author: Mr. Justice Scanlan

text:
    Henry R. Levy, Appellant, v. Broadway-Carmen Building Corporation et al., Appellees.
    Gen. No. 37,441.
    Opinion filed December 31, 1934.

      Isaac B. Lipson, of Chicago, for appellant; A. C. Lewis, of Chicago, of counsel.
    Kamener, Halligan & Marks, of Chicago, for appellees ; Samuel M. Lanoff, of Chicago, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

In the above proceedings the chancellor entered a decree of foreclosure and sale finding the indebtedness due to complainant from defendant Broadway-Carmen Building Corporation, a corporation (hereinafter called Building Corporation), for principal, interest and moneys advanced, to be $70,246.91, and ordering a sale of the premises described in the trust'deed if the said sum should not be paid within a period of three days. At the sale the master in chancery “struck off and sold the same to Henry R. Levy, the complainant, for the sum of $50,000, there being no other bidder at said sale.” After the master presented his report of sale and distribution, Building Corporation filed objections to the report, which objections set up that the premises were worth more than the amount bid by complainant and that the world-wide depression had caused a destruction of the market value of real estate and an absence of competitive bidding at all foreclosure sales. Complainant filed a verified answer to defendant’s objections and thereafter, by leave, defendant filed affidavits in support of its objections, and complainant filed additional affidavits in support of his answer. The chancellor then entered the following decretal order:

‘‘ This cause coming on to be heard upon the petition of the complainant to confirm the sale by the master in chancery, and upon objections to the confirmation of the master’s report of sale, and upon the affidavits by Donald T. Morrison and David Cordon, on behalf of the defendants, and Henry R. Levy and M. B. Rutherford, George S. Lurie and I. S. Lowenberg on behalf of the complainant, and the court having read the master’s report of sale, and the objections to the confirmation thereof, and the affidavits submitted by all of the parties hereto, and having heard the arguments of counsel thereon, and being fully advised in the premises :
1 ‘ The court finds that the bill of complaint was filed herein to foreclose a trust deed securing a total indebtedness of Sixty-five Thousand Dollars, upon which there was a balance due of Sixty-two Thousand Five Hundred Dollars, together with interest thereon from November 15, 1931 at 7% per annum; that the decree of foreclosure finds to be due thereon, the sum of Seventy-one Thousand Five Hundred Eight and 45/100 Dollars, including interest, solicitors’ fees, costs, and expenses, and that on June 21, 1933 the master’s sale was had and the premises were purchased by the complainant for the sum of Fifty Thousand Dollars, leaving a deficiency of Twenty-one Thousand Five Hundred Eight and 45/100 Dollars.
“The court finds that the notes secured by said trust deed were guaranteed by David Gordon and Ida Gordon, his wife, and that on June 17, 1932, complainant caused judgment to be entered on said notes, in his favor and against David Gordon and Ida Gordon, his wife, in the Municipal Court of Chicago, case .#2760549, in the sum of Sixty-six Thousand Six Hundred Ninety-one and 87/100 Dollars, together with costs; that said judgment still remains in full force and effect, no part having been satisfied; that the premises herein foreclosed are located at 5100 Broadway, Chicago, Illinois, being the northwest corner of Broadway and Carmen Avenues, Chicago, Illinois, consisting of ninety-seven feet on Broadway by one hundred feet on Carmen Avenue, improved with a one story display building and service garage, occupying the entire land, ninety-seven by one hundred feet, and built to a frontage height- of fifteen feet, containing an auto display room approximately fifty by ninety-seven feet, with plate glass windows on two sides, tile floor, lavatory and toilet, with office section containing two private offices, and the balance of the building approximately fifty by ninety-seven feet, containing service garage with cement floor, and frame supply room and loft approximately twenty by fifty feet, with the entire building heated by steam and small basement, twenty-five by twenty-five feet, with Weil-McLain Boiler and Century Oil Burner, with hot water heater and tank, containing ninety-seven hundred square feet.
‘ The court further finds that the reproduction value of said building on June 15, 1933, and at all times subsequent thereto and at the present time, was and is Thirty-three Thousand Nine Hundred Fifty Dollars, less fifteen percent depreciation, leaving reproduction value of said building at that date amounting to Twenty-eight Thousand Nine Hundred Dollars', and that the fair and reasonable market value of the said building was then Twenty-eight Thousand Nine Hundred Dollars.
“The court further finds that the fair and reasonable market value of the land upon said date was Five Hundred Dollars per front foot, and, on the basis of the frontage of ninety-seven feet, the fair and reasonable market value on said date of the land was Forty-eight Thousand, Five Hundred Dollars, making a total market value of the building and land of Seventy-seven Thousand Four Hundred Dollars.
“The court further finds that the fair and reasonable market leasing value or economic valuation of said premises on said date was Eighty Thousand Dollars.
“The court further finds that on January 8, 1926, David Gordon negotiated with Henry R. Levy, complainant in this cause, to purchase the said property, and, at said time, the said Henry R. Levy was the principal stockholder, officer and director of the Studebaker Sales Company, the then owner of said premises; that on January 28, 1926, David Cordon entered into an agreement with the said Studebaker Sales Company, through Henry B. Levy, to purchase, and did purchase, the real estate herein involved for the sum of One Hundred Thirty-five Thousand Dollars, of which Thirty-five Thousand Dollars was paid in cash on account of the purchase price, and a purchase money mortgage for One Hundred Thousand Dollars, was executed and delivered by David Cordon and Ida Cordon, his wife, payable as follows: five notes numbered one to five, both inclusive, note No. 1 for Five Thousand Dollars, Note No. 2 for Five Thousand Dollars, Note No. 3 for Ten Thousand Dollars, Note No. 4 for Ten Thousand Dollars, and Note No. 5 for Seventy Thousand Dollars, due respectively, one, two, three, four, and five years after date; that Notes Numbers 1 to 4, both inclusive, in the aggregate sum of Thirty Thousand Dollars, with interest, were duly paid by David Cordon and Ida Cordon, his wife, - leaving a balance due, secured by said mortgage, of Seventy Thousand Dollars; that on April 13, 1931, Note No. 5 in the sum of Seventy Thousand Dollars became due, and at that time an agreement was entered into between the said Henry E. Levy, complainant herein, and David Cordon, to pay the principal sum of Five Thousand Dollars on account of the principal of said note, and execute a note in the sum of Sixty-five Thousand Dollars, secured by the trust deed foreclosed herein; that it was further agreed between Henry B. Levy and David Cordon that the real estate should, prior to the execution and delivery of the notes and trust deed, be transferred to a corporation to be formed by this affiant, and further that a commission, or discount, or additional interest be paid by the said David Cordon to the said Henry E. Levy, complainant herein, in the sum of Nineteen Hundred Fifty Dollars, for such extension.
‘ The court further finds that on April 14, 1931, title to said premises was conveyed by general warranty deed, executed by David Gordon and Ida Gordon, his wife, now deceased, to the Broadway-Carmen Building Corporation, Chicago, the stock of which was owned or controlled by David Gordon and Ida Gordon, his wife, which said warranty deed was recorded in the County Recorder’s office of Cook County, Hlinois, on April 16, 1931, as document No. 10883237.
“The court further finds that on April 27, 1931, the Broadway-Carmen Building Corporation did pay to the said Henry R. Levy, the sum of Nineteen Hundred Fifty Dollars, as a commission or discount, or additional interest, for the acceptance of the notes secured by the trust deed.
The court further finds that the total amount paid in cash, exclusive of interest and taxes, on account of the purchase price of the real estate herein foreclosed, is as follows:
“Oash paid, at time of purchase............$35,000.00
“ “ on account of original mortgage 30,000.00
“ “ “ commission ........ 1,950.00
original mortgage .. 5,000.00
71,950.00
Amount of new trust deed (the one foreclosed herein ..........................$65,000.00
Paid on account of principal of new trust deed 2,500.00
Leaving a balance due on account of new trust deed — principal ...................$62,500.00
Total cash paid by defendants on account of the purchase price — principal old mortgage, and discount or commission.................. $71,950.00
Total paid on account of principal of new trust deed ...................................... 2,500.00
Total paid on account of the principal of old mortgage, commission, and principal of new mortgage ............................. $74,450.00
“The court further finds that the master’s report of sale herein should be confirmed, providing the court will declare satisfied, released, and cancelled, the outstanding and unpaid indebtedness found due and owing to the complainant from the defendants, or any of them, under the decree of foreclosure entered in this cause.
“The court further finds that the complainant has refused and does now refuse, in open court, to declare satisfied, released, and cancelled the outstanding unpaid indebtedness found due and owing to the complainant from the defendants, or any of them, under the decree of foreclosure entered in this cause.
“It is therefore ordered, adjudged, and decreed, that the confirmation of the master’s report of sale be, and the same is hereby denied.
“It is further ordered, adjudged, and decreed that the mortgaged premises mentioned in the bill of complaint or so much thereof as may be sufficient to realize the amount so due the complainant, principal and interest, and also the costs of this suit, including the fees, disbursements, and commissions upon the sale herein mentioned, and which may be sold separately without material injury to the parties interested, be resold at public vendue, for cash in hand, to the highest and best bidder, at the Board of Appeals, Room 337 County Building, Chicago, Illinois,- but in no event shall the master accept a bid for the entire premises, or separate bids for different parcels thereof which, in aggregate, amount to less than Seventy-one Thousand Five Hundred Eight and 45/100 Dollars, being the amount found due in the decree of foreclosure heretofore entered in this cause, together with interest and costs as therein provided.
“It is further ordered, adjudged and decreed that this cause be referred to Benj. E. Cohen, master in chancery of this court to execute this decree; that he give public notice of the time and place of said sale, by previously publishing the same for the space of 30 days in a newspaper published in said county; and that the complainant, or any of the parties in this cause, may become the purchaser or purchasers; that the said master, on such sale being made, execute a certificate of purchase to each purchaser or purchasers thereof, or any portion thereof; which certificate shall specify the lands or tenements purchased by such purchaser or purchasers, and the sum paid therefor; or if purchased by the complainant in said bill, the amount of his bid, and the time when the purchaser will be entitled to a deed for such lands or tenements, unless the same shall be redeemed according to law; that the said master shall also file, in the office of the Becorder of said County, a duplicate of such certificate or certificates signed by him.
“The court also reserves jurisdiction over all matters not herein specifically disposed of.” _

To reverse the decree complainant prosecutes this appeal.

