author: Mr. Justice Hall

text:
    H. W. Rouse, Administrator of the Estate of Louise A. Rouse, Deceased, Appellee, v. George P. Tomasek, Appellant.
    Gen. No. 37,365.
    Wilson, J., dissenting.
    Opinion filed April 10, 1935.
    Miller, Gorham, Wales & Adams, of Chicago, for appellant.
    John" A. Bloomihgstoh, of Chicago, for appellee.
   Mr. Justice Hall

delivered" the opinion of the court.

By this appeal, defendant seeks the reversal of a judgment of the circuit court of Cook county against him and in favor of plaintiff for the sum of $4,000 and costs of suit. The action is brought by plaintiff as administrator-of the estate of Louise A. Bouse, deceased, and is based upon the charge that decedent’s death was caused by the negligence of defendant in the operation of an automobile. Plain iff was the husband of decedent. The trial was by jury. The declaration filed contained six counts. The first count charges that defendant carelessly and negligently operated his automobile so that it struck the intestate. The second count charges that defendant diove the car with reckless and conscious indifference, ai d that he wilfully and wantonly injured the intestal e. The third count charges that defendant drove with a speed greater than was reasonable. The fourth count charges that defendant drove at a greater rate of speed than 15 miles per hour through a business districl of Chicago. The fifth count charges that he drove at a greater rate of speed than 20 miles per hour through a residential district of Chicago, and the sixth count that he drove the car without reasonable precaution, and without stopping upon the approach of a person wall- ing on a public highway.

James Booney, a witness produced by plaintiff, testified to the effect that the ac cident, which resulted in the death of decedent, occurred at about 11 o’clock on the night of January 14, 1932; that at the time in question, it was raining and cloudy; that at that time he was going northwest on South Chicago avenue-, near 76th street, in the City of Chicag o; that 76th street runs east and west, and South Chicago avenue runs northwest and southeast, and the streets intersect each other; that he first saw Louise Bouse standing on the north side of 76th street on the west side of South Chicago avenue; that she was then standing at the regular crossing place where people step from the sidewalk to cross the street; that at that time, the witness started to cross from the southwest corner of'the two intersecting streets, and that he started to walk on an angle when Mrs. Rouse stepped off the curb going east at the crosswalk; that he then heard the screech of a human voice and that he then saw a Ford coupé going north on South Chicago avenue; that the car dropped a woman about in the middle of the car track; that the automobile went almost to Kimbark avenue; that the man in the Ford turned around, came back, and picked up the woman and put her in his car; that the first he saw of the accident was when he saw the woman falling between the north and south street car tracks of South Chicago avenue, and that this was after he saw her standing on the corner; that she fell about 35 feet northwest of 76th street; that it was then raining and dark, but that there was sufficient light for the witness to see the woman; that he had no trouble in seeing either the woman or the automobile, and that the car went down the street quite a way and came back.

Plaintiff produced other witnesses who heard the decedent scream, and saw her picked up and put in defendant’s car after she was struck, but none of these witnesses saw the actual occurrence upon which the action is based. One witness testified to an approximate distance which the automobile ran after the accident.

Harry W. Rouse, plaintiff, testified as a witness on his own behalf. After he had been sworn, the following proceedings were had as shown by the abstract. He testified that:

“I am the administrator and husband of the deceased, Mrs. Louise A. Rouse. During the thirty years I lived with her I had an opportunity to observe her while crossing streets in the city.

“Q. What is the fact as to whether or not, as you did observe her during the course of these thirty years, that she appeared to be a careful person?

“Mr. Adams: Object, if the court please. The testator is not an eyewitness.

“Mr. Bloomingston: Let’s find out who the eyewitness is he is going to interrogate.

“Mr. Adams: Greorge Tomasek.

“Mr. Bloomingston: If the defendant is here, he is not a competent eyewitness. Is the only eyewitness the defendant?

“Mr. Adams: Yes.

“Mr. Bloomingston: Then I contend that Mr. Tomasek is not a competent witness. May I proceed, your Honor ?

“The Court: Yes, objection overruled.

“Q. What is the fact as to whether or not in her activities in crossing the street, street car tracks and where automobiles were driving, whether or not she appeared to be a careful person? A. She was very careful.

“Cross-Examination by Mr. Adams.

“I was not present at the scene of the accident. I don’t know of my own krowledge what she did on that particular night at that intersection. I don’t know whether she walked or ran. I don’t know whether she walked or ran into the sic e of the car or in front of the car. I don’t know whether she looked to the right or to the left either before starting to cross or out in the middle of the street.”

Defendant was then called as a witness in his own behalf. Objection was made to his giving any testimony at all. He was asked this question by his counsel: “Q. Calling your attention to defendant’s Exhibit 1, do you know what this is?” Objection to this question was made by counsel for p .aintiff on the ground that the defendant was not a competent witness, and the objection was sustained. After this the following occurred: “Question (by defendant’s counsel): “When was this picture taken?” Objection sustained. “Q. Was that taken before or after the night of January 14th, 1932?”

Objection sustained. The record shows that the parties then retired to the judge’s chambers, and the following occurred:

“Mr. Adams (for defendant): First, I offer and propose to prove that this defendant in accordance with, or on the principle I just spoke of, — I claim he is competent to testify to the whole thing, and as to how, I offer to prove the manner in which the accident occurred. He was traveling in a northwesterly direction at a proper rate of speed, on the night in question; that there was a street car stopped, southbound on South Chicago avenue, stopped on the north side of 76th street, with its front end near 76th street; that as he came up to the street car, the street car was starting up and as he got a little back of the rear end, the plaintiff’s intestate in this case came into the sight of his car, hit the glass in the left hand door of his car, breaking it; that no part of the plaintiff came in contact with the front of his car; that she was not in front of his car, and that his bumper and fender was not hit; that the only part of his car that was touched by her was the left hand door; that he did not see her; that he did not swerve; that he was going in a direct line of South Chicago avenue which was in á northwesterly direction, in or about the northwest bound car track on his own proper side of the street.

“The other thing I wish to show by this witness is based upon the premises I spoke about; that he is competent to testify to everything. I offer to show that these two pictures, Defendant’s Exhibits 1 and 2 were taken, I think, the day after the accident. That would be the 15.

“The Court: January 14th is when it happened.

“Mr. Adams: The day after the accident would be the 15th, January 15th, 1932; and that these pictures truly represent the condition of his car after the accident. I offer to show that his car was in good condi-

tion; that the glass was not broken before the accident. This is the condition oí the car right after the accident. “Mr. Bloomingston: I object to that.

The Court: The plaintiff objects and the court sustains the objection.

“Mr. Adams: The defendant rests.”

By an “Act in regar I to evidence and depositions in civil cases,” Cahill’s Illinois Revised Statutes, 1931, chapter 51, Iffí 1-3, it is provided:

“1. That no person shall be disqualified as a witness in any civil action, suit or proceeding, except as hereinafter stated, by reason of his or her interest in the event thereof as a part y, or otherwise ....

“2. No party to any civil action, suit or proceeding, or person directly interested in the event thereof, shall be allowed to testify therein of his own motion, or in his own behalf, by virtue of the foregoing section, when any adverse party sues ... as administrator . . . of any deceased person ... unless when called as a witness by such adverse party so suing . . . and

also except in the folio wing cases, namely:

“3. Where, in any such action, suit or proceeding, any such party suing, . . as aforesaid, or any person having a direct inte rest in the event of such action, suit or proceeding, shall testify in behalf of such party so suing or defending ;o any . . . transaction with the opposite party or party in interest, then such opposite party or party in nterest shall also be permitted to testify as to the . . . transaction.” The general purpose of this statute is to prevent the living party to a transaction from testifying, because the other party being dead, cannot be produced to contradict in case of false swearing. Denial of the right to the living person is supposed to put them on an equality.

Counsel for defendant insists that in view of the fact that there was an eyev itness to the occurrence in the person of the defendant, the court erred in admitting testimony as to decedent’s habits; that there was no evidence that decedent was in the exercise of due care at the time and place of the accident; that the court erred in excluding defendant’s testimony after admitting the testimony of plaintiff as to decedent’s habits, and that the court erred in excluding defendant’s testimony as to certain photographs of the automobile involved in the accident, said to have been taken shortly after the accident had happened.

Van Meter v. Goldfarb, 317 Ill. 620, was similar in many respects to the instant case. In that case, a boy was killed by the defendant, who was driving an automobile through an alley. In the trial of the cause, a brother of the boy who was killed, as a witness for plaintiff, was permitted to testify as to the occurrence. The defendant, Goldfarb, was then permitted by the trial court to testify in his own behalf, and the question presented to the Supreme Court was whether or not the trial court "erred in permitting the defendant to testify. In deciding the case, the Supreme Court said:

“The right of action created by the Injuries Act is not one for the benefit of the estate of the deceased but is one for the benefit of his next of kin, who is the real party in interest. Harold, the brother who testified, is one of the ‘persons having a direct interest in the event of’ this action, and he testified in behalf of the party bringing the action, giving his version of the accident out of.which the action arose. If this accident is a ‘transaction’ between the deceased and appellee, within the meaning of the statute under consideration, ‘then such opposite party or party in interest (appellee) shall also be permitted to testify as to the same . . . transaction.’ Plain v. Roth, 107 Ill. 588.

“The purpose of sections 1 and 2 of the Evidence Act is to emancipate the parties as witnesses. Such statutes were not designed to restrict the admissibility of evidence but were intended to enlarge the competency of witnesses, so that, with the statutory exceptions, all persons might, testify in an action. The purpose of the exception in favor of one suing as administrator in statutes removing the incompetency of parties as witnesses is to guard against the temptation to give false testimony in regard to the transaction in question on the part of th 3 surviving party and to put the two parties to a suit upon terms of equality in regard to the opportunity of giving testimony. (4 Jones’ Commentaries on Evidence, sec. 773.) The sources of original information on the part of the representative of the deceased person are so inadequate, as compared with those of the surviving party, that the law-makers assume the representative to be utterly unable to testify as to the details of the transaction, and therefore they exclude the adve :se party. The principal reason for the statutory excsption is the supposed inability of the representative to oppose the statements of the adversary, but that reason is not applicable to a case like the one before us. Here the next of kin, the real party in interest, was an occurrence witness and gave his version of it. Manifestly it would be in direct violation of the purpose of the exception to bar the opposite party from giving his version of the occurrence. We are of the opinio]i that the word ‘transaction’ as used in the statute, is used in a broad sense, and that it includes an occur rene 3 like the one out of which this action arises.” See also Reget v. Bell, 77 Ill. 593; Petro v. Hines, 299 Ill. 236; and Minns v. Crossman, 193 N. Y. S. 714, 118 Misc. 70.

