author: Mr. Justice Dove

text:
    Trustees of Schools, Township 36, North, Range 10 East of Third P. M., Will County, Illinois, Appellees, v. American Surety Company of New York et al., Appellants.
    Gen. No. 9,354.

      Opinion filed April 6, 1940.
    Kehearing dismissed December 20, 1940.

      Edward R. Nadelhoffer, of Joliet, for certain appellants.
    Adams, Hawxhurst, Hawley & White, of Chicago, for certain other appellant; Ralph R. Hawxhurst and Homer C. Dawson, of Chicago, of counsel.
    Snapp, Heise & Snapp, of Joliet, for appellees; William Martin Garvey, of Lockport, of counsel.
   Mr. Justice Dove

delivered the opinion of the court.

Carl H. Muehlenpfordt was appointed school treasurer in June, 1912 for a term of two years by the Trustees of Schools of Township 36 North, Range 10 East of the 3rd P. M. in Will County, Illinois and was reappointed to succeed himself every two years thereafter to and including June,' 1932. After each appointment he qualified as such treasurer and with the exception of 1932 executed the required statutory bond with the American Surety Company as surety. Following his reappointment in June, 1932, he executed a bond upon which the names of Philip Tost and Edward T. Winkler appear as sureties. This bond is in the penal sum of $125,000, as were all the bonds executed after 1914 and all the bonds appear to have been duly executed and approved as provided by law. At the time of his appointment Carl Muehlenpfordt, the treasurer, was connected with the First National Bank of Lockport and had been its president for many years and he there kept his treasurer records and carried his school account in that bank. He embezzled the school funds and when his misappropriations were detected by a bank examiner, he committed suicide on April 22, 1933. While treasurer he made annual reports to the trustees and to the county superintendent of schools each year as provided by law. His last annual report is dated June 30, 1932 and showed a balance of cash on hand at that time of $117,910.78. His books disclosed that on April 1, 1933, he had on hand as treasurer a cash balance of $29,936.58, but he did not have this amount or any cash on hand as treasurer when he died and no money was ever turned over to his successor, Aloysius P. Dailey, who was appointed treasurer immediately after Mr. Muehlenpfordt’s death.

On September 5, 1933, the original bill in this cause was filed by the Trustees against the American Surety Company of New York, Philip Yost and Edward T. Winkler, individually and as administrators of the estate of Carl H. Muehlenpfordt, deceased. The relief sought was an accounting and a determination of the liability of the several defendants upon these bonds executed by Carl H. Muehlenpfordt as township school treasurer. On March 1, 1934, leave was granted the plaintiifs to file an amended complaint and an order was entered that thereafter the pleadings and proceedings should be governed by the Civil Practice Act. An amended complaint was filed, the several defendants answered and after the issues had been made up, the cause was heard in open court by the chancellor, who entered an interlocutory decree making certain findings of fact and referring the cause to the master in chancery to state an account and particularly directing him to determine the amount of the liability of the several defendants. From this decree the several defendants have appealed.

The amended complaint was filed on March 6, 1934, and in the thirteenth paragraph thereof the reappointment of Muehlenpfordt as treasurer in 1932 was alleged, and it was averred that he, as principal, and Philip Yost and Edward T. Winkler, as sureties, executed their joint and several bond as required by law on July 1,1932 in the sum of $125,000, which was duly acknowledged, approved and accepted by the plaintiffs and a copy thereof was attached to the complaint. By their original joint answer filed September 12, 1935, the defendants Yost and Winkler denied generally most of the allegations of the amended complaint and as to paragraph 13 stated that “they did not have before them any copy of said alleged bond and were unable to remember what its terms and conditions were, if any, and do not admit the same to be true as in the petition alleged.” Subsequently and on November 22, 1935, these defendants filed a verified amendment to their answer, in which for the first time they denied executing the bond dated July 1, 1932. Upon the hearing each testified positively that he did not sign the bond and did not know until after Muehlenpfordt’s death that his name appeared thereon as surety. Mr. Yost testified that he and his daughter, on June 30, 1932, left their home in Illinois for Willow Lake, Minnesota, and remained there until July 28, 1932. The daughter corroborated her father’s testimony. The notary public, whose name and seal appear upon this bond in the certificate of acknowledgment testified that he was an employee of Muehlenpfordt’s bank in June and July, 1932, that he had frequently seen Yost and Winkler’s signatures, that the signatures on this bond looked like theirs, appeared to him to be theirs and that his genuine signature and notarial seal appeared in the certificate of acknowledgment. This witness could not recall when or whether Yost or Winkler appeared before him and acknowledged their signatures to the bond and he did not remember signing his name to the certificate of acknowledgment. Yost and Winkler were both officials of the bank of which Muehlenpfordt was president and while they testified their signatures were not genuine, two handwriting experts who showed extensive qualifications testified that they had examined the admittedly genuine signatures of Yost and Winkler and compared them with the signatures appearing on this bond and that the signatures on the bond were genuine. Satisfactory reasons were given for their conclusions and we have examined the several photostatic exhibits found in the record and considering these together with all the other evidence and the further fact that more than two years after the original bill was filed, these defendants filed their amended answers, in which they then, for the first time, made this contention, we are inclined to concur in the chancellor’s finding on this issue and approve that portion of the decree which found that these defendants had executed this bond.

It is next insisted by counsel for Tost and Winkler that they are not liable for any loss occurring prior to July 1,1932, the date of the bond which we have found they executed. The decree held them jointly and severally liable with the American Surety Company for all misappropriations made by Muehlenpfordt during the terms prior to the date of their bond. The law is that where a public official, at the end of his term, makes a report showing that he had on hand public funds for which he is bound to account and this report is accepted and approved by the proper authorities and the officer so reporting is re-elected or reappointed and executes a new bond, the principal and sureties on the last bond are estopped to say that the sum shown in the report to be in the hands of the officer at the time the report was approved, was not actually in his hands. Otey v. Westerman, 276 Ill. App. 395; People v. Birket, 342 Ill. 333; Morley v. Town of Metamora, 78 Ill. 394; City of Chicago v. Gage, 95 Ill. 593; Roper v. Sangamon Lodge No. 6, I. O. O. F., 91 Ill. 518; Cowden v. Trustees of Schools, 235 Ill. 604.

Morley v. Town of Metamora, supra, was an action upon the official bond of a supervisor who was first elected in April, 1872 and was elected his own successor the following year. The sureties on the bond given the first year were not the same'as on the bond given the second year and the question for determination was upon whom falls the liability for the default, whether upon the sureties on the first or second bond and in affirming a judgment against the sureties upon the second bond the court said: “It is not made to appear very clearly, that whatever default occurred took place in the first year the supervisor was in office; but, conceding that fact, we do not think it relieves the sureties on the bond upon which this action is brought, from liability. The supervisor was his own successor in office. He had made his annual report, in which he charged himself with having a certain amount of money in his hands. That report was approved, and we must presume it was true. When he was re-elected, it was in his hands as his own successor. These facts appeared upon the public records of the town. The new securities upon the official bond of the supervisor must be held to have had notice of what appeared on the public records. In contemplation of law, the money mentioned in his report was in the hands of the supervisor, and the undertaking of the sureties on his bond was that he should account for it. It was as much his duty to account for whatever funds were in his hands at the end of the first year, as it was to account for whatever should be received during the second year. The law made the sureties responsible for any default in that regard. There could be no action maintained against the sureties on the first bond at the expiration of that year, for there was no one who could make a demand for the money the supervisor reported as having in his hands, so as to establish a default.”

The evidence discloses that Muehlenpfordt made his annual report on June 30, 1932, in which he charged himself with the sum of $117,910.78 cash on hand. The rule announced in the Morley case requires Yost and Winkler to account as sureties for whatever sums were received by Muehlenpfordt after June 30, 1932, as treasurer, as well as for the sum of $117,910.78, which his report disclosed was in his hands on June 30, 1932. In other words, if Muehlenpfordt charged himself with having $117,910.78 on hand as treasurer on June 30, 1932, when in fact he did not have such sum, but a lesser sum on hand, then Yost and Winkler would be jointly and severally liable with the American Surety Company for whatever portion of that amount was in fact not on hand. Appellants Yost and Winkler are estopped to deny their principal’s report and are therefore liable according to its terms, but it does not follow that because they are estopped to deny Muehlenpfordt’s report, that they are jointly and severally liable with the American Surety Company for all misappropriations of their principal during the preceding terms. We think that Yost and Winkler’s joint and several liability with the American Surety Company must be confined within the amount of $117,-910.78, after allowing credit for whatever portion of said sum was actually in the hands- of said treasurer on June 30, 1932. In this respect the decree was not correct and it should be modified and limited to the extent hére indicated.

It is insisted by appellant American Surety Company that the statute of limitations had run on the bonds which it executed in 1912, 1914, 1916, 1918 and •1920 and that the chancellor erred in not so finding. This is a suit in equity for an accounting and this defense is technically one of laches as the statute of limitations does not strictly apply to equity cases. Moneta v. Hoffman, 249 Ill. 56; Duncan v. Dazey, 318 Ill. 500. However, as a general rule, equity follows the law and will adopt by analogy the same period of time fixed by the statute. Thomas v. Chapin, 274 Ill. 95; Dixmoor Golf Club, Inc. v. Evans, 325 Ill. 612; Fyffe v. Fyffe, 292 Ill. App. 539. This is especially true, where there are concurrent remedies at law and in equity. Richardson v. Gregory, 126 Ill. 166; Wolkau v. Wolkau, 202 Ill. App. 387. Counsel for appellees insist first that laches cannot be imputed to the trustees of schools as the funds in their treasurer’s hands were trust funds, and second, that the doctrine of laches cannot be invoked because their treasurer fraudulently concealed his embezzlement.

