author: Mr. Justice Wolfe

text:
    G. T. Humphreys, Appellee, v. East St. Louis & Suburban Railway Company, Appellant.

      Opinion filed June 5, 1929.
    McGlynn & McGlynn, for appellant.
    Louis Beasley and Edward C. Zulley; for appellee.
   Mr. Justice Wolfe

delivered the opinion of the court.

On the morning of October 27, 1927, appellee was assigned as a motorman to operate an electric car running between Belleville, in the State of Illinois, and St. Louis in the State of Missouri. Appellee took his car No. 26 from appellant’s sheds about 4:50 a. m. Just before appellee left the sheds with his car another car of the appellant, known as car No. 22, which was also to be operated between Belleville, Illinois, and St. Louis, Missouri, left the sheds. Car No. 22 was to be run special to the switch at Belleville. On the way from the sheds to the switch at Belleville they do not pick up passengers.

Car No. 22 reached Sixty-fifth and State Streets on the morning of the accident about 5 o’clock. It was still dark at that time. At Sixty-fifth and State Streets there is a curve to the right. On the morning of the accident the trolley on car No. 22 came off: as the car rounded this curve and stopped a short distance east of the curve, the place where the accident occurred.

Appellant is organized under the General Railroad Act of the State of Illinois, Cahill’s St. ch. 114, ¶ 1 et seq., as is alleged in each count of' the declaration. This allegation was not denied by the appellant, nor is it denied anywhere that appellant and appellee, at the time in question, were engaged in interstate commerce.

At the time of the accident appellant had in force certain rules governing the operation of its trains. Section 87 of its rules is as follows: “Night signals: Night signals are to be displayed from sunset to sunrise. When weather or other conditions obscure day signals, night signals must be used in addition.” Another one of appellant’s rules in force at the time in question governing the operation of these trains is sections 104, as follows: “Bear End Signals: The following signals will be displayed, one on each side of the rear of every train as markers, to indicate the rear of every train; by day, red flags; by night, yellow lights to the side and red lights to the rear, except when train is clear of the main track, when yellow lights must be displayed to the rear. ’ ’

While car No. 22, without any rear lights, was standing on this track at Sixty-fifth and State Streets, which was one of the main tracks, car No. 26 ran into it while so standing. As a result of the collision the appellee sustained injuries to his back and other injuires set out in his declaration.

The first count of appellee’s declaration is a count based upon the Federal Employers’ Liability Act, Cahill’s St. ch. 114, ¶ 321 et seq. The second count of the declaration is based upon the Safety Appliance Act, and alleges that the brakes on the car being operated by appellee were so defective that he was unable to stop the said car on account of the defective brakes, etc. Each count alleges that as a result of the cars colliding, appellee was thrown with great force and violence against the parts of the car directly in front of him and was then thrown backwards and his back and body struck the iron pipe that ran from the floor of the car to the ceiling. He claimed damages in the sum of $25,000.

Appellant filed a plea of general issue and filed an additional plea to the first count of the declaration, alleging that “the injuries received by the plaintiff on the occasion in plaintiff’s declaration mentioned were proximately caused by the negligence of the plaintiff and that the negligence of the plaintiff on the occasion in question was the sole and proximate cause of his injury.” Appellant also filed an additional plea ,in which it alleged that “the injuries received by the plaintiff on the occasion mentioned in the plaintiff’s declaration were caused by the contributory negligence of the defendant which directly and proximately contributed to the injuries to the plaintiff complained of. ’ ’ To this plea a demurrer was sustained.

The case was tried before a jury September, 1928. The jury, by their verdict, found in favor of the appellee on the first count of his declaration in the sum of $5,000. After motion for a new trial had been overruled, judgment was entered on the verdict. It now comes before this court on appeal.

The evidence clearly establishes the fact that the cars involved in the accident were engaged in interstate commerce; that the accident happened in the early morning, while it was still dark, east of the curve of Sixty-fifth and State Streets, East St. Louis, and that appellant’s car No. 22 at the time of the accident was not displaying the red lights on the rear of his car as provided in rule No. 104 heretofore mentioned ; and that plaintiff was injured.

The question in dispute is whether the injuries received by the plaintiff, on the occasion as set forth in plaintiff’s declaration mentioned, were proximately caused by the negligence of the defendant, and whether the negligence of the defendant on the occasion in question was the sole and proximate cause of his injuries. The jury having specified in its verdict the count in the declaration upon which their finding is based, its verdict is in effect a ■ finding for the defendant on the other count. Therefore, only the first count of the declaration need be considered in this opinion. The question of defective brakes is no longer a ground of recovery and we need not examine the evidence under that count, unless it relates in some way to the operation of the car under the count alleging failure to display signal-lights. (Wabash R. Co. v. Smillie, 97 Ill. App. 7.)

The declaration charges facts that bring this case under the Federal Employers’ Liability Act, and our State courts are governed in their construction, application and interpretation of said acts by decisions of our Federal courts. (Beck v. Baltimore & O. R. Co., 244 Ill. App. 441; Brant v. Chicago & A. R. Co., 294 Ill. 606.) Under the evidence we think it is clearly established that at the time of the accident the first car was not displaying the signal lights as required by the rules of the company, which was an act of negligence on the part of the defendant. It is the contention of the plaintiff that the failure to so display the lights was the proximate cause of the accident. It is the contention of the defendant that the failure to display signal lights was not the proximate cause of the accident, but the negligence of the plaintiff himself was the proximate cause of the accident, and that, therefore, he cannot recover in this case.

“Section 1 of the Federal Employers’ Liability Act, Cahill’s St. ch. 114, ¶ 321 (U. S. Comp. St. 1918, § 8657) provides:

“Every common carrier by railroad while engaging in commerce between any of the several States or Territories, or between any of the States and Territories, or between the District of Columbia and any of the States or Territories, or between the District of Columbia or any of the States or Territories and any foreign nation or nations, shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce, or, in case of the death of such employee, to his or her personal representative, for the benefit of the surviving widow or husband and children of such employee; and, if none, then of such employee’s parents; and,- if none, then of the next of kin dependent upon such employee, for such injury or death resulting in whole or in part from the negligence of any of the officers, agents, or employees of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, track, roadbed, works, boats, wharves or other equipment.” Beck v. Baltimore & O. R. Co., supra, 446, 447.

Under the provision of said statute, an employee is not obliged to exercise care to discover danger which results from the employer’s negligence, and contributory negligence is not a defense under said act, but only goes in mitigation of damages. (Brant v. Chicago & A. R. Co., 294 Ill. 606; Pennsylvania R. Co. v. Gavin, 234 Ill. App. 28; Chesapeake & O. R. Co. v. Proffitt, 241 U. S. 468; Texas & P. Ry. Co. v. Harvey, 228 U. S. 319; Rock v. Minneapolis, St. P. & S. S. M. Ry. Co., 247 Ill. App. 609; and Fisher v. Chicago, R. I. & P. Ry. Co., 290 Ill. 49.) Under the federal act, if the appellant was negligent in any degree, and such negligence contributed as a proximate cause, as we think it did, to his injury, the plaintiff’s right to recover cannot be defeated, although his negligence might have been gross, and the üegligence of the defendant comparable therewith slight. (Pennsylvania Co. v. Cole, 214 Fed. 948; Norfolk & W. Ry. Co. v. Earnest, 229 U. S. 114; Grand Trunk Western Ry. Co. v. Lindsay, 233 U. S. 42.)

Th,e plaintiff testified that he could not see this car in front of him until he was within about 70 feet of it; that as soon as he noticed it he immediately applied his air brakes, but owing to the defective cqndition of the brakes he could not stop his car; that on discovery that the brakes would not work he immediately threw the car into reverse, and that the car being heavy the wheels would not reverse the action of the car, and he collided with the car in front of him and received the injuries complained of; that owing to the car having no signal lights he was unable to see it until he got within a short distance from it; that the car was standing around the curve at Sixty-fifth Street and his lights did not show directly upon the car ahead of him. This evidence is disputed by the conductor of the car on which the. plaintiff was driving, and by some witnesses who took other cars and made tests with what they testified were cars approximately in the same position that these cars occupied just prior to the accident; that they could see the front car from the light on the front end of the second car at least 500 feet, and, therefore, defendant insists that the plaintiff should have seen this car at this same distance, and that it was solely his fault and not the fault of the defendant by not having the lights on the rear of the front car as provided by its rules the accident was caused.

Whether the plaintiff is right in his contentions, or the witnesses for the defendant, are proper questions of fact for the jury to decide. They had an opportunity to see and hear the witnesses upon the witness stand, and it is for them to judge which witnesses are credible and the ones to believe. They by their verdict have given more credence to the witnesses of the plaintiff, and unless it is manifestly against the weight of the evidence this court would not be justified for that reason in reversing the case. We cannot say that the finding of the jury is manifestly against the weight of the evidence in this case.

Attorneys for each side of this case complain about the other’s argument to the jury. We think from an examination of the record that the point is well taken in each instance; that each of the attorneys made remarks to the jury and engaged in arguments that were improper, and the judge would have been justified in reprimanding the attorneys and stopping the argument before he did. But it appears to us that one party is as guilty of these offenses as the other and the verdict will not be disturbed on that account.