In the case at bar, aefore plaintiff could recover, it was necessary that he establish the fact that the decedent was in the exerci se of due and ordinary care for her safety at the time of the accident. His testimony established the presumption that she was. The plaintiff, as the record indicates, will be the beneficiary in case a recovery is had here, and in view of the authorities, we are brought to the conclusion that he is a “person having a direct interest in the event of such transaction”; that having testified in his own behalf as to decedent’s careful habits, he thereby made defendant’s proffered testimony as to decedent’s conduct at the time of the accident, relevant, material and proper for the purpose of rebutting this presumption. The court erred in rejecting the proffered testimony of the defendant with reference thereto. The judgment is, therefore, reversed and the cause remanded.

Reversed and remanded.

Hebel, P. J., concurs.

Wilson, J., dissents.


source: Caselaw Access Project

license: Public Domain

text:
    Webster Manufacturing Company, Defendant in Error, v. Pike County Coal Company et al. John H. Coulter, Plaintiff in Error.
    Gen. No. 37,414.

      Opinion filed April 10, 1935.
    Arthur A. Basse, of Chicago, for plaintiff in error.
    Blanksten & Lansing, of Chicago, for defendant in error.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal from a judgment against defendant, John H. Coulter, entered in the superior court of Cook county on October 28, 1933, for the sum of $24,086.95. The suit was brought against the three defendants upon five promissory notes executed by the Pike County Coal Corporation, and indorsed in blank by John H. Coulter and Robert A. McClevey. Coulter filed a plea with an affidavit of merits, and McClevey filed a plea and an affidavit in support thereof, in which he sets forth his discharge in bankruptcy on October 10, 1932. On the hearing, the court directed the jury to find for the defendant, McClevey, and against the Pike County Coal Corporation. The cause was submitted to a jury as to the claim against Coulter, and after consideration of the evidence submitted, the jury on October 18, 1933, returned a verdict for plaintiff and against Coulter for the sum of $24,086.95, upon which the judgment referred to was entered. The jury also returned a verdict in favor of defendant McClevey. On October 28, 1933, the suit was dismissed as to the Pike County Coal Corporation.

A. T. Perkins, president of the plaintiff company, testified to the effect that plaintiff is in the business of manufacturing elevators, conveying machinery and other like articles, and that the Pike County Coal Corporation is in the business of mining coal; that Coulter was vice president of the Pike County Coal Corporation ; that the notes in question were signed by the Pike. County Coal Corporation, by Robert A. McClevey, president of such corporation, and indorsed by Coulter and McClevey. The notes were received in evidence, and are as follows:

1 note dated Dee. 6th, 1926 due 1-28 after date for $2,086.95
1 note dated Oet. 26th, 1927 due 90 days “ “ “ 4,000.00
1 note dated Oet. 28th, 1927 due 90 “ “ “ “ 2,000.00
1 note dated Dec. 31st, 1927 due 120 “ “ “ “ 8,000.00
1 note dated Dee. 31st, 1927 due 180 “ “ " 8,000.00

Perkins further testified to the effect that the notes had not been paid; that they were in the same condition as when they were signed by the parties; that when the notes became due, he called up the Pike County Coal Corporation’s office and told McClevey that the notes were due, that he wanted them paid, and if they were not paid, he would have to protest them; that McClevey asked him not to have the notes protested; that as the notes came due, he spoke to McClevey about them and received practically the same answer; that later he talked to Coulter, and that Coulter requested the witness not to protest the notes; that after the last note became due on June 29, 1928, Coulter came to the office of the witness and told the witness that he should not worry, that he, Coulter, had guaranteed the notes, and that he would take care of them or pay them, and that the witness would hear from him, Coulter, in two or three days; that thereafter he had a talk with Coulter over the telephone and requested Coulter to talk to the treasurer and vice president of the plaintiff company, and that Coulter declined to do so, and told the witness that on the advice of his attorney, he might incriminate himself if he talked to these parties; that thereafter in the Spring of 1929, the witness again talked to Coulter, and that Coulter stated that he, Coulter, thought he would he able to do something on account of these notes.

On cross-examination, this witness stated that none of the notes was protested for nonpayment; that when Coulter ordered the machinery for which the notes were given, plaintiff company refused to take the order until and unless the notes were guaranteed.

John H. Coulter, dsfendant, testified in substance that he was the president of the Pike County Coal Corporation ; that the notes sued on were renewal notes; that no request was mi.de upon him for payment of the notes; that he had no conversation with Mr. Perkins with reference to the payment of the notes; that he never was asked to and never agreed to pay the notes personally; that he ns ver told Mr. Perkins that he might incriminate himself; that he might have had a conversation with Perkins in 1929, but that he had no recollection of it; that he told Perkins that the company was not able to pay, and that it was intended that a company be organized to take over the machines sold by plaintiff to the Pike County Coal Corporation, sell stock in said company, and with the proceeds derived therefrom, reduce the account owed the plaintiff.

Defendant, Coulter, insists that he was merely an indorser, and that his li ability could not be enlarged to that of a guarantor by parol evidence; that the failure to give Coulter notice of the dishonor of the notes operated to discharge him from liability thereon; that the declaration does not state a cause of action upon a new promise of Coulter to pay the notes after he was discharged; that there is no evidence that Coulter knew the facts which operated to discharge bim from liability as indorser at the time the alleged new promise to pay the notes was made, and that in the absence of such proof, the judgment against Coulter cannot be sustained; that a new promise to hind Coulter must he clear and unequivocal; that the judgment against Coulter does not conform to the declaration, which states a joint cause of action in assumpsit against three defendants, and that recovery cannot be had against one, but must be against all or none.

The declaration is simple, and after setting forth the notes, alleges that they were signed by the Pike County Coal Corporation, and indorsed by Coulter and Mc-Clevey; that the notes were duly presented for payment, and due notice of dishonor given the indorsers ; that demand was made upon them for payment, and that payment was refused. Plaintiff also declares upon the common counts.

At the close of all the evidence, and after a motion by Coulter to strike the evidence of Perkins as to Coulter’s alleged new promise to pay,- had been denied, the court permitted the plaintiff to file an amended declaration, in which a charge is made “that after the aforesaid notes became due and payable, the defendant, John H. Coulter, promised to pay the plaintiff the aforesaid notes. ’ ’

Section 1 of “An Act to revise the law in relation to amendments and jeofails” (Cahill’s Illinois Revised Statutes, 1931, ch. 7, If 1) provides :

‘ ‘ That the court in which an action is pending shall have power to permit amendments in any process, pleading or proceeding in such action, either in form or substance, for the furtherance of justice on such terms as shall be just, at any time before judgment rendered therein.”

In Cogshall v. Beesley, 76 Ill. 445, the Supreme Court said:

‘ ‘ This was an action of assumpsit, brought by appellee, in the circuit court of Mason county, against appellant and Francis S. Gogshall. A trial was had before a jury, which resulted in a verdict in favor of appellee for $398.50. A motion was made for a new trial, whereupon appellee entered a motion to amend his declaration and dismiss as to Francis S. Cogshall, which the court allowed, and rendered judgment in favor of Francis S. Cogshall j‘or his costs, against appellee. The court then overruled the motion for a new trial, and rendered judgment, upon the verdict against appellant. The decision of ihe court in allowing the amendment to the declaration, and the dismissal of the suit as to Francis S. Cogshall, is assigned as error. The amendment allowed by the court was proper under the Practice Act. Revised Statutes of 1874, page 778, sec. 24.” This case disposes of the question as to the right of the plaintiff ;o amend the declaration even after the verdict, and to dismiss the suit as to the Pike County Coal Corporation.

With reference to the action of the court in directing a verdict in favor of MoClevey, our opinion is that the cotirt had no choice in ihe matter. He had filed a plea setting forth his discharge in bankruptcy. The Supreme Court, in Merrifield v. Western Cottage Piano & Organ Co., 238 Ill. 526, said:

“As has been repeatedly held, when an action is brought on a joint contract the rule is that the judgment must be rendered against all the defendants or none, (Kingsland v. Koeppe, 137 Ill. 334) unless a defense is interposed by one or more of the defendants personally, of such character as infancy, bankruptcy or the like, and then the defense must be alleged and proved. (Byers v. First Nat. Bank of Vincennes, 85 Ill. 423.)”

In House v. Schnadig, 138 Ill. App. 498, this court said:

“The National Bankruptcy Act in its first section expressly provides that the word ‘discharge’ as used in the act ‘ shall mean the release of a bankrupt from all of his debts which are provable in bankruptcy, except such as are excepted by this Act.’ Section 17 of the act provides that ‘A discharge in bankruptcy shall release a bankrupt from all his provable debts, ’ with certain exceptions not relevant in this case. A discharge in bankruptcy must be pleaded, but where it is pleaded it is in bar, and a good plea in bar sustained by proof naturally entitles the defendant to a judgment of nil capiat.”

Section 108 of “An Act in regard to negotiable instruments payable in money,” Cahill’s Illinois Revised Statutes, 1931, ch. 98, 130, page 1957, provides that “Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied. ’ ’

The question as to whether Coulter did or did not waive the protest of these notes was a question of fact upon which the jury had the right to pass. Perkins, the president of the plaintiff corporation, testified that he did, and Coulter denied such waiver. There were no other witnesses as to this particular matter. As the statute- provides in terms that such notice may be waived expressly or impliedly, and in view of the fact that the jury passed upon the question and apparently held that he did waive it, we hold that there is nothing for this court to review as to that matter. The amended declaration charges in terms that Coulter made a new promise to pay after the notes had matured. The waiver of protest would be a sufficient consideration for this new promise, if made, and there is evidence to the effect that Coulter did make such new promise. There is nothing presented which would justify a reversal. Therefore, the judgment is affirmed.