Brown v. Trustees of Schools, 224 Ill. 184, was an ejectment action brought by the trustees to recover possession of a part of a schoolhouse lot to which the trustees held legal title for the use of the school district. In sustaining the defense of the statute of limitations, the court held that to exempt a municipal corporation from the operation of such statutes it must appear that the use for which the property is held must be for the public at large and not merely for the inhabitants of a particular local district, that in that particular case the people of the State in general had no interest in common with the inhabitants of the school district, in the schoolhouse site or in the proceeds derived therefrom, and that the use and the right to the use were confined to the particular local district. In Phillips v. Leininger, 280 Ill. 132, the commissioners of highways of the town of Norwood Park sought to enjoin the defendants from obstructing an alleged highway across the grounds of the Chicago State Hospital. One of the defenses interposed was that the land in controversy was State property and that the State Board of Administration, as an agency of the State, had a right to close up the alleged highway. In holding otherwise the court quoted extensively from Brown v. Trustees of Schools, supra, and held that under the facts in that ease the county of Cook was subject to the statute of limitations the same as an individual.

In the instant case the moneys protected by the treasurer ’s bond were not for the use of the public generally but for the use of the inhabitants of the particular school districts and the defense of laches will bar liability on the bonds given by the treasurer prior to 1922 unless the delay of the plaintiffs to assert their rights - is excused by ignorance or lack of knowledge of the facts due to the fraudulent concealment of their cause of action by their treasurer. The record discloses that the reports made by Muehlenpfordt to the trustees were false and untrue, contrary to the provisions of the. statute which provided that his reports should disclose the true condition of his accounts. The statute, however, required the trustees to at least semi-annually examine the books, notes, mortgages, securities, papers, moneys and effects of the corporation,- and the accounts and vouchers of the township treasurer, and to make such orders for their security, preservation, collection and correction of errors as may be necessary (Ill. Rev. Stat. 1939, ch. 122, sec. 38 [Jones Ill. Stats. Ann. 123.039]). The evidence is that Muehlenpfordt cleverly and fraudulently concealed the true conditions of his accounts and succeeded for years in escaping the discovery of his misappropriations. The trustees had no knowledge of these misappropriations and the law is that there can be no laches where there is no knowledge and delay will not bar relief where the injured party was ignorant of the fraud. Moneta v. Hoffman, supra. But want of knowledge caused by the failure to exercise diligence is no excuse for stale demands. Simpson v. Manson, 345 Ill. 543; Neagle v. McMullen, 334 Ill. 168. In our opinion the trustees failed to exercise the diligence imposed on them by express statutory command and their lack of knowledge of the true state of Muehlenpfordt’s accounts as school treasurer is due to their failure to exercise the degree of diligence imposed on them by law and this failure on their part permitted their treasurer to succeed in making the concealment effective. We therefore hold that the defense of laches is sustained by the evidence in this record and there can be no' recovery against the appellant Surety Company for Muehlenpfordt’s misappropriations prior to September 5, 1923, this suit having been commenced on September 5, 1933.

Appellant American Surety Company next contends that Muehlenpfordt reported at the beginning of his last term of office on June 30,1932, the amount of cash and securities which he had on hand, that this report was approved by the appellees and that therefore appellees and the appellants Yost and Winkler are estopped under the law relating to successive sureties from insisting that any part of the loss should be borne by the American Surety Company. Numerous authorities are cited to the effect that the principal and the surety on the principal’s last bond are estopped from showing that the money reported by the principal as being on hand at the beginning of his last term was not actually on hand or that the shortage occurred during a preceding term. Morley v. Town of Metamora, supra; City of Chicago v. Gage, supra; Cawley v. People for use of Woodford County, 95 Ill. 249; Cowden v. Trustees of Schools, supra; Otey v. Westerman, supra. The rule creating an equitable estoppel applies between the principal and the sureties and prevents the principal and the surety on his bond from denying the principal’s report of money on hand as against a surety on a prior bond. The money reported by the principal as being on hand at the beginning of a term, as against him and his sureties, is transferred in law to that term. It is true therefore that each successive surety is liable not only for the shortage actually occurring during the period for which his bond pertains but is liable also for any difference between the amount reported on hand when his bond was given and the amount turned over at the end of the term, no matter when the shortage occurred. The Trustees of Schools, however, owe no duty to the school treasurer or his sureties the performance of which can be the basis of any estoppel in favor of the sureties on a prior bond and against the Trustees of Schools. In this connection it is well to consider the conditions as they existed on July 1, 1932. On that day the period of the American Surety Company’s last bond expired. Muehlenpfordt’s annual report and a new bond with Yost and Winkler as sureties was executed. The Trustees of Schools approved this report and the new bond but it is inconceivable that any reliance was placed by the Surety Company on the acts of the trustees of that date which could in any way have misled the American Surety Company and induced it to do anything or change its position as a result thereof. With the expiration of the American Surety Company’s bond, its rights and obligations were fixed and determined and this surety neither changed its position in reliance on the treasurer’s report nor did it do any act or assume any duty believing that the treasurer’s report was true. It is an essential element of an equitable estoppel that the person asserting it shall have done or omitted some act or changed his position in relying upon the representation or conduct of persons sought to be estopped. Chicagoland Agencies v. Palmer, 364 Ill. 13; DeProft v. Heydecker, 297 Ill. 541. One who is not misled by another’s conduct cannot claim estoppel. McGee v. Vandeventer, 326 Ill. 425. Estoppel applies only against one inducing belief in the existence of a state of facts on which another was induced to act. People v. Federal Surety Co., 336 Ill. 472; Wollenberger v. Hoover, 346 Ill. 511. On July 1, 1932, the trustees had done no act which would have stopped them from holding the American Surety Company liable as of that date and they have done nothing since that time to alter this situation. Counsel insist that the case of Otey v. Westerman, supra, supports this contention but we do not think so. It appears in that case that the trustees of schools were made a party defendant and filed a cross-bill for relief, but the language of the opinion in that case expressly limits the estoppel to the school treasurer and his sureties. On page 405 of the opinion the court uses the following language: “If this be a correct recital of the facts, it is, within the rule as stated, an estoppel in favor of the United States Fidelity and Guaranty Company, as against the surety on the $250,000.00 bond, approved July 8, 1931, as well as the surety on the $50,000.00 indemnifying obligation.” This holding announces a rule of estoppel against one surety in favor of another surety. It does not hold that the Trustees of Schools can be held to be estopped from proceeding against the sureties under the facts disclosed by this record.

It is next insisted by the Surety Company that appellees are estopped from asserting any claim against it because of the certificates of examination furnished to appellant. These certificates were furnished by the Trustees of Schools to 'the American Surety Company at its own request. The American Surety Company claims that these certificates were falsely made because they certify that the trustees examined the treasurer’s accounts and found them correct, when in fact the trustees had failed to make a thorough investigation of the treasurer’s accounts as required by statute. There is no merit in this contention as the record discloses that the several bonds of the Surety Company, except one, were executed and approved before the current certificate was made by the Trustees of Schools. Appellants ’ last bond was dated June 16, 1930, while the Trustees ’ certificate was dated August 19, 1930 and received by appellant on August 21, 1930. A mid-term certificate was made which was received by appellant on October 5, 1931. In 1928 appellant’s bond was dated May 7th, while the certificate bore no date as to when it was made or received by the appellant. In 1926 appellant’s bond was dated May 25th, while the certificate bore no date but was received by appellant on August 1, 1926. In 1924 appellant’s bond was dated May 29th, while the certificate bore no date but was received on July 1, 1924. In 1922 appellant’s bond was dated May 22nd, while the certificate bore no date but was received on December 7,1922. In each case the audit was made by the Trustees after the date of the bond, except in 1928, when the audit was made on April 1st prior to the bond’s execution on May 7th by appellant. The fact that the Surety Company executed the several bonds prior to receiving the Trustees’ certificates indicated that it did not rely upon the statement made in these certificates in executing Muehlenpfordt’s bonds as surety. There was no statement made to the appellant Surety Company by the Trustees upon which it would rely at the time it executed each current bond. The fact that these statements were subsequently made to appellant containing misrepresentations of fact fail to satisfy the requirement that the statement of fact must be made for the purpose of inducing action and reliance by the Surety Company. Furthermore, the duty of the Trustees of Schools to examine the school treasurer’s accounts is for the benefit of the general public and is not for the benefit of the school treasurer and his prospective bondsmen. Robbins v. Scarborough, 181 Ill. App. 58.

