text:
    Malcolm B. Stark, Appellant, v. Chicago Title and Trust Company, Appellee.
    Gen. No. 42,113.

      Heard in the second division of this court for the first district at the February term, 1942.
    Opinion filed November 17, 1942.
    Folsom, Grossberg, Brill & May, of Chicago, for appellant.
    Harold L. Reeve and Elmer M. Leesman, both of Chicago, for appellee.
   Mr. Justice Friend

delivered the opinion of the court.

Plaintiff sued to recover damages from defendant for its alleged violation of an escrow agreement under which it was made depositary, with its consent and for a consideration, of certain stock certificates and other documents which it was authorized to hold and directed to deliver subject to the written instructions of the parties. Trial by the court without a jury resulted in finding and judgment in favor of defendant for costs, from which plaintiff has taken an appeal.

There is substantially no dispute as to the essential facts, which are set forth in the pleadings and are supported by testimony adduced upon trial. It appears that February 17, 1937, Malcolm B. Stark and J. I. Sperling executed and delivered to Chicago Title &

See Callaghan’s Illinois Digest, same topic and section number. Trust Company an agreement in escrow for deposit by Sperling, on behalf of Superior System, Inc., of six bearer notes signed respectively by B. H. Weiss as president and Samuel Lancet as treasurer, two for $2,500 and four for $2,300 each, the first one due March 15, 1937, and the others maturing one month apart; and for the deposit by Stark, a lawyer in New York city, of two stock certificates aggregating 75 shares and constituting 25 per cent of the capital stock of Superior System, Inc., of which he was the owner, together with his resignation as officer and director of the corporation,, waiver, and certain minutes of a special meeting of the board of directors held February 17, 1937.

Defendant accepted the escrow and was authorized and directed to hold the respective deposits subject to the following instructions:

“First — Receive the payment on the notes deposited and forward the collections therefor to the order of Malcolm B. Stark.
“Second — Cancel notes as paid and deliver same to the order of J. I. Sperling.
“Third — Upon payment of the fourth note, due June 15th, 1937, deliver the resignation as an officer and minutes of special meeting of Board of Directors held February 17, 1937, and release of salary as an officer signed by Malcolm B. Stark, to the order of J. I. Sperling.
“Fourth — Upon payment of the final note, deliver the stock certificates deposited herein, together with the executed proxy and resignation of directorship to the order of J. I. Sperling.
“Fifth — That in the event of default in the payment of any of the aforesaid notes, the stock certificates, proxy agreement, and resignation of directorship, deposited pursuant to this escrow by Malcolm B. Stark, shall be returned to said Malcolm B. Stark and any and all payments of notes made to Malcolm B. Stark heretofore hereunder shall he retained by Malcolm B. Stark as liquidated damages and not as a penalty.”

The first two notes were paid at maturity. With plaintiff’s consent, payment of the note which became due May 15 was extended $800 to May 22, $800 to May 29 and $700 to June 5. In consenting to the extension plaintiff wrote the escrowee that, “in the event of a default by Superior System in the payment of any one of these three sums upon the due dates, I shall preserve my remedies with respect to the original note #3.” A similar letter was written relative to extension of the note due June 15 to June 18, June 25 and July 2, respectively. Notes 3 and 4 were paid as provided by the letters of extension and the proceeds of the four notes, aggregating some $9,600, were transmitted by defendant to Stark, who claimed the sums paid as liquidated damages under the escrow agreement because of default in payment of notes numbered 5 and 6. Note No. 6 fell due Thursday, July 15, 1937. On the succeeding day, July 16, defendant sent a telegram to plaintiff informing him that the note had not been paid. Thereafter, on the same day, defendant received a letter from Sperling, attorney for Superior System, Inc., advising that his client, the signer of the note, had filed a voluntary petition in bankruptcy for reorganization in the federal court under sec. 77-B, and by reason thereof was unable to make any payments on the notes remaining due without order of court. The letter advised defendant to keep all matters pertaining to the escrow in status quo until further notice. After receipt of this letter from Sperling and on the same day (July 16) defendant received a telegram from plaintiff asking for the immediate return of the certificates of stock, proxy agreement, and the resignation of Stark as director. July 17 fell on Saturday and the business day of the Chicago Title & Trust Company ended at 12:30 p. m. On that day defendant received a letter from plaintiff, which had been sent by registered air mail, confirming bis telegram of the previous day, and again demanding return of the stock certificates and other deposits. Defendant immediately advised Stark by telegram that it had received notice of the filing of a voluntary petition in bankruptcy by Superior System, Inc. Thereafter, Monday, July 19, defendant received a letter from Sperling dated July 17, informing defendant on behalf of Superior System, Inc., that he intended making an application in the federal court for a general restraining order not later than the succeeding Wednesday, requesting that defendant retain all deposits in the escrow, and suggesting that he (Sperling) be notified by telephone before defendant took any steps for redelivery of the deposits to plaintiff. On that same day, July 19, defendant was served with notice in the bankruptcy proceeding, notifying it that on the following day at the opening of court Superior System, Inc., would apply for an injunction restraining defendant from releasing, relinquishing or returning any of the deposits made with it under the escrow agreement. Attached to the notice was a copy of the petition to be presented, in which the escrow instruments were described and in which it was stated that Superior System, Inc., had prior thereto July 15, 1937 filed its petition for reorganization under sec. 77-B and was therefore without power to make any further payments under the terms of the agreement. The restraining order in the bankruptcy proceeding was entered Tuesday, July 20. Defendant thereupon withheld compliance with plaintiff’s demand for return of the documents until the dissolution of the injunction in October 1937, following the summer vacation.

After defendant had filed its amended answer to the complaint the motion judge of the circuit court sustained plaintiff’s motion to strike portions of the answer, including averments that July 16, following receipt of Sperling’s letter and plaintiff’s telegram demanding the immediate return of the escrow deposits, Joseph D. Shelly, defendant’s chief escrow officer, consulted with Edmund J. Reynolds, one of the attorneys regularly employed by defendant to counsel and advise it on matters of law concerning its proper conduct in matters of this kind, and that Reynolds and Shelly thereupon consulted with George Gillette, defendant’s general counsel and consultant, who advised Shelly that it would be perilous to accede to plaintiff’s demand without further inquiry into the bankruptcy proceeding; that thereupon on Saturday, July 17, Shelly communicated with Sperling over the telephone and inquired what, if any, orders or proceedings had been had or taken in the bankruptcy matter with reference to the escrow or the subject matter thereof, and informed him of the directions defendant had received by telegram from plaintiff July 16, and was thereupon informed by Sperling that Superior System, Inc., was about to apply for an injunction in the district court of the United States to restrain defendant from returning to plaintiff the documents demanded by him in his telegram. Upon trial defendant offered to prove the foregoing averments but the trial court properly sustained plaintiff’s objections thereto because the motion judge had stricken the portions of the amended answer in which the foregoing averments were made, and defendant assigns as cross errors both the ruling of the motion judge in sustaining plaintiff’s motion to strike those portions of the amended answer, and of the trial judge in sustaining plaintiff’s objections to the offer of proof.

Since conversations with its attorneys were not offered to prove the soundness of the advice given, but merely to show the care exercised by the escrowee under the circumstances, we think defendant was entitled to show that it acted in good faith in consulting and following the advice of its attorneys as part of its defense. No assignment of errors was necessary to raise the point (McNulty v. Hotel Sherman Co., 280 Ill. App. 325), but under section 74 of the Civil Practice Act (par. 198, ch. 110, Ill. Rev. Stat. 1941 [Jones Ill. Stats. Ann. 104.074]) the entire record comes to this court for review, and any erroneous action of the trial court may be corrected if the point is properly reserved, as it was in the case at bar by the assignment of cross errors. Hillmer v. Chicago Bank of Commerce, 375 Ill. 266. Had the foregoing averments of the amended answer not been stricken, the trial judge could have received evidence tending to show the considerations which prompted defendant, in the exercise of caution, to hesitate before returning the deposits. No one could then foresee what position the debtor or its trustee in bankruptcy would take with respect to the stock in escrow. Since the jurisdiction of the federal court attached at once upon the. filing of the petition (In re Long Island Properties, Inc., 40 F. Supp. 611), defendant, who had been given special notice of the pendency of the bankruptcy proceedings, might have subjected itself to a charge of contempt of court if it had sent the stock to plaintiff in New York, out of the jurisdiction of the court. Moreover, defendant may have been advised that the trustee in bankruptcy, or some person representing the debtor, might later claim that the retention of $9,600 by Stark as liquidated damages constituted a penalty, notwithstanding the provision of the escrow agreement that it be treated as liquidated damages, and if that question were ultimately resolved against Stark, defendant might be required to return the sums received as proceeds of the first four notes or parts thereof, as a condition precedent to the delivery of the 75 shares of stock to Stark. In Giesecke v. Cullerton, 280 Ill. 510, the court observed that no branch of the law is involved in more obscurity by contradictory decisions than whether a sum specified in an agreement to secure performance will be treated as liquidated damages or a penalty, and that each case must depend upon its own peculiar and attendant circumstances. In any event, there was at least sufficient doubt as to whether this was a penalty or liquidated damages to cause hesitation in the mind of the escrowee as to what its course should be, and under the circumstances the law would not require it to determine hastily for itself what the rights of the parties might be. These considerations may well have entered into Gillette’s advice to Shelly that it would be perilous to accede to plaintiff’s demand without further inquiry into the bankruptcy proceeding.