Affirmed,.

Rebel, P. J., and Wilson, J., concur.


text:
    Melvin L. Straus, Defendant in Error, v. Gideon W. Turnquist et al., Plaintiffs in Error.
    Gen. No. 37,550.
    Opinion filed April 10, 1935.
    Rehearing denied April 22, 1935.
    Tags Joranson, of Chicago, for plaintiffs in error.
    Altheimer, Mayer, Woods & Smith, of Chicago, for defendant in error; William F. Struckmann and Herman A. Kabaker, both of Chicago, of counsel.
   Mr. Justice Hall

delivered the opinion of the court.

By this writ of error, defendants seek the reversal of a decree of sale entered against them in a proceeding brought in the superior court of Cook county to foreclose a mortgage trust deed. The bill of complaint in the cause was filed by the trustee on April 28, 1932. The trust deed is. dated April 15, 1924, conveys certain property, and is given to secure an indebtedness of $325,000, evidenced by 523 bonds, all dated April 15, 1924. The bonds secured by this mortgage are numbered 1 to 523, inclusive, and the dates of their maturities run from April 15, 1926, to April 15, 1936. It is-provided that the bonds shall bear interest at the rate of 6% per cent per annum, payable semiannually on the 15th day of October and April of each year, until the maturity of the several principal amounts. It is further provided that after the maturity of any interest payment agreed to be made and any principal snm, both the matured interest and principal shall bear interest at the rate of seven per cent per annum.

Article II, section 1, of the trust deed provides that:

“Beginning, however, on the fifteenth day of October, 1924, and on the fifteenth day of each of the five months next immediately succeeding thereafter, the Mortgagor will deposit with S. W. Straus & Co., a corporation, at Chicago, Illinois, or with such other depositary as the Trustee may from time to time in writing appoint, for the account of the bondholders, a sum of money which shall be equal to one-sixth (l/6th) of the total semi-annual interest charges for the six months period beginning October 15, 1924, and ending April 14, 1925, and thereafter, beginning April 15, 1925, will deposit in equal monthly payments on the fifteenth day of each of the months of each year during the lifetime of the indebtedness secured by this Indenture, a sum of money which shall be equal to one-sixth (l/6th) of the amount of the next succeeding semiannual interest charges falling due for the current half-yearly periods respectively. The said Mortgagor further agrees to deposit with said depositary on the fifteenth day of April, 1925, and on the fifteenth day of each of the eleven months next immediately succeeding thereafter, a sum of money which shall be equal to one-twelfth (l/12th) of the principal due April 15, 1926, and thereafter during the lifetime of the indebtedness secured by this Indenture, beginning April 15, 1926, will deposit in equal monthly installments on the fifteenth day of each and every month during the twelve months periods beginning with April 15 of each year and ending with April 14 of the succeeding year (except during the twelve months’ period preceding April 15, 1936, as to which special provision is hereinafter made), one-twelfth (l/12th) of the principal due on April 15 of each such last mentioned ‘ succeeding year’ respectively. The Mortgagor further agrees to deposit with said depositary on the fifteenth day of each of the- twelve calendar months next preceding April 15, 1936, the sime amounts of principal as are hereinbefore provided to be deposited on the fifteenth day of each of the twelve months next preceding* April 15, 1935. The balance of the last payment of principal, due April 15, 1936, shall be deposited at the office of said S. W. Sti aus & Co., on or before April 15, 1936. The intent hereof is that such aggregate deposit one.month before the date of each semi-annual interest payment shall be sufficient to meet each such interest payment when due ard as it matures; and that such aggregate deposit one month before the date of each principal payment shall be sufficient to meet each such principal payment whe n due and as it matures (except as to a portion of the principal payment falling due April 15, 1936).”

In Article VII, sed ion 1, of the trust deed, it is further provided that:

“In case default sha. 1 be made in the payment of the principal of or of any interest or income tax payments on any of said bonds, c r in the due observance or performance of any covenant or condition whatsoever in this Indenture, required to be kept or performed by the Mortgagor, and an)" such default shall continue for a period of thirty (30) days after written notice thereof to the Mortgagor by the Trustee, or to the Mortgagor and the Trustee by the holders of not less than twenty-five per cent (25%) in principal amount of the bonds hereby secured and then outstanding, specifying whérein such default consists, then and in any such case the Trustee, in his discretion, and without any action on the part of any bondholder, may, and upon the written request of the holders of not less than one-fourth in principal amount of the bonds then outstanding shall, or in case of his refusal or failure to so act within thirty (30) days after such request, the holders of not less than twenty-five per cent (25%) in principal amount of said bonds may, declare the principal of all bonds hereby secured and then outstanding to be due and payable immediately, and upon such declaration the said principal together with the interest accrued thereon, shall become and be due and payable immediately, at the place of payment aforesaid, anything in this Indenture or in said bonds to the contrary notwithstanding. ’ ’

Article IX, section 1 provides that:

“In case default shall be made in the payment of the principal of, or any interest or income tax payment on, any of said bonds or in the due observance or performance of any covenant or condition whatsoever in this Indenture required to be kept or performed by the Mortgagor, and such default shall continue for a period of thirty (30) days after written notice thereof as provided for in Article VII hereof, or in the event of default in the payment of the principal or interest or income tax payment or any part thereof for the maturity of April 15, 1936, without any notice whatsoever, the Trustee may, without any action on the part of any bondholder, and without declaring said bonds due, and upon the written request of the holders of not less than one-fourth in principal amount of said bonds then outstanding shall, institute such suit or suits in equity or at law, in any court of competent jurisdiction, to enforce and protect any of his rights or the rights of the bondholders hereunder, as he may deem proper, and especially may institute proceedings to foreclose this Indenture in any manner provided by law and to obtain a sale of the mortgaged property under order of court.

1 ‘ Or the Trustee may proceed to protect and enforce his rights and the rights of the bondholders hereunder, either by suit or suits in equity or at law, in any court or courts of competent jurisdiction, whether for specific performance of any covenant or agreement contained herein or in aid of the execution of any powers herein granted or for any foreclosure hereof or hereunder, or for any sale of the mortgaged property or any part thereof, so far as may be authorized by law, or for the enforcement of such other or additional appropriate legal or equitable remedy as the Trustee may deem most effectual to protect and enforce the rights aforesaid.”

It is complainant’s claim that this action is properly brought and can be maintained because the trust deed contains covenants to make monthly advance deposits to meet the payment of principal and interest as and when due by the terms of the bond, and the interest coupons and the trust deed given to secure payment thereof; that there were defaults in the covenants requiring monthly advance deposits both as to interest and principal payments; that the trust deed authorizes the acceleration of maturity at any time after 30 days’ written notice of default after the notice; that written notice of defaults to make monthly advance deposits (specifying the months in and for which such defaults were made) was given; that the defaults continued for more than 30 days after the giving of the notice; that the foreclosure proceedings were commenced after the expiration of the 30 days ’ written notice; that the defaults had not been made good at the time the proceeding's were instituted; that the decree was entered after the expiration of 30 days from the filing of the bill to foreclose, and that up to tie time of the entry of the decree, the defaults had not been made good; that the trust deed does not require any notice of acceleration or election to accelerate; that the filing of the bill to foreclose was notice of the trustee’s exercise of his right to accelerate the maturity of the principal and accrued interest, and that the decree adjudicated the rights of the parties as of the date of its entry.

It is the claim of defendants that the failure of defendants to make the deposits to be applied towards interest and principal, as provided by the trust deed, was not such a default as permitted the trustee under the trust deed to accelerate the maturity of the principal and interest under the trust deed, for the reason that in the trust deed there was no express provision that failure to make such deposits could or would accelerate such maturity, and that such a provision could not be inferred therefrom; that defendants’ failure to pay principal and interest was not a ground of foreclosure of the trust deed; that Article VII of the trust deed provides that a 30 days’ notice of foreclosure was necessary before suit could be started; that said principal and interest was not due until April 15, 1932, and suit was commenced on April 28, 1932, and hence was premature; that but one notice of default of defendants was alleged and proven at the trial of this action to have been served by the trustee, whereas a notice of default should have been served by the trustee under the provision of Article VII of the trust deed, and a further notice of foreclosure should have been served by the trustee as provided in section 1 of Article II of the trust deed. It is not denied that defendants failed to make the deposits as provided by Article II, section 1, of^the trust deed, and that on January 22, 1932, defendants were served with the following notice:

“Gideon W. Turnquist and Nellie C. Turnquist Turnquist Construction Company 217 East 69th Place Chicago, Illinois

“John Cornell Hyde Park Hotel 1511 East 51st Street Chicago, Illinois

“The undersigned, Melvin L. Straus as trustee under that certain trust deed from Gideon W. Turnquist as mortgagor, and Nellie C. Turnquist, his wife, to Melvin L. Straus, as ti astee, and recorded in the office of the Recorder of Deeds of Cook County, Illinois, in Book 19804 of Records, page 186, as Document 8391172 conveying certain real, personal and mixed property therein described, to secure, among other things, the payment of first mortgage gold bonds of said mortgagor, amounting in the aggregate to the principal sum of $325,000 hereby notifies you and each of you that default has been made in the due observance and performance of certain of the covenants and conditions of the aforesaid trust deed in the following particulars, among others:

“(1) By failure to make deposits on the fifteenth day of each of the months of April, May, June, July, August, September, October, November and December, 1931, and January, 1932, on account of the principal of said bonds maturing on April 15, 1932, the aggregate sum of which deposits so unmade is $11,666.70;

“(2) By failure to make deposits on the fifteenth day of each of the months of October, November and December, 1931, and January, 1932, on account of interest due on April 15,1932, on said bonds, the aggregate sum of which deposits so unmade is $5,590.00;

(3) By failure to pay in full taxes assessed for the years 1928 and 1929 against the property conveyed by said trust deed.