That the chancellor has a broad discretion in reviewing the acts of a master in making a judicial sale, and that this discretion, unless abused, will not be interfered with by a court of review, is settled law in this State. (See Worden v. Rayburn, 313 Ill. 495, 498; Farmers and Mechanics Bank v. Griffith, 352 Ill. 323, 327.) In the last case the court said:

“The highest bidder whose bid has been reported to the court as the best offer acquires no interest in or right to the land and is a mere offerer to purchase. Confirmation is final consent, and the court, being in fact the vendor, may consent or not, in its discretion. ’ ’

The main contention of complainant is that “the rule is well settled that a judicial sale, regularly made in the manner prescribed by law, upon due notice, and without fraud, will not be set aside or refused confirmation on account of mere inadequacy of price, how-. over great, unless the inadequacy is so gross as to shock the conscience and raise a presumption of fraud.” In Worden v. Rayburn, supra, the court states (p. 498):

“Mere inadequacy of price may not, alone, be sufficient to justify the court in setting aside a judicial sale, but where the conditions under which the sale was held tend to reduce or destroy competition it is proper for the court to do so. (Bondurant v. Bondurant, 251 Ill. 324; Smith v. Huntoon, 134 id. 24; 16 R. C. L. 98; 35 Corpus Juris, 49, 103; Rorer on Judicial Sales, — 2d ed. — sec. 1095; Oswald v. Johnson, 34 Ann. Cas. (Ga.) 1, note.)”

In the well known case of Suring State Bank v. Giese, 210 Wis. 489, 246 N. W. 556, the Supreme Court of Wisconsin said:

“The question presented is one of great importance, and one to which earnest consideration has been given. The court takes judicial notice of the fact that the present economic depression has not merely resulted in a serious dislocation of the value of real estate, but also in the almost complete absence of a market for real estate. As a consequence there is no cash bidding at sales upon foreclosure. In normal times competitive bidding' is the circumstance that furnishes reasonable protection to the mortgagor, and avoids the sacrifice of the property at a grossly inadequate sale price. In the present situation the device of a judicial sale largely fails of its intended purpose because of the lack of competitive bidding, and the question arises whether a court of equity is wholly impotent to rise to the needs of justice and see that the parties are fairly and properly protected. This is not a situation in which ordinary logic with respect to values has much vitality. In theory, a thing that cannot be sold has no value, and so with a parcel of real estate that is offered for sale at foreclosure. It may be argued that it is worth what purchasers will pay for it, and no more, and that if the only price offered constitutes but a negligible part of its theretofore assumed value, it nevertheless represents the value of the real estate at that time. Such a conclusion is shocking to the conscience of the court, or, as the old equity courts said,. to the conscience of the chancellor, and to all notions of justice as applied to this situation. Certainly the land has value so long as it or the buildings upon it may be used, and certainly in the case of farm lands, which constitute the homes of farmers, the premises have value in the sense of usefulness,-however difficult it may be to translate this value into terms of dollars. Furthermore, this real estate, which is suffering from the consequences of a period of readjustment through which we are passing, has potential or future value which may legitimately be taken into account. Its value in terms of dollars has been affected by a general condition. No one piece of land has depreciated in value; it has all depreciated. It has all suffered from the lack of demand on the part of buyers. Under these circumstances it is within the power of a court of equity, without the aid of statute, to take one or all of three steps for the protection of the parties and the promotion of a fair solution of the difficulties. What is said here is said in the light of the present emergency, and because of the present inadequacy of a judicial sale to establish a fair value for the security.
“1. The court may decline to confirm the sale where the bid is substantially inadequate. While it has been said that mere inadequacy of consideration is not.a ground for setting aside a foreclosure sale, this rule has been rather carefully circumscribed by the court. In Griswold v. Barden, 146 Wis. 35, 130 N. W. 952, 953, this court, speaking through Mr. Chief Justice Win-slow; said: ‘It has been said by this court that it is the settled practice of courts of equity to refuse a resale for mere inadequacy of consideration, and that this court will not depart from that rule where no other cause exists. Meehan v. Blodgett, 86 Wis. 511, 57 N. W. 291. This is doubtless a correct statement of the rule, but it seems from the argument in the present case that it may be easily misunderstood. It must be strictly confined to cases where there is absolutely no fact appearing, except that the price is inadequate. Whenever other facts appear, such as mistake, misapprehension, or inadvertence on the part of the interested parties or of intending bidders, as a result of which it seems to the court the failure to obtain a fair and adequate price for the property was due in whole or in part to such mistake, misapprehension, or inadvertence, the court will readily refuse to approve the sale. No fraud is necessary to justify the court in so withholding its approval. The question simply is, Is the sale under all the circumstances one of which the court in justice to all parties should approve?
“This doctrine is also stated in Kremer v. Thwaits, 105 Wis. 534, 81 N. W. 654, and Johnson v. Goult, 106 Wis. 247, 82 N. W. 139. What was said in the Griswold Case is applicable here, when the fact of an in- • adequate price is coupled with an emergency which operates to prevent competitive bidding. A court of equity is justified in refusing to confirm the sale and ordering a resale.
“2. The court, in ordering a'sale or a resale, may, in its discretion, take notice of the present emergency, and, after a proper hearing, fix a minimum or upset price at which the premises must be bid in if the sale is to be confirmed. This is a power that courts of equity ordinarily exercise in cases of foreclosure of corporate property which is of such size and character as to preclude the establishment of a fair price by competitive or cash bidding. Northern Pacific Railway Co. v. Boyd, 228 U. S. 482, 33 S. Ct. 554, 57 L. Ed. 931. We see no reason why the same power should not be exercised in cases where economic conditions are such as to preclude the element of competitive bidding, and to make ineffective the ordinary and usual manner of fixing the market value of the property.
“3. The court may, upon application for the confirmation of a sale, if it has not theretofore fixed an upset price, conduct a hearing, establish the value of the property, and, as a condition to confirm.ati.on, require that the fair value of the property be credited upon the foreclosure judgment. If an upset price has been established, the plaintiff may be required to credit this amount upon the judgment as a condition to confirmation. If the fair value as found by the court, when applied to the mortgage debt, discharges it, there will be no occasion for the entering of a deficiency judgment. In case this procedure is adopted by the court, the option should be given to the plaintiff to accept or reject it. In the event of its rejection, the resale of the property should be ordered.
“In the instant case the court evidently took the third of the three methods of dealing with this problem. While in terms it denied the deficienc3 judgment, in effect it valued the property, found this value to be equal to the debt, and required that it be credited against the debt as a condition to the confirmation of the sale. This was not error, for the reasons heretofore stated. However, it is our conclusion that plaintiff should have been given the option to accept or reject the condition. In the event that the condition is rejected, the court may set aside the sale and order a resale in accordance with the principles set out in this opinion. It follows that the order must be reversed.” Complainant concedes that the Suring case supports the order in question, but contends that the doctrine announced in that case is bad law and has not been followed by other courts. We find that the Curing case has been approved by a number of other courts. (See Wilson v. Fouke, 188 Ark. 811, 67 S. W. (2d) 1030; Baader v. Mascellino, 113 N. J. Eq. 189, 166 Atl. 466, 467; Bank of Manhattan Trust Co. v. Ellda Corp., 265 N. Y. S. 115, 116-7; Chemical Bank & Trust Co. v. Adam Schumann Associates, 268 N. Y. S. 674-678. As bearing upon the instant contention, see also Better Plan Bldg. & Loan Ass’n v. Holden, 114 N. J. Eq. 537, 169 Atl. 289, 290; Monaghan v. May, 273 N. Y. S. 475.) In Home Bldg. & Loan Ass’n v. Blaisdell, 290 U. S. 398, Mr. Chief Justice Hughes held that the mortgage moratorium law passed by the Minnesota legislature, suspending foreclosures for a limited period, was constitutional. Some of the statements in the opinion are helpful in determining the question before us. To quote from the opinion:
“And that the question is no longer merely that of one party to a contract as against another, but of the use of reasonable means to safeguard the economic structure upon which the good of all depends. . . . ‘But into all contracts, whether made between States and individuals, or between individuals only, there enter conditions which arise not out of the literal terms of the contract itself; they are superinduced by the preexisting and higher authority of the laws of nature, of nations or of the community to which the parties belong; they are always presumed, and must be presumed, to be known and recognized by all, are binding upon all, and need never, therefore, be carried into express stipulation, for this could add nothing to their force. Every contract is made in subordination to them, and must yield to their control, as conditions inherent and paramount, wherever a necessity for their execution shall occur.’ ... In the absence of legislation, courts of equity have exercised jurisdiction in suits for the foreclosure of mortgages to fix the time and terms of sale and to refuse to confirm sales upon equitable grounds where they were found to be unfair or inadequacy of price was so gross as to shock the conscience. The ‘equity of redemption’ is the creature of equity. While courts of equity could not alter the legal effect of the forfeiture of the estate at common law oil breach of condition, they succeeded, operating on the conscience of the mortgagee, in maintaining that it was unreasonable that he should retain for his own benefit what was intended as a mere security; that the breach of condition was in the nature of a penalty, which ought to be relieved against, and that the mortgagor had an equity to redeem on payment of principal, interest and costs, notwithstanding the forfeiture at law. This principle of equity was victorious against the strong opposition of the common law judges, who thought that by ‘the Growth of Equity on Equity the Heart of the Common Law is eaten out.’ The equitable principle became firmly established and its application could not be frustrated even by the engagement of the debtor entered into at the time of the mortgage, the courts applying the equitable maxim ‘ once a mortgage, always a mortgage, and nothing but a mortgage. ’ ’ ’

