement.

Whether the mortgagor is released from liability where he conveys property subject to the mortgage, which his grantee either orally or in writing assumes and agrees to pay, and thereafter the mortgagee enters into an extension agreement with the grantee, without the knowledge of the mortgagor, is the subject of conflicting opinion. Mr. Justice Gray in Union Mut Life Ins. Co. v. Hanford, 143 U. S. 187, said: “Few things have been the subject of more difference of opinion and conflict of decision than the nature and extent of the right of a mortgagee of real estate against a subsequent grantee who by the terms of the conveyance to him agrees to" assume and pay the mortgage.” The conflict of opinion on this question seems to be still as great as in 1892, when Mr. Justice Gray wrote the opinion above quoted from. In Morganroth v. Pink, 227 Ill. App. 244, and other cases decided in this State, it was held that a mortgagor was not discharged pnder circumstances similar to those before us, and on December 11, 1922, the Supreme Court of this State denied certiorari in the Morganroth case, but in the late case of Albee v. Gross, 250 Ill. App. 98, where there is an exhaustive review of the authorities, it was held, under circumstances similar to those above stated, that the mortgagor was released and on December 19, 1928, the Supreme Court denied certiorari in that case. In view of these facts we are of the opinion that in the instant case the mortgagors were released from liability under the facts above set forth. It therefore follows that the judgment of the circuit court of Cook county must be reversed.

Judgment reversed.

McSurely and Matchett, JJ., concur.


text:
    The Roy Iverson Company, Appellee, v. United States Lloyds, Inc., Appellant.
    Gen. No. 32,923.
    Heard in the first division of this court for the first district at the October term, 1928.
    Opinion filed January 21, 1929.

      Wolf & Love, for appellant; Alexander Wolf, of counsel.
    Harry A. Biossat, for appellee.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiff brought an action on an insurance policy to recover a fire loss on automobiles. There was a verdict and judgment in plaintiff’s favor for $4,085.46. The defendant appealed to this court, where the judgment was reversed and the cause remanded for a new trial — The Roy Iverson Co. v. United States Lloyds, Inc., 246 Ill. App. 628 (abst.). Upon a retrial of the case there was again a verdict and judgment in plaintiff’s favor for the same amount and the cause is brought here again by the defendant.

In the opinion rendered on the former trial we said: “There were submitted to the jury those vital questions of fact: (1) Was proper notice given to the defendant of the location of the burned automobiles at a place other than that named in the policy? (2) Was Mr. Throop, an insurance broker, the agent for the defendant with power to accept notices and premiums ? (3) Were the monthly statements of plaintiff of automobiles on hand correct, or were they false so as to constitute an evasion under the terms of the policy? And (4) Were the premiums paid?”

The judgment was reversed on the former appeal for the undue and frequent interruptions of the trial judge which prevented a fair and impartial trial.

On the vital questions mentioned in the above quotations from our former opinion, evidence was offered by both sides. There was a conflict in the evidence and the issues were submitted to the jury which found in favor of the plaintiff.

The record discloses that on November 29, 1924, the defendant issued its fire insurance policy covering automobiles owned by plaintiff. The policy is a dealers ’ monthly average rate policy, the monthly rate being-fixed according to the value of the automobiles covered. The policy was for a period of one year and contained the following- provisions: “This policy shall cover . . . all automobiles . . . owned by the Assured . . . while said property is in the actual possession of the Assured ... at any location which is not excluded by the term of this policy.

“Named Locations. All locations owned, rented or controlled, wholly or in part, by the Assured as places of storage of automobiles at the date of inception of this policy shall be specified herein, and all such locations so used by the Assured during- the currency of this policy shall be reported to the Company within forty-eight hours after the commencement of such use. No liability shall attach hereunder at any such location not specified herein, or reported to this Company, except for the period of forty-eight hours as referred to herein. The Assured shall promptly notify the Company of the discontinuance of the use of any locations that have been reported to the Company.

“Limits of Liability. The liability of this company for loss or damage under this policy from any one casualty shall be limited as follows: . . .

“Not exceeding $50,000.00 at 2330 S. Michigan Ave., Chicago, Illinois. ’ ’

A further provision of the policy required the assured on or before the 15th of each month to render to the insurance company a statement showing the actual cash value of' all the property covered by the risk at the close of business on the last day of the preceding month, and further provided that the insurance company, through its agent, should at all reasonable times have access to the assured’s books and that any evasion or attempted evasion by the assured in connection with the monthly statements or payments of premiums should render the policy void.

The evidence shows that the Tennant Finance Corporation, which apparently financed the purchase and sale of automobiles, had and conducted an insurance department, which was in charge of Robert S. Throop. The defendant’s local agent in Chicago was Colin McK. Tennant. Throop obtained the policy and delivered it to the plaintiff, collected the monthly premiums and turned them over to the defendant’s agent. There is evidence to the effect that Throop called at plaintiff’s place of business and obtained the monthly statement from plaintiff and endeavored to collect the monthly premiums, some of which the evidence shows he collected and turned over to the defendant. George B. Campbell, a witness for the defendant, testified that he was connected with defendant’s local agent in Chicago and signed the policy in question for the defendant. He testified that the representative of Tennant Bros. (Throop) was supposed to get monthly statements on behalf of the defendant company from the plaintiff. There is much more evidence in the record showing what Throop did in the matter which would warrant any jury in finding that he was the agent and representative of the defendant in delivering the policy, examining plaintiff’s books, getting monthly statements and premiums, etc. The fact that he calls himself a broker does not in any way tend to show that he was not the representative of the defendant in the instant case. There is no magic in the term “broker” that will permit an insurance company to hide behind him in case of a loss and insist that he is the representative of the assured, as is too often sought to be done, and is the fact in the instant case.