It is next contended that the evidence does not show a shortage in the treasurer’s accounts, and especially does not show any shortage prior to July 1, 1932. The record does not sustain this contention. A. P. Dailey, who succeeded Muehlenpfordt as treasurer, testified that he received $5,500 in notes, mortgages and securities when he became treasurer. The annual report of Muehlenpfordt made on June 30, 1932 shows a balance on hand of $117,910.78. The accountant testified that the last entries in Muehlenpfordt’s accounts for each district prior to his death on April 22, 1933, disclosed a total balance of $29,936.58 in his hands as treasurer. Neither this balance nor any part thereof was turned over to Dailey as succeeding treasurer. A shortage was proved to exist in Muehlenpfordt’s accounts. The matter of time when the shortage first occurred or when the various items constituting the shortage arose relate particularly to the matter of the accounting before the master, when it will be necessary to make this proof. In our opinion a sufficient showing was made as to a shortage to justify the decree ordering an accounting not only against the surety on Muehlenpfordt’s bond when the shortage was discovered but also against his prior sureties. The proof in this case justified the decree directing the master to take evidence and state the account. Ligare v. Peacock, 109 Ill. 94; Rhodes v. Ashurt, 176 Ill. 351.

Counsel for the American Surety Company finally insist that the chancellor erred in overruling their oral motion made at the time the case was called for trial to make available to it all the books and records relating to the accounts of the school treasurer, Muehlenpfordt. The motion was made on December 5, 1935, more than two years after this suit was instituted. Counsel for appellant insisted that counsel for appellees had the books and records in their custody and refused to permit counsel for appellant to examine them. Counsel for appellees denied that they refused to permit opposite counsel from examining these books and records but did refuse to furnish appellant with the audit of these books and records until appellant paid one-half the cost of the audit which had been made at the expense of the appellees. Many of the records were public documents of the county superintendent of schools and other public officials and some were the books and records of the school treasurer and school trustees. We do not believe appellant exercised due diligence in making this motion and therefore the case of People v. Gerold, 265 Ill. 448 is not in point. From the testimony of the attorneys in the case, it seems to us that appellant was more interested in procuring a copy of the audit made by appellees’ accountants rather than the books and records. They had no right to demand this audit of appellees as it was appellees’ evidence of the true condition of Mueblenpfordt’s accounts as shown by his own books and records and the records of Will county. The evidence is that five accountants worked more than five months in examining the books and records of the treasurer, the records of the county treasurer and county superintendent of schools, the books of 11 school districts of which Muehlenpfordt was treasurer and examined between 25 and 30,000 school orders, vouchers, books and other instruments. If appellants’ motion had been made in apt time and had it disclosed a refusal by appellees to permit this appellant to examine the books and records of the school treasurer, the court undoubtedly would have protected appellants’ interests and if it had not, this appellant would them be in a position to complain.

The decree of the circuit court of Will county is modified in the respects intended in this opinion relating to the defense of laches and the joint and several liability of the appellants Tost and Winkler. In all other respects the decree of the trial court is affirmed.

Decree modified and as modified affirmed.


source: Caselaw Access Project

author: Mr. Presiding Justice Stone

license: Public Domain

text:
    Arthur M. Grosse, Appellee, v. Terminal Railroad Association of St. Louis, Appellant.

      Opinion filed October 28, 1940.
    Rehearing withdrawn December 3, 1940.

      Kramer, Campbell, Costello & Wiechert and Norman J. Gundlach, both of East St. Louis, for appellant.
    Mark D. Eagleton and Egberts P. Elam, both of St. Louis, Mo., and McGlynn & McGlynn, of East St. Louis, for appellee.
   Mr. Presiding Justice Stone

delivered the opinion of the court.

This is an action at law, based upon the Federal Employers’ Liability Act, brought by Arthur M. Grosse, appellee (hereinafter referred to as plaintiff), against the Terminal Eailroad Association of St. Louis, a corporation, appellant (hereinafter referred to as defendant), by whom plaintiff was employed, to recover damages for personal injuries sustained by Grosse, on July 13, 1937, as a result of a fall from a wrecker car through a trestle, while he and other employees were about to clear a wreck, from the right of way of the railroad.

The case was tried upon an amended complaint, consisting of one count, which alleged in substance, that plaintiff was an employee of the defendant and that plaintiff and defendant were subject to the provisions of the Federal Employers.’ Liability Act; that plaintiff was a member of a wrecking crew and was being transported from St. Louis, Missouri to St. Clair county, Illinois, for the purpose of clearing a wreck; that it was the established custom and practice, when a wrecking train had been brought to a stop at the scene of a wreck, not thereafter to move said train without the members of the train crew first giving to the members of the wrecking crew, a timely and adequate warning of said intended movement; that plaintiff was upon one of the cars of the wrecking train, which had been brought to a stop at the scene of the wreck; that plaintiff was caused to be violently jerked and thrown from said car; that he fell to the ground and was injured by the negligence of the defendant in violation of the aforesaid custom and practice in moving said train without giving a timely and adequate warning to the plaintiff.

Upon a trial of the issues before a jury, a verdict of $15,000 was returned in favor of plaintiff. A motion for a new trial was denied and judgment was entered in the above amount from which defendant appeals to this court.

Plaintiff’s testimony was to the effect that he was an employee of the defendant, with about 20 years’ experience in car repair and inspection work as member of a wrecking crew. He was so employed at 12:30 a. m. on July 13,1937, in the city of St. Louis, Missouri when he was assigned to go with a wrecking crew to East St. Louis, Illinois. A wreck had occurred on the Illinois Transfer track. A Cotton Belt train had collided with a cattle truck near East St. Louis. There were four members of the train crew, engineer, fireman, conductor and brakeman. There were four members of the wrecking crew, including plaintiff.

As the train left St. Louis and headed generally in an easterly direction toward East St. Louis, the engine was at the front of the train and pulled a block car, tool car and a car upon which a derrick was located. At what was known as the Willows, on the B. and O. track, where there was a “Y,” the train moved west, with the wrecking car, or car with the derrick as the leading car and the engine pushing the cars. Plaintiff and other members of the wrecking crew were in the tool car, with the conductor of the train, until arrival at the B. & O. tracks. Here, he left the tool car and went back to the derrick, for the purpose of firing it. Between the wreck and the wrecking train was a trestle, upon which ran two tracks 'with an open space between. As the wrecking train approached the scene of the wreck it was proceeding very slowly. It was on the northbound track, proceeding west. The Cotton Belt train was on the south track, stationary and facing east, with the engine at the front, its headlight on. It is claimed said headlight was later dimmed. When the train stopped the first time, near the wreck, according to the plaintiff, he did not immediately go outside and get down. Plaintiff testified that Hyde, the foreman, in charge of the wrecking crew, yelled at this time, “Loosen up,” which meant that the wrecking crew from then on was in charge. He also testified that the movement of a wrecking train is entirely under the control of the switching crew, until the wrecker is finally stopped for the wrecking crew to proceed to work, and that control passes to the wrecking crew, when the foreman of the wrecking crew says, “Loosen up.” After the wreck is spotted, the wrecking crew is to be warned of any prospective movements of the train.

Plaintiff testified that he went over the south side of the derrick car and looked down to see if it was safe to get off, but could not determine accurately and definitely. He then started down the side, stepped on the sillstep and then down on the grab iron until he got to the bottom sillstep. At this time, he said, there was a violent movement of the train back toward the east and he was thrown against the side of the car, his handhold was torn loose and that was the last he remembered. Plaintiff suffered injuries about the seriousness of which there seems to have been little controversy.

It is contended by the defendant, at considerable length that the court erred in denying defendant’s challenge to the array of power in that the County Board of Supervisors failed to comply substantially with the statute and that therefore the panel of jurors was not drawn properly. We do not deem it necessary for the purposes of this opinion to set forth verbatim the provisions of the act relating to jurors in connection with the duties of the County Board of Supervisors with relation to petit jurors. Under the act the County Board has two entirely separate and distinct functions, one of which is to make a jury list of not less than one-tenth of the legal voters of each town or precinct in the county and the other of which is to select from the jury list such number of persons to serve as petit jurors in the circuit and other courts of record held in the county during the succeeding year as may be designated by joint action of the judges of those courts. There are then, the two functions of making a jury list and making a selection therefrom.

Section 1 provides for the making of a “ list, ’ ’ while section 2 provides for the making of a selection from such list. Section 3 refers to such two groups, respectively, as the “list” and the “selection.” Therefore, for convenience, as well as using the language of the statute, the two groups respectively may be referred to as the “jury list” and the “jury selection.” It is argued by the defendant that the legislative intent was that a new list should be made' by the Board of Supervisors every year in their September meeting. From this language counsel contend that the “jury list” should be made every year. On the other hand they maintain that it is quite apparent from these provisions that the service of a jury panel drawn from this list must cease with the expiration of two years.

Standing alone the language in section 1, is perhaps uncertain. From such language it might appear that the statute directs that the jury list be made each year, “or at any time thereafter (in such year) when necessary.” However, all of the sections of the statute must be read together in order to arrive at the proper construction. Uphoff v. Industrial Board, 271 Ill. 312; Krome v. Halbert, 263 Ill. 172. From the language in section 5, directing that “all subsequent (as well as initial) selections shall be made from such list until all persons thereon qualified to serve have been selected, or until the expiration of two years from the time of making such list,” it clearly appears that the jury list is to be made only once in two years, unless for some reason it is necessary to make a subsequent list during such two years.

In the instant case the board made the jury list on June 14,1937. That this list was properly made is not questioned. It was from this list that the selection was made. On August 22, 1938, pursuant to section 2, the judges of the courts of record ordered that the board make a selection of nine hundred jurors from the jury list. The jury selection in question was made on September 10, 1938, or before the expiration of two years from the date the master list was compiled. This particular panel was drawn on May 4, 1939 and was summoned to appear for service on June 19, 1939. May 4, 1939, when such panel was drawn was within two years from June 14, 1937, when the jury list was made.