In referring to the power of the State to protect the public interest under the extraordinary conditions created by the great depression, the Chief Justice states:

“It cannot be maintained that the constitutional prohibition should be' so construed as to prevent limited and temporary interpositions with respect to the enforcement of contracts if made necessary by a great public calamity such as fire, flood, or earthquake. See American Land Co. v. Zeiss, 219 U. S. 47. The reservation of state power appropriate to such extraordinary conditions may be deemed to be as much a part of all contracts, as is the reservation of state power to protect the public interest in the other situations to which we have referred. And if state power exists to give temporary relief from the enforcement of contracts in the presence of disasters due- to physical causes such as fire, flood or earthquake, that power cannot be said to be non-existent when the urgent public need demanding such relief is produced by other and economic causes.”

That case also answers the contention of complainant that the decree denies him his right to a complete and prompt enforcement of his rights, under the obligations of the trust deed, and that it, therefore, denies him his constitutional rights under section 14, article II, of the constitution of Illinois.

Complainant contends that the chancellor had not the right to provide in the decree that the master should accept no bid less in amount than the judgment, interest and costs. We find no merit in this contention. (See Suring State Bank v. Giese, supra; Guaranty Trust Co. v. Chicago, M. & St. P. Ry. Co., 15 F. (2d) 434, 442; McClintic-Marshall Co. v. Scandinavian-American Bldg. Co., 296 Fed. 601, 604; Chemical Bank & Trust Co. v. Adam Schumann Associates, supra. See also Straus v. Chicago Title & Trust Co., 273 Ill. App. 63, 67-68.) Complainant closes his brief by propounding to us the following question: What is to happen “if the plaintiff refuses to bid at the resale, and no one else offers a bid?” The Circuit Court of Appeals, in McClintic-Marshall Co. v. Scandinavian-American Bldg. Co., supra, p. 605, gave the following answer to a like question:

“If the property cannot be sold, We cannot anticipate the changes that may be made necessahy in the form of the decree or the terms of saleV” "

We may say, in conclusion, that this is the first appeal, during the great depression, from an order of a chancellor setting aside a sale by a master. We approve of the decretal order appealed from and it is accordingly affirmed.

Affirmed.

Gtridley, P. J., and Sullivan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Scahlah

license: Public Domain

text:
    Ellen Gavin, Appellant, v. Louis C. Keter et al., Defendants. Louis C. Keter et al., Appellees.
    Gen. No. 37,892.

      Opinion filed December 31, 1934.
    Rehearing denied January 12, 1935.
    Joseph B. Lyhch, of Chicago, for appellant; Hart E. Baker and Jasper F. Rommel, both of Chicago, of counsel.
    Alfred Roy Hulbert and Albert W. Feoehde, both of Chicago, for appellees.
   Mr. Justice Scahlah

delivered the opinion of the court.

Ellen Gavin, plaintiff below, sued Louis C. Keter; Chicago Title & Trust Company, a corporation, as trustee under a certain trust agreement and declaration of.trust dated June 30, 1924; John Otto Stoll; William F. Russell; Frank G. Rainey; Michael J. Purcell; Jeremiah J. Sullivan; Paul Frisch; Morris G. Frankel; Edwin D. Krenn and Edward A. Dato, doing business under the firm name and style of Krenn & Dato, and Ben W. Lawless and Krenn & Dato, Incorporated, a corporation. The suit was in assumpsit. Chicago Title & Trust Company was dismissed from the suit by stipulation. During the trial and before verdict Edwin D. Krenn, Edward A. Dato, Ben W. Lawless and Krenn & Dato, Incorporated, a corporation, were, on their motion, dismissed from the case. The death of. defendants Frisch and Frankel was then suggested and, on motion of plaintiff, they were also dismissed from the case. A jury returned a verdict finding the issues for plaintiff and assessing her damages at $2,206.03. The remaining defendants,, appellees in this court, filed a written motion for a new trial. The trial court granted the motion and entered the order for a new trial, and thereafter plaintiff filed, in this court, her petition, under the new Practice Act, Cahill’s St. ch. 110, ¶ 129 et seq., for leave to appeal from the order granting a new trial, and an order was entered granting her such leave.

The written motion for a new trial filed by appellees in the trial court sets up the following-grounds:

“ (1) The verdict is contrary to the evidence.
“ (2) The verdict is contrary to the law.
“ (3) The trial court erred in the exclusion of competent testimony offered on behalf of the defendants.
“(4) The trial court erred in excluding various documentary evidence and exhibits offered in evidence by the defendants.
(5) The trial court erred in denying the motion of the defendants made at the close of the plaintiff’s evidence to direct a verdict in favor of the defendants.
“ (6) The trial court erred in holding that the plaintiff had proved a prima facie case under the pleadings.
“(7) The trial court erred in submitting this case to the jury on both the pleadings and the facts in evidence.
“ (8) The trial court erred in holding as a matter of law, that upon the pleadings the plaintiff could recover any sum of money from the defendants by virtue of, and based upon, any verbal agreement for the purchase by the plaintiff from the defendants .of real estate. • . • ?. ■
“ (9) The trial court erred"in refusing to hold as a matter of law that the plaintiff could recover from the defendants, any sum of money - under the pleadings, for the reason that the alleged verbal agreement for the purchase of real estate is not one enforcible at law, because it is prohibited by the Statute of Frauds.
“ (10) The trial court erred in refusing to grant the motion of the defendants made at the close of all of the testimony to direct a verdict against the plaintiff and in favor of the defendants.”

The bill of exceptions is silent as to the ground or grounds upon which the new trial was granted. Plaintiff, in her brief, states that she is unable to advise us as to the reasons that influenced the trial court in granting the motion, and in her brief considers all of the grounds set forth in the motion for a new trial.

’ The declaration consists of the common counts. Plaintiff’s affidavit of claim states, in substance, that her claim is upon a contract for the payment of money, viz., $2,203.06, received by defendants for her use and benefit; that on September 18, 1924, plaintiff and defendants entered into a certain verbal agreement for the purchase of two building lots on the east side of Kostner avenue one-half block south of Main street in Niles Center; that she paid, on account of the purchase, $55 on September 18, 1924, $45 on September 25, 1924, and $620 on February 9, 1925, and that from time to time thereafter she paid defendants divers sums of money on account thereof; that the payments aggregated $2,203.06; that defendants received and retained said money pursuant to the terms of said verbal agreement; that on November 20, 1928, defendants stated to plaintiff that they would not and could not comply with the terms of said verbal agreement, and could not and would not be bound any longer thereby, and would not and could not convey to her the said two lots on Kostner avenue; that thereupon plaintiff demanded of defendants that they repay her the said $2,203.06 but they refused to repay such sum of money, and have hitherto failed,- neglected and refused so to do; that there is due plaintiff from defendants, after allowing all deductions, claims and set-offs, $2,203.06, together with interest from November 20, 1928. Defendants filed the plea of the general issue and five special pleas, but it is necessary to mention only three, —two of the statute of frauds and a special plea denying that defendants had promised as plaintiff alleges in her declaration, and alleging, in substance, that the money defendants received from plaintiff was pursuant to the terms of two written contracts for the purchase by plaintiff of lots 169 and 170 in Krenn & Dato’s Main-Kostner subdivision.