“(4) By failure to pay premiums on insurance required by said trust deed to be maintained, which unpaid premiums amount,1- to $562.80.

“This notice is give a conformably with the provisions of the aforesaid trust deed, but it is not intended, nor shall it be construed, as a waiver of any other defaults which may exist under said trust deed, or of any of the rights or remedies of the undersigned, as trustee as aforesaid, arising or accruing by reason of the defaults herein specifically recited or indicated, or by reason of any other default heretofore or hereafter accruing.

“Dated January 23, 1932.

“Melvin L. Straus, “As Trustee.”

It is not claimed by defendants that all the defaults mentioned in this notice had not taken place, as stated, nor that by the terms of the trust deed defendants had covenanted and agreed to do all the things that the notice states were not done. Defendants, however, insist that under the agreement between the parties, the notice served is not sufficient to cause the acceleration of the “due dates” of the principal and interest agreed to be paid, and that there should have been an express notice served of complainant’s intention in that regard before the action can be maintained. Again we call attention to Article VII, section 1, of the trust deed, which states that:

“In case default shall be made in the payment of the principal of or of any interest . . . or in the due observance or performance of any covenant or condition whatsoever in this indenture required to he Jcept or performed hy the mortgagor, and such default shall continue for a period of thirty days after written notice thereof to the mortgagor by the trustee . . . then and in such case the trustee in his discretion . . . may declare the principal of all bonds hereby secured and then outstanding to be due and payable immediately, and upon such declaration the said principal together with the interest accrued thereon shall become due and payable immediately at the place of payment aforesaid, anything in this indenture or in said bonds to the contrary notwithstanding.” (Italics ours.) The provisions of the trust deed seem to be very clear and definite. The agreement to make these deposits was one of tho covenants in the deed. These deposits were required and agreed to in order that it be made certain that the payments be made, as agreed. It was complainant’s right to require such security.

The notice served upon defendants was in strict accord and in complian le with the requirements of this trust deed. The notice was served on January 22, 1932, and the bill was not filed until April 28, 1932, more than three montis after the notice of default had been given.

The question then arises as to whether or not, under the terms of the trust deed, the trustee had the right to declare the whole ar íount due, and to proceed with the foreclosure.

In Brown v. McKay. 151 Ill. 315, a bill was filed to foreclose a mortgage ' rust deed on real estate. As stated by the court in r s opinion, “the trust deed provided that if default should be made in the payment of said notes, or any part thereof, or of the interest' thereon, or any part thereof, at the time and in the manner specified, then "he whole of said principal sum and interest secured by said three notes should, at the option of the legal holder thereof, become immediately due and payable; and, on the application of the legal holder of said notes, the grantee might file a bill, etc., for foreclosure and sale of the whole or any part of said premises.” It was insisted that the mortgagee should have given some notice of his intention before bringing suit. In its opinion, the court said:

“The option to decís re the whole indebtedness due upon default in payment, is given to the legal holder or holders of the notes, to be exercised in their discretion, and without notice to the mortgagor. No formula is to be observed, nor particular form of expression necessary to be used for the purpose of declaring the maturity of the whole indebtedness. The formation of. an intention in the mind of the person who has the option to exercise Ms election to declare the entire debt matured, accompanied by any affirmative act or declaration evincing such determination, will be sufficient. ’ ’

See also Gray v. Robertson, 174 Ill. 242; Meyer v. Levy, 249 Ill. App. 408, and Heffron v. Gage, 149 Ill. 182.

We are of the opinion that the trustee acted in strict accord with the covenants and agreements of the trust deed when the foreclosure suit was instituted, and that it was properly instituted without further notice than that given. Therefore, the decree of the superior court of Cook county is affirmed.

Affirmed.

Hebel, P. J., and Wilson, J., concur.


author: Mr. Justice Wilson

text:
    Frank G. Reynolds et al., Appellees, v. The First National Bank of Chicago et al., Defendants. Abel Davis et al., Cross Complainants, v. Frank G. Reynolds et al., Cross Defendants. Appeal of David Labowitch et al., Appellants.
    Gen. No. 37,715.

      Opinion filed April 10, 1935.
    Rehearing denied April 22, 1935.
    Shulman, Shulman 6 Abrams and Harold J. Finder, all of Chicago, for appellants; Meyer Abrams, of counsel.

      SoNNENSCHEIN, BeRKSON, LiAUTMANN, LEVINSON & Morse, of Chicago, for appellees and cross appellants Abel Davis, Murray Wolbach and Howard A. Loeb.
    Poppenhusen, Johnston, Thompson & Cole, of Chicago, for appellee and cross appellant Central Republic Trust Co.; Henry L. Kohn, of Chicago, of counsel.
    Amberg, Ott, Dahlin & Livingston and Nat. M. Kahn, all of Chicago, for appellant First Nat. Bank of Chicago; John N. Ott, of counsel.
    West & Eckhart, of Chicago, for complainants as appellants and appellees.
   Mr. Justice Wilson

delivered' the opinion of the court.

The complainants, Frank G. Reynolds et al., seek to establish an equitable lien on funds deposited with the First National Bank, one of the defendants herein, by David Labowitch, also a defendant in the cause.

Complainant’s claim arose out of a lease between complainant and Labowitch to certain premises known as 24r-32 North Dearborn street in the City of Chicago. The fund in question appears to be made up of rents collected by the lessee from the subtenants occupying the premises in question and deposited as a special account designated as “24 to 32 N. Dearborn St. Bldg, a/c Special.”

Abel Davis and others, constituting a bondholders’ committee, also claimed the fund under and by reason of an oral trust.

From the record it appears that after the procurement of the lease in question by Labowitch, he, together with one Morris, improved the property and in order to do so issued certain bonds secured by a trust deed on the leasehold hereinbefore referred to. Finder, Rickie and Saiah Labowitch claimed an interest in the fund as assignees of David Labowitch. These latter claims are not di sputed by the defendant David Labowitch, but are dependent upon his title to the fund.

The county treasurer, Thomas D. Nash, filed his intervening petition in the cause based upon unpaid taxes due against the premises involved herein. By the decree and also through an arrangement with the complainant, Nash was dismissed out of the suit and is not a party to this appeal.

The defendant Morris who joined with David Labowitch in the issuance of the bonds in question, has no interest other than that of the defendant Labowitch and maíces no claim.

The First National IBank which was made a party defendant to the proceeding, appears to occupy somewhat the position of s, stakeholder, but with an individual interest in the fund. This interest was based upon a promissory note payable by Labowitch for $3,500' and on May 13, 1932, the bank charged this amount against the deposit already referred to. May 3, 1932, complainaat served the bank with notice of its interest in the fund and subsequently the bank made payments at the direction of David Labowitch, which are sought to be recovered. It also has an interest inasmuch as it was taxed for part of the costs of the proceedings. The fund on deposit with the bank was carried as a checking account.

The Central Republic Trust Company was the trustee by succession in the deed of trust given to secure the building bonds. It came into the case upon the filing of the second amended cross-bill of the bondholders’ committee and joined therein. It had no arrangement with David Labowitch or anyone else as to the fund involved and had taken no steps to secure the rents for the benefit of all the bondholders. Its interest, if any, is dependent on that of the bondholders’ committee.

The master in his report found that the complainant had no cause of action and also found against Davis and others known as the bondholders’ committee, and entered his finding in favor of the defendants. Upon objections filed the chancellor sustained the objections and found in favor of the complainant and against the bondholders’ committee and the other defendants to the cause.

For the purpose of brevity, the parties will be referred to as the complainant, the bank, Labowitch and the bondholders’ committee.

A brief synopsis of the facts in general and those surrounding the claim of each contestant is necessary to a thorough consideration of the cause and for the purpose of establishing the basis upon which each individual claim rests.

William D. Boyce, the owner of the premises known as 24-32 North Dearborn street, Chicago, Illinois, executed his lease to the premises to David Labowitch for a term beginning February 1,1923 and ending June 29, 1983, as to part of the premises, and ending April 30, 1990, as to the balance. William Boyce died June 11, 1929, while the lease was still in effect, leaving his estate, including the leasehold, to the State Bank of Chicago, as trustee, and by a series of substitutions the trusteeship was changed until at the time of the bringing of this action the title of trustee was in the complainants, Frank G. Reynolds, Mary J. Boyce and Dickinson Bishop.

The general taxes against the property were due and unpaid at the time of the filing of the bill of complaint for a part of the year 1928 and for the years of 1929 and 1930, amounting in all to more than $80,000. The lessee Labowitch defaulted in the payment of the rent which was due February 1,1932, and remained in default from that time on.

May 3,1932, the complainant served notice upon the First National Bank to the effect that the lessee was in default in the payment of rent for the premises and had been for a period of over 90 days past and that by the terms of the lease, the rents and profits from the premises had been assigned and mortgaged to the lessor. The notice also contained the statement that Labowitch, the lessee, had an account with the bank which consisted of all rentals from the premises and that the lessee being in default demand was made for the amount of the deposit known as account “24-32 North Dearborn St. Bldg. A/C Special.”

The complainant did. not take actual possession of the premises nor begin the collection of rents therefrom until after May 3, 1932, the date of the foregoing notice.

December 22, 1924, Benjamin I. Morris and David Labowitch executed their trust deed securing a bond issue of $200,000. The Central Republic Trust Company by succession at the time of the filing of the bill had become successor in trust in the trust deed issued to secure these bonds. This deed provided among other things that in default o f payment of any of the instalments of principal or interest, the legal holders of outstanding bonds aggregating two per cent of the total amount were authorized to declare immediately due and payable the principal sum and to cause the trustee to institute foreclosure proceedings and to take possession of the premises described in the trust deed. As we have already stated this trust deed is on the leasehold of the premisos known as 2A-32 N. Dearborn street.