Of course, there was evidence on the other side to the effect that premiums had not been paid; that statements had not been given to Throop, and in fact most of the evidence offered by the plaintiff was contradicted, so that the case was a proper one for the jury. Upon a careful consideration of all the evidence in the record, we are of the opinion that the jury was warranted in returning its verdict in favor of the plaintiff. It is certain that we would not be warranted in holding that its verdict is against the manifest weight of the evidence.

The automobiles which were destroyed by fire on July 3, 1924, were located at No. 2431 South LaSalle Street, and the defendant contends that the policy did not cover these automobiles but only those located at No. 2330 South Michigan Avenue, as expressly stated in the policy. We have above quoted material provisions of the policy, from which it appears that at the time the policy was issued it covered the automobiles of the plaintiff then located at No. 2330 South Michigan Avenue,- but it provided that in case plaintiff’s automobiles were placed in any other premises the company should be notified of this fact within 48 hours. One of the provisions in this respect is that “no liability shall attach hereunder at any such location not specified herein or reported to this company. ’ ’ Plaintiff offered evidence tending to show that on a number of occasions in February, 1924, it notified Throop that it had automobiles located at the LaSalle Street number and that Throop replied that that was all right. Throop denied this, so that the question was for the jury to decide, and if Throop was an agent of the company, to whom notice might be given, as we hold he was under the evidence disclosed in the record, then this would be notice to the company, notwithstanding the provision in the policy that no notice would be binding unless written in or attached to the policy. Dwelling House Ins. Co. v. Dowdall, 159 Ill. 179; Phenix Ins. Co. v. Grove, 215 Ill. 299.

The testimony on the question as to whether the monthly statements rendered by plaiiitiff to the defendant, showing the value of the automobiles on hand and on which the premiums were based, was false so as to constitute an evasion under the terms of the policy, and whether such premiums were paid was conflicting, as was also the evidence on the question whether plaintiff owned one of the four automobiles claimed to have been destroyed by the fire. We have carefully considered all the evidence in the record on these questions, and while some of them are not free from doubt, we are of the opinion that all of the questions were for the jury to decide, and we are unable to say that the verdict of the jury in favor of the plaintiff on these questions is against the manifest weight of the evidence.

Complaint is also made of the rulings of the court on the admission of evidence and the argument is that Iverson, the witness for the plaintiff, was asked leading questions as to the value of the automobiles destroyed. We think there is no merit in this. Complaint is also made that when counsel for the defendant cross-examined Throop the court sustained plaintiff’s objection to a question put to this witness on the ground that he was a hostile witness. We think this is a misapprehension as to what the record discloses. The question asked was: “You were the broker in

this case, weren’t you?” And it was the objection to this question that the court sustained and properly so, because it called for a conclusion. Plaintiff was seeking to prove that Throop was the agent of the defendant in what he did in the transaction, and not technically a broker. Another question asked Throop (and of which complaint is made to the sustaining by the court of objections to it) was as to why Throop charged off a certain premium shown to be due under the policy. Whatever error there was in this ruling was cured by the fact that the witness later testified that he had charged the amount off their books because he could not collect it from plaintiff.

The defendant further contends that the court erred in refusing certain instructions offered. The abstract fails to show at whose request such instructions were submitted, so that we are unable to pass upon them intelligently. Moreover, in the argument of counsel, the instructions are referred to only by number. This is improper argument, as we held in General Platers Supply Co. v. Charles F. L’Hommedieu & Co., 228 Ill. App. 201. We there said: “Counsel for defendant has questioned some of the instructions given and refused, but in argument presents them only by number. This is not the proper way to present instructions for consideration by this court. Instructions of which complaint is made should be set out in full, followed by definite and clear reasons supporting the alleged errors incident thereto. ’ ’ But if-we assume that the refused instructions were all requested by the defendant, we think there was no error in the refusal of them. Refused instructions Nos. 1 and 2 were to the effect that a provision of the policy could not be waived unless such waiver was written in or attached to the policy. From what we have already said, it is obvious that these instructions were wrong. So is refused instruction No. 3, by which it was sought to tell the jury that plaintiff could not recover if the fire which destroyed the automobile did not occur at No. 2330 South Michigan Avenue. Refused instruction No. 4 stated in substance that plaintiff was bound by the terms and conditions of the policy and that by the policy any evasion or attempted evasion by plaintiff in connection with the monthly statements or payments of premiums should void the policy and should be an absolute defense, and that if the jury believed from the evidence that plaintiff made or attempted any evasions of premiums, then they should find for the defendant. The jury was not advised as to what would constitute an evasion. Moreover, the first part of the instruction said that plaintiff was bound by the terms and conditions of the policy, and as we have held, he was not bound by those provisions of the policy as written, because one of them was waived. Under the circumstances as disclosed by the evidence, there was no written waiver attached to the policy showing that plaintiff’s automobiles were stored on LaSalle Street, but information to this effect was brought home to the defendant through its agent Throop. The instruction was indefinite, erroneous and misleading. And refused instruction No. 5 was to the effect that a broker is not the agent of the insurance company as a matter of law. This obviously was wrong for the reasons above stated.

Nor are we able to say that the verdict is excessive. There was evidence tending to show that the value of the cars destroyed was the amount of the verdict, and that four cars were destroyed. The fact that there was conflicting evidence does not warrant us in disturbing the verdict of the jury where, upon a careful consideration of all the evidence, we are unable to say that the verdict is against the manifest weight of the evidence.

The judgment of the superior court of Cook county is affirmed.

Affirmed.

McSurely and Hatchett, JJ., concur.