As we read this record there is but one of the grounds urged for a new trial that we need notice, viz., the verdict is contrary to the evidence. The following is plaintiff’s statement of her theory of fact: “Plaintiff was asked to buy two lots on September 18, 1924, by John Powers who came to her home for that purpose. He was then defendants’ real estate representative. He pointed out two lots on the east side of Kostner Avenue, half a block south of Main street, in Niles Center, Illinois, on a blue print he had with him. The following day he took her to see the lots in Niles Center and showed them to her. They were the 7th and 8th lots south of the alley. They are shown as lots 47 and 48 on the blue print in evidence. They were owned by the defendants and were for sale. Plaintiff agreed to buy them and made a down payment of $720.00 and thereafter paid monthly installments. What Mr. Powers told her as to the location of these lots on Kostner Avenue was later verified by an agent and employee of the defendants, namely: a Mr. Geiger. In all plaintiff paid $2,206.03 under the impression she was purchasing the two lots on Kostner Avenue. In November 1928 before the agreed price was fully paid she interviewed Edward A. Dato, the manager for the defendants in this sale’s project. He told plaintiff in that interview that the defendants could not and would not sell her those lots, that they had been sold to someone else. She asked for her money back. This was refused and this suit subsequently brought.” Plaintiff introduced evidence to support her theory of fact. Appellees contend, inter alia, that the only contracts that plaintiff made in reference to any lots in the subdivision in question were for the purchase of lots 169 and 170, and that the contracts for said lots were in writing. In support of their theory defendants offered in evidence a number of written documents. The first was a receipt, for the down payment. It is dated September 18, 1924, is signed by Krenn & Dato and also by plaintiff, and recites, inter alia, that Krenn & Dato received the money from plaintiff ‘ as payment on purchase price of property known as Lot No. 169-170.” Plaintiff testified that the figures “169-170” were not upon the receipt when she signed it. Defendants also introduced in evidence a written contract for the purchase of lot 169 and another written contract for the purchase of lot 170. Each bears the signature of plaintiff, and she admits signing them, but testifies that she did not read them, that she “looked at them but I didn’t read them; didn’t look to see that this was a contract for the sale of lot 169 and the other for 170.” Plaintiff testified that thereafter she paid instalments upon the written contracts of $18 a month until June, 1928, and that each time she made a payment she took said contracts to the office of Krenn & Dato, where the payments she made would be written on the back of the contracts; that each month she received a notice or due bill through the mail but she “no longer has these communications ’ ’; that she did not notice if each one stated the lot number; that she “noticed on each slip the amount of money; didn’t take notice or look at the slip to see whether it was lot 168, 912 or 8, did not notice if there was a memo on the face of each little notice that I owed so much money on the purchase price of a definite lot number”; that when she made her payments she did not look to see if she was paying on lots 169 and 170, as she did not suspect anything. She further testified that for four years she received a tax bill yearly from Krenn & Dato but did not take particular notice that the tax bills were for taxes on lots numbered 169 and 170; that she paid four tax bills; that “when I got tax bills for different numbered lots I never paid no attention; it was not until I wanted to get a loan and somebody called my attention to it that I first discovered I did not have the right lots.” Defendants also offered in evidence a written notice to plaintiff, dated June 12, 1928, which bore at its head the following: “Lot #169-170 Re: MainKostner,” and which notified plaintiff that they had written her twice before about the special assessments which were due, and urging her to promptly send them a check for the amount due. This letter, upon objection, was not admitted in evidence. Defendants also offered in evidence a declaration filed in the circuit court of Cook county by one Ellen Gavin against Edward A. Dato. The declaration is signed, “Ellen Gavin By Heth, Lister & Collins Her Attorneys.” The words “Heth, Lister & Collins” are in handwriting, the rest in typewriting. This declaration alleges that' Dato was indebted to plaintiff in the sum of $2,203.06 for moneys had and received, pursuant to the terms of two certain instruments in writing. The declaration sets up the two instruments verbatim, and they are identical with the two written contracts introduced by defendants in the instant case and heretofore referred to in this opinion. Upon objection by plaintiff the court refused to allow this declaration in evidence. The ruling was based, apparently, upon the fact that plaintiff testified that she did not sign the declaration and did not authorize the attorneys who signed it to commence any such suit. In the absence of proof that plaintiff authorized the suit in question and had personal knowledge of the facts contained in the declaration, the action of the trial court in sustaining the objection to the declaration was justified.

In passing upon the merits of the instant contention' it must be borne in mind that this is an appeal from an order of the trial court granting a new trial. If judgment had been entered upon the verdict and the appellees were here claiming that the evidence did not warrant the verdict, the question of the preponderance of the evidence would not arise in this court and we would not be warranted in disturbing the verdict of the jury unless the verdict was clearly against the manifest weight of the evidence. But, under the new Practice Act, Cahill’s St. ch. 110, ¶ 129 et seq., this appeal concerns the action of the trial court in granting a new trial. A trial court has more latitude than this court in passing upon the verdict of a jury. The allowance or refusal of a new trial on the weight of the' evidence -is peculiarly within the discretion of the trial court and he is warranted in granting a new trial if a plaintiff has failed to sustain his claim by a preponderance of the evidence. In passing upon the question as to whether or not the trial court in such case was justified in granting a new trial, we must bear in mind that there are many things which a trial judge observes on a trial that do not appear from the printed record, — the appearance of a witness, his or her manner of testifying, and other circumstances that greatly aid the trial court in determining the credibility of a witness and the weight, if any, that should be attached to his or her testimony.

After a careful consideration of the oral and documentary evidence in this case, we have reached the conclusion that we would not be justified in setting aside the order of the trial court granting the defendants (appellees) a new trial. We may state, in conclusion, that to properly aid this court in determining the merits of an appeal from an order granting a new trial, the trial judge should incorporate in the bill of exceptions the ground or grounds upon which his action is based.

The order of the circuit court of Cook county granting to defendants (appellees) a new trial is affirmed.

Affirmed.

G-ridley, P. J., and Sullivan, J., concur.


author: Mr. Justice Sullivan

text:
    D. C. Carswell et al., Plaintiffs in Error, v. Binga State Bank et al., Defendants. Mary T. Williams, Defendant in Error.
    Gen. No. 37,523.

      Opinion filed December 31, 1934.
    Dowling & Healy, J. C. De Wolee, O. C. Brown and B. C. Cyrus, all of Chicago, for plaintiffs in error.
    Walter M. Farmer, of Chicago, for defendant in error.
   Mr. Justice Sullivan

delivered the opinion of the court.

This writ of error seeks to reverse an order or decree of the circuit court entered December 20, 1933, dismissing plaintiffs’ amended and supplemental bill of complaint for want of equity.

The material allegations of said bill, filed by plainiiffs as depositors of the closed bank in behalf of themselves and all other depositors and creditors to enforce the liability of various stockholders under section 6 of article XI of the constitution of the State of Illinois, are that the Binga State Bank (hereinafter referred to as the bank), a banking corporation, was organized December 1, 1920, with a capital stock of $100,000, subsequently increased to $200,000; that the bank was closed by the auditor of public accounts July 31, 1930, with liabilities to the depositors and creditors in excess of $1,000,000; that a receiver was shortly thereafter appointed for the bank; that the bank is insolvent and in process of liquidation; that plaintiffs, are creditors of the bank; and that Mary T. Williams, defendant, was the owner of 43 shares of the capital stock of the bank of the par value of $100 a share from May 21, 1930, to July 31, 1930, the date of the bank’s closing.

Defendant’s answer alleged that she did not own the stock in question and never had possession or control of it; that she had neither purchased nor received the stock as a gift; and that she did not know that it appeared in her name on the books of the bank until summons in this cause was served upon her.

A general replication was filed to her answer and the cause referred to a master to take evidence and report same with his conclusions of law and fact thereon. The pertinent portion of the master’s report is as follows:

“Dr. A. Wilberforce Williams testified that he had in his possession some money belonging to his wife, Mary T. Williams, which she did not know that he had, and that he on May 21, 1931, without her knowledge caused to be transferred to her forty-three (43) shares of stock in the Binga State Bank then owned by him, and that he bought this stock without her knowledge. The defendant, Mary T. Williams, testified that she often signed business papers at the request of her husband and relied implicitly on his request to sign papers, and she signed Defendants’ Exhibit 1 without looking at it or reading it and knew nothing of its contents. Complainants’ Exhibit 21 (same as Defendants’ Exhibit 1) was offered and received in evidence. It is a paper that was pinned to stock certificate stub A-347, which was the stub of a stock certificate for forty-three (43) shares of stock in the Binga State Bank that was issued to'Mary T. Williams. Mrs. Williams also testified that she signed her name to said paper and also wrote her address on the bottom of the paper, which paper was directed-to the Binga State Bank, authorizing said bank ‘to deliver the shares of said bank in my name to Rosalie M. Edie, ’ and that said paper was prepared by her husband, Dr. Williams, and was presented to her for her signature. Pursuant to the direction contained in said paper, Rosalie H. Edie, who was the secretary of Dr. Williams, presented said paper to the officers of the Binga State Bank, received the certificate of stock and signed the receipt for the same, which she then delivered to Dr. Williams. The Master is of the opinion that Mary T. Williams, by the signing of said paper, ratified the issue of stock of said bank in her name and authorized the delivery of it and is bound thereby and is liable herein as a stockholder.”

Plaintiffs’ exhibit 21 referred to in the master’s report is as follows:

‘ ‘ Chicago, Illinois, May 27,
Binga State Bank,
Chicago, Illinois.
Please deliver to Miss Rosalie M. Edie the shares of Binga State Bank in my name and oblige.
Mrs. Mary T. Williams,
4940 South Parkway.”

The evidence also showed and the master reported that liabilities to the extent of $291,540.44, which remained unsatisfied when it closed, accrued against the bank during the period the stock was registered in defendant’s name on the books of the bank, and that a dividend of only 12% per cent had been paid to the general unpreferred creditors of the bank. The master recommended that a decree be entered against defendant for $4,300, representing the par value of the 43 shares of stock shown by the bank’s records to have been held by her.

After a hearing on exceptions to the master’s report they were sustained by the chancellor, who found that “Mary T. Williams was not and is not the owner of 43 shares of the capital stock of the Binga State Bank. ...”

The only issue presented for our determination is whether defendant is liable as the owner of the 43 shares of the bank stock in question.