Although plaintiff advances numerous propositions of law as ground for reversal, some of which are not argued, the gravamen of his contentions is that Stark’s telegram of July 16 amounted to a positive unequivocal direction or instruction to the depositary for the return of the documents held in escrow; that the terms of the agreement left no discretion to the defendant, except to follow the instructions of the escrow agreement to the letter, regardless of bankruptcy or other proceedings, other than an injunction; and therefore by failing to comply immediately with plaintiff’s demand and with the directions of the escrow agreement, defendant rendered itself liable in damages for violation of its duties.

There is substantially no disagreement between counsel as to the effect of an escrow agreement. From the time the deposit is made the escrowee becomes the trustee of both the party making the deposit and the one for whose benefit it is made. It is likewise a settled rule that when a disagreement arises between the parties as to the right to delivery, the escrowee is not required to act upon his own responsibility. In such case a bona fide reasonable detention of the papers and securities deposited in escrow is justified for the purpose of ascertaining the true rights of the parties. Sliscovich v. Scandinavian-American Bank, 88 Wash. 674, 153 Pac. 1077; Farming Corporation v. Bridgeport Bank, 113 Neb. 323, 202 N. W. 911. In Warner v. Mettler, 260 Ill. 416, the court said that “ ‘A trustee cannot be expected to incur the least risk in the distribution of the trust fund. Therefore, where there is a mere shadow of doubt as to the rights of the parties, he may require a bond of indemnity,’ ” and in Kaufman v. Loomis, 110 Ill. 617, it was held that “If, in good faith, as a trustee, he exercised his honest judgment in so refusing, and acted, as he supposed, for the best interests of all concerned, — unless that judgment was grossly erroneous, with the lights he had, — he surely cannot be charged with wronging any one by acting upon his judgment.” In the case at bar the fact alone that Superior System, Inc., had filed a petition in bankruptcy, coupled with the knowledge that the bankruptcy court had jurisdiction of the matter from the time the petition was filed, justified the escrowee’s hesitation before yielding to Stark’s insistence for the immediate return of the shares of stock. Upon two other occasions plaintiff had manifested the absence of any urgency. When note 3 fell due he notified the escrowee that payment might be made in instalments extending over three weeks thereafter, and he did the same with respect to note 4. Furthermore, the escrow agreement provides that in the event of default in the payment of any of the notes, the documents deposited should be returned to Stark, without specifying their immediate return, as Stark requested. There are decisions holding that the duty of an escrowee in such a situation is not to act immediately, but that he is entitled to wait until after reasonable time is given, notwithstanding the time limit named in the contract. Bott v. Wright, 62 Tex. Civ. App. 632, 132 S. W. 960; Smith v. Moore (Tex. Civ. App.), 155 S. W. 1017. The short space of two days within which the various events herein recited occurred, cannot well be urged as an unreasonable delay. Thereafter, the injunction of the federal court intervened to enjoin defendant from returning the shares of stock until the injunction was dissolved.

Considerable space is devoted by counsel in their briefs to the question of damages. Plaintiff alleged and sought to prove that he was deprived of an opportunity to dispose advantageously of the stock certificates, which depreciated greatly in value because of defendant’s failure to deliver them promptly on Stark’s request, and he offered in evidence a contract with one Eugene K. Tonkonogy for resale of the stock, and also sought to prove that he had incurred certain expenses, including attorney’s fees, in procuring a dissolution of the injunction, all of which the court refused. As the record stands, no damages were shown. In view of our conclusion that defendant was not liable, the determination of the question whether the proffered evidence was admissible, is of secondary importance. ■

We are of opinion that the circuit court properly found the issues in favor of defendant, and the judgment in its favor for costs is therefore affirmed.

Judgment affirmed.

Sullivan, P. J., and Scanlan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Friend

license: Public Domain

text:
    Joseph M. Rummler and Dixie K. Rummler, Appellees, v. Metropolitan Life Insurance Company, Appellant.
    Gen. No. 42,147.

      Heard in the second division of this court for the first district at the February term, 1942.
    Opinion filed November 17, 1942.
    Hoyne, O’Connor, Rubinkam & Melaniphy, of Chicago, for appellant; Nathaniel Rubinkam and John C. Melaniphy, both of Chicago, of counsel.
    Bell, Boyd & Marshall, of Chicago, for appellees; Victor M. Harding, Jr., of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Joseph M. Rummler, as the insured, and Dixie K. •Rummler, as beneficiary under a policy of insurance issued by Metropolitan Life Insurance Company upon the life of Joseph M. Rummler in the sum of $3,000, which had lapsed for nonpayment of a premium due March 16,1940, filed a complaint in equity for the purpose of enjoining the company from canceling the policy and for a decree continuing the policy in full force and effect upon the payment of premiums by plaintiffs, on the twofold theory (1) that one of the company’s agents had assured the policyholder that late payment would be excused, and (2) that the receipt and retention of the late payment by the company and the subsequent mailing to the policyholder of notice to pay his next premium, with the warning that unless it was paid the policy would be forfeited, constitute a waiver of the right to forfeit. The cause was referred to a master, who found the issues in favor of defendant and recommended dismissal of the complaint for want of equity. The chancellor, however, sustained plaintiffs’ exceptions to the report and entered a decree in their favor, from which defendant appeals.

From the essential facts it appears that Joseph M. Rummler (hereinafter referred to as plaintiff) was covered by a group policy while employed as salesman by Popular Science Monthly. After leaving its employment April 30, 1938, he exercised his night to convert the contract "into an ordinary life policy, which was issued by defendant without physical examination June 16, 1938, for $3,000. Plaintiff was then in his early thirties, had graduated from Cornell University in 1930, possessed considerable business experience, had read the policy and retained it in his possession from the day it was issued. The policy provided for quarter annual premiums of $18.36, payable on the 16th day of September, December, March and June of each year, with a grace period of 31 days after each date. Plaintiff paid the first premium of $18.36 on or about June 16, 1938 and all quarter annual premiums to and including December, 1939. The premium due April 16, 1940 (adding the period of grace) was not paid on or prior to that date, and it is conceded that the company had the right to forfeit the policy. Several days after his default plaintiff received by mail an application for reinstatement. He proceeded to the loop office of the company in Chicago and asked for Richard Kinsella, his ‘ ‘regular agent.” Kinsella was not in at the time and plaintiff was referred to John H. Kritikson, who advised him to fill out the application and mail it to the company with his check for $18.36. Plaintiff testified that Kritikson assured him the policy would be reinstated without medical examination, but this statement was denied by Kritikson, who defined his position as that of salesman, employed to solicit and sell insurance, without authority to pass upon applications for reinstatement. Kritikson also said that the Chicago office had nothing to do with the approval or disapproval of such applications, but that such matters had to be submitted to, the home office. May 11, 1940, plaintiff mailed his application and check to the Chicago office. The application was prepared and signed by plaintiff, contained a notation that the policy had lapsed for nonpayment of premium due March 16, 1940, and provided :

“Application is hereby made for the reinstatement of the above stated policy which lapsed for nonpayment of premium due as stated above. I hereby certify that the foregoing statements and answers are correct and wholly true and have been made by me to induce the Metropolitan Life Insurance Company to reinstate the above policy, and I agree that if said Company shall grant such reinstatement the same shall be deemed to be based exclusively upon the representations contained in this request and upon the express condition that if the foregoing statements be in any respect untrue said Company shall, for a period of two years from the date of such reinstatement, be under no liability by reason of the attempted reinstatement of the policy, except that the Company shall return to the insured or his personal representative all premiums paid since the date of said reinstatement.
“It is understood and agreed that any sum deposited with the Company on account of this application for reinstatement, will be held for my account without obligation on the part of the Company until it has officially acted on this application, and that (a) if this application is approved, then any such sum will be applied to the payment of overdue premium and interest, but (b) if the Company declines to reinstate said policy, the said sum will be returned.”

Upon receipt of the application and check the company mailed plaintiff the following provisional receipt:

“Pending the ascertainment of facts or the accomplishment of acts upon which the Company’s acceptance of such payment depends, and the delivery of an official receipt to replace this provisional receipt, the said sum, is held subject to the order of the payer, without obligation or waiver of any rights on the part of the Company, and it will be returned if it is not accepted, or upon the request of the payer at any time before such acceptance.”

Shortly after May 11,1940 plaintiff had a telephone call from Kinsella, who advised him that a medical examination would be required and directed him to call on Dr, Benjamin Levinson, the company’s physician, who subsequently examined him on May 28. The examination disclosed a murmur over the mitral area of the heart, commonly designated as “a leaky valve.” Following the submission of the physician’s report to the company, Kinsella called on plaintiff in the forepart of June 1940, and told him of the heart condition found by Dr. Levinson. Plaintiff was evidently aware thereof, because he said he “expected something like that, that there was a heart condition, and that he was very, very foolish to let the policy lapse.” Kinsella thereupon suggested that the company would reinstate the policy on a special class rating requiring the payment of premiums at $28.32 instead" of $18.36 per quarter, or in the alternative plaintiff could get approximately $1,500 insurance at the original premium rate. Plaintiff entertained some doubt as to whether he could afford to pay the increased premium and Kinsella therefore offered the suggestion that he pay the premium he had been paying and reduce the amount of insurance. According to Kinsella, plaintiff said “it was a good idea, he would think it over.” But neither Kinsella nor the company heard from him thereafter. The complaint was filed early in August, while defendant was still awaiting Rummler’s reply. Under the circumstances defendant had no- occasion to return the check inclosed with plaintiff’s application for reinstatement before suit was filed, but the money was tendered in defendant’s answer and again upon trial before the master.