It is insisted that the trial judge erred in giving appellee’s instructions Nos. 1, 2, 3 and 8. Appellant cites several cases to sustain its contention. No doubt, if the Federal Employers’ Liability Act was not involved in this case its contention would be correct. An examination óf all the cases cited discloses that they were personal injury suits brought in our State courts and the Federal Employers’ Liability Act is not involved. While some of these instructions are not free from criticism, we think they are not subject to the criticism as pointed out by the attorney for appellant. Brant v. Chicago & A. R. Co., 294 Ill. 606; Beck v. Baltimore & O. R. Co., 244 Ill. App. 441; Pennsylvania R. Co. v. Gavin, 234 Ill. App. 28.

Lastly, it is contended that plaintiff’s damages are excessive. It is the province of the jury in cases of this kind to allow such damages they think from the evidence the plaintiff has sustained. In this case they fixed that amount at $5,000. From the evidence in this case we cannot say that this amount is excessive.

We find no reversible error in this case and the judgment of the city court of East St. Louis is hereby affirmed.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Southern Surety Company, Appellant, v. Harrisburg Hospital, Inc., Appellee.

      Opinion filed June 5, 1929.
    Miley & Combe, for appellant; P. G. Risher, of counsel.
    James B. Lewis, for appellee.
   Mr. Justice Wolfe

delivered the opinion of the court.

Appellee brought suit in assumpsit against the appellant on account for hospital, surgical, medical and professional services rendered certain employees of A. Guthrie & Company, who had received personal injuries in the course of their employment. Appellant had a contract of insurance with said A. Guthrie & Company against claims covered by the Workmen’s Compensation Law of this State. There was no express contract between appellant and appellee. Injured employees were sent to the appellee by Dr. Duncan, who was employed by A. Guthrie & Company, and bills were rendered appellant for services performed by appellee. Some of the bills were paid by the appellant. The amount of unpaid bills is $1,307.50, for which appellee recovered judgment on a trial of the issues before the trial judge of the Saline county circuit court. Appellant defended the suit upon the theory that appellee’s cause of action was against A. Guthrie & Company, who was primarily liable for necessary hospital, surgical and medical attention furnished to the employees and that whatever the contractual relations between A. Guthrie & Company and appellant were had no bearing in this suit.

Appellant contends that, if there was any liability upon an implied contract, by the conduct and manner of prior dealings between appellant and appellee, then the appellee was bound by the acts and recommendations made by Dr. R. B. Nyberg, when he advised appellant that certain of the patients would be discharged from the appellee’s hospital on certain days, and that appellant would not be legally liable for charges rendered by said hospital for hospitalization of said patients after the date of which Dr. Nyberg advised appellant said patients would be discharged.

There is little, if any, dispute in regard to the facts in this case. For several years A. Guthrie & Company, by Dr. Duncan, had been in the habit of sending injured employees to the hospital for treatment and the bills had always been rendered to the appellant for the hospital services and treatment connected therewith, and, until the controversy over the, bill now in question, had always been paid by the appellant to the hospital company. It is not now contended that Dr. Duncan was not fully authorized by the appellant to place injured employees of A. Guthrie & Company in the hospital in question as agent and representative of the appellant. It is contended under the evidence and pleadings in this case that the plaintiff was not entitled to recover as there was ho express agreement from the appellant to the appellee to pay for such services. The plaintiff relies wholly upon the course of conduct between the parties. that had existed for the last several years as establishing an implied contract between the parties to pay for the services that had been rendered to the injured employees of A. Guthrie & Company.

We think that the evidence sustained the contention of the appellee that the appellant, by its acts and conduct in continuing to allow Dr. Duncan to send the injured employees of A. Guthrie & Company to the hospital for treatment, and without any protest paying the bills to the hospital company when they were rendered, would now be estopped from denying that it had authorized Dr. Duncan to send these patients to the hospital for treatment. The law is well settled that, if a principal, by his conduct toward third parties, causes them to reasonably believe that the second party is agent of the principal and authorized to contract for him, he is estopped from denying the authority of such agent," and when the principal accepts the benefits arising from the contract made by an unau-l thorized agent, he is liable on a special contract and» cannot dispute the authority of said agent. Fay v. Slaughter, 194 Ill. 157; Rawson v. Curtiss, 19 Ill. 456. Or where a principal permits persons, employed by a person, who, with his knowledge, pretend to act for the principal, to continue to work without protest, he ratifies the acts of such agent and is primarily liable. Pardridge v. La Pries, 84 Ill. 51.

The appellant cites American Hominy Co. v. National Bank of Decatur, 294 Ill. 223, and Dorion v. Jacobson, 113 Ill. App. 563, as cases sustaining the contention that it is not liable in cases of this kind. The point in the above-cited cases is not the same as in this. There was no contention in either of those cases that, the insurance company was liable, nor was the suit against the insurance company. In this case, as we view it, the Workmen’s Compensation Act is not governing, since the case does not arise under that law or act, but it is a suit upon an implied contract for services rendered.

It is further.contended by the appellant that even by admitting that there is a liability upon an implied contract, then the amount of settlement should be reduced from $1,307.50 to $1,064.50, for the reason that the patients were not discharged from the hospital at the time Dr. Nyberg wrote the appellant that three of these patients should be discharged from the hospital. Dr. Nyberg was the attending physician and surgeon in charge of these patients, and it is undisputed that he wrote to the appellant December 14, 1927, and stated that the patient Dan Radiocovich within a short time could be discharged from the hospital but should report back for daily treatment. On the same date similar letters were written in regard to patients W. H. Miller and George Sukis, stating, that they would be able to be discharged on December 19., None of these patients was discharged on the day that Dr. Nyberg stated in his letter to the appellant they would be discharged. Dr. Nyberg is very positive in his testimony and gives his reason why these patients were not discharged, viz.: That the patients did not improve as rapidly as he had anticipated..

Appellant does not attempt to disprove any of the evidence of Dr. Nyberg, but contends that for the reason that he did not notify it that the patients would not be discharged, it cannot be held responsible for the care and services rendered these three patients from the date stated in the letter that they were to be discharged, until the time they were actually discharged from the hospital.

The only evidence offered by the defendant was a witness by the name of J. R. Callahan, an adjuster, employed by the Southern Insurance Company, who stated that he was acquainted with the cases of the parties involved in this suit; that he received the letters that Dr. Nyberg had written the defendant and on receipt of these letters he had gone to the Commerce Hotel and made arrangements for these men to lodge at that place and so advised the three patients, and he received no information that they had not gone to the hotel until after they were discharged from the hospital. He testified that in his opinion these three patients were able to be discharged December 19, 1927; that the rate for the room at the Commerce Hotel would be $12 per week. He further testified that he has no qualifications that would enable him to tell when a man should be placed in a hospital or able to be discharged. He made no examination of the patients at all. The difference between the rate charged by the Commerce Hotel and the hospital was about one dollar per day, He further testified that he was sent there by the Southern Surety Company to adjust cases in which men were injured while in the employ of A. Guthrie & Company on which the Insurance Company carried the insurance; that he arranged with Dr. Nyberg for the hospital bills, medical and hospitalization when they were hurt in the employ of A. Guthrie & Company; that he did that as an agent for the Southern Insurance Company.

We find nothing in this record to show that Dr. Nyberg’s treatment of these cases is subject to criticism. Certainly when the appellant placed these patients in charge of the hospital, as it had been doing for years, it relied upon the hospital staff to treat its patients and restore them to health in the shortest time possible. The doctor in charge of a case owes a duty to give his patient his best efforts and skill in the treatment of his disease or injury, and to discharge him from the hospital and treatment at the earliest possible time that in his judgment would be proper under the circumstances; but, it is also his duty to retain a patient in charge of the institution and properly treat him until such time as in his best judgment he feels that the patient should be discharged. Dr. Nyberg had charge of these cases. The responsibility was upon him to say when these patients would be discharged and if they had not recovered as rapidly as he had anticipated it was his duty to retain them and treat them until such time as in his opinion they should be discharged. We see nothing in the actions of Dr. Nyberg nor the hospital that should relieve the appellant from paying for the care of these patients after the time the doctor wrote the letter anticipating that these patients would be discharged down until the time they were acually discharged.

The learned trial judge properly found that the appellant company was indebted to the appellee in the sum of $1,307.50. The judgment of the circuit court of Saline county is hereby affirmed.

Affirmed.


author: Mr. Presiding Justice McSurely

text:
    Sewell M. Osgood, Appellee, v. Chicago and North Western Railway Company, Appellant.
    Gen. No. 33,409.
    Opinion filed June 24, 1929.
    Nelson J. Wilcox, Nelson Trottman and I. O. Belden, for appellant.
    William L. Hart, for appellee; William L. Hart and Joseph P. Brodie, of counsel.
   Mr. Presiding Justice McSurely

delivered the opinion of the court.

On the trial of an action to recover for damages to his automobile, plaintiff had a verdict for $278.60. From the judgment thereon defendant appeals.

The facts tending to show negligence of defendant’s servant whereby the defendant’s locomotive ran into and collided with plaintiff’s automobile are not discussed in the brief. The only question presented is whether section 18 of the Practice Act, ch. 110, as amended in 1925, Cahill’s St. 1927, ch. 110, ¶ 18, applies. This amendment is as follows:

“Any proceeding or suit at law or in equity hereafter brought under or by virtue of the subrogation provision or provisions of any contract or under or by any subrogation by operation of law shall be brought either in the name of, or for the use of the subrogee: Provided the subrogee shall in his pleading oath, or by his affidavit, where pleading is not required, allege that he is the actual tona fide subrogee and set forth how and when he became the subrogee.”