It is contended that although the panel was drawn within the two years it was not summoned and did not serve within such two years. We cannot see any force to this reasoning. In our opinion the jury selection was a legal selection and remained such until at least the expiration of two years from June 14,1937. It was a legal selection on May 4, 1939 when the panel was drawn. The fact that the panel was not to serve until June 19,1939 did not invalidate the panel.

We do not agree with the contention that the county clerk at the time of the drawing of the panel unlawfully acted by deputy instead of in person. The drawing was, in legal effect held “in the presence of the County Clerk” when held in the presence of his duly appointed and authorized deputy. Mitchell v. Short, 251 Ill. App. 357; Woodward v. Donovan, 167 Ill. App. 503; People v. San Filippo, 255 Ill. App. 554.

Section 8, ch. 78 (Ill. Rev. Stat. 1937); Jones Ill. Stat. Ann. 107.231 provides in substance that, upon a day designated by the judge (in this case there were two judges of the city court) of the court. . . the clerk of such court shall repair to the office of the county clerk and . . . draw from the jury box . . . such number . of persons ... as shall be required by said order to act as petit jurors, in said court for such time as may be fixed in such order. The clerk of the court testified there were two judges of such court, that such judges ordered him to go to Belleville (the county seat) and draw a jury for two weeks beginning June 19, but that there was no written order of record. Defendant contends that this oral direction was not in compliance with the statute.

It will be noted that in getting the regular panel the statute above uses the words “upon a day designated by the judge.” It does not say the judge shall order. In our opinion the action of the judges in directing the clerk to draw was a sufficient designation.

Where a substantial compliance is made with the statutory method of summoning petit jurors for trials in courts of record, mere irregularities will be disregarded, and a challenge to the array should be overruled unless there is a clear showing that the rights of a litigant have been prejudiced. People v. Coffman, 338 Ill. 367, 170 N. E. 227; People v. Corder, 306 Ill. 264, 137 N. E. 845; People v. Stevens, 335 Ill. 415, 167 N. E. 49; Siebert v. People, 143 Ill. 571, 32 N. E. 431; People v. Albers, 360 Ill. 73, 195 N. E. 459.

We believe that there was a substantial compliance with the statute in the instant case, and there being no showing of prejudice, the challenge to the array was properly overruled.

It is urged that the court erred in denying defendant’s motion for a directed verdict at the close of all of the evidence. In passing upon this point, we are not unmindful that there seems to be no dispute about the fact that plaintiff was engaged in the furtherance of interstate commerce at the time of his injury and

the Federal Employers’ Liability Act controls this action. 45 U. S. C. A. sec. 51; Kinzell v. Chicago M. & St. P. R. Co., 250 U. S. 130, 63 L. Ed. 893, 39 S. Ct. 412; Miller v. Central R. Co. of N. J. (C. C. A. 2), 58 F. (2d) 635; Parrent v. Mobile & O. R. Co., 334 Mo. 1202, 70 S. W. (2d) 1068.

Therefore State courts are bound by the decisions of the federal courts in such actions. Chesapeake & Ohio R. Co. v. Kuhn, 284 U. S. 44, 76 L. Ed. 157, 52 S. Ct. 45; Pryor v. Williams, 254 U. S. 43, 65 L. Ed. 120, 41 S. Ct. 36; Kusturin v. Chicago & A. R. Co., 287 Ill. 306, 122 N. E. 512.

The federal courts have held that the fact that the verdict and the judgment are against the weight of the evidence, are not for the determination of an Appellate Court. Warbende v. Prudential Ins. Co. of America (C.C.A. 7), 97 F. (2d) 749; Swinger v. Firmin Equipment Corp. (C.C.A. 7), 94 F. (2d) 269; Grand Trunk W. R. Co. v. Heatlie (C.C.A. 6), 48 F. (2d) 759; Goodwin v. United States (C.C.A. 6), 2 F. (2d) 200; Kusturin v. Chicago & A. R. Co., 287 Ill. 306, 122 N. E. 512.

In passing upon the proposition as to whether or not the lower court erred in denying defendant’s motion for a directed verdict at the close of all the evidence, plaintiff is entitled to the benefit of all the evidence favorable to him and all favorable inferences reasonably and naturally to be drawn from the evidence, in order to determine only if such evidence and inferences, if true, were sufficient to establish plaintiff’s case. Gunning v. Cooley, 281 U. S. 90, 74 L. Ed. 720, 50 S. Ct. 231; Tobin v. Pennsylvania R. Co. (App. D. C.), 100 F. (2d) 435; Huff v. Illinois Cent. R. Co., 362 Ill. 95, 199 N. E. 116; Walldren Express & Van Co. v. Krug, 291 Ill. 472, 126 N. E. 97.

We are limited under the authorities to a determination of the one question of whether or not the plaintiff’s evidence, taken as true, with all the intendments therefrom most favorable to him, is sufficient to establish the specific negligence charged by him, the material propositions therein being, the custom, the unexpected violation of the custom (without warning), and the resultant injury. The plaintiff’s testimony proved the custom, when he testified, “After we get to a wreck and the derrick man says ‘loosen up’ that is the time when it passes control. ’ ’ He further testified that during his entire experience, when called on wrecks of that type, and the derrick car had been brought to a stop, it was the custom and practice that the train crew would never make a move unless they would notify the wrecking crew by “hollering” at them.

The defendant’s witness, Hyde, who was the foreman of the wrecking crew, corroborated the plaintiff, when he testified, “After the wrecking foreman hollers ‘loosen her up’ they never move it (the train) until they get permission from him.”

Briefly stated, the plaintiff, with reference to how the injury was sustained, testified: “After the train had come to a complete stop . . . I "started down the side (of the derrick car) so I could see the ground. . . . I was on the bottom of the sill step, my feet were on the sill step, and my hands on the grab iron . . . and the derrick (car) moved in the opposite direction (easterly) and threw me up against the side and tore my hand hold loose . . . When the train started to back up . . . there was a severe jerk, severe enough to . . . tear loose the strong hold I had on the sill step. I did not receive any warning of any kind from the train crew before this thing was moved backwards ... no one hollered at me.” Giving the plaintiff the benefit of all the evidence favorable to him and all favorable inferences reasonably and naturally to be drawn from the evidence, he established all the material allegations of his complaint, the custom, which was known to him and upon which he relied, the unexpected violation of that custom, without warning, and the resultant injury, and by their verdict, the jury so found.

It is contended that plaintiff assumed all the ordinary risks of his employment. The burden of proving this was on the defendant and the weight of the testimony was for the jury. Brant v. Chicago & A. R. Co., 294 Ill. 606; Kiefer v. Elgin J. & E. Ry. Co., 351 Ill. 634; Maher v. New York, C. & St. L. R. Co., 280 Ill. App. 222. In the Kiefer case the Supreme Court said, “Plaintiff did not assume the risk incident to a sudden increase in speed at the very moment he was attempting to board the locomotive, when the engineer had knowledge he was about to do so.” It was there held that the trial court did not err in refusing a directed verdict for the defendant on the ground the plaintiff assumed the risk. In the instant case there was the custom, plaintiff knew of such custom and had a right to rely upon the observance of it. Such a servant does not assume the risk of an unexpected, negligent departure from the customary method of doing dangerous work. Waiswila v. Illinois Cent. R. Co., 220 Ill. App. 113.

We are of the opinion that the trial court properly denied defendant’s motion for a directed verdict at the close of all of the evidence.

Complaint is made of instructions one and two offered by the plaintiff and given by the court. We find no reversible error in either instruction so given. The first instruction relates to the question of damages, and concludes, “you may also take into consideration the loss of earnings plaintiff has suffered, if any, on account of said injuries, if any, and from the preponderance and greater weight of the evidence plaintiff is reasonably certain to suffer in the future by reason and on account of said injuries, if any, not however, at a greater rate than One Hundred Sixty Dollars per month for any such loss of earnings, if any.” Although such reference to the maximum amount of the wages alleged to have been earned by plaintiff as a maximum of recovery for loss of earnings is not to be commended, still, we do not think that it constitutes such error as calls for a reversal of the judgment.

For the reasons above indicated, the judgment of the lower court is affirmed.

Affirmed.


text:
    Hector Bassett, Appellee, v. Garland Heiens, Appellant.

      Opinion filed October 28, 1940.
    Terry, Gueltig & Powell, of Edwardsville, for appellant.
    Henry B. Eaton, of Edwardsville, for appellee.
   Mr. Presiding Justice Stone

delivered the opinion of the court.

This suit was commenced by plaintiff appellee, Hector Bassett on August 31, 1937, at which time a judgment by confession was entered on a promissory note in the sum of $500 signed by defendant appellant, Garland Helens. Said note provided for 6 per cent interest and 10 per cent attorney fees. Thereafter defendant appellant appeared and filed his motion and affidavit to set aside the judgment and for leave to defend, upon the ground that said note was without any good consideration, and was obtained by duress. The court allowed the motion and ordered said motion and affidavit to stand as the pleading of defendant appellant and granted plaintiff appellee time to reply thereto. Such reply denied the duress, and denied that the defendant appellant received no consideration on account of the alleged execution and delivery of said note, hut did not specifically set forth the consideration for said note.