Although there is some conflict in the testimony as to whether Kritikson told plaintiff that the policy would be reinstated upon filing of the application for that purpose and payment of the premium, there is nothing in the record to justify the conclusion that Rummler .relied on any such assurance. The application which he prepared and signed showed on its face that the policy had lapsed for nonpayment of premium due March 16, 1940. Plaintiff'had read the policy, as he said, which contained the following provision:

“Reihstatemeett — If this Policy shall lapse in consequence of default in payment of any premium, it may be reinstated at any time, . . . upon the production of evidence of insurability satisfactory to the Company and the payment of all overdue premiums with interest at six per centum per annum to the date of reinstatement.”

Moreover, there is nothing in the evidence to suggest that when Kinsella reported the heart condition disclosed by Dr. Levinson, plaintiff then considered the policy reinstated or in full force and effect; otherwise there is no reasonable explanation for his submitting to a medical examination as a prerequisite for reinstatement of the policy. It is unlikely that Rummler believed Kritikson to have had authority to reinstate the policy because 17 days after he talked to Kritikson he appeared before Dr. Levinson, and prior thereto he had made a declaration in writing that his policy was lapsed and that he was applying for its reinstatement. He at no time claimed that the policy had actually been reinstated. The master who heard the evidence makes no factual finding as to the conversation between plaintiff and Kritikson, but he concluded that defendant was not bound by any statements made by its agents or representatives in connection with the application for reinstatement, and Ms conclusion is fortified by a provision of the policy which could not have escaped plaintiff’s attention if he read it, as he said he did, that “No agent is authorized to waive forfeitures, to alter or amend this Policy, to accept premiums in arrears or to extend the due date of any premium. ’ ’

After the master had filed his report and an order was entered by the chancellor allowing plaintiffs’ objections to stand as exceptions thereto, the Rummlers amended their complaint by adding count 2 in wliich they alleged that May 26, 1940, the company mailed plaintiff a written notice of premium due June 16, 1940. The notice read: “Metropolitan Lies Insurance Company hereby gives notice that the premium on the policy described below will be due in the amount and at the time stated, if said policy be then in force.” (Italics ours.) Having received this notice shortly after May 26, as plaintiffs alleged in their amended complaint, Rummler on May 28 submitted to the physical examination by Dr. Levinson, and about June 28 sent defendant his check for $18.36, which sum was returned to him by the company. Obviously he could not have considered that the policy was in force and effect when he mailed his check because he undoubtedly knew that it had lapsed for nonpayment of premium due March 16, 1940, and that its reinstatement depended on whether the examination disclosed him to be an insurable risk. Nevertheless he relies on this notice as the second circumstance constituting a waiver of the right to forfeit.

The policy under consideration, like most life insurance policies, stipulates: (1) for the payment of premiums; (2) for their payment on a certain day; and (3) for the forfeiture of the policy in default of punctual payment. The courts in tMs and other States have consistently held that time is material and of the essence of the contract and nonpayment at the day involves absolute forfeiture if such be the terms of the contract. New York Life Ins. Co. v. Statham, 93 U. S. 24. In Lester v. Guardian Life Ins. Co. (S. C.), 13 S. E. (2d) 627, the court, quoting from Bergholm v. Peoria Life Ins. Co., 284 U. S. 489, pointed out that “the condition in a policy of life insurance that the policy shall cease if the stipulated premium shall not be paid on or before the day fixed is of the very essence and substance of the contract, against which even a court of equity cannot grant relief.” In Broughton v. Equitable Life Assur. Society of United States, 71 F. (2d) 821, the insured executed an application for reinstatement of a lapsed policy, after his agent had cashed his check for the past due premium. He received a provisional receipt therefor and died before the application was acted upon. The court held that until evidence of insurability was furnished and accepted, the policy was not reinstated, saying: “The receipt given him for the check he had tendered in payment clearly indicated that the money was received tentatively to be held in trust until he should comply with the provisions of the policy. There was nothing in the previous course of business between the parties nor in the receipt or application for reinstatement that could lead a reasonable man to believe that the provision of the policy requiring that the evidence of insurability should be satisfactory to the company would be waived.

Counsel seem to agree that the chancellor in the case at bar was of opinion that the mailing of the notice relating to the June 16, 1940 premium brought the case within the ruling of this court in Stevenson v. Prudential Ins. Co. of America, 308 Ill. App. 401. In that case suit was brought upon a life insurance policy for $10,000 issued on the life of one Joseph Husband. Trial by the court without a jury resulted in a judgment for plaintiff of some $7,500. There was a loan on the policy of $3,001.87 and the cash surrender value was $3,015, so that on June 16, 1938, when the quarter premium was due the net cash surrender value was $13.13. This would purchase extended insurance for 43 days from that date. No part of the June premium was paid. Thereafter, August 30, 1938, the company notified the beneficiary of the policy that the quarterly premium was due September 16, 1938, and that “ ‘unless the premium then due shall be paid . . . by or before’ 31 days thereafter, (October 17, 1938) ‘said policy and all payments thereon will become forfeited and void. ’ ” Insured died September 21, 1938. The circumstances of that case can readily be distinguished from the case at bar. It was here shown, without contradiction, that the statutory notice of forfeiture was given plaintiff more than 15 days prior to March 16, 1940, whereas proof of a similar condition precedent was not present in the Stevenson case. Moreover, in this proceeding the notice relating to June 16, 1940 specifically contained the words “if said policy be then in force,” whereas no such fact appeared in the notice in the Stevenson case. The gravamen of the conclusion reached in the Stevenson case is that insured was misled to his disadvantage, since insured and beneficiary did not know that the policy had lapsed for nonpayment of premium, having had some value for extended insurance. Nor was there any application for a reinstatement involved in that decision. In the case at bar there is nothing to indicate that Rummler was misled. He was fully aware of the lapse of the policy, he made application for reinstatement, submitted to a physical examination and obviously could not have considered that the policy was in force and effect when he received the notice relating to the June 16 premium.

The evidence in this case establishes without contradiction that Rummler allowed his policy to lapse, made an application for reinstatement, submitted to a medical examination in connection with his application and was advised that the company would not reinstate the policy on the same terms on account of his heart condition. Under these circumstances and in the view that we have heretofore expressed, there could be no waiver in law or in fact of the forfeiture due to plaintiff’s failure to pay the premium when it fell due. Therefore we are of opinion that the decree of the circuit court should be reversed and the cause is remanded with.directions to overrule plaintiffs’ exceptions to the master’s report and enter a decree dismissing the complaint for want of equity in accordance with the conclusions and recommendations of the master.

Decree reversed and cause remanded with directions.

Sullivah, P. J., and Scanlaw, J., concur.


text:
    Sam Reisman et al., Appellants, v. Central Manufacturing District Bank et al., Defendants. Charles C. Wright, Appellee, v. Howard K. Hurwith, Coappellant.
    Gen. No. 42,260.
    Heard in the second division of this court- for the first district at the June term, 1942.
    Opinion filed November 17, 1942.
    Irving Goodman, Harold L. Perlman, Marvin J. Welfeld, Murphy & Pearson, John A. Russell, McFarland, Morgan & Stearns and John D. King, all of Chicago, for certain appellants; Irving Goodman, of Chicago, of counsel.
    Max M. Grossman, of Chicago, for certain other appellant.
    Martin, Ullmann & Brown, of Chicago, for appellee.
   Mr. Justice Friend

delivered the opinion of the court.

Central Manufacturing District Bank closed its doors and went into liquidation June 24, 1932. Thereafter a representative Suit was filed in the circuit court to enforce the constitutional liability of its stockholders. The second amended and supplemental complaint alleged that Charles C. Wright was the. owner of 13 shares of the capital stock of the par value of $100 each. Appropriate allegations were made as to the insolvency of the bank, its liabilities and assets, and other facts necessary to support the suit. Howard K. Hurwith was appointed receiver. February 18, 1933, one Charles C. Wright was served with summons at his residence in Oak Park, Illinois, but failed to appear or answer. November 7, 1935, a decree was entered finding that Charles C. Wright was one of the stockholders of the bank, fixing his liability at $1,300, reciting that summons had been served upon him and default entered, and directing him to pay $1,300 and costs as the owner of 13 shares of stock. Execution was issued against him, but not served.