It is to be noted that the present action does not purport to be brought by a subrogee but by the owner of the automobile alone, but defendant argues that it offered,, out of the presence of the jury, to prove that this action was in fact brought under the subrogation provisions of an insurance contract; that plaintiff in fact paid only $50 of the loss and that the insurance company paid the balance; that plaintiff was not entitled to anything over $50 and that the Chicago Motor Club, the insurance company, was subrogated to plaintiff’s interest and was the real party in interest to the portion over $50, and therefore defendant asked that the action be dismissed as not having been brought under section 18. This motion was denied and we are of the opinion that the court properly held that this section did not apply. The statute clearly applies only to any proceeding brought by a subrogee or for his use. Here, the subrogee is not trying to recover anything; he is not a party to the suit and the section therefore does not apply.

But it is said that in McKinnon v. Studebaker Sales Co., 245 Ill. App. 596, this section was held applicable. The opinion in this case is not in point. That suit was entitled ** Mrs. R. W. McKinnon for use of Commercial Union Assurance Company, Ltd.” vs. Studebaker Sales Company, and the declaration alleged that Mrs. McKinnon was insured against loss in the Commercial Union Assurance Company which paid the loss to her and that she executed and delivered to it “proper articles of subrogation,” assigning to it her right of action, but the insurance company did not in its pleading on oath allege that it was the actual bona fide subrogee nor set forth how and when it became such. It was held that such allegations were required by section 18 of the Practice Act and therefore the declaration was obnoxious to a demurrer. Here, as we have said before, the suit does not purport to be brought for the use of any subrogee, but is brought solely in the name of the party suffering the wrong.

Neither is the opinion in C. J. DeWit Co. v. Central Lime & Cement Co., 250 Ill. App. 161, in point. That was a suit brought by an employee under the provisions of the Workmen’s Compensation Act, and it was held that the suit was not brought by virtue of any subrogation proceeding and that section 18 of the Practice Act was not applicable. In the opinion the court by way of dictum said that the insurance company might have brought the suit as subrogee, in which event section 18 would apply.

The owner suffering the injury and the subrogee are not the same in any case. It would be unjust to hold that an owner of property who is in whole or in part protected by insurance has no right of action for damages and cannot maintain a suit except in the name of the insurance company as subrogee. It has been uniformly held that any reference to the fact in a trial by jury that the owner was protected by insurance is reversible error. To compel an insured owner to bring suit in the name of the insurance company would be revolutionary of the established practice.

We have recently decided in Clancey v. McBride, 251 Ill. App. 157, that only one cause of action may be maintained for damages sustained from a single tort. The rule contended for by the defendant would require two suits for the same tort, where the owner was only partially insured; one suit to be in his own name for his own damages and the other by the subrogee, for the amount it had paid on its policy of insurance.

Furthermore, damages to be recovered by an owner are measured by the value of the property destroyed or the cost of necessary repairs. This is not necessarily determined by the amount of insurance carried.

If an insurance company as subrogee should obtain a judgment for the amount of insurance paid to the owner, this would discharge the wrongdoer from all further liability leaving the owner without any recourse for damages sustained above the amount paid him by the insurance company.

In Byalos v. Matheson, 328 Ill. 269, where it was contended that the plaintiff having collected his loss from the insurance company could not maintain an action against the defendant, the Supreme Court said:

“The insurance company did not make the payment for the benefit of the appellant and the payment did not discharge the appellee’s right of action' against him. (American Express Co. v. Haggard, 37 Ill. 465.) If insured property is destroyed by the act of a wrongdoer, the owner of the property may sue the wrongdoer though the insurance company may have paid the loss. Vose v. Central Illinois Public Service Co., 286 Ill. 519.”

Although this suit arose before the amendment of 1925 of section 18, yet the rule is equally applicable to the present section as amended.

For the reasons indicated, we are of the opinion that the trial court ruled properly, and the judgment is affirmed.

Affirmed.

Hatchett and O’Connor, JJ., concur.


author: Mr. Justice Matchett

text:
    Foreman Trust & Savings Bank, Executor of the Estate of Harry Peder, Deceased, Appellee, v. Herman Cohn and Theresa Cohn et al., Appellants.
    Gen. No. 33,474.
    Opinion filed June 24, 1929.
    Rehearing denied July 8, 1929.
    Golan & Hall, for appellants. •
    Deneen, Healy & Lee and Harold L. Feigenholtz, for appellee; Harry W. Liepincott and Harold L. Feigenholtz, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

This appeal is brought by the principal defendants to reverse a decree granting the prayer of complainant in a bill to foreclose a mortgage. The defense set up in the answer is that complainant’s testator, Harry Feder, and one Samuel J. Hachtman obtained a trust deed and notes in suit from defendants without giving money or any other consideration therefor by representing to defendants that Feder and Hachtman would use the trust deed for the purpose of exhibiting the same; that it was never to be recorded and that they would destroy it, but that fraudulently, falsely and contrary to their promise they recorded the trust deed; that Hachtman informed defendants the mortgage was destroyed; that they never knew until after the death of Feder that the trust deed 'was recorded, and that they were then for the first time requested to pay the notes secured by the trust deed.

Averring the same facts, defendants, Herman and Theresa Cohn, filed a cross-bill in and by which they prayed that the unpaid notes and the trust deed might be delivered over to them. The decree dismissed the cross-bill for want of equity.

The cause was heard by the master upon exceptions to the master ?s report, which were overruled. The report was approved and a decree entered in conformity with the report. Defendants testified upon the hearing to matters occurring prior to the death of Harry Feder. The master received the evidence subject to objection, but in preparing his report disregarded this evidence upon the theory that defendants were incompetent witnesses under the statute. The evidence of Samuel J. Hachtman was also received as to similar occurrences. His evidence was also held to be incompetent under the statute by the master. However, the parties have stipulated that the evidence of Hachtman shall be regarded as free from this objection.

An examination of the record leaves little doubt as to the facts. Samuel J. Hachtman was a lawyer who dealt in securities. At the time in question he had an office with Harry Feder. He is the son-in-law of Herman and Theresa Cohn, the principal defendants, who executed these notes and trust deed on June 3, 1926. Louis L. Kahn is named as trustee in the trust deed. Herman Cohn is a bond broker at 640 North Clark street, and he has been engaged in business at that address for 15 years and has lived in Chicago for 37 years. There is nothing in the record to indicate that" he is now or ever has been on unfriendly terms with his son-in-law Hachtman. When Hachtman was about to engage in business and needed credit, his father-in-law became his guarantor at banks to the total amount of $50,000. The trust deed in question was acknowledged before Hachtman as a notary public, and the evidence is uncontradicted that he procured the execution of the notes and trust deed by Herman and Theresa Cohn on June 3 and the delivery of the same to himself. He testifies that he did not give any money or anything of value to Herman or Theresa Cohn for the execution and delivery of these papers. He further testifies:

“I told Mr. Cohn that these papers were necessary in order to help out Mr. Feder and incidentally to help out myself. I told him Mr. Feder wanted these papers just to exhibit and that he was not going to put them on record and that they would be returned to Cohn.”

He further says that Mrs. Cohn did not want to sign the papers; that she said she could not see why Hachtman had to have the papers as long as there was not any money going into the business; that she did not know that the business warranted borrowing any money from Harry Feder, and that if it was just to help him out she did not see why they should jeopardize their property or take any chance with real estate in order to help Hachtman out. He says:

“I told her that Mr. Feder and myself — that Feder asked me to get this mortgage to help him out and that incidentally it would help me out due to the fact that I was doing so much business with him, and I had to have these papers to present, that he would not put them on record: — just a matter of showing somebody that he had these papers. I was present at the time she signed this instrument.”

He further testifies that after he received the mortgage he turned it over to Feder. He says that Feder took the mortgage, and he does not know what he did with it. As a matter of fact, we think the preponderance of the evidence shows, as the master finds, that the notes and mortgage were executed as an accommodation to Hachtman and that he delivered the same to Feder in consideration of money which Feder loaned to him about this time. Seven of the notes which matured prior to the death of Feder were paid by checks from Samuel J. Hachtman, and the evidence leaves no doubt that about this time Feder actually loaned to Hachtman a sum of money which, with the commission, amounted to the exact amount of the notes secured by this mortgage.

Theré is no dispute as to the general rule which obtains in this State that in equity the purchaser of notes secured by a trust deed or mortgage is an assignee only and takes the deed and mortgage subject to all the defenses which might have been interposed by the mortgagor. That rule is laid down in the well-known case of Olds v. Cummings, 31 Ill. 188, and has been consistently followed ever since. Miller v. Larned, 103 Ill. 562; Naef v. Potter, 226 Ill. 628; Ridings v. Hynds, 154 Ill. App. 429, and many other cases might be cited. As an examination of the opinions filed in these cases discloses, the basis for the doctrine is found in that maxim of equity which declares that where the equities are equal, the first in order of time must prevail — a principle which, it is perfectly apparent, must give way where the original maker of the notes and mortgage has made and delivered the same as accommodation paper to a third person. To apply the maxim under such circumstances would amount .to a judicial approval of the perpetration of a fraud— always abhorent to a court of equity. As was said in Miller v. Larned, supra:

“To allow the equities existing between the original parties to accommodation paper secured by mortgage to prevail over the equities of the assignee of the note would be to carry the doctrine of Olds v. Cummings to such an unreasonable extent as would ensnare honest dealers in such securities.”