The case was tried before the court, without a jury, and the court found the issues for the plaintiff appellee, and entered final judgment, restoring the judgment by confession previously entered in the sum of $550 and costs.

Principal errors relied upon for reversal by defendant appellant, are that the trial court erred in denying the motion to exclude the evidence and find the issues for defendant appellant; that the court erred in finding the. issues in favor of plaintiff appellee; that the finding and judgment of the court are contrary to the manifest weight of the evidence, that the court erred in admitting certain evidence for plaintiff appellee over the objection of defendant appellant; that there was no consideration for the note sued upon and that it was obtained by duress.

It was stipulated between the parties, that the plaintiff appellee was the holder of a previous $500 note signed by William Heiens and Lydia M. Heiens, father and mother of the defendant appellant; that the will of the father was duly probated and his widow appointed executrix; that plaintiff appellee filed his claim in the probate court on account of said note, and that said claim was allowed and he received $78.52, about 15 per cent of the claim, said estate being insolvent, and that thereafter at public sale, defendant appellant bought the real estate of his father.

The testimony of the defendant appellant, with reference to the duress so pleaded was to the effect that he had several conversations with the plaintiff appellee relative to the payment of the $500 alleged to be owed by the father’s estate and that on July 28,1937, he went to the Laclede Steel Company where he was employed and where the son of plaintiff appellee, Clyde Bassett, was also employed as watchman. He testified that he was there accosted by Clyde Bassett and his father, the plaintiff appellee, and was told by the former that if he did not sign a note in the sum of $500 he would see that he lost his job at the plant, said Clyde Bassett at the same time shaking his fist in his face, and that he then and there because of such threats signed the note in question.

This was denied by Clyde Bassett and plaintiff appellee. The defense of duress was an affirmative defense and the burden of proof was upon defendant appellant. Commercial State Bank of Forreston v. Folkerts, 200 Ill. App. 385. We are not constrained to hold under this state of the record that duress was proven.

However the defense of want of consideration presents a much more serious question for the consideration of this court. Apparently the only consideration for the note claimed by the holder himself was the old indebtedness of the father of the defendant appellant. Upon the witness stand he testified on direct examination that the note was given for money loaned the father before he died. On cross-examination he testi- ' fied in substance, that the note was given for the $500 loaned the father. Further, that he did not claim to have ever given any money to Garland Helens and that there was no other transaction between him and Helens on account of this note, except the money that his father owed. This debt of the father could not be a valid consideration for the note sued upon. At the time said note was signed the estate of the father had been settled, the assets exhausted, and the estate declared insolvent. The indebtedness of the father was no longer in existence. There was no well founded or disputed claim to compromise. This was not the personal obligation of Garland Helens. When a debt is incurred and after the incurring of the same a third party promises to pay or guarantee it, some additional consideration is necessary to support such promise. Anderson v. Norvill, 10 Ill. App. 240; Haven v. Chicago Sash, Door & Blind Co., 96 Ill. App. 92, 101; Scott v. Leaf River State Bank, 242 Ill. App. 268.

In the brief of plaintiff appellee it is hinted that such additional consideration for said note was supplied by the action of the plaintiff appellee in securing a loan for defendant appellant, making it possible for him to purchase the farm home of his father, and in addition thereto, some agreement of the plaintiff appellee to stay away from and not bid at such sale, which latter proposition was denied by defendant appellant. Assuming such matters were proven upon the trial, neither was alleged in the reply of plaintiff appellee, as being the consideration for the note. He simply denied that there was no consideration for the note.

Upon a proffer of such evidence, objection was made by defendant appellant, upon which the court did not directly rule. Section 43, sub-sec. 4 of the Civil Practice Act, Ill. Rev. Stat. 1939, ch. 110; Jones Ill. Stats. Ann. 104.043 provides in part, “The facts constituting any affirmative defense, such as . . . want or failure of consideration . . . and any ground or defense, whether affirmative or not, which if not expressly stated in the pleading, would be likely to take the opposite party by surprise, must be plainly set forth in the answer or reply. ’ ’ The reply filed by the plaintiff appellee did not give defendant appellant sufficient notice of the facts which were relied upon by plaintiff appellee at the trial to sustain the validity of the note. The objection of defendant appellant to this testimony should have been sustained.

Plaintiff appellee does not seem to have considered that his efforts in securing the loan was a part of the consideration for the note for in answer to the question, “You were not charging him for your time and service and work that you were doing for him that you talked about?” Bassett answered, “No sir, I never charged him a cent.”

Aside from the question of the admissibility of the •evidence with reference to the alleged agreement on the part of Hector Bassett to stay away and not bid at the public sale of the Helens farm, such agreement if there was one proven would be void as being contrary to public policy. Fallon v. Layfield, 94 W. Va. 428, 119 S. E. 172. In that case it appeared that the defendant and his- wife wanted to retain ownership of the property in question and entered into an agreement which in substance recited that it was the desire of the wife and her sons to purchase the property and that the plaintiffs intended to bid at the sale, and in order to give the wife an opportunity to buy the property at a lower price, the plaintiffs agreed not to bid, with the understanding that the wife, if she purchased the property, would give to the plaintiffs notes and a trust deed securing the same, to secure the balance of their claims after crediting thereon their share of the proceeds of the sale. The contract was regularly executed and the sale held. After the sale, the wife refused to carry out the agreement, suit was brought by the plaintiffs, and the court held that the contract was not enf orcible, as being contrary to public policy.

The Illinois cases, while not so near in point, recognize the rule that contracts which are entered into for the purpose of stifling competition at public sales, are contrary to public policy, and such contracts will vitiate the sale, when the purchaser is a party to such contract. Mansfield v. Wallace, 217 Ill. 610; Wilson v. Kellog, 77 Ill. 47; Ingalls v. Rowell, 149 Ill. 163.

It is contended that the note given carries the presumption of consideration. When all material facts are admitted and undisputed a presumption has no weight whatever arid entirely vanishes. Osborne v. Osborne, 325 Ill. 229; Nelson v. Stutz Chicago Factory Branch, 341 Ill. 387, 397. The illegality of the alleged agreement to stay away from and not bid at the sale; the . failure of Bassett to plead in his reply and to claim on the witness stand that his efforts in securing the loan, was the consideration, and the stipulated facts with reference to the previous obligation of the father of Garland Helens, are all undisputed matters, overcoming any presumption of legal consideration. It is fundamental that want of consideration destroys the validity of a note in the hands of the payee. Knotts v. Preble, 50 Ill. 226; Mulholland v. Bartlett, 74 Ill. 58; Green v. Smith, 180 Ill. App. 572; Straus v. Citizens' State Bank of Elmhurst, 254 Ill. 185; First Nat. Bank of Morris v. Stephen, 291 Ill. App. 373. Upon this state of the record, we cannot do otherwise than hold that there was no consideration for the note sued upon and plaintiff appellee- is entitled to recover nothing from defendant appellant and the case should be reversed.

Reversed.


author: Mr. Justice Culbertson

text:
    William (Bill) Bingaman and Martin W. Busekrus, Trading as Da-Nite Garage and Filling Station, Appellees, v. Alfred E. Dahm et al., Appellants.

      Opinion filed October 28, 1940.
    Russell H. Classes, of Belleville, for appellants.
    Louis J. Gtrossmahh, of Belleville, for appellees ; Edgar C. Q-rossmahh, of Belleville, of counsel.
   Mr. Justice Culbertson

delivered the opinion of the court.

This is an appeal from a decree of foreclosure of a mechanic’s lien, decreeing that defendants, Alfred E. Dahm, etc., James H. Bipley, and Barbara Bipley, pay to plaintiff William (Bill) Bingaman, the sum of $559.93, and to plaintiff Martin W. Busekrus, doing business as Da-Mte Garage & Filling Station, the sum of $145.15, together with interest at the rate of 5 per cent from the date of the decree, and providing in the usual form for the sale of certain premises of the said James H. Bipley and Barbara Bipley, in the event of the failure to make such payments.

The evidence disclosed that Alfred E. Dahm, one of the defendants, entered into a lease agreement, which was ultimately reduced to writing with the defendants, James H. Bipley and Barbara Bipley, for the purpose of operating a coal mine on the premises decreed to be sold. A mine had previously been operated on the premises, but the tipple and other equipment had been destroyed by fire. Plaintiffs were employed by the said Alfred E. Dahm in the erection and construction of a new tipple and of certain machinery necessary to operate the mine. It was alleged by the plaintiffs that this was done with the knowledge and consent of defendants, James H. Bipley and Barbara Bipley. There is evidence that James H. Bipley knowingly permitted the labor to be performed, that he was present repeatedly while the work was being done, and one witness testified that Bipley even pleaded with plaintiff Bingaman to continue with his work and that he would “take care” that such plaintiff be paid for doing the work. The Bipleys were shown to have resided on the premises about two blocks from the property upon which the work was being done during such time. It was also shown that the Bipleys had later forfeited the lease to Dahm and obtained title to the property upon which the work was done.

Plaintiff Bingaman testified that, under verbal contract, he had performed certain work, upon which there was paid him a certain sum in cash and coal, leaving an unpaid balance which he made the basis of his claim for lien. Plaintiff Busekrus also alleged and testified that he performed certain work, for which he was not paid, and both plaintiffs presented evidence to the effect that the improvements and work done by plaintiffs were adapted to the use of the mine property, and that the amount was reasonable and constituted a valuable and lasting improvement on the premises, and enhances the value thereof at least to the extent of the labor performed.