Some five years later, in 1940, plaintiffs’ counsel discovered that the wrong Charles C. Wright had been served with summons and that the Charles C. Wright who was a stockholder of the bank, resided at 6945 S. Dante avenue, Chicago. Accordingly, December 6, 1940, an alias summons was duly served on the Charles C. Wright who resided at the latter address, whereupon he appeared before Judge Dunne of the circuit court March 11, 1941, and procured an order quashing the summons. Thereafter, April 4, 1941, plaintiffs, Howard K. Hurwith, the receiver, and the Charles C. Wright who resided.in Oak Park, entered into a stipulation to vacate and set aside the decree of November 7,1935 in so far as it affected Wright, and an order was entered accordingly which also provided that as to all other defendants named in the decree, except Charles C. Wright, and as to all other matters contained therein, the decree remain in full force and effect. The order directed that pluries summons issue against the Charles C. Wright who was a stockholder of the bank residing at 6945 S. Dante avenue, which was issued June 12,1941, and served personally on him by the sheriff of Cook county June 16, 1941. He appeared in court July 3, 1941, and moved to quash the writ of summons and to dismiss the suit as to him, under section 48 of the Civil Practice Act. December 16,1941, his motion to quash summons was allowed, an order dismissing the suit as to him was entered, and this appeal followed.

Wright, the appellee, takes the position that the court having entered final judgment against the Charles C. Wright who resided in Oak Park, pursuant to the service of process and default, and the term having passed, no authority existed to issue a summons in that cause against any other party, and consequently the summons and service thereon were a nullity; that there was no complaint on file and no suit pending against him; that on a previous hearing Judge Dunne had adjudicated that there was no suit and no complaint on file and that the court had lost jurisdiction, and no appeal having been taken from that order, it was therefore res adjudicatei.

Wright relies largely on the authority of Trupp v. First Englewood State Bank of Chicago, 307 Ill. App. 258, decided by this division of the Appellate Court in November 1940. In that case plaintiffs filed a creditors ’ representative suit in equity to settle and determine in one action the constitutional liability of all stockholders to all creditors of the First Englewood State Bank of Chicago, which had been closed by the auditor of public accounts in June 1932. The National Republic Bancorporation was named defendant along with numerous individual shareholders. Pursuant to hearings had before the master several decrees were entered, one of which fixed the liability of Bancorporation as owner of 1,890 shares at $189,000. Some 18 months prior to the entry of that decree an involuntary petition in bankruptcy had been filed against Bancorporation, with its consequent adjudication of bankruptcy. Long after the decree of December 28, 1934, fixing the liability of Bancorporation as a shareholder, plaintiffs in that proceeding sought to amend the complaint to charge the individual stockholders of Bancorporation with liability, on the ground that certain new facts had come to light which were previously unknown to plaintiffs prior to the entry of the decree. By these facts plaintiffs sought to open the proceeding and show not only the pending bankruptcy proceedings against Ban-corporation, but also to establish the alleged illegality of its incorporation for the purpose of operating a general banking system. Plaintiffs there relied on section 46 of the Civil Practice Act (par. 170, ch. 110, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 104.046]) permitting amendments of pleadings to conform to proof at any time “before or after judgment.” We held, however, that sec. 46 did not purport to enlarge jurisdiction of courts to reopen a case long after final decree had been entered therein, and that the inability of a court to reopen a case after final decree had been entered and the term had expired rested upon a want of jurisdiction, and was not a question of practice or procedure. The Trupp case can readily be distinguished from the circumstances of this proceeding in the following respects: the stockholders of Bancorporation were never made parties to the Trupp suit, and plaintiffs in that proceeding sought two years after they had procured a decree finding Bancorporation to be the owner of 1,890 shares of the capital stock of the bank, to reopen the proceeding and fix liability against the individual stockholders of Bancorporation, who were never made parties to the suit; whereas in the case at bar this particular defendant, Charles C. Wright, was a party to the original suit, but the wrong Charles C. Wright was served with summons. Furthermore, in the Trupp suit no complaint was brought against the stockholders of Bancorporation, whereas in this proceeding a cause of action was stated in the original complaint against this particular Charles C. Wright.' Lastly, in the Trupp case there was no stipulation to vacate the decree by any of the- parties, as there was in the case at bar, and consequently the court had no jurisdiction after two years to do so. Our conclusion in the Trupp case is not at variance with the proposition that a decree or judgment may be vacated or set aside by the stipulation of the parties at any time. In Humphreyville v. Culver, Page, Hoyne & Co., 73 Ill. 485, it was held as early as 1874 that although a court cannot set aside its own judgment at a subsequent term without consent, yet with the consent of all the parties it may do so. In Steinhagen v. Trull, 320 Ill. 382, the court, following the earlier cases, held that as a general rule a court has no jurisdiction to set aside, modify or change its judgment or decree after expiration of the term at which it was rendered, but that this may be done at a subsequent term with the consent of all the parties, and in Miller v. Miller, 332 Ill. 177, it was held that although the decree was entered at a former term, the only parties interested in the suit could agree to dismiss it upon stipulation entered into pending confirmation of the sale by the master.

However, Wright’s counsel advance the ingenious argument that plaintiffs sued the wrong Mr. Wright, procured a decree finding him to be the owner of 13 shares of stock, “and are now seeking to hold another because they claim he is the real owner of the stock”; that “At the time judgment was taken the Charles C. Wright who was served had to be a defendant else no judgment could have been taken against him”; that “He was named in the decree . . . after they knew who had been served, and found to be a defendant served with process”; that “If he was not the Charles C. Wright who was a defendant, there was no occasion for any stipulation to set the judgment aside or to enter any order relieving him from the burden of it”; and that “Although he may have been mistakenly or wrongfully made a defendant, he was a defendant just the same.” From this argument they conclude that since the Charles C. Wright against whom judgment was taken having once been a defendant, no other defendant could be substituted for him without amendment of the pleadings and the entry of an order adding a new defendant. The argument advanced seeks to create a fiction by which the real owner of the stock will, on a pure technicality, be relieved from a liability that he does not disavow. The simple fact is that the Wright who owned 13 shares of bank stock was made a defendant, but the wrong person was served, and when the mistake was discovered it was plaintiffs’ duty to advise the court and rectify the mistake. Plaintiffs could have done this of their own motion or by means of stipulation. Because the person against whom judgment was mistakenly entered was dismissed by stipulation does not alter the fact that the right Charles C. Wright was still liable, nor does it justify the contention that another defendant was substituted. The only defendant ever named was the owner of the stock, the present Charles C. Wright, but he was never served before the entry of the decree of November 7, 1935.

It is urged in this connection that the stipulation to vacate the decree was not binding on anyone except those who entered into it, and that its only effect was to relieve one who, it was claimed, had wrongfully been sued. The only effect of the stipulation, as we view it, was to relieve the Charles C. Wright who resided in Oak Park and who was not liable because he owned no stock in the bank, from the burden of a decree for money which he did not owe. The fact that someone else with the same name may have prior thereto erroneously been served with summons should not release the present Charles C. Wright of liability or alter his position as a defendant in the proceeding. He was always a defendant because the complaint spécifically made him a party. He was a stockholder of the defunct bank and does not deny that he became liable for the 13 shares that he held. His sole contention is predicated upon the fact that he was not served and that the service upon another who is admittedly not liable, should operate to relieve him, the appellee, from payment because, as he contends, the court had no jurisdiction after the term to summon him.

Whatever merit may be attached to the contention that the stipulation was not binding upon the Charles C. Wright who owned the stock is of secondary importance because of a provision in the decree entered November 7, 1935, which reserved jurisdiction in the court for further proceeding. This provision is contained in par. 17th of the decree and is as follows:

“That those defendant stockholders against whom a decree has not been rendered herein, shall upon proper service of summons or the entry of an appearance by them, be subject to the jurisdiction of this court, and this court reserves the right to enter a decree against any or all of them for the amount of the unsatisfied ' liabilities that accrued while they held their respective shares of stock as provided by the constitution and statutes of the State of Illinois.”

It was also recited in said decree among other things:

‘ ‘ That this decree be without prejudice to the rights of the complainants or any of ¡the creditors of said Central Manufacturing District Bank, a banking corporation, to proceed at a further hearing or hearings of this cause or by some other appropriate proceeding or means against the defendants who have heretofore not been served with process or as to those defendants in regard to whom this case is not at issue, or in regard to those defendants who are outside the jurisdiction of this court, or in regard to those defendants who are now deceased and whose legal representatives are not.parties hereto, and that for the purpose of determining existence and extent of the liabilities of these defendants who have either not been served with process or as to whom this cause is not at issue, or who, for some other reason, a decree has- not been entered against them or their personal representatives, this court expressly reserves and retains jurisdiction for further and future hearing and determination of their respective liabilities by this court, and this court reserves the right to permit any such action or proceeding against such defendants as may be lawful, appropriate and expeditious for determining their respective liabilities.”

Under the foregoing provisions the court retained jurisdiction to proceed against those defendant stockholders against whom a decree had not been entered for the amount of the unsatisfied liabilities that accrued while they held respective shares of -stock as provided by the constitution and statutes of the State of Illinois; and we think this would be equally true whether or not the decree was vacated by stipulation or otherwise.

The remaining question argued is that the order of Judge Dunne entered March 11, 1941, quashing the alias summons constituted res adjudícala. When this order was entered the decree as to Wright had not been set aside by the stipulation of the parties. Subsequently such an order was entered and thereafter Judge Harrington ordered the present Charles C. Wright to be brought into the proceeding by pluries summons, with which he was personally -served. Judge Dunne’s order was proper, because there was at that time a decree of record against one Charles C. Wright and until it was set aside, no alias summons could properly issue; but when the decree was set aside as to Wright by stipulation of the parties, the court had power under its reserved jurisdiction to order a pluries for summoning Wright, the defendant, into court. Judge Dunne’s order had no relation to the later order for a pluries summons by Judge Harrington and was not an adjudication of anything except the right of plaintiffs to bring Wright into the proceeding by alias summons before the decree was vacated.