The master found that this note and trust deed were turned over to Feder by Hachtman as collateral or in payment of a principal existing indebtedness and that this was a valid consideration for the note and mortgage. McIntire v. Yates, 104 Ill. 491; First Nat. Bank of Crown Point v. Davis, 146 Ill. App. 462; McLeish v. Hanson, 157 Ill. App. 605.

These facts are found by the master and have been approved by the chancellor, and we have no right to set them aside unless they are clearly and manifestly against the weight of the evidence. Cahill v. Lauf, 133 Ill. App. 607; Nimmons v. Lyon & Healy, 197 Ill. App. 376; Klekamp v. Klekamp, 275 Ill. 98. We cannot so find.

The defendants, however, invoke the elementary rule that the pleadings, the proofs and the decree in chancery must correspond and that in the event they do not so correspond the bill must be dismissed, and they say that the finding that these notes and trust deed were made and delivered as accommodation paper is equivalent to a finding that they were given without consideration; that the bill alleges they were made and delivered for a cc :sideration and that Herman and Theresa Cohn, being indebted, made, executed and delivered the notes; that if this was accommodation paper they were not indebted and they therefore received no consideration. James H. Rice Co. v. McJohn, 244 Ill. 264; Stearns v. Glos, 235 Ill. 290; Lang v. Metzger, 206 Ill. 475, and many other cases, stating the elementary rule as to the necessity that allegations, proofs and the decree must correspond, are cited. In particular, the case of Burr v. Beckler, 264 Ill. 230, is relied on, and it is urged that the facts there are identical with those which appear in this case. An examination of the opinion in that case discloses that the question of whether the securities given were accommodation paper was not at all necessary to the decision of the case, and as a matter of fact the case was decided upon entirely different grounds. In the course of the opinion, however, the court stated that if the note had been accommodation paper it would make no difference because the facts alleged in the bill were inconsistent with that theory (in that the bill alleged that the maker was indebted to a named person, and being so indebted, in consideration thereof, made the note) and that a party could not make one case by his bill and another by his proofs.

We have examined the bill in this case, however, and find that it does not allege that Herman and Theresa Cohn were indebted to any particular person. We take it, however, that one who hands to another accomodation paper, upon the delivery of it to a third person, who takes the same for value, does become indebted. The allegation of the bill is therefore sustained, and there is no variance, as defendants contend.

A consideration of the whole record convinces us that there is no valid defense to these notes. There is proof in the record from which the master found, the chancellor approved (and we cannot say that the finding is wrong) that Herman Cohn after the death of Feder made statements to the effect that the mortgage was good and that it would be paid.

The decree is just and it is affirmed.

Affirmed.

McSurely,"P. J., and O’Connor, J., concur.


author: Mr. Justice O’Connor

text:
    Atlas Coal & Coke Company, Appellee, v. Kentucky River Coal Mining Company et al., Appellants.
    Gen. No. 33,446.
    Opinion filed June 24, 1929.

      Gallagher, Kohlsaat, Binakbr & Wilkinson, for appellants.
    Pomeroy & Martin, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff, as payee of a document which for reasons hereafter stated we hold to be a negotiable instrument, brought an action against the Kentucky Kiver Coal Mining Company, the maker of the note, and R. C. Whitsett, J. C. Morrison and August P. Poehlmann, indorsers of the note, to recover a balance claimed to be due on the note. The maker of the note was not served-, so the indorsers are the only defendants. The jury returned its verdict in favor of the plaintiff and against the three indorsers and assessed damages at $6,211.40. Judgment was entered on the verdict and the defendants appeal.

The record discloses that the Kentucky River Coal Mining Company was the lessee of a coal mine in Kentucky ; that plaintiff was engaged in the wholesale coal business in Chicago and on January 31, 1925, the parties entered into a written contract whereby the Coal Mining Company appointed plaintiff its sole and exclusive agent for the sale of the entire output of the mine. Plaintiff agreed to use its best efforts to sell all of the coal mined at the best price obtainable and the Coal Mining Company agreed to operate the mine so as to produce the maxim amount of coal under proper mining practices, and to ship it in conformity with orders given it by the plaintiff. Plaintiff further agreed to give the Coal Mining Company shipping directions for not less than 150,000 tons of coal per year during the life of the contract, which was from January 31,1925, until the 31st of March, 1930. There are other provisions in the contract which need not be adverted to here.

Apparently the Coal Mining Company was in need of funds, and on the date of the contract it made and some time thereafter delivered the document which is the basis of this suit, to wit:

“Chicago, Illinois,
January 31, 1925.
$15,000.00
On or before fifteen (15) months after date, for value received, the undersigned Kentucky River Coal Mining Co. promise to pay to the order of Atlas Coal & Coke Co., the sum of Fifteen Thousand and no/100 Dollars, at their office, Old Colony Building, Chicago, Illinois, with interest at the rate of six per cent per annum, after date hereof, as per contract of even date herewith by and between the parties hereto.
Kektuckt River Coal Minthg Co.,
By R. C. Whits ett, President.
No.;...........
Attest :
Roland A. Plate, Secretary.”

The three defendants wrote their names on the back of the note.

On the argument at the bar the original document was exhibited, and from it it appears that the document was an ordinary printed blank form of a promissory note, and immediately following the last of the printed matter these words were typewritten: “After date hereof, as per contract of even date herewith by and between the parties hereto.”

The evidence further shows that about February 7 plaintiff paid the $15,000 mentioned in the note to the Coal Mining Company and the president of plaintiff testified that at that time the note was delivered to him; that it then bore the indorsement of the three defendants and that it had been retained by plaintiff continuously from that time. The three defendants gave testimony to the effect that plaintiff paid the Coal Mining Company the $15,000 about February 7, 1925, and that it was about the latter part of that month that the note was brought to them, when they indorsed it, and that it was afterwards returned to plaintiff.

The court instructed the jury that if they found from the evidence that the three defendants did not sign their names on the back of the instrument until after it had been delivered to the plaintiff by the Coal Mining Company and until after the $15,000, evidenced by the note, had been paid to the Coal Mining Company, they should return a verdict for the defendants. They were also instructed that if the defendants had indorsed the note prior to the time it was delivered to plaintiff, or prior to the time when the $15,000 was paid by plaintiff to the Coal Mining Company, then they should find the issues for the plaintiff.

The jury by their verdict in favor of pláintiff found in effect that the indorsements had been placed upon the note prior to the payment of the $15,000 and prior to the delivery of the note to the plaintiff, which finding the defendants contend is against the manifest weight of the evidence. We have carefully considered all the evidence in the record on this point and are of the opinion that we would not be warranted in disturbing the finding of the jury on the ground that it was against the manifest weight of the evidence. An analysis of the evidence on this point we think unnecessary.

The defendants contend that the note in suit is not a negotiable instrument “because it does not contain an unconditional promise to' pay a sum certain in money; the promise in the note is to pay ‘as per contract of even date by and between the parties hereto. ’ ”

Section 1 of the Negotiable Instrument Law of 1907, Cahill’s 1927 Statute, page 1734, provides in part that:

“An instrument payable in money, to be negotiated, must conform to the following requirements:
“1. It must be in writing and signed by the maker or drawer.
“2. Must contain an unconditional promise or order to pay a sum certain in money.
“3. Must be payable on demand or at a fixed or determinable future time.
“4. Must be payable to the order of a specified person or to bearer.”
And section 3 of the same Act [page 1735] provides that: “An unqualified order or promise to pay is unconditional within the meaning of this Act, though coupled with:
“1. An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or
“2. A statement of the transaction which gives rise to the instrument.
“But an order or promise to pay out of a particular fund is not unconditional.”

It is conceded by both parties that whether the instrument in suit is negotiable within the meaning of our statute must be determined from the face of the instrument alone. And the defendants contend that it is not negotiable because the promise to pay is conditional in that the note states upon its face that it is made and delivered “as per contract of even date herewith by and between the parties hereto”; that these words qualify the promise to pay and are not a mere statement of the transaction giving rise to the instrument.

On this question numerous authorities are cited and discussed by counsel for both parties, but we think it would serve no useful purpose to analyze or discuss them to any great extent because the wording of the documents in suit in the several cases is different. The tendency 'of the courts is to construe commercial instruments, having on them a memorandum as to the dealings of the parties, as negotiable if they in other respects have all the characteristics of negotiability. 34 Yale Law Journal 98, citing 163 N. Y. Supp. 719. And continuing the author of the article says: “Greater circulation of commercial paper tends to lower interest rates and stability of circulation makes for efficiency in handling business affairs. If negotiability is a socially desirable end, an instrument should be held negotiable where two interpretations are equally possible.” And again, after quoting section 3 of the Negotiable Instrument Law, it is said: “Some courts, by strict construction . . . interpret the phrase ‘as per’ in the sense of ‘subject to’ or ‘according to, ’ and hold the paper non-negotiable by applying the latter section. (Sec. 3.) Other courts apply sec. 3 of the act and hold such instruments negotiable.” (Citing 218 Mass. 30; 282 Fed. 920.)