A default having occurred in the payment of the interest on these bonds, a bondholders ’ committee was organized consisting of Abel Davis, Joseph E. Otis, Howard A. Loeb, John P. Oleson, B. M. Winston, Murray Wolbach and M. E. G-reenebaum. During the pendency of this suit Winston has died and Otis, Ole-son and Greenebaum have resigned as members of the committee.

May 7,1932, the bondholders ’ committee notified the defendant Labowitch and the- First National Bank that this special account in the name of Labowitch had been opened for the benefit of owners and holders of the bonds secured by the trust deed upon the property. The special account in controversy was opened with the First National Bank December 21, 1931. Prior to the opening of this account Labowitch had carried his account with the Central Republic Bank & Trust Company in which Labowitch had been accustomed to depositing the rents and profits from the premises. Sometime prior to May 1, 1932, Labowitch had executed a promissory note to the defendant, First National Bank, which became due and unpaid and on May 13, the bank charged the special account of Labowitch with the sum of $3,500, the amount of the note, and credited itself with that amount. May 7, 1932, on the check of Labowitch, the First National Bank paid out of the special account to one Joseph Rosenberg, the sum of $3,500 and charged this amount against the credit balance remaining in the special account. May 12, 1932, by assignment, David Labowitch conveyed the sum of $2,500 to Harold J. Finder and notified the bank of this transfer of that amount of his account.

- May 14, 1932, Labowitch again executed an assignment of $10,000 to this special account in favor of Rickie Labowitch and Sarah Labowitch, relatives of the assignor, and again notified the bank of this additional assignment. At the time of the filing of the bill of complaint there was a credit balance in the amount of $11,976.21.

September 21,1931, the bondholders’ committee was organized and represented approximately 60 per cent of the total bond issue. The bonds represented by this committee were transferred to it under the terms and provisions of a certain deposit agreement dated December 12,1929, and was for the benefit and protection of the owners of the bonds so deposited with the committee.

At no time does the record show that the trustee undertook to sequester or take possession of the rents derived from the building. True a foreclosure suit was started but nothing was done by reason of it. By a system of elimination we find, therefore, that the claim of the intervening petitioner Nash, as county treasurer, is no longer involved and that Morris, by assignment, had conveyed all his right, title and interest in the fund to Labowitch. The rights of the assignees in and to their proportionate interest in the fund is dependent upon the right of David Labowitch and prevail or fall in accordance with his success or failure in the litigation.

We also find that the rights of the First National Bank, defendant, as to amounts paid out after the notice of May 3, are dependent upon two things: First, the right of Labowitch in and to the fund, and second, its right as a depository bank to honor checks drawn by Labowitch against this fund as a duty arising in the regular course of its banking business.

Considering the claim of the complainant in the first instance, we are compelled to consider the terms of the lease. Paragraph 12 provides:

“. . . the Lessor shall have a first and valid lien . . . upon all sub-rents and other incomes, issues and profits of said land and improvements and upon the entire estate, rights and interest of the Lessee in said land and improvements or otherwise under this lease, as well as upon all insurance policies issued pursuant to the provisions hereof, and upon all money realized upon such policies, and upon all money and other property held by any trustee under the provisions of the ‘Fifteenth,’ ‘Sixteenth’ and/or ‘Seventeenth’ subdivisions of this lease, to secure the payment of all money (including interest) at any time becoming due to the Lessor under the provisions of this lease, and to secure the prompt satisfaction by the Lessee of all his obligations under this lease. ’ ’

The fifteenth paragraph of the lease provided that the lessee should within five years expend not less than the sum of $100,000 in permanent general improvements on the building.

Paragraph 12 also provides that the lien reserved may be foreclosed in equity when the money due the lessor from the lessee shall remain unpaid for a space of 10 days and after written notice to the lessee; provides the right of the lessor to institute foreclosure proceedings and then follows a provision by the lessee assigning and transferring the rents due by virtue of any sublease, “Provided, however, that the Lessor shall not have the right to collect said avails, rents, issues and profits, or to take possession of said premises, unless and until the said Lessee shall be in default for a period of ninety (90) days in the payment of any of the rentals specified in the ‘Fifth’ subdivision of this lease, or unless and until the Lessee shall be in default for a period of thirty (30) days in the payment of taxes or any part thereof, as specified in the ‘Sixth’ subdivision of this lease.”

Paragraph 13 also provides that if the lease demised be ended in any manner prescribed in the twelfth or thirteenth subdivision, then all insurance policies and all insurance money held by the lessor, “together with all estate, right and interest of the Lessee in and under this lease and in the land above described and all improvements thereon, including all rents, issues and profits of said lands and improvements, whether then accrued or to accrue, shall (without any compensation therefor being made to the Lessee) at once upon the conclusion, in any manner in this ‘Thirteenth’ or in the ‘Twelfth’ subdivision provided, of the term hereby demised, pass lo and become the property of the Lessor, not as a penalty or forfeiture, or as of the nature of a penalty or forfeiture, but as the liquidated damages of the Lessor due to such default of the Lessee, hereby fixed and agreed upon by the parties hereto, both parties hereto recognizing the impossibility of precisely ascertaining the amount of damages sustained by the Lessor in consequence of such default, and both parties desiring to obviate any question or dispute concerning the amount of such damages.”

Under the terms of this lease the defendant Labowitch raises three questions:

First, it is insisted that the money in the deposit was rents already collected by the lessee and, therefore, ceased to be rents, but instead became cash;

Second, that by the terms of the lease the lessor, having undertaken to declare a default, was not entitled to the rents, issues and profits until the expiration of the 90-day period provided in the lease; and Third, that the lease itself, in accordance with the terms of paragraph 13, provides for the damages by agreement of the parties and that by taking possession under the default, the lessor was entitled only to the premises together with the improvements, moneys due under insurance policies and the rents subsequently to accrue. The lease provided that the lessor should have a first and valid lien on all subrents and on other income, issues and profits on the land and improvements.

There is a very serious question as to whether or not moneys already paid should still be designated as rents within the m'eaning of the lease. If the assignment was an outright assignment of all rents, whether collected, or otherwise, the lease having been recorded, then such moneys could be traceable into the hands of others to whom they were paid by the lessee. If the lien provided was intended as security, the title to the rents would be in the lessee until, according to the terms of the lease, the lessor had signified his intention of availing himself of the right to his lien. We have no quarrel with the cases cited by counsel to the effect that the court will declare an equitable lien in proper cases as to funds on property in the hands of others, but courts of equity will not go counter to the express agreements of the parties.

Where there is an agreement in writing the written words are controlling. The lease expressly provides when and how the lien for rentals shall take place and be enforced. Among other rights reserved by the lessor is the right to have a receiver appointed after 10 days’ notice, for the purpose of operating the property and collecting the rents.

Paragraph 12 of the lease expressly provides that the right to collect rents on the part of the lessor in case of default in the payment of rent, is limited by a clause therein providing that this right shall not come into existence until the default shall have extended over a period of 90 days. If the assignment of the rentals was an outright assignment, such a clause would be unnecessary and the rights of the lessor attach at once. It was evidently the purpose of the section to provide the lessee with an opportunity to rectify the default in the payment of rent and there is no question in our minds but that the rents collected would be available as well as other funds for the purpose of the payment of the lease rentals. The language would indicate that it was the intention of the parties that the assignment was intended as a security rather than an outright assignment. Oases analogous are those based upon the construction of mortgages wherein the courts have repeatedly held that the assignment of rent is intended merely as security. Rohrer v. Deatherage, 336 Ill. 450; Levin v. Goldberg, 255 Ill. App. 62; Taylor v. Osman, 239 Ill. App. 569.

In the case of Levin v. Goldberg, supra, the court in its opinion says:

“The provision in a trust deed, pledging the rents, issues and profits is for the sole purpose of providing a secondary fund or security to protect the mortgagee against loss in the event that upon foreclosure and sale there is a deficiency. Until the mortgagee takes possession or procures the appointment of a receiver he has no better claim to the rents than a stranger. Until he takes such action the owner may permit any person whether duly authorized in writing or otherwise to collect the rents, and retain, from the amounts collected, commissions and disbursements. It is his money and he may do vith it as he pleases.” Gubbins v. Equitable Trust Co., 80 Ill. App. 17.

If the word “assignment” as used in the lease were strictly construed, the rents in the first instance should have been properly payable to the lessor. Such a construction would be abhorrent to equitable principles and certainly in conflict with the written words contained in the lease. From the facts in evidence it appears that the default occurred February 1st, at the time when the February rent was due from the lessee to the lessor. May 1, 1932, marked the end of the 90-day period provided in the lease under which the lessor was entitled to the collection of the rents. The funds in question on that date were already on deposit with the First National Bank in the name of David Labowitch, as depositor. Even though upon that date the lessor was entitled to the rents, it could only be to such rents as thereafter became due and payable or had already accrued from the subtenants. In our opinion the moneys already collected were the property of Labowitch and could not be affected by the notice served by the lessor. Ip. this connection it is well to observe that the notice forfeiting the lease was dated September 20, 1932. It should also be noted that under the notice of May 3, directed to the First National Bank by the lessor, no claim is made to any equitable lien against the fund in the possession of the bank, but the right of the lessor is based upon the lease and particularly that section pertaining to the ‘right to collect rents after the expiration of the 90 days as provided in the lease. As we have already pointed out, this right vested after the funds had already been deposited by Labowitch.

The lease contains a further pertinent covenant. This covenant provides that if the terms of the lease be ended, whether according to paragraph 12 or 13, or otherwise, then all right and interest of the lessee in and under the lease, pass to and become the property of the lessor, not as a penalty or forfeiture, but as liquidated damages. This provision appears to have been based upon the proposition that it would be impossible to ascertain in exact terms the amount of the damages sustained by the lessor.