Nothing that we have said herein is intended to predetermine the present Charles C. Wright’s liability as a stockholder. He has nowhere in his brief denied his liability, but of course if he was not a stockholder or if he has any other defense to this suit he should be permitted to set it up by appropriate pleadings.

Accordingly the order of the circuit court entered December 16, 1941, sustaining the motion to quash the summons and dismiss the suit as to the present Charles C. Wright is reversed, and the cause is remanded with directions to order him to answer the second amended and supplemental complaint and for such other proceedings thereon as are not inconsistent with the views expressed herein.

Order reversed and cause remanded with directions.

Sullivan, P. J., and Scanlan, J., concur.


author: Mr. Justice Scanlan

text:
    Henry Schoellkopf, Plaintiff, v. Emma C. Gallagher et al., Defendants. Continental Illinois National Bank and Trust Company of Chicago et al., Appellees, v. Eunice M. Kennedy et al., Defendants. Eunice M. Kennedy, Appellant.
    Gen. No. 41,714.
    Heard in'the second division of this court for the first district at the June term, 1941.
    Opinion filed November 17, 1942.
    Rehearing denied December 8, 1942.
    Urion, Bishop & Sladkey, of Chicago, for appellant; Howard F. Bishop, Jerome J. Sladkey and Robert F. Dewey, all of Chicago, of counsel.
    Mayer, Meyer, Austrian & Platt, of Chicago, for certain appellees.
    Herbert G. Immenhausen, guardian ad litem, for certain appellee.
   Mr. Justice Scanlan

delivered the opinion of the court.

A bill in chancery to construe the will of Henry Schoellkopf, Sr., deceased, was filed in the above cause in Í916. ' A decree was entered on December 27, 1916, in which the court reserved jurisdiction for certain purposes. On June 21, 1940, by leave of court, a “petition in the nature of a cross-bill” was filed in the same cause by “Continental Illinois National Bank and Trust Company of Chicago', a national banking association, The Northern Trust Company, an Illinois banking corporation, and Ida S. DeVry, as Trustees under the Last Will and Testament of Henry Schoellkopf, Sr., deceased, and under- the Settlement Agreement of April 17,1916 . . ., Edward Gallagher, Patrick L. Gallagher and Continental Illinois National Bank and Trust Company of Chicago, as Trustees under the Last Will and Testament of Emma C. Gallagher, deceased, and as 'Trustees under a certain Trust Agreement dated July 27, 1934, Ida S. DeVry, individually, Harris Trust and Savings Bank, as Trustee under the Last Will and Testament of Edward C. Schoellkopf, deceased, Emma C. Allen, Edna C. Bell, Elsie DeVry Barker, Minnie D. Burton, Henry W. DeVry and Carl DeVry.” Eunice M. Kennedy and Eoland H. Lueder, a minor, were made defendants. The petition prayed, inter alia, for authority to sell the premises at 174-176 North Michigan avenue, Chicago, and for leave to take such other action as might be necessary to terminate certain trusts. After a hearing before a master in chancery a decretal order was entered, on November 15, 1940, which authorized the trustees, “as Trustees under the last will and testament of Henry Sehoellkopf, Sr., deceased, and under the Settlement Agreement of April 17, 1916,” to sell the said property for $200,000. From this decree Eunice M. Kennedy, hereinafter called appellant, appeals. The other defendant, Eoland H. Lueder, through his guardian ad litem, asks this court to affirm the decree.

Henry Sehoellkopf, Sr., died testate on January 2,1916. Five children, Henry Sehoellkopf, Jr., Edward C. Sehoellkopf, Minnie DeVry, Ida DeYry and Emma C. Gallagher, survived him. His will, dated July 2, 1914, was admitted to probate in the probate court of Cook county on April 18, 1916. It provided, after certain specific bequests, that the residue of the property go to Henry Sehoellkopf, Jr., in trust, with a division of the net income of the trust into five equal parts, one-fifth to each of the sons and one-fifth to be set aside for each daughter, and that certain specific amounts be paid annually out of such income to each of the daughters. It further provided that the balance of the three-fifths income reserved for the daughters be added to the principal of the three trusts of $150,000 set up for the three daughters; that the trust created should terminate at the end of ten years from the testator’s death and that the trustee should then divide and partition the trust estate, subject, however, to the provision that at the end of ten years the trustee should further divide the trust estate and create and establish three separate trust estates of $150,000 each for each of the daughters, and that all the rest of the principal of the trust should then (at the end of ten years) be divided equally between the two sons. The will further provided that the trustee should hold the principal of the three trusts for the three daughters, paying certain amounts of the income therefrom to the beneficiaries therein named until the youngest surviving child of Ida DeVry reached twenty-one years of age (a like provision as to Minnie DeVry and Emma C. Gallagher), when the principal was to be distributed. At the end of the ten-year period the value of the trust estate was approximately $2,800,000. The assets of the estate included certain real estate known as 174-176 North Michigan avenue, Chicago. The three daughters were dissatisfied with the provisions of the will and threatened to contest its validity, but on April 17,1916, the five children executed an agreement which stated that it was the desire of all of the children that the plan of distribution under the will be modified so as to equalize the shares of the five children at the end of ten years from the testator’s death, and it provided that the two sons should convey to trustees therein named, namely, Henry Sehoellkopf, Jr., Edward C. Sehoellkopf and Continental Illinois National Bank and Trust Company, a sufficient part of the estate to which they were entitled under the will, which part would, when added to the three trusts created by the will for the three daughters, equalize the respective shares of the five children. The trustees under the will were to continue as such after the ten-year period only as to the $150,000 estate of each daughter, and the trustees under the agreement held the balance of the estate. The total estate for each daughter aggregated one-fifth of the two trust estates. The agreement provided for similar powers and provisions for the trustees, created under the agreement, as were provided for the trustees under the will. The agreement further provided that a bill in equity should be filed to construe the will and for the appointment of Edward C. Gallagher and the Continental Illinois National Bank and Trust Company as additional trustees of the trust estate created under the will of Sehoellkopf, Sr. While the bill that was filed in the instant cause, on May 24, 1916, asked for a construction of the will it is clear that the paramount purpose of the bill was to obtain a judicial approval of the agreement. The bill was filed and the decree was entered with the consent and approval of the five children of the testator. The decree recites the will of Henry Sehoellkopf, Sr. Paragraph (8) of the decree recites:

“(8) The court further Finds that doubts and differences have arisen and exist between some of the beneficiaries under said will of said decedent with reference to the true and proper construction and interpretation, intent and meaning of said will with respect to the provisions hereinafter referred to, and various conflicting claims have been made by the different persons hereinbefore named relative to the meaning, construction, validity and legal effect of certain of the provisions, devises and trusts contained in said will, and that by reason of said doubts and differences and conflicting claims the complainant is embarrassed and hindered in the management of said estate and in the performance of his duties as Trustee under said will; and that all of said uncertainties, differences and doubts with respect to the construction, meaning and effect of said will should be settled, determined and set at rest, and that the complainant and the others who\ may be appointed to serve with said complainant, as Trustees, under said will, require and should have the advice and direction of this court in the premises in order to properly administer upon said estate and carry out the provisions of said will . . . .”

(Italics ours.)

The decree further provides:

“That under and by virtue of the provisions of the said last will and testament of said Henry Sehoellkopf, deceased, the complainant, Henry Sehoellkopf, has such an estate and title in and to all the property bequeathed or devised to him in said will, that he has full power and right in his individual capacity to at once make a valid sale, transfer, assignment and conveyancé thereof, subject only to the legal title and the powers of the Trustees under said will and this decree, and that he also has full power to bequeath, or devise the same by will, subject only to said legal title and powers of the Trustees under said will and this decree.”

The decree contains a similar provision as to Edward C. Sehoellkopf. Paragraph (12) of the decree reads as follows:

“(12) That paragraph Thirteenth, clause (1) in said will, was not intended to and does not prevent a conveyance of the interest of any party under the said will from being effective at whatever time such interest is distributable under said will; that any, or all of the beneficiaries under said will have, notwithstanding said clause (1) full power and the right to enter into valid, binding agreements for a distribution of said estate among themselves in whatever manner and portions they may desire, and also, subject only to the trusts created by said will, as herein construed, to make valid sales, transfers, assignments and conveyances of their respective interests in said estate.”