And in 19 Illinois Law Review, page 289, it is said:

“A fairly common situation is that arising from the use of the phrase ‘as per’ specified contract. The prin.cipal case (Calvert Drug Co., Md., 124 Atl. 891) holds that the insertion of that phrase by the drawee conditions his acceptance. A contrary view is taken by a case on all-fours: (International Finance Corp. v. Northwestern Drug Co. (1922), 282 Fed. 920.) But the greater weight of authority is that the use of the phrase ‘as per’ designated contract by maker or drawer in the body of the instrument, following words denoting an unconditional promise or order to pay, does not render that engagement conditional.” (Citing 163 N. Y. Supp. 719.)

In the instant case the document in suit is the ordinary printed blank form of a promissory note, and following the printed matter the words, “as per contract,” etc., are added. We think it obvious that it was the understanding of all the parties that they were executing an ordinary promissory note and were merely adding to it a statement of the transaction which gave rise to the instrument, as mentioned in section 3 of the Negotiable Instrument Law, above quoted. (See Doyle v. Considine, 195 Ill. App. 311.) We therefore hold that the note in suit is a negotiable instrument within the meaning of our statute.

The evidence further shows that from the date of the contract, January 31, 1925, until March 9, 1926, plaintiff gave orders for coal to the Coal Mining Company, and that during that time 1,895 carloads of coal were shipped on certain orders received and on other orders the Mining Company shipped 94,082.49 tons of coal; that they also shipped some coal to Cleveland, Ohio, on plaintiff’s orders.

The contract entered into between the plaintiff and the Coal Mining Company provided that plaintiff might retain $500 a month out of the moneys due and owing by it to the Coal Mining Company and apply the same towards the payment of the note; and the evidence shows that plaintiff retained in this manner $10,481.40, payments of which are indorsed on the note, leaving the balance for which the present suit was brought.

On March 9, 1926, a receiver of the Coal Mining Company was appointed in a bankruptcy proceeding brought against it; shortly thereafter the United States District Court for the Eastern District of Kentucky, in which the bankruptcy proceedings were pending, entered an order authorizing the receiver not to assume the carrying out of the contract of January 31, 1925. Each of the three defendants was a stockholder and director of the Coal Mining Company and Whit-sett was the president. It further appeared that the plaintiff withheld $2,054.44 due and owing from it to the Coal Mining Company, which amount was claimed by a customer of plaintiff as damages on account of the Coal Mining Company’s failure to ship coal to the customer. The customer claimed damages from the plaintiff and plaintiff paid this sum to its customer in settlement of the claim.

The written contract of January 31, 1925, is in evidence. On the trial the defendants sought to recoup the damages the Coal Mining Company had sustained by reason of the fact that the Coal Mining Company had lost money and was forced into bankruptcy through the failure of the plaintiff to order coal at the times and in the quantities the contract provided. By the offer the defendants sought to prove that “by reason of the plaintiff’s failure to furnish orders during the.first year as per the terms of the contract, the Coal Mining Company was unable to operate its mine on many days, and that by reason of said failure the Coal Mining Company sustained losses in excess of the unpaid amount of the note in question.” And defendants further offer to prove that “up to March 9, 1926, the Kentucky River Coal Mining Company filled all orders placed with it by the plaintiff, and that all coal was shipped in accordance with the contract and of the quality specified in such orders and in the contract.” Plaintiff’s objection to this offer was sustained.

The objection of plaintiff to this offered evidence was that defendants failed to offer to prove that the Coal Mining Company was ready, willing and able to perform the written contract on its part, and the argument is that since the evidence showed that the Coal Mining Company went into bankruptcy on March 9, 1926, and since the receiver was shortly thereafter relieved from the contract, this demonstrated that the Coal Mining Company was not in a position to carry out the contract, but that on the contrary it was in default; and that under the law, even if plaintiff was in default in the performance of the contract, the defendants were not entitled to recoup the damages sustained by reason of such default, because the Coal Mining Company was also in default; and in support of this the case of Harber Bros. Co. v. Moffat Cycle Co., 151 Ill. 84, and other authorities are cited.

Since the note in suit had not been negotiated, the defendants, the indorsers, could interpose any defense that would have been available to the maker of the note, the Coal Mining Company; and we are clearly of the opinion that if the Coal Mining Company were sued by the plaintiff on the note and the proof showed that while the contract was being carried out by both parties, the defendant, the maker of the note, through the default of the plaintiff was forced into bankruptcy and damaged in an amount greater than the amount claimed as a balance due on the note, that the Coal Company could recoup the damages it had sustained by reason of such default. Waterman v. Clark, 76 Ill. 428; Puterbaugh’s Common Law Pleading and Practice (10th Ed.), sec. 191. In the Waterman case, suit was brought by the payee of a promissory note against the maker and surety. The defendants interposed a plea seeking to recoup damages. It is set up that Waterman, the payee of the note, owned and was running a distillery and took certain cattle and hogs belonging to the defendant, Clark, the maker of the note, to feed and fatten at defendant’s distillery at a certain price per head; that after the plaintiff had had the stock for three months Clark, the owner, finding they were not being fattened but were being greatly injured or damaged on account of improper food, thereafter demanded the return of the stock, which plaintiff refused unless defendant would execute the note, which was done; that there was no consideration for the note but to prevent further injury and damage to the stock the note was executed, and damages were claimed on account of the improper feeding of the stock in the sum of $300, which it was sought to recoup against the note.

The Supreme Court held this plea good. The court said (p. 430) that the objection to the plea was: “That the matter, in respect to which the damages are sought to be recouped, does not arise between the parties to, the record, it arising between the plaintiff and one of the defendants, not both — that the same rule should apply to recoupment as to set-off. The objection would be valid if set-off and recoupment were governed by the same rules. But such is not the case; they depend on quite different principles. In the case of recoupment, a claim originating in contract may be set up against one founded in tort, and vice versa. Streeter v. Streeter, 43 Ill. 197. The cross demand must proceed from the same subject matter as the plaintiff’s right of action, and the defendant cannot, as in the case of a set-off, recover any excess in his favor. He uses his claim in mitigation of damages, by way of reducing the amount of the recovery. It is a defense here against the note, to be availed of as any other defense against the note itself.”

In Puterbaugh’s Common Law Pleading and Practice (10th Ed.), in the section cited, it is said: “Becoupment is the act of abating a part of a claim on which one is sued, by means of a legal or equitable right, resulting from a counter claim arising out of the same transaction.” In the instant case, although both parties were in default in carrying out the contract (the default of the defendant as pointed out by plaintiff being that the defendant had gone into bankruptcy and the contract abrogated by the bankruptcy court), we think plaintiff ought not in equity recover the balance due on the note without deduction. The default (the bankruptcy) of the defendant resulted from plaintiff’s default, as the offered evidence tended to show. The defendants’ evidence should have been admitted.

We think there is no holding in the Harber Brothers Co. case (151 Ill. 84) that would prevent the defendants in the instant case from recouping their damages. In that case the plaintiff was seeking to recover the damages for the breach of an express contract and the court held in such case plaintiff must prove that it was not in default. The court there said (pp. 92, 93): “Appellant (plaintiff) here is not seeking damages as on an implied agreement, nor, by way of recoupment, but by action on the express contract; and we understand it to be an elementary and inflexible rule in such case, that it must aver and prove it is not itself in default as to the agreement for the breach of which by appellee it brings the suit.” In that case the defendant filed a set-off, claiming a balance due for bicycles sold and delivered to plaintiff for $1,647.96. The evidence showed that plaintiff was required to expend $588.70 in repairing the bicycles, and this was allowed against the set-off. In that case there was a contract between the parties whereby the plaintiff bought and the defendant sold a certain number of bicycles to be delivered at specified times. The plaintiff was in default in the payment of some of the machines and the defendant was in default in shipping the machines. Plaintiff brought suit with the result as above stated. The court there further said (p. 96): “The question here distinctly presented as the controlling one, is 'whether a vendee who has accepted goods delivered under an express contract, but not at the time or in the quantity required by it, with knowledge of the default of the vendor in those respects, but has himself failed, without legal excuse, to pay for them according to it, can maintain an action on the contract for such a default of the vendor. We think the general rule, everywhere recognized, is against it, and has been specifically so applied in analogous cases in Illinois. Pennsylvania Coal Co. v. Ryan, 107 Ill. 226; Bradley v. King, 44 id. 339; Stewart v. Many, 7 Ill. App. 517.” We think it apparent that the Barber Brothers case is not in point.

The defendants further offered to prove that the $2,054.44 withheld "by plaintiff, as above mentioned, amounted to duress and that they should be given credit for this sum. It was stipulated that the Coal Mining Company shipped only about 8,000 tons of an order for 15,000 tons of coal which plaintiff had sold to the. Cleveland and Western Coal Company, and that by reason of plaintiff’s failure, the Cleveland Company claimed damages of approximately 30 cents per ton on account of the undelivered coal. This amounted to $2,054.44 and it seems that plaintiff paid this sum to the Cleveland Company in settlement of the claimed damages. Before this was done, plaintiff refused to pay the Coal Mining Company for coal'delivered unless plaintiff was authorized to withhold this sum and pay it to the Cleveland concern and the defendants contend that the Coal Mining Company was forced to acquiesce in the withholding of the money and that this amounted to duress because it had to have the money for the coal to meet its payroll.