After a careful examination of the evidence of defendant and her husband, and considering same and all of the inferences that may be reasonably drawn therefrom in the aspect most favorable to defendant, it presents a most peculiar and suspicious situation to say the least.

Dr. Williams stated substantially that over a period of years he purchased small blocks of the bank stock until he accumulated the 43 shares which he caused to be transferred to his wife May 21, 1930, without her knowledge; that he had been using money belonging to her which she did not even know that he had (and which she apparently never missed); and that, thinking that a dividend would be paid on the stock about July and “to keep peace in the house” by having such anticipated dividend paid to his wife, he caused the transfer of the stock to be made to her. If his purpose was to surprise his wife with the July dividend, and “to keep peace in the house” by his transfer of the stock to her, it is difficult to understand why a few days later, May 27, 1930, he requested the bank to deliver the stock to him “with the hope of being able to sell it and get the money to reimburse her without her knowledge.” He further testified that, after the bank’s refusal to deliver the stock to him without an order from defendant and although the entire transaction was still a dark secret as far as his wife was concerned, he inscribed an order in his own handwriting to the Binga State Bank to “please deliver to Miss Rosalie M. Edie (his secretary) the shares of Binga State Bank in my name” to be signed by defendant; that he placed the paper on which the order was written flat on the table, with the writing uppermost before his wife, and that she signed her name and address beneath the order; and that his secretary presented the order to the bank, secured the stock and delivered it to him.

Defendant insists that she signed the order without reading it because of the confidence she reposed in her husband in business matters. We think the order itself was of such a nature as to attract her eye and attention, either consciously or unconsciously. It was neither an extensive nor complicated document. It consisted of less than 20 words and occupied no more than two or three lines on the paper on which it was written. Defendant admits writing her name and address immediately beneath the order. She testified that she could read and write the English' language and we feel that we have a right to assume that she, a doctor’s wife, was a woman of at least average intelligence. Even though she had implicit confidence in her husband, and even though she had no deliberate intention of reading the order, it is almost inconceivable that as she signed her name and address beneath the order its import could have escaped her attention.

If a party signing an instrument can read, it is his duty to read such instrument before signing, and, if lie does not and is not prevented by fraudulent means, he cannot be permitted to say, when called upon to respond to its obligation, that he did not know what it contained. (Strong v. Linington, 8 Ill. App. 436; Swannell v. Watson, 71 Ill. 456; Anderson v. Bills, 335 Ill. 524.)

It is urged that, while the bank’s records may have raised the presumption that she was the owner of the stock, that presumption was conclusively overcome by the unimpeached evidence of defendant and her husband that she did not own the stock and had no knowledge that it had been transferred to her name. We are of the opinion that the testimony of both was impeached by the irrefutable evidence of the order signed by her, which acclaimed her knowledge that the stock was carried on the records of the bank in her name.

It is idle to urge that she could not he held to have ratified the unauthorized act of her husband in transferring the stock to her unless the evidence disclosed that she had been fully and fairly informed of all of the material facts and circumstances. It is sufficient answer to this contention to state that, if she were not cognizant of the facts prior to the presentation of the order to her for her signature, the order itself was enough to put her on notice so that she might interrogate her husband concerning the matter, which she failed to do.

As heretofore stated she admits her signature to the order for the delivery of the stock and is estopped to say that she did not know its contents and was not the owner of the shares of stock referred to therein. The order disclosed on its face that the stock stood in her name on the books. If the transferee of stock does any act approving or acquiescing in the transfer or in any way ratifies it, she becomes liable to be treated as a shareholder, with such responsibilities as the law imposes in such cases. (Keyser v. Hitz, 133 U. S. 138, 10 Sup. Ct. 290.)

If we assume that defendant did not know of the issuance of the stock to her on May 21, 1930, the date of the certificate, still, when she signed the order in question May 27, 1930, authorizing its delivery to her husband’s secretary, who receipted for it in defendant’s name, she must be held to have known of the issuance of the stock to her and to have ratified and acquiesced in its original issuance to her.

We are constrained to hold that, because of the inherent improbability of defendant’s theory of fact, coupled with her execution of the order “to deliver . . . the shares of Binga State Bank in my name, ’ ’ the master properly found that defendant was liable as a stockholder of the bank and that the chancellor erred in failing to approve the master’s recommendation that a decree be entered against her for $4,300, the par value of the 43 shares of stock owned by her in said bank. Other points have been urged, but in the view we take of this cause we deem it unnecessary to discuss them.

For the reasons indicated herein the decree of the circuit court is reversed and the cause remanded with directions to the chancellor to approve the report and recommendation of the master, and enter a decree against defendant for $4,300.

Reversed and remanded with directions.

(tridley, P. J., and Scanlan, J., concur.


author: Mr. Presiding Justice O’Connor

text:
    Auto Mechanics Local 701, International Association of Machinists, Appellee, v. Chicago Automobile Trade Association and Clayton Dean Chevrolet Company, Appellants.
    Gen. No. 37,677.

      Opinion filed January 8, 1935.
    Mayer, Meyer, Austrian & Platt and Evert O. Hutchins, all of. Chicago, for appellants; Frederic Burnham, of Chicago, and Evert O. Hutchins, of counsel.
    No appearance for appellee.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

On May 22, 1934, plaintiff filed its verified bill against the Chicago Automobile Trade Association to restrain it from violating section 7(a) of the National Industrial Recovery Act as incorporated into the Code of Fair Competition of the Motor Vehicle Retailing Trade. On the day following, May 23rd, Clayton Dean Chevrolet Co., a corporation, by leave of court filed its petition praying that it be made a party defendant. On the same day .an order was entered authorizing the Chevrolet company to enter its appearance as a defendant. June 5th the Chevrolet company filed its motion to dismiss the bill of complaint setting up a number of grounds. The next day, June 6th, plaintiff filed its verified amended bill and on the same day an order was entered which recites that the matter came on to be heard on motion of attorney for plaintiff that a temporary injunction issue “without notice and without bond”; that the court read the verified amended bill in support of the motion, and for good cause shown it was ordered that the writ issue without notice and without bond, enjoining the defendants substantially as prayed for in the amended bill. It is to reverse this injunctional order that defendants prosecute this appeal.

After the record was filed in this court, on motion of defendants the force of the injunctional order was suspended by this court pursuant to sec. 78 of the Civil Practice Act, Cahill’s St. ch. 110, 206. Plaintiff has filed no brief in this court.

The question for decision is, Does the amended bill state a cause of action? Plaintiff, the Auto Mechanics Local No. 701, International Association of Machinists, alleges that it is a labor union organization, affiliated with the American Federation of Labor; that its membership is open to all persons engaged in the trades of auto mechanics, etc.; that the purpose of this organization is to offer to its membership the means of bargaining collectively with their employers through representatives of their own choosing in all matters affecting their employment; that plaintiff is the authorized agent of a number of persons who are employed by persons or concerns engaged in selling automobiles at retail and who are members of the defendant, Chicago Automobile Trade Association; that the defendant, Chicago Automobile Trade Association, is an organization composed of individual retail dealers in new and used automobiles who employ a large number of skilled mechanics who are members of plaintiff’s union; that these employees are authorized by the National Industrial Recovery Act to bargain collectively with their employers through representatives of their own choosing; that to carry out the policy of the N. I. R. A., Codes of Fair Competition have been approved as provided by the Act.

It is further alleged that the defendant, Chicago Automobile Trade Association, has notified its members who are engaged in selling, at retail, new and old automobiles, not to enter into any agreement with their employees, but that the matter of entering into such agreements be referred by the members to the defendant, and a number of specific instances are set forth, the effect of which is to show that defendant, Chicago Automobile Trade Association, has violated the N. I. R. A. and the Code adopted pursuant to that Act. In the view we .take of the case, we think it unnecessary to further set forth the allegations of the amended bill because we have reached the conclusion that suits of this character cannot be maintained by individual members of an industry under the National Industrial Recovery Act, but that such suits must be brought as section 3 of that act provides, by the U. S. District attorneys. Purvis v. Basemore, 5 Fed. Supp. 230; Stanley v. Peabody Coal Co., 5 Fed. Supp. 612; Western Powder Mfg. Co. v. Interstate Coal Co., 5 Fed. Supp. 619; Progressive Miners of America v. Peabody Coal Co., 7 Fed. Supp. 340. Under these authorities we hold that plaintiff cannot maintain this suit. Sec. 3 (c) provides: “The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code of fair competition approved under this title.”

We are also of opinion that the suit cannot be maintained under the State Industrial Recovery Act, approved May 14,1934, in force July 1, 1934, even if that Act might be held applicable although not effective until after the injunctional order complained of was entered. (Texas Co. v. Brown, 258 U. S. 466.)

Section 6 of the State Industrial Recovery Act provides that “Any person subject to and complying with the terms and conditions of any code of fair competition which has been or may be approved pursuant to the terms of the National Industrial Recovery Act, . . . may institute a suit to prevent and restrain any violation of any provision thereof, within this State in any court of competent jurisdiction . . . .” Sec. 6% of that Act expressly provides (p. 184) that no “suit to prevent and restrain any violation in accordance with section 6 of this Act shall be instituted unless the written consent of both the Attorney General of this State and the Compliance Director for the National Recovery Administration for the State of Illinois, appointed by the President of the United States, has first been obtained.” Special Session Laws of 1933, 1934, p. 184. And since there is no allegation that the written consent of the Attorney General or the Compliance Director was obtained (which obviously could not have been done because the Act was not passed until after the amended bill was filed), the bill cannot be maintained.