Claims for lien were filed by both plaintiffs, and thereafter the action to foreclose such liens was instituted. The matter was heard before a master in chancery, who reported his conclusions to the court, and the objections of defendants to such report were overruled, and were again overruled by the circuit court of St. Clair county when such objections were noted as exceptions. A decree was entered in accordance with the report, as hereinabove set forth.

The appellant defendants, in the brief filed in this court, set forth numerous assignments of error, which are apparently a partially edited copy of the objections filed to the master’s report. No useful purpose could be served by reviewing all of the assignments so set forth. The major points relied upon by the defendants for reversal in this cause, are: (1) That necessary parties in interest who should have been made parties defendant have been omitted, and that, therefore, the plaintiffs’ action should be dismissed; (2) That some of the labor performed by one of the plaintiffs was performed in the regular course of operating the mine, and is not lienable; (3) That the claims combine lienable and nonlienable items, and that they cannot, therefore, be enforced for any part of the work done; (4) That the labor was furnished on movable or temporary items; (5) That the landlord’s estate is never subjected to mechanic’s lien where the lease provides (as here) for removal of the improvements by the tenant at the expiration of the term; (6) That there is a variance between the bill of complaint, exhibits attached thereto, the claim for lien, and the evidence introduced at the trial; and (7) That there is no evidence to show that Barbara Ripley knowingly permitted the work to be done.

The evidence in the record shows that there was some dispute as to the various items referred to in the points relating to matters of evidence outlined heretofore. The evidence, however, tends to sustain the decree in these respects, and we cannot say that the finding and conclusion of the court below, as to any matters objected to, is contrary to the weight of the evidence.

Upon consideration of all the evidence in the record, the lease from the Ripleys, under which Dahm was operating, the nature of the work done, the special adaptability of the results of the labor for the use of the mine and of the particular premises involved, and the effect of such labor in placing the property in condition for the use for which it was intended, this court must conclude that such labor is properly lienable under the Mechanics’ Lien Act (Westphal v. Berthold, 273 Ill. App. 266; Dobschuetz v. Holliday, 82 Ill. 371; Owings v. Estes, 256 Ill. 553; Cross v. Weare Commission Co., 153 Ill. 499).

While the court (in view of the evidence) is not impressed by the argument advanced by the defendants that a portion of the Bingaman claim was for work of a character which could not be lienable, this court would, in any event, be constrained to hold that payments by, and credits to the tenant were made to extinguish all nonlienable portions of the claim, leaving the remainder lienable, under the authority of Young v. Bergner, 243 Ill. App. 473.

The case of Young v. Bergner, supra, likewise contains an answer to objections made by defendants as to lack of notice to Barbara Ripley, the wife of defendant James H. Ripley and a joint owner of the premises with him. In that case, where a wife was a joint owner with her husband and lived in close proximity to the premises and where the husband had knowledge of the work being done, it was held that the wife had “actual if not constructive” notice of the plumbing work which was going on. In the case before us, the work was much more open and visible, such defendant lived in close proximity to the portion of the premises where the work was being done, and the evidence disclosed that the husband was present and unquestionably had knowledge of the labor performed by plaintiffs.

It is contended by the defendants that, under authority of Granquist v. Western Tube Co., 240 Ill. 132, the . failure of the plaintiffs to make certain lien claimants parties to the action, is fatal to plaintiffs’ right to maintain their action to foreclose their mechanic’s liens. The answer of defendants did not set forth that there were other parties in interest, and nothing in the record tended to show such interests and claims until exhibits were introduced by the defendants, showing the nature of the claims of other persons than plaintiffs. No question of omitted parties was raised at such time, but the question of omission of parties was raised for the first time in the objections to the master’s report, which were filed by defendants. At the time of the filing of such objections, and at the time of the entry of the decree herein, more than two years had expired from the time of the furnishing of the last labor or material in each of the claims to which reference was made, and as to which defendants raise the objection of lack of parties. It is not contended by the defendants that such claimants now have, or may assert, a lien upon the premises, or that such claimants are, in fact, unpaid. Defendants simply contend that such claims for lien were on file at the time the suit was filed, and that this action is governed by the facts as they existed at the time the suit was instituted, rather than at the time of the filing of objections to the master’s report, or at the time of the entry of the decree.

It is correctly observed by defendants that the lack of a necessary party in a foreclosure case of the character here involved, if such objection is properly raised, will operate to deprive a foreclosing lien claimant of his right to proceed until he makes such necessary party a party to his proceeding. As stated in the Qranquist case, the legislature never contemplated that there should be a separate suit by each contractor or subcontractor, for the purpose of having a lien established in his favor, but that the statute contemplates one suit and that all persons who are known to have any interest, either legal or equitable, in the land, or any claim for lien against it, should be joined either as plaintiffs or defendants so that the court will be able to adjust all equities and render a decree in relation to the distribution of the proceeds. It was stated that the owner should not be harassed with a multiplicity of suits, and thereby unnecessarily burdened with additional costs and expenses. In the Qranquist case there were clearly two unpaid claimants, each attempting a separate foreclosure. The decision was in keeping with the manifest intention of the legislature that all such claims should be adjudicated in one proceeding.

In the instant case, however, there is no showing that there were any unpaid lien claimants at the time the issue was raised by the defendants. A court will not dismiss or remand simply because of nonjoinder of necessary parties, unless it appears that the decree will have the effect of depriving an omitted party of his property rights (Crescio v. Crescio, 365 Ill. 393), or, as stated in the Granquist case, of unnecessarily burdening an owner of property with a multiplicity of suits in a mechanic’s lien case. In the case at hand, the record shows that the claims for lien, upon which the defendants base their contention of omission of necessary parties, were unenforceable at the time objection was first raised by defendants.

Courts endeavor to protect parties to any action, as well as those who have rights which should be protected and included within the purview of the statutory legislation under which the action is instituted, but Appellate Courts do not engage in futile acts simply to adhere to a technical rule of procedure. It would be of no benefit to the omitted lien' claimants to reverse the instant case. As shown in the record, they had no rights as lien claimants at the time objection was first made. So far as the record discloses, such claims may have been paid, or settled, at such time. It will suffice, for the purposes of this case, however, to state that unless a showing is made that, at the time objection is taken to a lack of necessary parties in an action to foreclose a mechanic’s lien, such omitted party or parties, or unpaid claimants, or persons whose rights might be adversely affected in the proceeding, actually have some substantial interest in participating in the proceeding, or would be benefited if made a party at such time, the objection as to nonjoinder cannot be maintained. The lien claimants must be unpaid at the time objection is made so that the requirement of adding such persons as parties defendant will operate to give added protection to a defendant, as well as to the omitted parties.

There being no reversible error in the record, and no basis in law for a reversal or remandment of the decree of the circuit court of St. Clair county, such decree is accordingly, affirmed.

Affirmed.


author: Mr.. Justice Dady

text:
    Timothy Hayes and J. W. Hayes, Appellees, v. Ethel Davis and R. S. C. Reaugh, Executor of the Last Will and Testament of Sarah E. Davis, Deceased (Defendants). Ethel Davis, Appellant.
    Opinion filed October 28, 1940.
    Boyles & Fisher, of Waukegan, for appellant; Paul T, Higgle, of Flora, of counsel.

      H. D. McCollum, of Louisville, for appellees.
   Mr.. Justice Dady

delivered the opinion of the court.

This suit was commenced on March 15, 1938, for the partition of a city lot in Flora, Illinois. Plaintiffs Timothy Hayes and J. W. Hayes obtained a decree in their favor. Defendant Ethel Davis is the only party who appeals.

It is conceded that the plaintiffs are the real owners of the property. Their title was derived through Charles H. Davis, who owned and occupied the property at the time of his death on March 25,1924. By his will admitted to record on May 7, 1924, he devised the lot to Lottie Hayes, his housekeeper, for life, and gave the remainder to her sons, Dillman Hayes and plaintiff, Timothy Hayes, Lottie Hayes went into possession of the premises and remained there until about six months prior to her death on December 16, 1931. At the time of their mother’s death, Dillman and Timothy Hayes were aged 15 and 16 years, respectively. On September 25, 1937, Dillman Hayes conveyed his interest to plaintiff J. W. Hayes. The will of Davis and the deed from Dillman to J. W. Hayes erroneously described the lot. This misdescription was corrected and reformed by the decree.

On June 13, 1927, the property was sold at a tax sale to P. N. Smith for $1.20. Based on such tax sale a tax deed was issued to and recorded by Smith on May 15, 1930. Smith held his tax deed interest until his death. The heirs of Smith conveyed their interest in the lot to Charles Briscoe by quitclaim deed dated May 20, 1933, which deed was never recorded. For a period of time the premises were leased by Briscoe for a rental of $2 a month.

The defendant Ethel Davis and Roy Davis, her husband, purchased the lot sometime in 1934 (the exact date not being specified) under an oral contract with Briscoe, and as consideration therefor Roy Davis traded to Briscoe land valued at $200. The purchase was made in the name of Ethel Davis who received her deed from Briscoe on March 23, 1935, which deed was recorded on April 19, 1935. . Ethel Davis and her husband took possession of the lot at the time of the purchase and thereafter remodeled the house and made the other improvements hereinafter mentioned. They have been in possession of and have lived on the premises continuously since the date of their original entry.