It further appears that this sum was not withheld at once but was deducted from monthly instalments paid by plaintiff to the Coal Mining Company for the coal, and there is no contention that the Coal Mining Company afterwards made any complaint because of the deduction, nor is there any contention that plaintiff made any profit out of any such deduction, but on the contrary it seems that it paid this sum to the Cleveland Company. We think there was no duress in these circumstances.

For the error in failing to permit the defendants to offer evidence in recoupment as stated, the judgment of the superior court of Cook county is reversed and the cause is remanded.

Reversed cmd remanded.

McSurely, P. J., and Maichett, J., concur.


text:
    Massachusetts Chocolate Company, Complainant, v. Pride Candy Company, Defendant. Gustave A. Oehler and Martha H. Oehler, Intervening Petitioners, Appellants, v. Charles H. Penikoff, Receiver (Defendant), Appellee.
    Gen. No. 33,486.
    Opinion filed June 24, 1929.
    SoNNENSCHEIN, BeRKSON, LaUTMANN & LEVINSON, for appellants; Ben Rothbaum, of counsel.
    Gallagher, Shulman & Abrams, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

The Massachusetts Chocolate Company, a corporation, filed its hill which it is stated is brought under the provisions of sections 53 and 54 of the Corporation Act, Cahill’s St. ch. 32, ¶¶ 53, 54, against the Pride Candy Company, an Illinois corporation. There is no other defendant. The hill set up that complainant was a creditor of the defendant (the amount or character of the indebtedness not stated); that a judgment in favor of Rachel E. Davis for $550 had been rendered against the defendant in the municipal court of Chicago : that an execution had been issued on the judgment, demand made for payment but that no part of the judgment had been paid and that it was still in full force and effect; that defendant had closed its doors and ceased to do business for more than 60 days prior to the filing of the bill; that the bill was filed on behalf of complainant and all other creditors who wished to join; that the defendant had certain office furniture, fixtures, equipment and merchandise which would greatly depreciate in value unless a receiver was appointed. The prayer was that a receiver be appointed to collect and marshall assets of the defendant and for general relief.

Afterwards the court appointed a receiver who took possession of the furniture, fixtures and office equipment of the defendant, and on December 31, 1928, filed his petition in which he set up an itemized list of the property belonging to the defendant and prayed that an order be entered authorizing him to sell the property upon five days’ notice to defendant’s creditors and for authority to pay the customary commission for advertising and making the sale. On the same day the matter came on for hearing and an order was entered granting the prayer of the petition, and it was further ordered that the receiver hold the proceeds realized from the sale until the further order of the court. On January 4, 1929, Gustave A. Oehler and Martha H. Oehler, his wife, upon notice to the receiver, were given leave to file a petition instanter whereby they claimed to have a chattel mortgage on the property in the possession of the receiver, and which he was about to sell; that the mortgage was for $6,000 and there was a balance of $3,105 due and unpaid. The petition set up this fact, and further that the receiver had sent out notice of the sale he was about to make. The prayer was that the receiver be ordered to turn over the property to the petitioners. A copy of the chattel mortgage and the recording thereof is attached to and made a part of the petition. The receiver filed an answer setting up that he had no knowledge of the execution of the chattel mortgage, that he claimed it was not a lien and denied that petitioners were entitled to any relief. January 8 the court entered an order on motion of the solicitors of the receiver, that the receiver be authorized to sell the assets in his possession free and clear of any lien of the petitioners, and that their lien, if any, attach to the funds realized out of the sale, less expenses of advertising and auctioneer’s commission of 10 per cent. It appears that afterwards the property was sold and that the funds are still held by the receiver.

The matter came on for hearing on the petition of the Oehlers; the court heard the evidence and entered a decree in which it was held that the chattel mortgage given by the defendant corporation to the Oehlers was void and therefore the Oehlers had no lien on the property. It is from this decree that the Oehlers appeal.

The facts as disclosed by the evidence are briefly these: Oehler had been conducting a candy business in Chicago and owned the equipment, fixtures, etc., covered by the chattel mortgage and sold by the receiver ; he agreed to sell this property for $10,000 to D. O. Duggan and Fred Gardiner, $4,000 to be paid in cash and a chattel mortgage on the property for the remaining $6,000, it being the understanding and intention of all the parties that a corporation would be formed, the property turned into the corporation, which would issue its chattel mortgage for the $6,000. A corporation -was accordingly formed and in the statement made to the Secretary of State in applying for a charter, the value of the property was placed at $16,000 and it was stated that this was subject to a chattel mortgage of $6,000. This $10,000 was represented as having been paid by turning over the property in question to the corporation. Afterwards the chattel mortgage was executed and recorded. The evidence further showed that Duggan paid his $2,000 in cash to Oehler, that Gardiner paid $500 and gave Oehler security for the remaining $1,500 which he was to pay in cash; after the corporation was formed Gardiner turned over his stock as collateral security to Oehler. The corporation then began conducting the candy business but was not successful and it appears that Oehler loaned it money and took assignments of bills that were due and owing from the corporation’s customers. The evidence further shows that payments were made upon the $6,000 secured by the chattel mortgage until it was reduced to $3,105, as above stated. It further appears from the evidence that at the first meeting of the directors of the defendant company one of the persons who subscribed for one share of stock turned this share over to Oehler. Oehler was then elected a director and vice-president. The court in his opinion in deciding the case said that Gardiner and Duggan had paid Oehler $10,000 for the property which, for another purpose, had a few months before been appraised at $5,000 and without adding anything of value to the $10,000 worth of property it was represented to the Secretary of State that it was worth $16,000. The court held that this was unwarranted because it would lead people to extend credit to the corporation, believing that there was $10,000 equity in the property belonging to the corporation when in fact there was only $6,000 of equity, the property having been sold for $10,000 and incumbered for $6,000, and that this rendered the transaction fraudulent and the chattel mortgage void.

We have carefully considered all the evidence in the record, and there is no intimation nor evidence that the defendant corporation had not agreed to pay to Oehler $10,000 for the property. There is no evidence in the record that Oehler or anyone else intended to defraud anybody when the corporation was formed, nor at any other time, unless it may be said that this appears from the fact that the incorporators represented to the Secretary of State when applying for the charter that the property was worth $16,000. But we are clearly of the opinion that there is no evidence tending to show that Oehler intended to defraud anyone in the transaction. He sold his property for $10,000. We think the chattel mortgage was valid.

The decree of the circuit court of Cook county is reversed and the cause is remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and rema/nded.

McSurely, P. J., and Hatchett, J., concur.


author: Mr. Presiding Justice Wilson

text:
    Harry Brodsky (Plaintiff), Defendant in Error, v. Sam Frank et al., Defendants. Joe Singer et al. (Defendants), Plaintiffs in Error.
    Gen. No. 33,265.

      Opinion filed June 26, 1929.
    David K. Tone, Blanksten, Freeman & Freeman and Floyd E. Britton, for plaintiffs in error.
    Gallagher, Shulman & Abrams, for defendant in error.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

The plaintiff, Harry Brodsky, brought his suit against Sam Frank, Joe Singer, Joseph Smith, Morris Siegel and Textile Headwear Company, a corporation, defendants, in an action of trespass on the case. The cause was tried by the court with a jury and a verdict was returned in favor of the plaintiff for the sum of $30,000. Plaintiff remitted the sum of $10,000 and judgment was entered for $20,000. The cause was submitted to the jury upon the first, second and third additional counts of the declaration.

The first additional count charges that on May 16, 1925, plaintiff was engaged in the business of manufacturing hats and caps and was the owner of certain fixtures, machinery, merchandise and good will and had a number of customers; charges that the defendants were at the same time officers and agents of the Textile Headwear Company, engaged in the manufacture of hats and caps; that on the day aforesaid the defendants and the Textile Headwear Company, by its officers and agents, falsely, fraudulently and maliciously conspired together for the purpose of inducing the plaintiff to turn over his good will, stock and fixtures; that in pursuance of said conspiracy the defendants falsely, fraudulently and maliciously represented to the plaintiff that if he would turn over said stock, fixtures, business, etc., together with his customers and accounts and devote his time to the combined business of the plaintiff and the defendants, the Textile Head-wear Company, up to and including December 31, 1925, plaintiff would receive, in the form of stock, one-fourth of all the company’s assets of the Textile Head-wear Company; charges that the plaintiff relied upon said representations and entered into the agreement and did turn over said good will, business, machinery, etc.; charges that the statements were false at the time made and were known to be false and made for the purpose of inducing.the plaintiff to turn over the stock, fixtures and machinery to the defendants; charges that the defendants wholly failed and refused to give the plaintiff stock representing a one-fourth interest in the assets of the Textile Headwear Company ; charges further that they did on the day aforesaid appropriate and convert to their own use said business, fixtures, appliances, good will, goods, customers’ accounts and business.

The second and third additional counts charged the defendants with having induced plaintiff to become associated with the Textile Headwear Company by false and fraudulent representations and upon promises to deliver stock in the future, setting forth practically the same set of facts as alleged in the first additional count. The following special interrogatory was submitted to the jury by the plaintiff:

“Do you find from the preponderance of the evidence that on or about to wit: June 8, 1925, the defendants, Joe Singer, Joseph Schmidt, Morris Siegel and Textile Headwear Company, a corporation, entered into a fraudulent conspiracy to cheat and defraud the plaintiff out of his business?” To this interrogatory the jury answered, “Yes.”