The decree also contains the following provision:

“That the said complainant, Henry Sehoellkopf, and his two co-trustees appointed hereunder shall have and exercise, and they are hereby vested with all the rights, powers, authorities, discretions and duties vested in and imposed on said complainant, Henry Sehoellkopf, in and by said last will and testament of said Henry Sehoellkopf, deceased, . . . and any sale, conveyance, lease, exchange, mortgage, investment, distribution, division, partition or disposition of any kind of any property belonging to the estate of said decedent, Henry Sehoellkopf, or other act in connection with said estate, which shall not be joined in by said complainant, Henry Schoellkopf, or his successor and said Edward C. Schoellkopf or his successor shall be invalid and void, and not binding upon said estate of said decedent, Henry Schoellkopf, or on any of the parties at any time interested therein unless it be approved or ordered or decreed by this court. ’ ’

The decree contains a provision appointing additional trustees for the trust estate created under the will, as was provided for in the agreement. It also contains findings that, in effect, carry out the provisions and purposes of the agreement. The decree also contains the following provision:

“Any of the parties hereto are at liberty to apply to this court, from time to time, for further direction and advice as to any matter in connection with the performance of the duties of said Trustees in carrying out the terms of said will, as interpreted and construed by this decree, or in case all three of said Trustees or their successsors shall at any time be unable to agree as to any matter in connection with the performance of their duties in carrying out the terms of said will as interpreted and construed by this decree, and the court reserves jurisdiction over this catóse and over all the parties hereto for that purpose.” (Italics ours.)

At the end of the ten-year period fixed by the will a new agreement was made, on April 12,1926, between the trustees under the will and the five children, which recited that it was advisable to extend the ten-year period for distribution provided for in the will, under which provision all of the trust estate except the three $150,000 estates reserved in trust for the daughters was to be distributed to the two sons. It further provided for an immediate payment of $50,000 to each of the beneficiaries and extended the time for distribution of said trust estate to October 1, 1926, and that the beneficiaries might thereafter extend the period again by an agreement in writing; “and further recites beneficiaries desire an immediate payment of $50,000 each on account of the principal to which they are respectively entitled under the agreement of April 17,1916, and the personal estate in the hands of the Trustee is insufficient to provide for the creation of the three special trusts, and that the Trustees are willing, upon the terms hereinafter specified, to make such payments.”

Some of the beneficiaries under the will died leaving heirs. There were changes of trustees in the trust created by the will and the trusts created by the agreement, but the changes in the personnel of the trustees were identical as to each trust. The instant petition described nine parcels of real estate that remained in the trust; defined the interests of the various parties therein {that of appellant being eight one hundred eightieths in eight of the parcels and nine one hundred eightieths in the ninth parcel); it set up an offer of $200,000 for the property known as 17A-176 North Michigan avenue; alleged that there had accrued expenses and taxes,- making it impossible to terminate the trusts; alleged that all of the parties except appellant and a minor beneficiary, Boland H. Lueder, had agreed to enter into a liquidation agreement, and that the appellant had arbitrarily refused to agree to the sale of the Michigan avenue property for the sum of $200,000. Paragraph 16 of the petition reads as follows:

“Tour petitioners further represent that in and by said decree heretofore entered herein on December 27, 1916, it was provided that any of the parties hereto are at liberty to apply to this court, from time to time, for further direction and advice as to any matter in connection with the performance of the duties of said trustees in carrying out the terms of said Will as interpreted and construed by this court, and that in and by said decreee this court expressly reserved juris dietion over this cause and over all of the parties hereto for that purpose.”

The petition prayed that the court authorize the “trustee petitioners” to sell the said premises at 174-176 North Michigan avenue, Chicago; to execute and deliver deeds, etc.; to distribute the net proceeds of said sale to the creditors of said trusts, and the claimants of the estate of Minnie S. DeYry, deceased, including the trustee petitioners and their counsel, and to the beneficiaries of said trusts; or, in the alternative, in the event the court should fail or refuse to authorize the trustee petitioners to sell said premises, that the court order a division and partition of the premises described according to the respective rights of the parties, or that if a division and partition of the same cannot be made without manifest prejudice to the owners, a sale thereof be made and proceeds divided according to the respective rights of the parties. The petitioners further prayed for directions as to the disposition of the remaining assets of said trusts, for leave to terminate the same and for the approval of the final accounting of the trustees, and for leave to join in a conveyance to liquidation trustees in accordance with the liquidation trust agreement which would be presented to the court and which has been executed by all of the persons who are beneficially interested in said trusts, except appellant and the minor; and that the court, pending the final disposition of the assets of said trusts, authorize the trustee petitioners to continue to operate said properties and to make leases and agreements to sell the same, and for further relief, etc.

The answer of appellant “admits that the petitioners have a right to apply to this court for direction and advice but denies that this court reserved jurisdiction for the purpose of entering a suit for partition of any of the property herein, and therefore denies the jurisdiction of the court in this suit.” The petitioners then waived the prayer for partition. Appellant then filed a petition for a change of venue from one of the judges of the superior court and an order was then entered assigning the cause to another judge. The petitioners then moved that the cause be referred to a master. Appellant opposed the motion, and upon her motion she was allowed to file an amended answer, in which she “admits that there was a reservation of jurisdiction in said original decree for certain purposes, but not exactly as concluded in said paragraph [16], and that some of the petitioners have the right to apply to this court for certain directions and advice under the terms and provisions of the original decree, but deny that any of them have the right to apply to this court for any of the relief herein asked in this proceeding, that said original bill to construe the will was entirely concluded and disposed of by the final decree therein except as to further advice or instructions in connection with the provisions of that decree and that there is no authority or jurisdiction over the subject matter of the petition filed herein, or of the parties, nor any authority or jurisdiction to bring in this defendant as a new party, therefore, that the court has no jurisdiction to grant any of the relief prayed for.” The answer denies that $200,000 was a sufficient consideration for the sale of the premises in question.

The cause was referred to a master, who heard evidence and filed a report, in which he found, inter alia, “that the Trustees still have the power to sell the property held by them as Trustees under said will and said Settlement Agreement; that the offer of $200,000 cash is a fair price for the property described as Parcel No. 1, and commonly known as 174-176 Michigan Avenue, Chicago, Illinois, and it is for the best interest of all parties that said property be sold for said sum.” The master recommended that an order be entered providing for the orderly liquidation of the remainder of the properties held in said trusts by the sale of said properties at public or private sale as expeditiously as possible under the direction of the court. The decree entered November 15, 1940, finds, inter alia, that the court has jurisdiction of the subject matter of the petition and the parties and that the petitioners properly filed their petition; approves the report of the master; finds that “the Trustees were given the power to sell the property held by them as such Trustees in both said will and the Settlement Agreement,” and that “the power to sell the property hereinabove set forth is still vested in the successor Trustees”; finds that the offer of $200,000 cash for the Michigan avenue property was a fair price for the premises and that the trustees exercised their discretion in good faith in entering into an agreement with Austin Wyman to sell said premises to him; that all of the beneficiaries except appellant and the minor defendant have approved the sale. The ordering part of the decree provides that the said trustees ‘ ‘ as trustees under the last will and testament of Henry Sehoellkopf, Sr., deceased, and under the Settlement Agreement of April 17, 1916,” are authorized to sell the said property to said Wyman for $200,000; to execute deeds and documents to effectuate the said sale and that the net proceeds of the sale be distributed to the creditors, the owners of claims, and to the beneficiaries in the proper proportion; that the trustees are authorized under the direction of the court to sell all the remaining parcels of real estate and if satisfactory offers are not received within sixty days, then the master is directed to sell the same at public auction after three weeks’ public notice of such sale. The court reserved jurisdiction of the cause for the purpose of liquidating and terminating the said trusts and to .assess costs of proceedings, etc. It is from that decree that appellant appeals.

Appellant contends that the decree should be reversed and the cause remanded with directions to dismiss the petition “because the lower court had no jurisdiction in the old proceedings over the new trust and the new trustees.” Appellant also contends, as we understand the contention, that after the expiration of the ten years provided in the will the trust provided for in the will became a dry trust with no further duties in the trustees and thereafter the trust assets were administered by the new trustees under the terms and provisions of the settlement agreement; that “in the instant case after the execution of the settlement agreement which disposed of the interests of the two sons effective at the expiration of the ten-year period, the old trustees had no further obligations and if the conveyances in the settlement agreement did not operate as conveyances (which clearly they did), then the Statute of Uses nevertheless executed the trust and vested the fees”; that “the old trust (except as to the three $150,000 trusts for the daughters) was to terminate by the Will at the end of ten years, and distribution was directed to be made so that the trust as to the bulk of the real estate thereupon became a dry trust with no duties to be performed, and the Statute of Uses executed the trust and vested title in the beneficiaries.” After carefully considering the instant contention and the arguments in support of it we are satisfied that appellant’s contention “that the decree should be reversed and the cause remanded with directions to dismiss the petition” should not be sustained. It will be noticed that the original answer of appellant merely questioned the jurisdiction of the trial court to order a partition of the premises. While the amended answer alleges “that the court has no power, authority or jurisdiction to grant the relief prayed for,” in her reply brief' appellant states: “Had the petitioners petitioned for instructions regarding whatever small portion may have remained in the old trust, or had they sought leave to sell that portion, and had they identified and established such a portion, the defendant would not have questioned the jurisdiction of the coiirt to entertain such a petition, as it appertained to the old trust estate only.” Appellant furiher states: “Defendant does not dispute that a court of general jurisdiction, in a wholly separate and new suit, would have jurisdiction over a proper and similar petition and that then the rules regarding courts of general jurisdiction ivould be applicable, but they are not applicable under the circumstances of this case”; that the proper procedure for the trustees would be to file a new suit and submit their petition to a court of general chancery jurisdiction.