The decree found the plaintiffs to be the owners of the property in equal shares; ordered that the tax deed to Smith, the deed from the Smith heirs to Briscoe, and the deed from Briscoe to the defendant Davis, be set aside; that the clerk pay to Ethel Davis the sum of $117.67 deposited in court by the plaintiffs as reimbursement for taxes, interest and costs by virtue of her interest under the tax deed; that Ethel Davis deliver possession to plaintiffs; that partition be made between the two plaintiffs and that certain persons act as commissioners to make such partition. The commissioners reported the property not susceptible of division and valued the property at $1,550. The trial court approved the report, ordered a sale and directed that the net proceeds be divided between the two plaintiffs.

Ethel Davis contends that, in addition to reimbursement for taxes paid, interest and costs, she is entitled to recover the reasonable value of the improvements made by her to the extent that such improvements enhanced the value of the premises. The failure of the trial court to allow her such recovery is the only error assigned. She claims such right not only on equitable grounds but by virtue of the provisions of sections 53 to 61 of chapter 45 of the Revised Statutes entitled Ejectment.”

In considering the claim of the defendant Davis for the enhanced value of the property, it is material to inquire as to the circumstances under which the improvements were made. The testimony shows without dispute that at the time Ethel Davis took posséssion the property was unoccupied but in the possession of Briscoe and the only improvements consisted of a “poorly built two room shack” and a chicken house. The record does not show how or when Briscoe obtained possession, except that he testified that when he o'ot his deed no one was living there, and this testimony was not denied. After her purchase and in the fall of 1934 Ethel Davis and her husband removed part of the old house and rebuilt the remainder by putting on a new roof and new siding and making it into a five-room house. The Davises also built a coal shed and dug a well on the premises and expended a total of $1,200 to $1,500 on the improvements made by them. A contractor who testified for the defendant placed the value of the lot at the time of the hearing at $350 to $400 and the value of the improvements at $1,900. Briscoe valued the lot at $250 and the improvements from $1,500 to $1,600. Plaintiffs offered no evidence as to the value of the lot or the cost or value of the improvements. There is testimony to the effect that Briscoe in a conversation was advised of the plaintiff’s title in the spring or early summer of 1934, and was cautioned against doing any work on the buildings. This was denied by Briscoe. There is no evidence tending to show that Ethel Davis or her husband at any time had any notice or knowledge of such conversation, if any. There is no evidence that either the defendant Ethel Davis or her husband had any actual notice of the plaintiffs ’ title prior to the making of the improvements. Boy Davis, however, testified that Briscoe told him that his (Briscoe’s) title was founded on a tax deed and that he (Davis) did not make any investigation to see what the title was; that he “supposed it was good.” There is no evidence that the plaintiffs or Dillman Hayes had any knowledge of the improvements referred to until after the improvements were made.

The general rule at law is that if a stranger enters upon the land of another without the consent of the owner and makes an improvement by erecting a building, the building becomes the property of the owner of the land (Olin v. Reinecke, 336 Ill. 530) but, as stated in Cable v. Ellis, 120 Ill. 136, “Courts of equity have not hesitated to soften the harshness and rigor of the rule of law, when the circumstances of the case and the relation of the parties required it to be done to meet the ends of justice.” Consistent with the policy that he who seeks equity must do equity, the rule has been established that when the true owner seeks relief in equity, as in the instant case, and where improvements upon real estate, of a permanent character, are made in good faith by one in possession, believing himself to be a bona fide purchaser or owner for value, and under circumstances justifying such belief, and the expenditure is reasonable in amount and of benefit to the estate, allowance may be made for the increased or enhanced value caused by the improvements, but the persons claiming such allowance are charged with the value of the use and occupation of the premises. (Cable v. Ellis, supra.)

In Lagger v. Mutual Union Loan & Building Ass'n of Chicago, 146 Ill. 283, a chancery proceeding, the court set aside the sale of the premises and allowed the purchaser for the enhanced value of the property caused by his improvements, and, in so doing, said; “The rule, that the purchaser of a defective title is not entitled to compensation for improvements, is relaxed in favor of such purchaser when he is brought into a court of equity as a defendant at the suit of the real owner. If the latter seeks the aid of equity to establish his right to the property itself, and it appears that the estate has been substantially benefited by the improvement, it would seem to be just that he should be required to make compensation.” In Gilbreath v. Dilday, 152 Ill. 207, a chancery proceeding, the court, in speaking of the rights of a tax deed holder who had made improvements, said: “Appellant cannot be regarded as a mere trespasser, since he took possession only after obtaining his tax deed, and if required to account for rents and profits, as was properly held, should be allowed for permanent improvements, if reasonable in their character and beneficial to the land, as well as for taxes and special assessments paid, and interest thereon.”

The proof shows Ethel Davis purchased the property in good faith, without actual notice of any defects in her title, and entered into the peaceable possession of the premises and made the improvements under the honest belief she was the true owner and without actual knowledge of the claims of the true owners. At the ' time she entered into possession she expected to and did thereafter receive from Briscoe a deed professing to give her complete title to the premises. The knowledge of her husband that her title was based on a tax deed and the inference that such information was conveyed to her does not prove or tend to prove she knew of any defect in her tax title. The improvements were openly made and there is no evidence to show anyone told her not to make such improvements or that she did not have the right to make them. If the good faith of Ethel Davis is challenged by attempting to charge her with constructive notice of the interests of the plaintiffs, it would not change the situation any, for the will of Davis and the deed to Hayes erroneously described the lot as in a subdivision which did not exist.

The record until corrected by the decree in this case cannot be said to have given any notice of the rights of the plaintiffs.

Plaintiffs elected their remedy and have asked the aid of a court of equity and asking equity they are required to do equity. The property is to be sold and the net proceeds divided and no injustice or hardship is imposed upon the plaintiffs by giving to the defendant the enhanced value caused by the improvements. In Eury v. Merrill, 42 Ill. App. 193, the court in a partition proceeding, said: “Where, in a case of partition and a sale of the land upon which the improvements are placed, the proceeds of the land are increased by reason of the improvements, a court of equity may allow and pay the wrongdoer the amount which the fund has been increased by reason thereof. Certainly the owner of the title is not injured by this, and the person who has improved the estate in his own wrong is simply allowed to take his money back; in other words, it is not considered forfeited. Any other rule would appear inequitable.” In accord is Killmer v. Wauchner, 79 Iowa 722, 45 N. W. 299.

In our opinion under the circumstances of this case it was reversible error to limit the recovery of Ethel Davis only to the amount due under the tax deed. She is also entitled to be reimbursed for the improvements placed upon the premises to the amount that such improvements enhanced the value of the real estate, the amount of such enhancement to be determined as of the time of the hearing, and the plaintiffs are entitled to charge against her the reasonable value for the use and occupation of the premises from the date of her entry on said premises to the time of the hearing, but if it appears that the rental value has been increased or enhanced by reason of the improvements placed on the premises by Ethel Davis, then she should not be held for any part of the increased rental value caused by the improvements. (Dougherty v. White, 112 Neb. 275, 200 N. W. 884.)

Consistent with the rule hereinabove announced, in the further hearing of this case the court should hear evidence as to the value of the said property as of the time of the hearing without the improvements made by defendant Ethel Davis, and also the value of said property at the time of the hearing with the improvements made by the said defendant, for the purpose of determining the enhancement in value, if any, caused by the improvements made by said defendant. The trial court should also hear evidence as to, and determine the reasonable value of the occupation of the premises from the date of the entry thereon by the defendant Ethel Davis to the time of the hearing.

Upon a sale being held after the payment of costs, the court should order that the balance remaining in the hands of the master be set apart and that there should be paid to the defendant Ethel Davis such proportion of the entire proceeds of said sale remaining in the master’s hands after the payment of costs (but not the costs on this appeal) as the amount of the enhancement, if - any, of the property by reason of the improvements made by the defendant, bears to the total value of the property as found by the court at the time of the hearing, less the amount fixed for the reasonable value of the occupation of the premises by the defendants, with the remainder of such moneys to be paid to the plaintiffs.

In the view we have taken of this case, it is unnecessary to decide whether or not the above mentioned provisions of the Ejectment Act are applicable.

Judgment of the trial court is reversed and the case remanded at the costs of appellees for further hearing in conformity with the views herein expressed.


text:
    The Village of Hartford, Appellant, v. First National Bank of Wood River, Appellee.

      Opinion filed October 30, 1940.
    Jacoby & Patton and Frank L. Manns, both of Alton, for appellant.

      Verlie, Eastman & Schlaely and John J. Gainer, both of Alton, for appellee.
   Mr. Justice Culbertson

delivered the opinion of the court.

This is an appeal from a judgment in favor of appellee, First National Bank of Wood River (hereinafter referred to as defendant), and against appellant, the Village of Hartford, a municipal corporation (hereinafter referred to as plaintiff Village).