From what we have said it follows that the injunctional order appealed from must be reversed.

Order reversed.

McSubely and Hatchett, JJ., concur.


author: Mr. Presiding Justice Edwards

text:
    The People of the State of Illinois, Defendant in Error, v. F. Paul Baldwin, Plaintiff in Error.

      Opinion filed January 4, 1935.
    J. Roy Browning, of Chicago, and Lawrence A. Glenn, of Murphysboro, for plaintiff in error.
    C. Edgar White, State’s Attorney, and Orwin H. Pugh, Assistant State’s Attorney, for defendant in error.
   Mr. Presiding Justice Edwards

delivered the opinion of the court.

November 7, 1933, the State’s attorney of Jackson county filed an information in the county court, containing three counts, which charged plaintiff in error, who will be hereafter referred to as the defendant, with violating the Illinois Securities Law, Cahill’s St. ch. 32, ¶ 254 et seq.

Count No. 1 charged that defendant, on January 22, 1930, as agent and solicitor for the Equitable Bond and Mortgage Company of Chicago, Illinois, sold to Grace Perry an interim certificate, issued by said Equitable Bond and Mortgage Company, for 80 shares of Class “B” and 20 shares of Class “C” of Beneficial Interest Old Colony Realty Trust, in violation of the Illinois Securities Act, Cahill’s St. ch. 32, ¶ 254 et seq., in that the securities so sold were defined, within such Act, as Class “D” securities, without the issuer of the same having filed in the office of the secretary of state the statements and documents required by the statute.

The second count was substantially like the first, the principal difference being that it was therein charged that defendant, in addition to being the agent and solicitor of the Equitable Bond and Mortgage Company, was also a broker for said concern.

In count No. 3 the averments were that defendant, as agent and solicitor in the sale of securities for the Equitable Bond and Mortgage Company, did unlawfully sell to Grace Perry securities in violation of law, and that the securities so sold were 80 shares of Class “B” and 20 shares of Class “C” of Beneficial Interest Old Colony Realty Trust.

Defendant pleaded not guilty, trial by jury was waived, and the cause submitted to the court. After a hearing, he was found guilty upon all three counts and sentenced to pay a fine of $500 upon each of the first and second counts, while upon the third he was sentenced to pay a fine of $1,000 and committed to the State Farm at Vandalia for six months, and ordered to work out the fine, if it were not paid, at the rate of $1.50 per day. This writ of error is prosecuted to reverse such judgment.

The proof shows that about December 1, 1929, defendant sold to Miss Perry, for the sum of $500, a bond secured by a mortgage upon real estate in Chicago; that on January 22, 1930, defendant informed her that the bond had been called, took same from her and gave her, in lieu, the interim certificate referred to in the information, and paid her the accrued interest on the surrendered bond. The shares of stock called for in the interim certificate were never delivered to her. Defendant urges, as a ground of reversal, that the evidence in the record does not support a finding of guilty, under all the counts of the information.

The proof shows a single transaction; that is, that on January 22,1930, Miss Perry surrendered her mortgage bond and received therefor an interim certificate issued by the Equitable Bond and Mortgage Company, reciting that upon its surrender, properly indorsed, the Mortgage Company “will deliver to Grace Perry or order 80 shares of Class B and 20 shares of Class C Beneficial Interest of Old Colony Realty Trust due optional with coupons attached representing all interest accruing thereon, from - until maturity, when, if and as said securities are issued and delivered to Equitable Bond and Mortgage Co. When said securities have been received by Equitable Bond and Mortgage Co., and are ready for delivery, notice to that effect will be transmitted to the above named holder hereof at his registered address.”

The charge in the first and second counts is that the security so sold “was then and there an Interim Certificate issued by the Equitable Bond and Mortgage Company for eighty shares of Class ‘B’ and twenty shares of Class ‘C’ of Beneficial Interest Old Colony Realty Trust.” In the third count the averment is, “and the said securities so sold and offered for sale were then and there eighty shares of Class ‘B’ and twenty shares of Class ‘C’ of Beneficial Interest Old Colony Realty Trust.”

An interim certificate is a receipt issued on a subscription for stock, or a purchase of bonds or other securities, to be held until the securities sold are ready for delivery. 19 Fletcher’s Encyclopedia of Corporations, p. 722. In other words, it is the promise or obligation of the issuer to deliver to the holder, when they are issued, the securities mentioned in the certificate, and is not the actual sale of the shares of stock called for by the certificate. It is merely a contract to sell and deliver when the shares are issued and delivered to the obligor.

The third count recites an. actual sale of the shares of Old Colony Realty Trust, while in the first and second counts the allegation is a promise to deliver to the obligee such shares when issued and delivered to the obligor.

That the three counts relate to the same occurrence is patent upon the face of the pleading. Moreover, the proof showed a single transaction, as evidenced by the certificate. That this could not be both an actual sale of shares of stock, which- would necessarily include their delivery, and an agreement or promise to deliver when they were issued and came into the possession of the promisor, is manifest. Hence the proof which would sustain the averment of the first and second counts would not support the allegations of the third; and as all of the evidence related to the single event of January 22, 1930, the court could not find the defendant guilty, in the same transaction, of selling both an interim certificate and the actual shares of stock which the certificate recited were to be delivered “when” and “if” they were issued, — an event which might never be. '

Defendant contends that the court improperly admitted in evidence certain exhibits. We are of opinion that the court’s ruling in this respect was correct. It is also urged that proof of sales of securities by the defendant to other persons, within a few weeks of the dealings with Miss Perry, was incompetent. Paragraph 1, sec. 5, of the Illinois Securities Law, Cahill’s St. ch. 32, ¶ 258, exempts isolated sales made in good faith by the owner, and not for the benefit of the issuer or underwriter of such security, from the operation of the Act. It was therefore competent to show other sales at or about the time of the occurrence in question, to prove that the transaction with Miss Perry was not an isolated sale, and also as tending to prove the relation of the defendant to the Equitable Bond and Mortgage Company, and that the sale charged was for the benefit of said company. People v. Love, 310 Ill. 558.

• The court, at the conclusion of the evidence, denied a motion by defendant to compel the People to elect upon which count they would rely for a conviction. This is claimed as error.

. As previously stated, it is obvious that all of the counts related to the same transaction, but which was differently charged to meet variations of proof. Where this is true, no election will be required. People v. Dougherty, 266 Ill. 420; Goodhue v. People, 94 Ill. 37. We think the motion was properly denied.

A finding of guilty was made upon each count of the information, and sentence severally imposed thereon. We have twice remarked that all of the counts charged the same offense and related to the same transaction. Indeed, the People admit such to be the fact, on page 17 of their brief and argument, stating, “the charge as made in all the counts, as to the security, was sufficient, and the charge as made was the same thing stated differently. ’ ’

It is the settled law that where the same offense is set out in different counts of an information, and there is a finding of guilty, but a single sentence may be imposed upon all the counts, for the one entire offense, and it is erroneous to enter a separate judgment on each of them. Parker v. People, 97 Ill. 32; In re Walsh, 37 Neb. 454, 55 N. W. 1075; Wharton’s Criminal Pleading and Practice, sec. 911, 9th Ed. And to the same effect is People v. Routson, 354 Ill. 573, at page 578, where the rule declared in Parker v. People, supra, is quoted with approval.

This question was not raised by the defendant. However, as the cause will be reversed and remanded, we deem it proper to state the rule which governs, in order that the error may be avoided at a subsequent hearing. While, generally, a reviewing court will only consider alleged errors argued or brought to the attention of the court, the rule is not inflexible; and where it is apparent that its application will result in injustice, it will, not be blindly followed. People v. Donahoe, 279 Ill. 411, 414.

Lastly, the proposition is argued that there is no evidence or finding that defendant was above the age of 16 years, and that the court therefore improperly sentenced him to the State Farm. To warrant his commitment to such institution it was necessary, under sec. 2 of the Act in relation to the Illinois State Farm, Cahill’s St. ch. 23, ¶ 249, that defendant be shown to be above the age of 16 years. There is no direct proof as to his actual age; such fact, however, may be established by circumstances in evidence in the case. People v. Lavendowski, 329 Ill. 223.

It appears that defendant was the representative of the Equitable Bond and Mortgage Company; was engaged in the extensive handling of their affairs, maintained an office in Carbondale, also one at West Frankfort ; that he employed subagents for his principal, and that he entered into contracts in its name. His dealings, as such agent, were those ordinarily engaged in only by an adult, and it seems a reasonable deduction that he would not have been intrusted with such business if he were a boy under the age of 16 years. It seems equally improbable that if he were under such age, Miss Perry and the other customers would have dealt with him in important matters, as his appearance would have certainly revealed his youth. While the proof as to age might well have been more definite and certain, we think the circumstances in evidence justified the inference that he was above the age of 16 years.

For the reasons stated, the judgment is reversed, and the cause is remanded.

Reversed and remanded.


text:
    John W. Spiller, Administrator with the Will Annexed of the Estate of M. J. Cockrum, Deceased, Appellee, v. Antonia Basso Riva and Bronko Yonkovich. Antonia Basso Riva, Appellant.

      Opinion filed January 4, 1935.
    D. F. Moore, of Benton, for appellant.
    Stone & Fowler, of Marion, for appellee.
   Mr. Presiding Justice Edwards

delivered the opinion of the court.