The decree of December 27, 1916, was entered upon the prayer of the five children of Henry Sehoellkopf, Sr., one of whom was Minnie S. DeVry. She and her two sisters as beneficiaries under the will were greatly benefited by the generosity of the brothers and by the decree. Minnie died in 1936. One of her children, Bernard DeVry, Jr., married appellant. After the death of Bernard DeVry, Jr., in December, 1936, appellant married Edward Kennedy. Appellant derived her interest in the estate through Bernard DeVry, Jr.; he derived his interest through his mother. By the terms of the decree of 1916 Minnie S. DeVry became a successor trustee under the will and she acted as such trustee until her death, and as such trustee she joined in the execution of various leases of properties that formed a part of the estate of Sehoellkopf, Sr.; a fortiori, she joined in the extension agreement of April 12, 1926. Neither the trustee under the will nor the additional trustees under the will that were appointed under the decree of 1916 conveyed any interest in the trust estate under the will to the beneficiaries under the will or to the other trustees, and they retained title to the trust assets, and they, in-eluding Minnie DeYry, continued to operate the trust under the will and as trustees under the settlement agreement. In the agreement the trustees under the will did not agree to convey anything to anybody, but Henry S. Schoellkopf, Jr., and Edward C. Schoellkopf, as individuals and beneficiaries under the will, did agree therein to convey to the trustees, at the end of the ten-year period, a sufficient part of the estate to which they were entitled under the will, which part, when added to the three trusts created by the will for the three daughters, would equalize the shares of the five children. While the original decree decreed that the will did not prevent a conveyance of the interest of any beneficiary and that the beneficiaries had power to enter into a binding agreement for a distribution of the estate amongst themselves in whatever manner and portions .they might desire, it was expressly provided that such agreements and distributions were subject to the trusts created by the will. Because of the real estate depression it was difficult to sell the properties, and the trust created by the will continued to function long after the time that the trust assets were to be sold or distributed. All of the interested parties, including appellant, knew that the trust under the will was continuing to function. Leases were signed by the trustees, “as trustees under the Will of Henry Schoellkopf.” Some of these leases were submitted to appellant. Accounts of the trustees under the will were submitted from time to time to the beneficiaries, including appellant and her predecessors in interest, and no objections were made by them to these accounts. In the agreement dated April 12, 1926, made at the end of the ten-year period, between the trustees of the estate of Henry Schoellkopf “under his will and the decree below mentioned, and under a certain settlement agreement between the parties hereto dated April 17,1916, ” and Henry Schoellkopf, Edward C. Schoellkopf, Emma C. Gallagher, Minnie DeVry and Ida DeVry, it was recited, inter alia, that it was the desire of the beneficiaries that the trustees should so far as practicable make distribution of said estate in cash and securities rather than in real estate, and it was therefore necessary and advisable to extend the time for distribution in order that the real estate might be disposed of without the sacrifice attendant upon a hurried or forced sale; and it also provided that “the time for completing the distribution of said G-eneral Trust Estate is hereby extended to and including October 1,1926, and may, by an instrument in writing, signed by said Beneficiaries alone, he thereafter extended from time to time for such additional periods as may be stated in any such instrument.” It further appears that at the bottom of the extension agreement of October 1, 1926, there is a memorandum, signed by the five beneficiaries, providing for the extension of the distribution of the general trust estate to May 1, 1927. Under the facts of this case we are unable to agree with appellant’s argument that the trust under the will became a dry trust at the expiration of ten years from the date of the death of the testator. Appellant, under the facts, should not be heard to raise such a contention. The fact that another trust was created by the settlement agreement did not oust the court of jurisdiction in the original proceedings to advise the trustees and give them directions as to the administration of the trust under the will.

Appellant admits that a court of general jurisdiction in a new suit would have jurisdiction of a petition similar to the instant one. The petition filed was as informative to appellant in the instant proceeding as it would be if it were filed in a new proceeding. She has had her day in court and a full opportunity to show that the offer for the property was inadequate. She vigorously contested the issue as to whether the offer of $200,000 was a fair one and she concedes that if her contention in that regard had been sustained by the trial court she would not have appealed from the decree entered. Why, therefore, under our present liberal system of pleading and in a court of equity should plaintiff be heard to raise the contention that petitioners, to succeed, must file a petition similar to the instant one in a new proceeding!

Appellant states that if we hold against her as to the jurisdictional point that she then desires to contend that the decree should be reversed because “the price of $200,000 for the Michigan Avenue property was wholly inadequate.” After a careful consideration of the entire evidence that bears upon the subject we are satisfied that the contention is without merit. The uncontradicted evidence shows that appellant took the position that she would not approve nor disapprove the sale of the property, and that “she felt the other interests should buy her out.” In her reply brief she states that if the other beneficiaries desired to pay her “the fair value of .her share, it would have been acceptable and would have avoided the present law suit.” It is a reasonable inference from the evidence that appellant, because she did not succeed in forcing the other beneficiaries to pay her what she considered a fair price for her share in the property, concluded to make them all the trouble that she could in the instant proceedings. It is significant that all of the beneficiaries save appellant approved the sale.

It appears, from an affidavit filed in this proceeding, that appellant failed to file an appeal bond in the instant proceeding and because of that fact the petitioners, in accordance with the terms and provisions of the instant decree, consummated the sale of the premises at 174-176 North Michigan avenue and executed and delivered to the purchaser, Austin L. Wyman, a deed conveying to him the said premises; that Wyman paid to the trustees the consideration for the premises and that thereafter, in accordance with the terms of the said decree, the trustees distributed a part of the proceeds to the creditors of the trusts and to all beneficiaries thereof except appellant, who refused to accept her share as a beneficiary; that the trustees, in accordance with the provisions of the decree, sought to sell the remaining parcels of the real estate, but not having received satisfactory offers for the same within sixty days from the date of the decree, the remaining parcels of the real estate in said trusts were offered at public sale by the master in chancery; that after due notice to appellant said sale was confirmed by the court; that no objections were filed to such public sale by appellant; that said decree sets forth the beneficial interests of the various parties in said trusts and that no objection was made by appellant as to her beneficial interest stated therein; that the sale of said properties was approved by the court on February 27, 1941, and that no appeal has been taken by appellant from said order. Petitioners have filed a motion to dismiss the instant appeal upon the ground, inter alia, that there is no longer any actual controversy between the parties. Appellant, in her objections to the motion to dismiss the appeal, admits that she filed no appeal bond but contends that if the point she raises upon the appeal, that the trial court had no jurisdiction to enter the order or decree from which the appeal is taken, is sustained, then the decree or judgment of the trial court is void and the purchasers of the property at the trustees ’ sale can ■ obtain no rights, interest or privileges by virtue of that order. Appellant makes no denial as to the proceedings that took place in the lower court after the time for filing a bond had expired. While there is considerable force in the argument of petitioners in support of their motion to dismiss the appeal, we have concluded to deny the motion.

Feeling, as we do, that appellant has shown no equitable ground for reversing the decree of the superior court of Cook county entered November 15, 1940, the decree is affirmed.

Decree affirmed.

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


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

text:
    Mary W. McKay, Executrix of Last Will and Testament of Dwight McKay, Deceased, and Leslie H. Whipp, Appellants, v. August A. Wilhelm, Appellee.
    Gen. No. 42,104.
    Heard in the first division of this court for the first district at the February term, 1942.
    Opinion filed November 30, 1942.
    Royal W. Irwin, of Chicago, for appellants.
    Seymour N. Cohen, of Chicago, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

Dwight McKay and Leslie H. Whipp, attorneys, represented the defendant August A. Wilhelm in a suit in the superior court and obtained a decree in his favor. Subsequently the case was appealed to the Supreme Court where the same attorneys secured an affirmance. Thereafter Dwight McKay died and this suit is brought by the executrix and Whipp to recover attorneys’ fees for services rendered in the appeal to the Supreme Court. The case was tried before a jury, which returned a verdict for the defendant, and plaintiffs appeal.

The complaint alleged that defendant promised to pay plaintiffs the fair and reasonable value for their services in the Supreme Court, and also that defendant had promised to pay them $25,000 for such services.

The jury returned a special finding that the defendant did not make a special agreement with plaintiffs to pay them $25,000 for their services in the appeal. Plaintiffs introduced testimony of experienced attorneys to the effect that the services rendered by them in the Supreme Court were worth, one witness said $27,500 to $30,000, and the other witness placed the value at $50,000. The defendant introduced the testimony of one attorney that the services were worth $1,100.

All of the facts and issues presented in the trial of the case in the superior court are found in detail in the opinion in Scully v. Wilhelm, 368 Ill. 573. It there appears that the nephews and nieces of Mary Scully Fagan (Mrs. Wilhelm) sought to have her marriage to the defendant annulled on the ground that she had not sufficient mental capacity to enter into a valid marriage ; it was alleged that Wilhelm, by false pretenses and undue influence, had persuaded her to execute deeds to parcels of real estate to herself and defendant as joint tenants; that he was 35 years of age, without business ability or financial means, and she was 75 and had considerable property at the time of the alleged marriage on May 6, 1933; that thereafter defendant persuaded her to indulge in a course of life beyond her endurance, taking her to night clubs and dances; that by reason of the conduct of defendant towards her she suddenly and mysteriously died, intestate, in September 1933. There were many other allegations to the effect that defendant was conspiring to obtain her property (over $400,000) as she was aged and mentally weak. The charges against him involved his reputation and his moral character and were of an extremely serious nature.