By electing to terminate the lease and take the property, the lessor has availed himself of his rights under this clause to accept in full the property and the improvements in payment of any claim the lessor may have. West Frankfort Bldg. & Loan Ass’n v. Dorris, 260 Ill. App. 21; Parker-Washington Co. v. Chicago, 267 Ill. 136. In the case of West Frankfort Bldg. & Loan Ass’n v. Dorris, supra, the court says:

“What the general rule is in cases where the rents and profits have been pledged for the payment of the mortgage debt, interests and costs, need not be decided in this case, for the complainants in their bill ask for strict foreclosure, and the decree finds, ‘the complainant is willing to accept the conveyance of said mortgaged property to it in full payment of the debt, interest and costs due in this case.’ This decree was filed in the circuit court of 1 franklin county on December 13, 1928. The complainant by electing to have strict foreclosure of its mortgage and by accepting the property in full payment of the mortgage debt, interest and costs, is now estopped from any claim or title to the funds in the hands of the receiver.”

In the ca'se at bar the lessor by declaring a default, in our opinion, has relegated himself, with regard to his rights, under the liquidated damages clause of the lease. In the case of First Nat. Securities Co. v. Ward, 275 Ill. App. 521, the court in its opinion said:

“Counsel for defendants, in urging the affirmance of the judgment appealed from, contend that ‘no recovery can be had upon any contract for unpaid installments if the contract has been forfeited by the vendor; and that after such forfeiture the contract in itself is at an end, and becomes extinct and is rendered void so as to bar any action thereon for any part of the money due thereunder.’

“In 20 Corpus Juris, p. 14, sec. 10, it is said:

“ ‘A remedy based on the theory of the affirmance of a contract or other transaction is inconsistent with a remedy arising out of the same facts and based on the theory of its disaffirmance, or rescission, so that the election of either is an abandonment of the other. (Citing cases.) Where a party rescinds a contract the law does not permit him thereafter to make use of it as subsisting for the purpose of claiming damages, or for the purpose of recovery thereon.’ (Citing Stinson v. Sneed [Tex. Civ. App.], 163 S. W. 989, 991.)”

We are of the opinion that the master in chancery was correct in recommending the dismissal of the bill of complaint and that the chancellor erred in holding otherwise.

The claim of the bondholders ’ committee appears to be based entirely upon an oral agreement between

Labowitch and the committee. The second amended cross-bill sworn to charges that the arrangement was for the benefit of the committee, but fails to charge that it was for the benefit of all the bondholders. No right is predicated upon the trust deed given upon the leasehold to secure the bondholders. In an examination of" the evidence produced in support of this contention of the cross complainants, it is well to first keep in mind the rule applicable in order to prove an oral trust. In this connection the Supreme Court in the case of Illinois State Trust Co. v. Jones, 351 Ill. 498, in its opinion said:

“Where an alleged trust does not appear on the face of a deed, will or other instrument and it is sought to establish it by parol evidence, such evidence must be unequivocal and unmistakable. (Keuper v. Mette, 239 Ill. 586; Sharp v. Sharp, 328 id. 564.) In order to establish a trust the evidence must be clear and satisfactory not only as to the existence of the trust but also as to its terms and conditions. (Lurie v. Sabath, 208 Ill. 401.) It is essential to the creation of a trust that the declaration must make reasonably certain its terms. These terms include the subject matter, the beneficiaries, the nature and quantity of the interests which they are to have and the manner in which the trust is to be performed. If any of these elements are not described with certainty no trust is created. (Marble v. Marble, 304 Ill. 229; Snyder v. Snyder, 280 id. 467.) ” To the same effect see Smith v. Baxter, 239 Ill. App. 453. The creation of such a trust must be definite in its terms and 6should specify the fund, the beneficiaries, the nature and the quantity of the interest;' "and the manner in which the trust is to be performed. A mere agreement to pay generally out of a designated fund does not necessarily operate as an equitable assignment of such a fund. In re Interborough Consolidated Corp., 288 Fed. 334.

A case somewhat similar to the one involved here is Hamilton v. Downer, 152 Ill. 651. In this case an action was brought by the executor of the deceased against Mary Donner on a writing in which the said Mary Donner agreed to pay the claim of Jane Donner out of the estate of Samuel Donner or out of the proceeds of sale of such property in said estate and that Jane Donner was to have a voice in the matter as to the disposition of the property held by Mary Donner. It was held that such an agreement did not necessarily create a trust fund even though it was sought to show that Jane Donner held a claim which she had and which could have been filed in the probate court against the estate.

Cross complainants attempted to show that the agreement between them and Labowitch was for the benefit of the bondholders’ committee, inasmuch as the money was to be used to pay the interest on the bonds and the operating expenses of the building and that, therefore, the agreement was one of benefit to the- bondholders. It should also be borne in mind that these payments were not only for the benefit of the bondholders, but were for the benefit of Labowitch as well as the owners of the property. Payment of cost of repairs to the building and premiums of insurance on the building were ¡alike for the benefit of all the parties concerned. If the consideration for the agreement between the bondholders and Labowitch was the withholding of the foreclosure proceedings by the bondholders’ committee, the fact is that in April of 1932, a bill to foreclose was, in fact, filed by the trustee at the instigation of the bondholders ’ committee. This consideration for' the alleged trust, if it \vas in fact a consideration for ;the agreement, was broken by cross complainants.

A written trust agreement could easily have been procured if it were -the intention of the parties to create a trust. Instead of this, however, there appears to have been some discussion of the proposition of requiring a countersigning by the trustee or some other person designated upon all checks drawn against the account. If such an agreement had been perfected it would not have been evidence of trust and confidence reposed in Labowitch and would have failed to indicate a trust. On the other hand if such condition had been agreed to and carried out, the present situation would not have arisen. At least there could have been no possibility of the assignment by Labowitch of his interest in the fund to the assignees of that fund who are made parties to this suit. The evidence in support of the position of the bondholders’ committee appears to be based upon the testimony of Zimmermann and Rosenberg, a former lawyer for Labowitch.

Zimmermann testified that he had a conversation with Rosenberg and Morris in which they stated that the money collected would be used for the benefit of the leasehold bondholders and that no money would be paid out of the fund except for the operation of the property, without first taking it up with him.

Zimmermann was a trust officer of the Chicago Title and Trust Company. His interest in the proposition is not disclosed other than that this company appears to have been the depositary of the bonds issued under the trust agreement.

Rosenberg testified that he was attempting to prevent a foreclosure and was seeking to satisfy the bondholders’ committee on behalf of Labowitch. He stated that he told Zimmermann that the funds were to be used for operating expenses and that no extraordinary expenses would be made without his knowledge; that the word “trust” with reference to the fund was not used.

Anderson, a witness called on behalf of the cross complainants, testified that he was secretary of the Q-reenebaum Bondholders Protective Committee and that Labowitch was present at a meeting of Zimmermann and himself and that Labowitch suggested that a special account be set up where the moneys would be deposited and that the operations would be paid out of this account and the balance held in lieu of a receivership for the benefit of the bondholders. Labowitch, himself, denied that he made any such statement and did not agree to set up a separate account to be used for the benefit of bondholders.

It is apparent from the testimony and the actions of the parties that there was no definite understanding as to the creation of a trust fund. The creation of the fund appears to have been part of a series of negotiations between Labowitch, the bondholders’ committee, and the owner of the property. It appears to have been a makeshift arrangement between parties antagonistic to each other, as a temporary expedient and, so far as the relationship between the parties is concerned, fails to indicate any reposing of trust or confidence by any of the: parties in any of the other parties concerned in the arrangement. A trust should be based upon a particular fund or article of property. The existing agreement at most appears to have been with reference to future rentals which were to be paid out to the best advantage to all parties concerned. There is considerable confusion as to the dates of the conversations with reference to the time that the original special account was made with the Central Republic Bank and Trust Company. This was the account, which was afterwards transferred to the. First National Bank. Some of the testimony offered by cross complainants would indicate that the arrangement was made after the special deposit had been created. In our opinion the testimony was not of such a character as to comply with the rule that in order to create a trust it should be established by evidence unequivocal and unmistakable. The burden was upon the cross complainants to establish such a trust and in our opinion the master properly found that the burden had not been sustained. The chancellor in dismissing the cross-bill did so on the ground that the agreement was inequitable and unconscionable.

This court is- not concerned with the reason for dismissing the cross-bill if as a matter of fact it should have been dismissed, and the decree of the chancellor should, therefore, be affirmed. This court, therefore, finds under the law and facts in this case that both the bill of complaint and the cross-bill of the bondholders’ committee should be dismissed and the title to the fund found to be in Labowitch, subject to the rights of the First National Bank and the assignees of that part of the fund recognized by Labowitch, by his assignment or by his checks issued against it.

The costs of the proceeding should be reassessed; two-thirds against the complainant and one-third against the cross complainants, the bondholders’ committee.

This cause was consolidated and considered with Gen. No.. 37,797 in this court.

For the reasons stated in this opinion, the decree of the superior court is reversed in part and affirmed in part and remanded with directions to proceed in accordance with the views expressed in this opinion.

Judgment reversed in part and affirmed in part and cause remanded with directions.

Hebel, P. J., and Hall, J., concur.


text:
    Frank G. Reynolds et al., Appellees, v. The First National Bank of Chicago, Appellant.
    Gen. No. 37,797.
   Mr. Justice Wilson

delivered the opinion of the court.

This cause is before us on an appeal by the First National Bank of Chicago, a corporation, from a decree entered in the superior court in favor of Frank G. Reynolds and others, finding against the First National Bank of Chicago and taxing costs. This cause was consolidated here with Gen. No. 37,715, supra. The appeal is from that part of the decree finding that the complainants had acquired an equitable lien upon the fund on the deposit with the bank described in the decree, and also to that part of the decree assessing and apportioning costs against defendant.

For the reasons expressed in the opinion in Gen. No. 37,715, the decree in this case is reversed and the cause remanded with directions to proceed in accordance with the views expressed in that opinion.

- Judgment reversed and cause remanded with directions.