This is an appeal from a decree of the circuit court of Franklin county, rendered in a suit to foreclose a mortgage.

The bill alleges that Tony Basso and Antonia Basso, on August 28, 1921, being indebted to the First National Bank of Sesser, Illinois, executed four notes, each for $1,000, and on October 21, 1921, did make and deliver to said bank two notes, each for $.1,000; all of said notes due in 12 months from their date, with interest from maturity at seven per cent payable semiannually; that to secure said indebtedness, they did, on January 19,1922, make and deliver to said bank the real estate mortgage in question; that said notes and mortgage were assigned to one M. J. Cockrum, who died on December 23, 1931; that complainant was duly appointed administrator, with the will annexed, of his estate; that on August 7, 1923, said Tony Basso died, and that afterwards said Antonia Basso intermarried Avith one Biva, and that her name is now Antonia Basso Biva; that said principal sums, together Avith interest on $2,000 from October 11, 1924, and interest on $4,000 from February 28, 1930, remain due and unpaid; also, that Bronko Yonkovich had acquired some interest in the mortgaged premises, but that same was junior and inferior to the lien of said mortgage.

To this bill Yonkovich made answer, Avhile Antonia Basso Biva filed two special pleas, the first of which set up the statute of limitations, that is to say, that the cause of action did not accrue Avithin 10 years of the filing of the bill; that no promise to pay the debt was made Avithin said 10 years, nor was any payment made thereon within said time. The second plea Avas a denial that the First National Bank of Sesser did indorse or deliver the notes or mortgage deed in question to Cock-rum, as alleged in the bill. To these pleas complainant filed the general replication in chancery. The cause Avas heard, and the court entered a decree for the complainant, from which only Antonia Basso Biva has appealed.

Various grounds are urged Avliy the decree should be reversed, the first of Avhich attacks the sufficiency of the bill, it being contended that the bill should charge a payment or a new promise to pay within the period of 10 years prior to the filing of the complaint. To this there are a number of answers.

First, it is alleged that there Avas due the principal sums of the notes, “with interest on $2,000 thereof from October 11, 1924, and with interest on $4,000 thereof from February 28, 1930.” The fair and reasonablé inference from such averment is that all sums of interest due prior to said dates Avere paid or had been satisfied. We think the bill in this respect was sufficient. Moreover, no demurrer was filed to the bill, and the rule is that all formal objections to a bill are waived by failure to demur, and the going to a hearing on the merits. McCloskey v. McCormick, 44 Ill. 336; Negaunee Iron Co. v. Iron Cliffs Co., 134 Mich. 264, 96 N. W. 468, at page 473; 21 Corpus Juris, p. 430, sec. 458.

By filing the statute of limitations in a special plea, to which appellee replied, appellant assumed the burden of proving same. Whitehouse Equity Practice, sec. 255. The statute of limitations is an affirmative defense, and the burden of proving it rests upon the party who puts it in issue by plea or answer. This is the rule in chancery. Sanders v. Merchants’ State Bank, 349 Ill. 547, 564. It is also true in actions at law. Schell v. Weaver, 225 Ill. 159.

Appellant contends that there was no competent proof of any payment made on the debt within the 10 years before the suit was instituted, and that the indorsements of interest payments on the notes were but self-serving statements.

Complainant offered in evidence the mortgage, as Exhibit No. 1, and by separate offer tendered the six notes as Exhibits Nos. 2 to 7 inclusive, together with all indorsements upon the front and back thereof. Appellant made the following objection: “Exhibit No. 1 is objected to for the reasons that it is not given to secure the payment of the six notes designated as complainant’s Exhibits Nos. 2 to 7 in this case, but is given to secure the payment of six other notes described in the mortgage.” It is thus seen that no objection whatever was made to the notes, hence they were properly admitted in their entirety, including all indorsements both on the face and back of same.

Whether an objection, properly made, should have been sustained, is of no moment, as it is the settled rule of law that evidence received without objection must be considered by the court and given its natural probative force, regardless of whether or not it is legal evidence. Ascher Bros. Amusement Enterprises v. In dustrial Commission, 311 Ill. 258; Peabody Coal Co. v. Industrial Commission, 289 Ill. 449. Also, as held by the court in Ingram v. Hammar Bros. White Lead Co., 273 Ill. App. 152; and to the same effect, 23 Corpus Juris, p. 39, sec. 1783.

“When the instrument, or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance or indorsement as the case may be.” Cahill’s St. ch. 98, ¶ 31 (sec. 31, ch. 98, Smith-Hurd R. S. 1933). Collins v. Ogden, 323 Ill. 594.

The natural probative force of indorsements of interest on the back of a note is that they are evidence of payments by the obligors, and, if they bear dates, that the payments were made as of such times. It is almost universally so regarded in the business world, and conveys such impression to the average reasonable person’s mind in the absence of countervailing proof. The evidence was before the chancellor, admitted without objection, and the law required its consideration by him, regardless of whether it would have been excluded, if timely objection had been made. The court was justified, upon its consideration, in drawing therefrom the belief which it would create in the average reasonable mind; that is, that the indorsements were testimony of payments of interest by the makers, made at or about the dates they bear.

There was sufficient proof to make a prima facie case of payments by the obligors, within the period of 10 years anterior to filing the bill of complaint; moreover, the appellant had the burden, under her plea, of establishing the contrary. This she did not do, nor even attempt to do. We think the chancellor’s conclusion, in denying the truth of the first plea, was warranted.

Appellant further contends that there is no sufficient evidence that the notes were assigned and transferred by indorsement to Cockrum. The proof is that the instruments were in his possession, and. by him delivered to his attorney, who retained their custody until the death of the former, when they were turned over to the administrator of his estate. The notes, on their back, bear the indorsement: “Pay to the order of M. J. Cockrum without recourse. First Nat’l Bank, Don Lionberger. ’ ’

The law seems to be well established that possession of a promissory note, whether it be by the payee or an indorsee, is prima facie evidence of ownership, even if the indorsement is in blank; and, with a stronger reason, where the possessor is the holder of a note, specially indorsed to him by a third party. Henderson v. Davisson, 157 Ill. 379; Palmer v. Gardiner, 77 Ill. 143; Spears v. Wilson Sewing-Machine Co., 50 Mich. 534, 15 N. W. 894; 8 Corpus Juris, p. 1006, sec. 1309; 3 Ruling Case Law, 980. The proof was ample to establish the prima facie ownership by Cock-rum of the notes in question.

The indorsement was undated, and appellant insists that in such event it will be presumed that the indorsement was of the same date as the execution of the notes; and that, as the mortgage was executed some months subsequent to the making of the notes, it (the mortgage describing notes executed to order of the First National Bank of Sesser) was not given to secure the notes in question, as they were at that time owned by Cockrum, and not by the bank; and therefore that the mortgage did not secure the notes in question.

So far as we are advised, the only legal presumption in this regard is that created by Cahill’s St. ch. 98, 11 65 (sec. 65, ch. 98, Smith-Hurd B. S. 1933), to the effect that except where an indorsement bears date after maturity, every negotiation of the instrument is presumed to have been made before same was overdue; and as held in Allis-Chalmers Mfg. Co. v. Hays, 339 Ill. 230, 236. Appellant cites some decisions as in support of her position, but these, upon inspection, will all be found to have been rendered before July 1, 1907, the date when the Negotiable Instruments Law, of which said section 65 is a part, became operative. The only legal presumption, under the statute, is that these notes were negotiated by indorsement before their maturity, which was several months after the date of execution of the mortgage; hence might well have been the property of the bank at the time the mortgage was given.

Aside from this, however, we do not deem the question properly raised. Appellant, by her pleas, proposed but two issues, — the statute of limitations, and nonassignment of the notes. These were the only issues in the case, so far as she was concerned. Had she desired to assert the defense now claimed, she should have raised the proposition by special plea or answer. Having failed to do so, she cannot, for the first time, in a reviewing court, create a new defense in the case. Butler v. Miller, 208 Ill. 231.

It is further urged that there is a variance between the terms of the mortgage, and the notes; the latter each reciting that it bore interest after maturity, while the former stated that the notes secured by it carried interest from date of execution. R. D. Webb, former president of the bank, who drew all the instruments, testified that the notes in question were the ones which the mortgage was given to secure. It seems obvious that the apparent variance was merely a clerical error.

The decree found that Tony Basso, on April 17, 1922, paid the interest on each of the four notes bearing date August 28,1921; that he paid interest on three of said notes September 11, 1922, and interest for the • same period on the fourth note, on December 1, 1922. It further found that Antonia Basso Riva paid the interest on said notes on December 24, 1923, and on divers dates thereafter. This is-claimed as error, as not being supported by the evidence. ’ ■

It appears that Tony Basso departed this life 'em August '7, 1923. For the reasons previously stated, we are of opinion that the indorsements on the notes are prima facie proof that the payments were made by the makers. As to which of the two primary obligors made the payments up to the date of the death of Tony Basso, there is no evidence; hence the court, in our judgment, could not properly find that they were paid by him. It should have found such payments were made by the makers, or one of them, without specification of name.

After the death of Tony Basso, the inference from the proof is plain that Antonia Basso Riva, as the surviving primary obligor, was the person who made the interest payments, and as to her, after Tony Basso’s death, the court found correctly.

The decree of the chancellor is in all things affirmed, except the findings as to interest payments made by Tony Basso, and as to such same is reversed, and the cause remanded, Avith directions to amend the decree to conform to the views herein expressed.