The plaintiff testified that he first talked with the defendant Frank about becoming a partner in the business in June, 1925, and that Frank stated to him that he heard the Modern Can Company was trying to combine with the plaintiff and that if the plaintiff would come over to his place of business he would talk with the plaintiff about combining with his, Frank’s, concern. Plaintiff testified that Frank further told bim that they would take over his stock and machinery and asked the plaintiff to call him up on the next day. Plaintiff further testified that Frank told him that there were four partners in the business, drawing not less than $5,000 a year, and that the business could not be bought for $200,000, and that the plaintiff thereupon told Frank that he, the plaintiff, was drawing not less than $5,000 or $6,000 a year and giving his relatives a living, and that Frank said if he would come over he would be paid a one-fifth interest.

Plaintiff testified further that he did go to the Textile Headwear Company and met Frank, Singer and Smith and that'Frank said at that conversation that they took stock about the end of December and suggested that the plaintiff draw the same as the rest of them for each and every week and about the’ first of December they would take stock and see how much his stock and machinery was and how much their stock and machinery was and appraise it, and if by the appraisal his stock and machinery was less in value than one-fourth of theirs, he, the plaintiff, was to pay the difference. Plaintiff testified further that he was to collect his own accounts receivable and pay up his bills, and that no value was to be placed on the good will or customers of either business.

Plaintiff testified further that he went to the Textile Headwear Company and started to work and that consolidated cards of the two businesses were prepared and the plaintiff took some of his machinery over and started drawing the same money as the rest. He also testified that he collected all of his own outstanding accounts and that no part of the receipts from these was turned over to the defendants.

From the other facts and circumstances in evidence, it appears that plaintiff remained with the defendants from early in June, 1925, until sometime in November of that year. In the latter month a quarrel developed between plaintiff and Singer, as a result of which Brodsky left. The defendants served notice on him after his leaving to take out such machines upon the premises of the company as belonged to him, and that if he did not do so they would have to store them at Ms expense.

The declaration is predicated upon the theory that the plaintiff was induced to enter into a business arrangement with the defendants by reason of the false and fraudulent representations made by the defendants and known by them to be false at the time.

An examination of the testimony fails to disclose any false representation as to any existing fact. The most that can be said in support of plaintiff’s contention is that there may have been a misrepresentation as to a matter of intention which may have influenced the transaction, but such a misrepresentation as to something to be done in the future is not such fraud in law as warrants a recovery on the ground of misrepresentation and fraud. The fraud must be complete at the time of the transaction and not be an intention to commit a fraud in the future.

The Supreme Court of this State in the case of Murphy v. Murphy, 189 Ill. 360, in its opinion, citing with approval the case of Gage v. Lewis [68 Ill. 604], says:

“In Gage v. Lewis, supra, it was said ‘that to warrant an action for a deceitful representation it must assert a fact or facts as existing in the present tense. A promise to perform an act, though accompanied at the time with an intention not to perform, is not such a representation as ca,n be made the ground of an action at law. The party should sue upon the promise, and if this be void he has no remedy,’ (Gallagher v. Brunel, 6 Cow. 346.) Even if at the time when such representations, amounting to a mere promise to do an act in the future, are made, it is not intended to comply with them, it is but an unexecuted intention, which has never been held of itself to constitute fraud. (Gage v. Lewis, supra.)

Again in the case of Luttrell v. Wyatt, 305 Ill. 274, it was said:

“Relying on language used by this court in Murphy v. Murphy, 189 Ill. 360, Miller v. Sutliff, 241 id. 521, and Grubb v. Milan, 249 id. 456, plaintiffs in error argue that, granting that Wyatt promised to pay Luttrell the money due on the notes if Luttrell would execute the release, the promise does not constitute a fraud. It is true that in order to constitute a fraud in law the representation must be an affirmance of fact and not a mere promise or expression of opinion or intention. A promise to perform an act, though accompanied at the time with an intention not to perform it, is not such a representation as can be made the ground of an action for deceit.”

Counsel for defendant in error relies upon the case of People v. Healy, 128 Ill. 9, but an examination of that case fails to show that it supports counsel’s position. It holds in effect that one who is induced to enter into a transaction by reason of false representations by another who does not intend to carry out the agreement, has a right of rescission by reason of the fraud. This is very different from an action to recover for fraud and deceit. Where a party is induced to enter into a transaction by fraud he has a right to rescind. But, before bringing an action, he is required by law to tender back such benefits he may have received from the other party before bringing his action.

We are not impressed with the effort of plaintiff to sustain the judgment by reason of an allegation in the first additional count to the effect that the defendants appropriated and confiscated to their own use said business, fixtures, appliances, good will, customers’ accounts, etc., on. the theory that it substantially charges a conversion. A reading of the count shows clearly that it is a count to recover for false and fraudulent representations and, moreover, the evidence clearly shows that the customers’ accounts were collected by the plaintiff; that only part of the appliances were turned over, and in addition the plaintiff was asked to remove the balance of his appliances and machinery from the premises of the defendants.

It is urged as error that the right of action, if any, did not exist in the plaintiff but in the Easter Hat & Cap Company, a corporation which was the legal owner of the accounts, fixtures and appliances at the time the arrangement was entered into by and between the plaintiff and the defendants and that therefore the plaintiff was not a proper party to the proceeding. Certain objections are also made as to the admissibility of evidence on behalf of the plaintiff, but we have not considered these because of the fact that we are of the opinion that the failure of the plaintiff to prove fraudulent misrepresentations on the part of the defendants is controlling.

For' the reasons stated in this opinion the judgment of the superior court is reversed and judgment is entered here for the defendants.

Reversed and judgment here for defendants.

Byner and Holdom, JJ., concur.


text:
    Louise Griswold, Appellee, v. Chicago Railways Company et al., Appellants.
    Gen. No. 33,278.

      Opinion filed June 26, 1929.
    George W. Miller and Arthur J. Donovan, for appellants; Frank L. Kriete and John E. Kehoe, of counsel.
    James C. McShane, for appellee.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

Plaintiff, Louise Griswold, brought her action against the Chicago Railways Company, Chicago City Railway Company, Calumet and South Chicago Railway Company and The Southern Street Railway Company, corporations, doing business as the Chicago Surface Lines, defendants, to recover damages by reason of personal injuries sustained on the evening of September 18, 1926.

Plaintiff charged in her declaration that her injuries were caused by the negligent operation of a car operated by the agents and servants of the defendants. A trial resulted in a verdict in favor of the plaintiff for the sum of $25,000, upon which judgment was entered and an appeal prayed and allowed to this court.

From the facts it appears that the plaintiff was a passenger upon a southbound Halsted street car which was being operated by the defendant company in the City of Chicago. This car proceeded as far south as 79th Street, an east and west street, and at that point switched over onto the 79th Street tracks and proceeded in an easterly direction. It was the intention of the plaintiff, who was accompanied by her daughter, to proceed a considerable distance south of 79th Street and, for that purpose, took a transfer with the intention of transferring to a southbound car, when the car upon which she was riding reached 79th Street.

It appears that at this point there was a safety zone, provided for passengers, hut there is no testimony to the effect that it was placed there by the defendants or that they had anything to do with its location. It appears also that this corner is a busy business corner in the City of Chicago and there were stop lights for the purpose of regulating traffic at that street intersection.

When the car upon which plaintiff was riding reached 79th Street it came to a full stop and the plaintiff and five or six other passengers alighted from the front end and upon the west side of the car. At this time the traffic lights were set for north and south traffic and there were a number of automobiles proceeding in a southerly direction over and along Halsted Street, between the street car and the sidewalk on the west side of Halsted Street. When the car came to a stop, its front end was about opposite the switch points by which the. car would be turned eastward into 79th Street, and about 11 feet south of the south end of the safety zone. The distance from the west rail of the southbound track to the west curb of Halsted Street is 16 feet 7 inches.

When the car came to a stop, it is apparent that the front of the car was very close to the crosswalk on 79th Street, so that when the plaintiff alighted, she was apparently about midway between the crosswalk and the south end of the safety zone. It appears, moreover, that this was the last trip for this car and all of the passengers were required to alight at that point as the car proceeded around to the east on 79th Street and from there to the car barns.

The car in question was about 48 feet long with an overhang over the rail of 2 feet 2 inches. It appears that as this car proceeded around the curb, the rear end began to diverge over the line of the normal overhang until it reached a maximum of approximately 3 feet over the normal overhang at a point about 3 feet south of the switch point or the beginning of the curve.

On the night in question after plaintiff, with others, had alighted at this particular point and was standing alongside of the car, apparently waiting for the automobile traffic to pass, the car proceeded to swing around the corner and, by reason of the divergence of the rear end of the car, the plaintiff was struck and knocked down and sustained the injuries in question. There is considerable testimony in the record to the effect that a number of other people, standing at this particular point, were also struck by the car in the course of its progress.