Hebel, P. J., and Hall, J., concur.


text:
    International Shoe Company, Appellant, v. H. W. Cline, Individually and as Trustee for the Benefit of Creditors of Wilner’s Department Store, Inc., Appellee.
    Gen. No. 37,746.
    Opinion filed April 10, 1935.
    Goldman, Allshouse & Healy, of Chicago, for appellant; Robert G. Dreffein, of Chicago, of counsel.
    No appearance for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

Wilner’s Department Store, Inc., a .corporation, made an assignment to the defendant, H. W. Cline, as trustee, for the benefit of all its creditors and transferred its property to him with directions to sell, liquidate and convert the same into cash, and after the payment of costs to pay all the claims preferred under the laws of the State of Illinois, and to distribute the balance among its general creditors. Attached to the list of creditors was the name of the International Shoe Co., whose claim was scheduled at $192.75. The defendant Cline accepted the assignment and the trust and reduced the assets of the department store to cash. The International Shoe Co. consented to the assignment and, upon the distribution of the assets among the creditors, was tendered a check for $56.78 which it refused to accept because of the fact that it bore an indorsement that it was in full settlement of the claim of the International Shoe Co. against the Wilner’s Department Store, Inc.

It is contended here that the International Shoe Company was entitled to receive its proportionate share of the distribution of the assets, amounting to $56.78, but that it could not be deprived of its right to satisfy the balance of its claim out of other assets of the Wilner’s Department Store, Inc., if any other assets could be found.

A bill was filed praying that the defendant Cline, individually and as trustee, be compelled to pay the plaintiff the sum of $56.78, without executing a release in full satisfaction. A demurrer was sustained to this bill and this appeal prayed and allowed.

We have not been aided in our consideration of the cause by briefs on behalf of the defendant.

As the matter is presented to us, it appears that the proceeding was one by the Wilner’s Department Store, Inc., to establish a common law trust for the creditors in a court of chancery. This it had a right to do. The National Bankruptcy Act suspended the statute of this State in reference to voluntary assignments for the benefit of creditors, but did not deprive the debtor of the right to make a common law assignment for their benefit and that right was not affected by the bank-

ruptey act. Pogue v. Rowe, 236 Ill. 157. The circuit court had the power to administer the trust and this power is peculiarly within the province of a court of equity.

In Howell v. Moores, 127 Ill. 67, the court in its opinion said:

“Such a court will entertain jurisdiction to enforce the trust, created by an assignment for the benefit of creditors, at the suit of one or more of such creditors. ’ ’

The question for consideration is whether or not the creditor, International Shoe Co., by filing its claim and participating in the trust, was barred from enforcing the balance of its claim by accepting its proportionate share of the trust estate upon the winding up of the trust estate by the chancellor. The authorities seem to hold otherwise.

The Supreme Court of this State in the case of Howlett v. Mills, 22 Ill. 341, lays down the rule, in its opinion, as follows: ‘ The plea fails to aver, that defendants in error ever agreed to look to, or rely upon this property, to pay or discharge this debt. There is no averment, that they had, in consideration of the execution of the assignment, agreed to release their claim. It fails to aver, that they had received or were entitled to receive any portion of the fund from Sears, or in what manner the plaintiff in error had sustained damage. It does not aver that Sears had wasted, sacrificed, or misapplied the fund, or had in any manner been wanting in care and prudence in its management. But it simply relies upon the fact, that by the advice of the creditors, of whom defendants were a part, the property was surrendered by the assignee into the hands of Sears, and that he had reduced it to money. The mere assent by a creditor, that his debtor may make an assignment for the benefit of his creditors, cannot have the effect to release and discharge the debt, and this is what is asserted by this plea. It, at most, could only be held to require him to look to ,the fund for his portion to be applied on his claim, and leave him to collect the remainder out of the debtor.” To the same effect see 5 Corpus Juris, page 1302, sec. 516:

“(§ 516) E. Discharge — 1. Generally. In the absence of any statute to the contrary, the mere assent of a creditor to the assignment does not discharge the debtor; nor does the distribution of the assigned property among the creditors entitle the assignor to a discharge from liability for his debts beyond the amount actually received by the creditors, unless they voluntarily release their claims, or expressly accept the assignor’s property in full satisfaction of their claims.” We are without the benefit of argument by counsel for defendant and, from the record before us, can only assume that the plaintiff did not expressly or by conduct release the Wilner’s Department Store, Inc. by reason of filing its claim and becoming a party to the common law assignment proceedings.

The decree of the circuit court directing payment upon the signing of a release is, therefore, reversed and the cause remanded with directions to order the payment to be made without qualifications.

Reversed and remanded with directions.

Hebel, P. J., and Hall, J., concur.


text:
    In re Estate of Julia Cohen, Deceased. Appeal of Rose London et al., Appellants, v. Douglas Park Day and Night Nursery et al., Appellees.
    Gen. No. 37,817.
    Opinion filed April 10, 1935.
    Hershenson & Hershenson, of Chicago, for appellants.
    Pines & Stein, of Chicago, for appellees; Clarence T. Morse and David E. Beber, both of Chicago, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

The will of Julia Cohen was admitted to probate in the probate court of this county November 29, 1932. An appeal from the order admitting the will to probate was taken to the circuit court of Cook county and an order was again entered in that court admitting the will and testament to probate, from which order this appeal has been prayed.

There is but one question raised, namely, whether or not Raymond Kelner was a competent witness for the purpose of proving the execution of the will in the probate court at the time it was offered for probate. The will contains a provision whereby the executor named in the will is specifically instructed as executor to employ and retain Raymond Kelner as his attorney to assist in the administration of the estate. The attestation clause contains the signature of Raymond Kelner as a witness to the making of the will.

It is insisted as ground for reversal that Kelner, by reason of the provision of the will directing that he be appointed as attorney for the executor, became a party in interest and as such disqualified as a witness. Under the statute as it was originally enacted, it may be that he would have been incompetent inasmuch as he would have gained or lost financially as a direct result of the establishing of the instrument as a will. In order to obviate the resultant failure of a testator to convey his property as he saw fit, because of the fact that some witness to the will would acquire a financial interest thereunder, section 8 of chapter 148, Cahill’s Illinois Revised Statutes, 1933, was enacted, under which such a witness was competent to testify, but was required by so doing to relinquish his or her interest under the will, except in so far as he would be entitled to take by law. The Supreme Court of this State has defined the law and the relative rights of the parties thereunder in the case of Scott v. O’ConnorCouch, 271 Ill. 395, wherein it said:

“In the revision of 1872 a provision of the Revised Statutes of 1845 was brought forward as section 8 of the Statute of Wills. It removed the incompetency of a witness to the execution of a will to whom any beneficial devise, legacy or interest was made or given by the will, and provided that such witness should be compellable to appear and give testimony on the residue of the will in like manner as if no such devise or bequest had been made, but the devise, legacy or interest was declared to be null and void unless the will had been duly attested by a sufficient number of witnesses exclusive of such person, saving, however, to the witness any share of the testator’s estate not exceeding the value of the devise or bequest to which the witness would have been entitled if the will was not established. That section of the Statute of Wills was regarded by this court as remedial and its purpose and effect were explained in Jones v. Grieser, 238 Ill. 183.”

We gather from the record in the case before us that the testimony of Kelner was necessary to establish the will and that by testifying as a witness he would be precluded from receiving any financial remuneration thereunder. This inhibition placed upon Kelner by the statute would properly be enforceable in the probate court of Cook county.

We are of the opinion that the order of the circuit court was correct and it is, therefore, affirmed.

Order affirmed.

Hebel, P. J., and Hall, J., concur.


text:
    Bertha Sturmer, Appellant, v. The Travelers Insurance Company, Appellee.
    Gen. No. 37,847.

      Opinion filed April 10, 1935.
    Rehearing denied April 22, 1935.
    Joseph B. Lynch and Joe A. Pearce, both of Chicago, for appellant.
    Kirkland, Fleming, Green & Martin, of Chicago, for appellee; William H. Symmes, David Jacker and Edward C. Caldwell, all of Chicago, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

The plaintiff, Bertha Stunner, the beneficiary named in a policy issued by the defendant on the life of William Joseph Sturmer, her husband, brought this action to recover the sum of $2,500, the amount named in the policy of insurance.

The policy was issued by the defendant to Stringer Bros. Co., Inc., for the benefit of the employees of that company and is what is known as a group life insurance policy. This class of policy has been the outgrowth of the industrial life of the country and is now in common use. The premiums are paid by the employer and are deducted from the wages of the employees covered by the group policy.

In the instant case the policy to Stringer Bros. Co,, Inc., was issued September 28, 1927, and a certificate was also issued by the defendant insurance company to William Joseph Sturmer dated October 1, 1927, stating that it was subject to the terms and conditions of a group life policy of insurance issued to Stringer Bros. Co., Inc., his employer, under which his life was insured for the sum of $2,500 and payable to Bertha Sturmer, his wife, as beneficiary. The certificate contained a clause to the effect that “The insurance of any Employee covered hereunder shall end when his employment with the Employer shall end or prior thereto when the Employee shall notify the Employer to make no further deductions from his pay to apply toward the premium for this insurance.”

The insured died September 4, 1931, and it is admitted that the policy covering Stringer Bros. Co., Inc., was in full force and effect and all the premiums paid. Such being the fact, the premium covering the life of William Joseph Sturmer, deceased, had been paid up to and including the day of his death, so that the policy, together with the certificate issued to the deceased, had been in effect for a period of nearly four years and was in effect at the time of his death unless his employment with Stringer Bros. Co., Inc., had terminated prior thereto.

Upon the trial of the cause plaintiff introduced the policy to Stringer Bros. Co., Inc. and the certificate issued to William Joseph Sturmer, and made proof of his death. The defendant moved for a directed verdict, which was granted, and judgment entered in favor of the defendant, from which judgment this appeal has been taken.

After the defendant had made its motion for a directed verdict in its favor and before the entry of judgment, counsel for plaintiff attempted to show by Mrs. Sturmer, the wife, that the deceased was employed by Stringer Bros. Co., Inc. at the time of his death. This testimony was objected to. It does appear from that part of her testimony, however, which was admitted, that he had been working for Stringer Bros. Co., Inc., up to a time about six weeks before his death, when he was laid off. We will have occasion to discuss the admissibility of her testimony later in this opinion.