Affirmed in part, reversed in part, and remanded with directions.


text:
    Julius Menestrina, Administrator of the Estate of Theodore J. Menestrina, Deceased, Appellee, v. The St. Louis National Stock Yards, Appellant.

      Opinion filed January 4, 1935.
    John W. Freels, of Bast St. Louis, for appellant; Ropiequet & Freels, of East St. Louis, of counsel.
    Wheeler, Oehmke & Dunham and Wilmer L. Vogt, all of East St. Louis, for appellee.
   Mr. Presiding Justice Edwards

delivered the opinion of the court.

Plaintiff, as administrator of the estate of .Theodore J. Menestrina, deceased, brought suit against defendant in the city court of East St. Louis, where he obtained a judgment for $2,000, from which the latter appeals.

The declaration charged that defendant owned and operated a stock yards in St. Clair county, consisting of many stock pens, separated by wooden board fences and alleys; that plaintiff’s intestate, a veterinarian, was an employee of the State of Illinois, in the course of which employment he was acting as an inspector of cattle at said stock yards, and that he was there by consent and invitation of the defendant; that “his usual duties as a cattle inspector required him, with the consent, permission and invitation of the defendant, to enter said cattle pens and cross said fences for the purpose of inspecting the cattle therein”; that it was the duty of defendant to maintain such fences in a reasonably safe condition for use by plaintiff’s intestate in carrying out his said duties; and that defendant permitted such fences to become in bad repair, in consequence of which, while plaintiff’s intestate was crossing one of them, the boards gave way and broke, occasioning plaintiff’s intestate an injury from which he later died.

To the declaration was pleaded the general issue, and a special plea, in substance, that plaintiff’s* intestate, being an employee of the State, plaintiff should have proceeded, under the Workmen’s Compensation Act, Cahill’s St. ch. 48, ¶ 201 et seq., against the State, and that he had no cause of action against the defendant. A demurrer to the special plea was sustained, and the ruling is assigned as error.

Sec. 26, Art. 4, of the State constitution, provides, “The State of Illinois shall never be made defendant in any court of law or equity.” Proceedings, under the Workmen’s Compensation Act, before the industrial commission, while somewhat informal, in all their essentials partake of the nature of lawsuits, and are terminated by an order or judgment which fixes the rights of the parties as effectually as does a judgment at law or a decree in equity. We are of opinion that to have thus proceeded against the State, would to all intents have been to sue the commonwealth, a course which is barred by the constitution.

The subject, however, is fully provided for by the Court of Claims Act, pars. 462 to 475, ch. 37, Cahill’s R. S. 1933. Par. 467, subpar. 4, relative to the powers of the court, provides that it shall have power to “hear and determine all claims and demands, legal and equitable, liquidated and unliquidated, ex contractu and ex delicto, which the State, as a sovereign commonwealth, should, in equity and good conscience discharge and pay.” Paragraph 6 of the same section confers upon the court the power “to hear and. determine the liability of the State for accidental injuries or death suffered in the course of employment by any employee of the State, such determination to be made in accordance with the rules prescribed in the Act commonly called the ‘Workmen’s Compensation Act,’ the Industrial Commission being hereby relieved of any duty relative thereto.” Par. 474 declares that the jurisdiction conferred upon the. court of claims is exclusive.

It is apparent that the legislature designed that such demands were only cognizable before, and by, the court of claims, and that the procedure therein should be, as near as might be, that employed under the Workmen’s Compensation Act, which should not otherwise apply. That this is clear appears from the last clause of said par. 6: “ The Industrial Commission being hereby relieved of any duty relative thereto.” It is manifest that the demand could not have been heard by the industrial commission, and the court properly sustained the demurrer to the special plea.

The defendant insists that the proof does not establish a duty on its part, towards plaintiff’s intestate, to keep the fences in repair for the safety of cattle inspectors climbing over or crossing them.

The proof shows that on June 3, 1932, decedent, while in discharge of his duties as a veterinary inspector, at the instance of the Liner Commission Company, entered one of the numerous pens of defendant for the purpose of inoculating a bull confined therein. The pen was 12 x 20 feet, with a door at its front running the entire width. Its sides were composed of fences made of 2 x 6 boards, placed 9 inches apart, the topmost of which was about 6 feet high, and surmounted by a cap-board which was laid flat upon the upper edge of the top board.

Decedent entered the pen through the door and attempted to drive the bull toward the gate, where Mr. Liner stood, so that the latter, when the animal thrust its head through the gate, which was open about 2 feet, might close it against the neck of the animal, and thereby hold it in a sort of improvised stanchion, the gate to be kept closed by means of a rope, until decedent should have injected serum. The animal, however, instead of heading for the gate, turned on decedent, who, in order to escape, climbed the side fence and threw his leg on the cap-board, whereupon the next board below it came loose and gave way, the cap-board, without its support, breaking in two, and letting decedent down upon the one secondly below it; after which he fell to the ground, on the outside of the pen, alighting on his feet. It is claimed, as a result of his fall, that he sustained injuries which later caused or hastened his death.

As before stated, the declaration averred that decedent’s duties as a cattle inspector required him to enter the pens and cross the fences for the purpose of inspecting the cattle; and that defendant was under the duty of keeping such fences in a reasonably safe condition for use "of decedent in carrying out his said duties of employment.

It is thus seen that the duty of defendant to keep the fences in repair, so far as decedent was concerned, is predicated upon the fact that one of the duties of decedent, as an inspector, required him to cross the fences ; and that, as he was an invitee of defendant, the latter bore the obligation of maintaining the fences in safe condition while he was discharging his duties as such.

The allegation that decedent’s duties required him to cross or climb the fences is thus laid as the basis of defendant’s duty to keep in safe repair such fences or the top boards thereof. This is a material and essential allegation, and must be proved as charged, to entitle plaintiff to a recovery.

The record is devoid of any testimony which tends in any way to prove that decedent’s duties required him to cross the fences of the pens. There has not been proven any rule that required him so to do, nor that there was any habit, practice or custom, ón his part or that of any other inspector, to climb or cross the fences in order to enter or leave the pens in the discharge of their duties as livestock inspectors. The only proof that decedent ever entered any pen was the testimony of Liner as to what occurred on the day in question. • Dr. Merryman, who was the superior of decedent, and under whose direction the latter worked, was called as a witness, but did not testify that any of the inspectors were required or expected, in the course of their employment, to climb the fences in order to enter or leave the pens. This necessary element of plaintiff’s case, as made by his declaration, is wholly unproved.

Defendant does not dispute that decedent was an invitee of its concern, nor that the latter owed him the common law duty of keeping the premises in reasonably safe condition. It contends, however, that such obligation applies only to those contingencies which are reasonably to be expected,- and that the occurrence in question was one which could not have been reasonably anticipated or foreseen, and that it was not a use of the fence against which defendant was required to provide.

The owner of premises is bound to use reasonable care in so maintaining his property, that those who come thereon by his invitation, whether express or implied, may do so in safety, and if he fails in such duty, and an invitee is injured as a consequence, without negligence or fault on his part, the owner will be required to respond in damages. Devaney v. Otis Elevator Co., 251 Ill. 28; McDermott v. Burke, 256 Ill. 401.

The rule, however, does not require that the owner foresee and guard against, or take precautionary measures to avert accidents or injuries, resultant from unusual and unexpected occurrences which could not have been reasonably anticipated, and would not have happened unless under exceptional and extraordinary circumstances. LaVeer v. Hanke Iron & Wire Works, 187 Ill. App. 481; Atchison, T. & S. F. Ry. Co. v. Calhoun, 213 U. S. 1; Glasier v. Town of Hebron, 131 N. Y. 447, 30 N. E. 239; Weesen v. Missouri Pac. Ry. Co., 175 Mo. App. 374, 162 S. W. 304; King v. Dawson (Tex. Civ. App.), 192 S. W. 271; Bonniwell v. Milwaukee Light, Heat & Traction Co., 174 Wis. 1, 182 N. W. 468; Nelson v. Chicago, M. & St. P. Ry. Co., 30 Minn. 74, 14 N. W. 360; Wabash, St. L. & P. Ry. Co. v. Locke, 112 Ind. 404, 14 N. E. 391.

The accident in question was most peculiar and unusual, and one the ordinary mind, which can be guided only by a reasonable estimate of probabilities, would not have anticipated would occur. To hold the owner to have foreseen and guarded against an event so rare and unexpected, would be to practically hold it as an insurer against any accident which human caution or foresight could prevent, — a responsibility not exacted by the law. Hubbell v. City of Yonkers, 104 N. Y. 434, 10 N. E. 858.

We are of opinion that under the pleadings, and upon this record, plaintiff has proven no duty on the part of the defendant to keep the top boards of the fence in sufficient repair to insure the safety of those climbing over them, nor has he proven, of the decedent, that “his usual duties as a cattle inspector required him ... to enter said cattle pens and cross said fences for the purpose of inspecting the cattle therein, ’ ’ as alleged in the declaration.

For which reasons we think the trial court should have sustained defendant’s motion for a directed verdict, made at the close of plaintiff’s testimony. The judgment is reversed and, by virtue of the authority conferred upon this court by sec. 92 of the Civil Practice Act, Cahill’s St. ch. 110, ¶ 220, judgment is given for defendant, and against plaintiff for costs.

Reversed, and judgment here. ,