Plaintiffs say that defendant agreed to and did pay them $75,000 for their services rendered in connection with the suit in the superior court but that this did not include any services rendered in the appeal case in the Supreme Court, and this is the decisive question presented.

The decree, favorable to defendant, was entered in the superior court on July 2, 1937; notice that plaintiffs in that case would! ask for leave to appeal to the Supreme Court was filed July 11, 1937. October 28, 1937, McKay and Whipp had a conversation with defendant with reference to their fees. It was then agreed that defendant would pay them $75,000 in full for services rendered in the trial of the main case “in the superior court . . . Case No. 591863, the decree . . . entered July 2, 1937,” — to be paid as soon as the final account in the estate of defendant’s deceased wife was approved in the probate court. This was signed by defendant.

Whipp testified that on November 18, 1937 he and McKay discovered that the record in the Supreme Court had not been filed within the time prescribed by rule and they prepared and presented a motion to dismiss the appeal. Counter-suggestions were made to this motion and the Supreme Court entered an order dismissing the appeal.

Evidently all of the parties thought at this time that the litigation was ended, and an order was entered in the probate court approving the account, and funds were ordered released from the custody of the First National Bank of Chicago where the funds in the estate, approximating $400,000, were held. After the order in the probate court was entered these funds or part of them were released to defendant, and between December 5th and 13th he paid McKay and Whipp $75,000.

Subsequently the Supreme Court changed its order dismissing the appeal and took the case, and thereupon the probate court order approving the account was set aside and defendant was ordered to turn back all the money and property that had been turned over to him. At his request McKay and Whipp returned the $75,000 paid to them, except that each of them were permitted to retain $1,000 to defray the expenses in connection with the motion to dismiss the appeal.

Plaintiff Whipp testified in great detail to the services rendered by himself and McKay in the Supreme Court in defending the superior court decree. January 20, 1938, their briefs were filed in the Supreme Court and the case was argued orally. April 15, 1938, the Supreme Court rendered an opinion affirming the superior court’s decree.

Subsequently there were conferences between McKay, Whipp and the defendant — the attorneys claiming that they were entitled to additional compensation for their services in the appeal case in the Supreme Court and that the previous payment of $75,000 was in full only for the services in connection with the trial of the superior court case, in accordance with the agreement of October 28, 1937. Defendant testified that he understood this payment was not only for such services but for all subsequent services which might be necessary.

After the case had been concluded by the decision and opinion in the Supreme Court and the defendant’s final account approved in the probate court, the First National Bank again turned over to defendant funds in its possession and defendant again paid McKay and Whipp $75,000, receiving from each of them a receipt reciting that this payment was for services in connection with the superior court case and did not include any services rendered or costs expended in the appeal to the Supreme Court.

Counsel for plaintiffs argues that the documents relating to fees contained the complete agreement of the parties, without ambiguity, and that no parol evidence can be admitted to add other terms, citing Armstrong Paint & Varnish Works v. Continental Can Co., 301 Ill. 102. This is the general rule but not applicable here. The only agreement signed by defendant does not contain a complete agreement as to fees. The matter of fees for services in the Supreme Court is not definitely fixed. Defendant agreed to pay $75,000 to his attorneys when his final account in the estate of his wife was approved in the probate court. As this was not finally approved until after the decision in the Supreme Court, it could be argued that the $75,000 was to cover all fees and costs of producing this favorable result.

On the other hand, when the appeal in the Supreme Court was dismissed all the parties evidently thought this was the end of the litigation, and defendant testitied that he was willing to pay $75,000 for the services rendered up to that time. From this it could be argued that defendant understood this payment covered only services rendered up to that time and not additional services to be rendered in the future. When there is uncertainty or incompleteness in the terms of an agreement parol testimony to explain is admissible. Fuchs & Lang Mfg. Co. v. R. J. Kittredge & Co., 242 Ill. 88, 94. We hold there was no error of the,1 trial court in permitting oral testimony as to the understanding of the parties.

Counsel for plaintiffs offered and was permitted to introduce in evidence the abstract and briefs filed in the Supreme Court for the purpose of proving the character of the litigation. The court in admitting this evidence suggested that counsel for plaintiffs defer reading to the jury from these until the argument; that if during the argument he wished to refer to parts of these exhibits counsel might do so. In the argument counsel for plaintiffs attempted to read from those exhibits, stating that the records in the Supreme Court showed that certain charges were made against the defendant. Objection to this was sustained. Again plaintiffs’ attorney attempted to state the charges made against the defendant in the litigation and insisted that the jury had the right to know its character ; that the value of these services depended in part on the charges made and the difficulty of defending against them. The trial court sustained an objection to any such matters, on the ground that it “may tend to inject any false issue in this case.” As the court had refused to permit the jury to examine the briefs filed in the Supreme Court and closed the door to any argument presenting the issues there involved, the jury were not fully informed as to the character of the litigation.

The value of legal services ofttimes depends upon a variety of considerations, such as skill, the nature of the controversy and the amount at stake and the time and labor bestowed. Louisville N. A. & C. Ry. Co. v. Wallace, 136 Ill. 87, 93. In Schmalz v. Arnwine, 118 Ore. 300, the opinion quoted with approval from 2 Thornton on Attorneys at Law, §§ 535, 536, that evidence in such cases may be introduced for the purpose of showing the importance of the cause to the client, also the responsibility assumed by the attorneys and the time and labor expended and their ability. In Thorp v. Ramsey, 51 Wash. 530, it was held that the records and files in the prior actions were entirely competent for the consideration of the jury in an action to recover the reasonable value of services performed by an attorney in such cause. In Axlon v. Vance, 207 Ky. 580, an attorney sued for fees. The court held that the jury was entitled to know the character of the matters in controversy and that the high degree of skill shown by the attorney saved his client’s reputation and standing in the community. In Stucky v. Smith, 148 Ky. 401, the trial judge who was called upon to fix the value of services in a prior suit read the record in that case and based his opinion partly upon what it contained. This was held to be proper. In George v. Wright (Tex. Civ. App.), 286 S. W. 656, a suit brought to recover attorney’s fees for services rendered in another case, the trial court admitted pleadings in the original cause in which serious charges were made against the client, only for the purpose of showing the nature of the issue involved in the original suit and the amount and character of the work required to be performed by the attorney in. defending against these charges. The court instructed the jury that the truth or falsity of these charges was not is issue; that the evidence of them was admitted only as bearing upon the reasonableness of the attorney’s fees. This was approved on appeal. We find no case and none is cited disapproving of this practice.

The court in admitting the briefs and abstract in evidence, limited their purpose to ‘ ‘ showing what service was rendered by” defendant’s attorneys in the Supreme Court. By the refusal to permit them, to be taken to the jury room or to allow plaintiffs’ counsel to read from them to the jury on the ground that this might “tend to inject a false issue in this case,” the jury was in effect told that it was not permitted to know anything about the nature of the prior controversy and the other matters mentioned in the above cases as proper to be considered by the jury. The best evidence of the issues involved was in the pleadings. Opinion testimony as to this would not be as convincing. It is apt to be partial — note the wide difference in the opinions of the experts as to the value of the services — from $1,100 to $50,000.

Complaint is made of alleged prejudicial remarks by the trial judge, such as the court’s comment on permitting plaintiffs to introduce certain bits of evidence —it may go to the jury “for what it is worth.” Such remarks, while not necessarily requiring a reversal, would impart to the jury the impression that the court did not consider the evidence as being of much importance. It is axiomatic that in a jury trial the jury alone may weigh the evidence.

It is my opinion that it- was reversible error not to permit reading to the jury from the briefs and abstract filed in the Supreme Court, only for the purpose of showing the nature of the issues there involved and the skill of the attorneys in defending against the charges there made, and the jury should be instructed as in George v. Wright, cited above.

A further reason for reversal is that the verdict is against the manifest weight of the evidence.

The judgment is therefore reversed and the cause remanded for a new trial.

Reversed and remanded.

Mr. Presiding Justice Matchett

specially concurring: I agree with the conclusion that the verdict is against the manifest weight of the evidence and that there should be a new trial. I do not think the abstract and briefs filed in the Supreme Court were admissible in this case.

Mr. Justice O’Connor

specially concurring: I agree with the conclusion reached in the opinion but not in all that is said. “The value of legal services will oftentimes depend upon a variety of considerations, such as the skill and standing of the person employed, the nature of the controversy, the character of the questions at issue, the amount or importance of the subject-matter of the suit, the degree of responsibility involved in the management of the cause, the time and labor bestowed.” Louisville N. A. & C. Ry. Co. v. Wallace, 136 Ill. 87, 93. To hold that in proving the reasonable value for legal services it is proper to admit in evidence the briefs and abstract of the case in which the services were rendered and which were filed in our Supreme Court, is, in my opinion, wholly unwarranted. Juries are made up of laywomen and laymen and it is obvious they would not be able to determine the legal value of services rendered by counsel and would be but little enlightened by the reading of the brief prepared and filed by him in the Supreme Court. The brief and abstract were clearly inadmissible. In my opinion, the proper way to prove the value of legal services in such a situation is to call a qualified lawyer who had examined the record, abstract and briefs, to give his opinion as to what such services were reasonably worth, bearing in mind all the things mentoned in the quotaton from the Wallace case.