The policy and the certificate issued thereunder contain certain covenants and agreements on the part of the insurance company which we deem important in a consideration of the case. The first of these provisions contained in the policy and made a part thereof is one with reference to lay-off or leave of absence. This provision provides as follows:

“Temporary lay-off or leave of absence for reasons other than physical disability as aforesaid shall not be considered as termination of employment for the purpose of this insurance unless the Employer shall so elect. ’ ’

There is nothing in the record to show that Sturmer was laid off for disability and, therefore, it does not come within the clause of the policy, which continues the policy for a certain period of time in his own name, if he so desires.

Another provision of importance in a consideration of the cause is the incontestability provision, which is number 13 in the provisions attached to the policy, and provides as follows:

“13. Incontestability: — This policy shall be incontestable after one year from its date of issue, except for non-payment of premium.”

Bichard on the Law of Insurance, 4th Ed., par. 376, p. 667, refers to this clause as one somewhat analogous to a short statute of limitations or repose. The author of that work regards it as one placed in the policy for the purpose of enticing persons to take out such insurance by reason of the reliance upon this provision of the policy in the belief that after the period of one year the beneficiary will be fully protected.

Language in an insurance policy is construed favorably to the insured and it may well be said that after the period of one year, the insured is entitled to the benefit of the presumption of continuity of service so long as the premiums are paid by the employer. Monahan v. Metropolitan Life Ins. Co., 283 Ill. 136. We can, however, safely assume that at least under this incontestability clause the burden of proof would have been upon the defendant to show that the policy was void because of the fact that the insured had left the employment of his employer.

In the case of Mutual Reserve Fund Life Ass’n v. Austin, 142 Fed. 398, the court in its opinion says :

“The term ‘incontestable’ is of great breadth. It is the ‘policy’ which is to be incontestable. We think the language broad enough to cover all grounds for contest not specially excepted in that clause. The word ‘policy’ may well be taken to mean a formal document delivered by the company, and containing evidence of an obligation to pay. Such a document so delivered is ordinarily contestable, with reference to questions arising in connection with its delivery and payment of the first premium, as well as with reference to statements contained in the application.”

This incontestability clause, while contained in the provisions attached thereto, is entitled to the same consideration as if it had been inserted at large in the policy. Hurt v. New York Life Ins. Co., 51 F. (2d) 936.

The provision in the policy that if the employment of the insured was terminated during the life of the policy it vitiated the policy, was a condition subsequent in our opinion and not a condition precedent. A clause in a policy which provides that, in the event of the happening of a certain thing, the policy shall become void is not a condition precedent to the procuring of the policy, but something that occurs thereafter and, consequently, comes within the purview of a condition subsequent. In the case of Kleinman v. Globe & Rutgers Fire Ins. Co., 111 N. J. L. 374, the court in its opinion quotes with approval from Center Garage Co. v. Columbia Ins. Co., 96 N. J. L. 456, and says:

“ £ Clauses contained in policies of insurance which provide that the policy shall be void or the insurer relieved of liability on the happening of some event or the doing of or omission to do some act by the insured are not in any sense conditions precedent. If they are conditions at all, they are conditions subsequent, and constitute matters of defense, which, together with their breach, must be pleaded by the insurer to be available as a means of defeating a recovery on the policy; and the burden of establishing the defense, if controverted, is of course, upon the party pleading it. 4 Joyce Ins. Ch. 2190, and cases cited.’ ” To the same effect see Benes v. Bankers Life Ins. Co., 282 Ill. 236; Union Trust Co. v. Chicago Nat. Life Ins. Co., 267 Ill. App. 470.

The question as to the burden of proof in a group insurance policy, where the defense is as in this case that the deceased had left the employ of his employer prior to his death, is squarely passed upon in the case of Travelers’ Ins. Co. v. Fox, 155 Md. 210. There the defendant pleaded the general issue and a special plea setting up the fact that the insured was no longer in the employ of his employer at the time of his death. The court in its opinion said:

“The burden of proving the discharge was on the defendant. It was for the jury to determine whether that burden had been met. Calvert Bank v. Katz, 102 Md. 56; Lemp Brewing Co. v. Mantz, 120 Md. 176; Travelers’ Ins. Co. v. Connolly, 145 Md. 554.”

In the case of Baker v. Prudential Ins. Co., 279 Ill. App. 5, which was a case based upon a group insurance policy, the court said:

“The incontestable provision did not prevent the defendant insurance company from showing that the policy was no longer in effect because Baker had been discharged a month before his death.” We gather from this language that it was the opinion of the court in that case that the burden was upon the defendant to prove such facts. It was also held in that case that although there was an incontestable clause in the policy, the defendant was not precluded from proving a forfeiture of the policy by reason of a violation of one of its terms and conditions. See also Hamson v. Travelers’ Ins. Co., 274 Ill. App. 80.

We have examined the authorities cited by the defendant on the question of the burden of proof, but we find that they do not conflict with the general rule that proof of the happening of an event, which would vitiate the policy and therefore a condition subsequent, is upon the insurer.

In the case of Duval v. Metropolitan Life Ins. Co., 82 N. H. 543, cited by the defendant, it appears from the opinion that plaintiff’s counsel over and over again admitted the termination of the employment and stated that his cause was one of waiver or reinstatement. Naturally the proof of waiver is upon the person claiming it. Neither do we find anything in the other cases cited in conflict with the rule as we have expressed it in this opinion.

The defendant company has received its premiums, in full and, so far as the record discloses, has made no effort to refund any part of such premiums. Certainly the incontestability clause in the policy should place the burden upon the insurance company after a period of one year. If, as already stated, this provision is in the nature of a period of limitation, then the burden should be upon the defendant after the lapse of that time. Moreover, as the condition in regard to employment is one which necessarily must arise after the issuance of the policy and the payment of the first premium, it becomes a condition subsequent and therefore one which places the burden upon the insurance company.

We believe the trial court was in error in directing a verdict at the end of plaintiff’s case. In the view we take of this proceeding, it is unnecessary to discuss at length the question of the competency of the wife as a witness, other than to say that we are of the opinion that the statute has no application and that she is a competent witness and that her testimony should be received subject to relevancy, materiality and such other matters as surround the governing of testimony by any other witness, except in so far as the fact that she is interested would bear upon the weight to be given to it. For the reasons stated in this opinion, the judgment of the circuit court is reversed and the cause remanded for a new trial.

Judgment reversed and cause remanded.

Hebel, P. J., and Hall, J., concur.


author: Mr. Presiding Justice O’Connor

text:
    First District.
    Wilma Foy, appellee, v. Dealers Transport Company, appellant.
    Gen. No. 37,693.
    Opinion filed January 28, 1935.
    Stebbins, McKinley & Price, for appellant; William McKinley and Paul E. Price, of counsel. John G. Riordan, for appellee.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.


text:
    The People of the State of Illinois, defendant in error, v. Robert Bowman, plaintiff in error.
    Gen. No. 37,827.
    Opinion filed January 28, 1935.
    George T. Evans and Edmund C. Maurer, for plaintiff in error; Edward W. Everett, of counsel. Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson, Henry E. Seyfarth and John T. Gallagher, Assistant State’s Attorneys, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.


author: Mr. Justice MeSurely

text:
    The People of the State of Illinois, defendant in error, v. John Brosnan, plaintiff in error.
    Gen. No. 37,585.
    Opinion filed January 28, 1935.
    Louis Greenberg, for plaintiff in error. Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson and Amos P. Scruggs, Assistant State’s Attorneys, of counsel.
   Mr. Justice MeSurely

delivered the opinion of the court.


text:
    J. P. Friend, appellant, v. Jacob G. Levinson and Sadie Levinson, defendants. Louis Liebling, appellee. Reywal Building Corporation, garnishee.
    Gen. No. 37,610.
    Opinion filed January 28, 1935.
    Ratner, Chapman & Ratner, for appellant. Samuel Berke, for appellee; Mayer Goldberg and Harold R. Gordon, of counsel.
   Mr. Justice MeSurely

delivered the opinion of the court.


text:
    Oswald W. Koeber, appellant, v. Mid-City Trust and Savings Bank of Chicago and Mid-City National Bank of Chicago, appellees.
    Gen. No. 37,654.
    Opinion filed January 28, 1935.
    Rehearing denied February 11, 1935.
    Harry C. Kinne, for appellant; William C. Riley and John A. Nordstrand, of counsel. John M. Lee, for appellees; Thomas J. Carroll, of counsel.
   Mr. Justice MeSurely

delivered the opinion of the court.


text:
    Albert O. Smith, appellant, v. Orra Greenabaum, appellee.
    Gen. No. 37,750.
    Matchett, J., dissenting.
    Opinion filed January 28, 1935.
    George D. Kimball, for appellant. Jean Smith, Henry B. Evans and Maurice H. Kamm, for appellee.
   Mr. Justice MeSurely

delivered the opinion of the court.


text:
    Bankers Trust Company, appellee, v. Jennie J. Johnson et al., appellants.
    Gen. No. 37,812.
    Opinion filed January 28, 1935.
    Louis L. Bresler, for appellants; David H. Kraft, of counsel. Cummings & Wyman, for appellee; Austin L. Wyman, of counsel.
   Mr. Justice MeSurely

delivered the opinion of the court.


text:
    Trust Company of Chicago, administrator of the estate of Rush F. Vass, deceased, appellee, v. Edward M. Craig, appellant.
    Gen. No. 37,836.
    Opinion filed January 28, 1935.
    Rehearing denied February 11, 1935.
    A, G. Dicus, for appellant. Francis W. Marshall and William Gillespie, for appellee.
   Mr. Justice MeSurely

delivered the opinion of the court.


author: Mr. Presiding Justice Gridley

text:
    R. F. Wilson and Company, appellant, v. T. M. White Company, appellee.
    Gen. No. 37,459.
    Opinion filed February 1, 1935.
    Cassels, Potter & Bentley, for appellant; Kenneth B. Hawkins and Richard Bentley, of counsel. Schuyler, Weinfeld & Hennessy, for appellee; Henry E. Jacobs and Thomas J. Downs, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.