After the accident plaintiff was picked up and carried to the sidewalk and from there taken to the Auburn Park Hospital, where Dr. Huntington was called and attended her within an hour after the accident. Prom there, on-the following day under the orders of the physician, she was removed to the Hose-land Community Hospital. It appears that she had sustained extensive abrasions and bruises about her body and a fracture of the upper part of the femur— the neck. She was placed on a special frame and the foot which was turned outward was corrected, and a plaster cast from the ribs down to and including the foot on the left side was applied. Heavy bandages were tied to the ankle and a turnbuckle used to pull the leg down to the proper length. She remained in this cast for eight weeks suffering a great deal of pain and was very nervous, requiring the application and use of sedatives. The cast was removed November 15, and thereupon it appeared that there was not a firm union and wooden splints from the armpit to the left foot were fastened upon the body and the leg to prevent movement. This was kept on about four weeks and then a snecial steel snliut apulied in ulace of the wooden splints and she remained in this for about three months. This steel splint had a bar coming down from between the two shoulders, taking a turn at the region of the hip and coming down the back of the leg beyond the heel and was held in place by two large leather straps. This steel splint was taken off sometime in March of the following year, when it was found that the knee was completely anklylosed.

Plaintiff left the hospital about the middle of April, 1927, and daily massage treatments were required. She was only able to get around with the use of two crutches. Plaintiff continued to suffer considerable pain during this time. As the result of the injuries plaintiff suffered a limitation of motion in the hip, and knee joint and a shortening of approximately one-half inch of the left leg. The condition is permanent.

At the time of the accident plaintiff was a woman 50 years of age, apparently in good health, although slightly hard of hearing, as a result of scarlet fever suffered a number of years previous. While in the hospital she lost approximately 20 pounds in weight. For some time prior to May, 1928, according to the testimony of the attending physician, her general physicial condition was good, -but her mental condition was bad and she worried a great deal, but did not complain much of pain. In May, 1928, she suffered a stroke of apoplexy. Dr. Huntington was called in immediately after the stroke and found her unconscious with complete paralysis of the right arm and right leg. She was immediately taken to the hospital, where she remained about seven weeks. She regained to a considerable extent the use of her arm and leg and was able to grasp objects with the hand and to^ walk with assistance. Dr. Huntington testified that in his opinion the stroke was the result of high blood pres-r sure, resulting from the worry arising out of her condition caused by the accident.

Plaintiff rests her case upon the theory that the defendants, by their servants and agents, were guilty of negligence in operating the car around the curve at the point in question, knowing that the rear end of the car would swing out to the west and strike the plaintiff and further that plaintiff had been placed in said position by the servants of the defendants who were, therefore, fully cognizant of her position, and were guilty of negligence in having placed her in a position where she was liable to sustain injuries when the car undertook to move forward and around onto 79th Street. Plaintiff testified that it was her intention to transfer at this point and take another car, but before doing so she intended to make a purchase at a fruit store on the corner. This fact is urged at some considerable length for the purpose of establishing the fact that at the time of the accident she was not a passenger, but it does not appear that plaintiff’s case is based upon the relationship of carrier and passenger except in so far as it becomes the duty of a carrier to provide a passenger a proper and safe place at which to alight from the car. Even though the plaintiff was not possessed of a transfer nor had intended to continue her journey, nevertheless, there is an obligation on carriers to exercise care in providing those who were passengers with an opportunity to alight from a car in a proper and safe manner. The obligation of carrier and passenger does not entirely cease the moment a passenger steps off a car and, while it may not be that the highest degree of care is required, still proper care under such circumstances would be such, under all the surrounding circumstances, as would require the furnishing of a reasonably safe place for passengers to alight and to exercise proper care for their safety immediately thereafter. Chicago Terminal Transfer R. Co. v. Schmelling, 197 Ill. 619; Pennsylvania Co. v. McCaffrey, 173 Ill. 169.

It is argued at considerable length that by stepping forward about a step or two plaintiff could have avoided the outward swing of the rear end of the car, but it should be borne in mind that during this time automobiles-were passing between plaintiff and the sidewalk toward which she intended to proceed and what was reasonable care on her part was a question of fact for the jury. It may have been, that by stepping forward away from the swing of the car she may have stepped into the line of traffic. These were all questions particularly for the consideration of a jury.

The eases cited by counsel, where people stepped in the way of a car swinging around a corner, are cases of pedestrians on the street to whom the carrier did not owe the same duty or obligation that they would toward one who had been a passenger on the car and placed in the particular position that plaintiff was at the time of the accident.

The correct rule, we believe, is found in the case of Kelly v. Chicago City R. Co., 283 Ill. 640. From the facts in this case it appears that plaintiff, with others, presented himself at a proper place near a street intersection for the purpose of taking passage on an oncoming.car. The motorman saw them standing there for that purpose and with knowledge of such fact failed to stop his car, but continued on around the curve onto the intersecting street with the result that the overhang of the car, in making the turn, struck the plaintiff. The court in its opinion said:

“Under these circumstances the slackening of the speed of the car might well have been understood by appellee and the others present as indicating an intention on the part of the motorman to bring his car to a full stop before rounding the curve and have caused appellee to remain in closer proximity to the car than he otherwise would. Had the motorman brought his car to a full stop, as his actions indicated he intended to do, there is no question but that the accident would not have happened.”

It may be well said in the case at bar that the motorman had knowledge that the plaintiff and others had alighted at this particular point, and it was his duty to wait until they had reached a place of safety before undertaking to cause the car to swing around the curve onto 79th Street.

It is urged as a ground for reversal that, a hypothetical question was put to a medical expert in which it was assumed that from the time of plaintiff’s injury, down to the time of the stroke, she had suffered a great deal of pain from the broken hip. It is insisted that the evidence shows that for some time prior to the stroke, she was free from physical pain. This is based on the testimony of the attending physician who testified that after she left the hospital her general physical condition was good, but that her mental condition was bad and that she worried a great deal, but did not suffer much pain and did not complain much. It might be argued from this answer of the witness that she did suffer some pain. However, it is evident that, during a large period of time, from the accident to the time of the stroke, she suffered pain accompanied by mental worry. The attending physician also testified‘that, in his opinion, the stroke was the result" of worry arising out of her condition after the accident and not the result of pain, so that the important fact established was whether there was sufficient evidence as to her condition from which a jury could find that the stroke of apoplexy was attributable to the accident. If this stroke of apoplexy was caused by worry, and the worry was produced as -a result of the accident, there would be a logical connection which should be • submitted to the jury independent of the question as to whether or not she was suffering pain prior to the apoplectic stroke. The jury was instructed on behalf of the defendants that the burden was upon plaintiff to show by a preponderance of the evidence, not only that such ailments existed, but that they were the result of the accident. It is proper for a court to permit the proving of the condition of health at and prior to the time of the injury, followed by proof showing the physical condition from that time on until the time of the trial and submit the question of the cause of her then physical condition to a jury as a question of fact to be determined by them. Chicago Union Traction Co. v. May, 221 Ill. 530.

An examination of the objection to the hypothetical question shows a number of specific objections, but not on the particular question as to the continuance of pain at the time of the accident down to the time of the apoplectic stroke. Counsel for defendants had a right to point out this particular objection in order to correct the question. Moreover, all the facts in the case were before the jury and they had a right to reject this testimony if in their opinion an essential element was included, concerning which there was no evidence. Moreover, the defendants had ample opportunity on cross-examination to have called the attention of the witness to this particular element incorporated in the question. We do not believe there was error sufficient, in view of the length of the trial and the number of witnesses testifying, to justify a reversal on this ground.

Objection is made to the admission of certain X-ray pictures in evidence on the gfound that they had not been properly identified as accurate representations of that part of plaintiff’s anatomy, which they purported to portray. These pictures were taken in the hospital in September, 1926, very shortly after the accident. They were taken for the purpose of guiding the attending physician in the treatment of the fracture and not for the purpose of presentation in court. If they were sufficient for the attending physician to rely upon in his diagnosis of the injury, they should be sufficient f'or a jury in their consideration of the case. Moreover, they were taken by the witness Myrtle Jones, a witness who testified that she had been in the X-ray business eight years and connected with the Eoseland Community Hospital, and had taken approximately 11,000 pictures in the prior three years. She did not remember how many she had taken before that time. She stated that they were taken on a Standard machine and that she had taken a great many films of fractured hip bones; that the films were the regular, usual Standard films, showing me condition of the left pelvis and the upper third of the femur. The skiagraphs after being admitted in evidence were used and examined by expert witnesses on behalf of the defendants, and these witnesses testified fully as to the facts they found after reading the skiagraphs, so that from the record it is apparent that a part of the defense was based upon these same pictures to which objection was made after their introduction bv the plaintiff.

The refusal of tlie court to give instruction Ho. 2, on behalf of defendants, was not error. This instruction directed the jury- to find that if plaintiff changed her position after the front of the car had passed the point where she was standing, and thereby brought herself in contact with the rear end of the car as it rounded the curve, that she could not recover. This was a directory instruction, and properly refused. The jury had a right to consider all the surrounding circumstances, and it may well have been that when she stepped off of the front end of the car she may have been confronted with circumstances which might have required her to step back and which should have been anticipated by the defendants in the operation of the street car which caused the accident. The jury was fully instructed that if the plaintiff in any way, by her negligence, caused or proximately contributed to cause the accident, then she could not recover. This was a general instruction under which the jury could have taken into consideration the question as to whether or not her stepping backward, if she did step backward, into a position where she was injured, was such negligence on her part as contributed to the accident. This was a sufficient instruction for the jury without singling out and calling to its attention this particular isolated fact.

We find in the record ample evidence to sustain the verdict of the jury and, after a consideration of the extent of the injuries, we are not prepared to say that the damages are excessive.

For the reasons stated in this opinion, the judgment of the superior court is affirmed.

Judgment affirmed.

Holdom and Ether, JJ., concur.