Plaintiff Village filed an action in chancery to set aside and hold for naught what it alleged to be a purported or pretended consent judgment, in favor of defendant, and against plaintiff Village, entered February 9,1932, in the sum of $12,120.37, on the ground that the items upon which said judgment was based (which consisted substantially of certain warrants payable solely out of funds realized from the collection of special assessments), were unlawful or improper claims or charges against the general revenue funds or credits of the Village, and that the action of the president and board of trustees in consenting to, or confessing said judgment, together with the action of the defendant in procuring the same, was and is a fraud upon the plaintiff Village and the public. It is alleged that the said Village president and board of trustees were without such authority under certain provisions of Ill. Rev. Stat. 1939, ch. 24, secs. 803, 808.25, and 104 [Jones Ill. Stats. Ann. 76.117, 76.175, 21.196]. Section 808.25 referred to provides, in substance, that no person accepting the vouchers or bonds provided for in connection with assessments, shall have any claim or lien upon the Village in any event for the payment of the vouchers or bonds, or the interest thereon, except from the collection of the assessment against which the vouchers or bonds are issued. In addition to allegations relating to the entry of the judgment, it was likewise alleged that between February of 1932, and June of 1938, the time of the filing of the complaint, plaintiff Village had made substantial payments on the principal and interest due on the judgment. The complaint prays for recovery of such amounts which, it is contended, were wrongfully paid out.

The defendant bank filed a motion to dismiss both the original and the amended complaint, and the matter was determined on the motion filed to dismiss the amended complaint. The grounds set forth in the motion were that: (1) The judgment, which the plaintiff Village sought to have set aside, was entered by a court having competent jurisdiction of both the parties and subject matter, and upon a consent and confession executed by the president of the plaintiff Village, pursuant to the authority of the board of trustees of the plaintiff, and it was therefore valid arid legal; (2) That the proper procedure to set aside such a judgment by confession was through the filing of a motion, supported by affidavit, rather than through complaint in equity; (3) That the action was barred by a prior judgment, and that plaintiff Village was barred by laches from obtaining the relief sought; (4) That it is not alleged that plaintiff has been diligent or has an equitable excuse for its delay; and (5) Also, that the complaint fails to state a cause of action against defendant. The motion to dismiss the amended complaint was sustained. The plaintiff Village elected to stand by such amended complaint, and judgment was thereupon entered against it. This appeal is prosecuted from such judgment.

Essentially, the grounds relied upon by the defendant are stated, as follows: (1) Plaintiff’s complaint does not allege due diligence; and it appears that plaintiff was guilty of laches and acquiescence; (2) Plaintiff’s complaint does not contain any facts to show that the defendant bank was guilty of fraud; and (3) That equity will not set aside the judgment of the court having jurisdiction of the parties and subject matter because such judgment is erroneous, or because plaintiff had a good defense thereto. We shall consider such points in the course of this opinion, roughly, in reverse order. What we have to say is predicated, for the purpose of consideration of this cause (on the basis of the motion to dismiss), on the assumption that the allegations stated in the complaint are true.

The contention that a court of equity will refuse to act even though the decision was erroneous, or a good defense might have been presented by a defendant, applies only where there has truly been an adjudication of the matter before the court, and does not apply to a case of the character under consideration, where a consent judgment has been entered under circumstances such as are present in the instant case.

In the case of Kelly v. Milan, 127 U. S. 139, the United States Supreme Court concluded that the action of officials representing a municipality, in consenting to a decree adjudging certain bonds to be valid obligations of such municipality, was ineffective to make such matter res adjudícala in a subsequent proceeding before there was no adjudication by the court of the validity of the bonds. It was stated that the case was not a submission to the court for its decision on the merits, but was a consent in advance to a particular decision by a person who had no right to bind the town by such consent, because it gave life to invalid bonds. It was observed that the authorities of the municipality had no more power to do this than they had to issue the bonds originally. A consent judgment, in which officials representing a municipality assume obligations against a municipality, which are unauthorized by law, is void, and the claim or demand receives no greater validity by reason of such act than it had theretofore (Kelly v. Milan, supra; Slayton v. Crittenden County, 284 Fed. 858).

On the second point raised by defendant, as to the failure of the complaint to recite facts showing fraud, it is only necessary to state that the complaint sets up facts which, in light of the law, demonstrate that the municipal officials engaged in an act, which was wholly unauthorized, in consenting to a judgment on warrants which were expressly declared not to be payable out of the general fund, but only out of the collection of special assessments, the remedy for the enforcement of which is by mandamus or injunction.

As stated in Goldman v. Blanksten, 240 Ill. App. 136 (quoting from Pomeroy’s Equity Jurisprudence), “The remedy which equity gives to a defrauded person is most extensive. It reaches those who are actually concerned in the fraud, and all those who directly or knowingly participated in its fruits.” The defendant knew, or was chargeable with knowledge on the basis of the issue presented on the motion to dismiss, that the warrants were to b¿ payable “solely out of the funds realized from the collection of the first installment of the Special Assessment,” and not out of the general revenues or funds of the municipality (Scates v. King, 110 Ill. 456). The attempt to convert the warrants into an obligation against the general funds of the Village by the entry of judgment through consent is adequately alleged as the basis of the fraudulent act of the then president and board of trustees of the Village, acting in conjunction with the defendant.

Where a judgment has been obtained by fraud or undue advantage, courts of equity have acted by injunction, even where the relief might be had at law. The proceeding to set such judgment aside, being purely original, could be instituted either in law, or in equity, by the injured party, and the fraudulent judgment being void in equity as regards the defrauded party, could not preclude the exercise of equitable jurisdiction (Nelson v. Rockwell, 14 Ill. 375; Truett v. Wainwright, 9 Ill. 418). This rule still prevails despite other available procedure under the Civil Practice Act (Printers Corp. v. Hamilton Investment Co., 295 Ill. App. 34).

The final point raised by defendant that plaintiff was guilty of laches and acquiescence and that, therefore, a court of equity will not intervene, deserves more extensive consideration. It is true that as relates to a private person or corporation, such objection would prevent relief in equity after a period of six years had expired from the time of the entry of judgment, before the complaint in equity is filed, and particularly when payments (stated to be about $6,000 in the instant case) have been made upon the judgment in recognition of it.

Different considerations, however, apply to a governmental agency, such as the municipality involved in this case. The maxim “nullum tempus occurrit regi” — in effect that the doctrine of laches does not apply against a unit of government, has been interpreted as being restricted to public rights of the governmental agency, and has been held not to apply to contract, or other nongovernmental rights (Ramsay v. County of Clinton, 92 Ill. 225; Chicago v. Chicago & N. W. R. Co., 163 Ill. App. 251).

With considerable ingenuity, it is contended by the defendant (as one reason for concluding that a public right is not involved), on the authority of Healy v. Deering, 231 Ill. 423, that a municipal corporation may validly consent to the entry of a judgment or decree against it (although fraud is expressly excepted in such case), and that a consent decree partakes both of the nature of a contract and a decree (American Tar Products Co. v. Bradner Smith & Co., 238 Ill. App. 151), and that, therefore, in the instant case a contractual or private right is involved, and that the doctrine of laches applies. We cannot agree that such conclusion is either legally sound or equitably proper.

We do not believe that a judgment obtained by consent, based upon warrants which do not authorize the entry of such judgment, can change the character of a right of the municipality so as to make applicable the doctrine of laches, irrespective of the manner in which, the contention is sought to be rationalized. The rule which has been stated in the cases attempting to distinguish between public and private rights, has not clearly established the limitations of the doctrine and of the interpretation of “public” or “private” rights. It has been stated in Chicago v. Chicago & N. W. R. Co., supra, that if the rights involved are such as are limited to a particular locality, they are deemed to be . private, while if they are such as belong to all of the people of the State, or in which all the people of the State are interested, such rights are deemed to be public, and the doctrine of laches, or the statute of limitations is not deemed to be applicable.

We might logically conclude that the general statutes of this State limiting the legal effect of the warrants upon which the consent judgment was taken, might give this action the character of one to assert a public right, rather than a private right. It seems to us, however, that another distinction, more fundamental in nature, exists in the present case, which should prevent the application of the doctrine of laches. If the municipal authorities had consented to a judgment based upon obligations of another municipality, or on no consideration, it could hardly be contended that such judgment was inviolate after a period analogous to that of the statute of limitations had expired, even though payments may have been made upon such judgment. Such judgment would have been void, and the consent of the municipal authorities could not have given it any greater validity. We feel that the same considerations apply in the instant case.

The rule as to the applicability of the doctrine of laches was never intended, we believe, to be available to defeat the intervention of equity in a case such as is presented here. The original parties in the transaction ■ giving rise to the entry of judgment, are involved in this proceeding. No change of position has taken place other than such as would arise from a partial payment upon such invalid judgment by the plaintiff Village. If action had been instituted originally under circumstances which would have justified the entry of judgment, even though the Village may have had a defense, or even though other specific objection might have been made to the entry of such judgment, our conclusion would have been that a court of equity should not intervene.

In the instant case, however, it was apparent from the original complaint in the action in which judgment was taken (on the basis of the record before us), that a valid judgment could not have been entered pursuant thereto, as against the Village. The act of the municipal authorities in consenting to a judgment upon such complaint, was a nullity. While, ordinarily, a change of position is not considered where a period analogous to the period of the statute of limitations has expired, still, where no change of interest has occurred and no innocent third parties are involved, and the original parties are before the court in an equity proceeding, we must conclude that it would not be in keeping with the principles of equity to invoke the doctrine of Inches and prevent the granting of relief to a public body.

It is, therefore, our conclusion that the circuit court of Madison county erred in sustaining the motion to dismiss, and in entering judgment in favor of defendant, and against the plaintiff Village herein.

This cause will, therefore, be reversed and remanded to said circuit court, with directions to overrule the motion to dismiss, and to proceed in accordance with the views expressed in this opinion.

Reversed and remanded.