text:
    Thaddeus Kantor, Appellee, v. Dziennik Zjednoczenia Publishing Company, also known as Polish Union Daily Publishing Corporation, Appellant.
    Gen. No. 39,846.
    Opinion filed May 11, 1938.

      Beach & Beach, of Chicago, for appellant.
    Charles Ralph Johnston, of Chicago, for appellee; Greydon L. Walker, of Chicago, of counsel.
   Mr. Justice Hall

delivered the opinion of the court.

Defendant, the English name of which is the Polish Union Daily Publishing Corporation, appeals from a judgment against it in favor of the plaintiff for the sum of $15,000, entered in an action in which it is charged that defendant published in its newspaper of general circulation among the Polish people of this community, an alleged libel against the plaintiff, written in the Polish language. The alleged libelous matter as set forth in the complaint, and which, as claimed, is a translation from Polish into English, is as follows:

“Yesterday into the hands of detectives fell Thaddeus Kantor, 38 years old, living* at 909 N. Hermitage Ave., author of the vaudeville performance having* the title of ‘Wedding* of John in the Old Country.’ He has been accused of larceny. Kantor suddenly became notorious when he put his theatrical troupe on a herring diet. He is supposed to have done so, because of lack of funds. Warrants for the arrest of Kantor were sworn to last Tuesday by Bernice Maciejewska, of 1639 N. Wood St., and Bernice Berkowiez, living at 2441 S. Whipple St., who were actresses in Kantor’s theatrical troupe. Warrants were signed by Judge Francis Borrelli. The girls stated that when Kantor hired them for his troupe, he ordered each of them to put up $50 as a security. The troupe met with great failures in the eastern states and because of that has returned to Chicago. Kantor is supposed to have refused to return the security. But what hurt the girls the most were herrings, with which Kantor began to feed his troupe. Kantor, as the girls tell the story, bought a whole barrel of herrings which Maciejewska and Berkowicz ate for breakfast, dinner and snpper seven days in succession. Yesterday in the detective bureau Kantor gave out such a statement: ‘It is true that my troupe has bankrupted and that I was forced to feed the girls with “Schmalz herrings.” It is also true that Maciejewska and Berkowicz have been eating the herrings with great appetite. I bought a barrel of herrings on account of Lenten days, because I did not want to break the commands of the church. I could have given my troupe sardines and other fish, but all of them demanded good Jewish schmalz herrings. And if after herrings my whole troupe’s appetite was whetted for other foods — that is not my fault. ’ ” It is alleged and not denied that the above was published by defendant on July 10, 1931. The trial was by jury, which returned a verdict for the amount upon which the judgment was entered.

Defendant insists that the verdict and judgment are contrary to the law and the evidence; that the publication of the article in question was qualifiedly privileged; that the burden of proving that it was false and that defendant was actuated by malice is upon the plaintiff; that the items mentioned in the alleged libelous matter were the truth, and were published with good motives and for a justifiable end, and that none of the words were actionable per se. It is also claimed by the defendant that the damages awarded are remote and speculative, and that there was no basis for exemplary damages; that the court erred in giving certain instructions, and that the verdict, even if justified, was grossly excessive.

Plaintiff’s testimony is to the effect that since 1928, he had been a Polish radio singer and entertainer in America; that he is a theatrical producer and manager ; that he has sung for phonograph records in the years 1927, 1928, 1929 and 1930, and that his earnings for the time mentioned in this work during these years was approximately $4,000; that he had written a great many plays and translated others from the French, German and English languages into the Polish language, and that he speaks and writes in four languages ; that he has been an editor and reporter since 1916; that he had produced various plays in the Polish language in America in various communities where the Polish language was spoken in various parts of the United States, and that he acted and produced these plays during the years 1928 until 1931; that in addition to being a creator and producer of plays, he is also a singer and actor; that prior to 1931, and for a period of four years, his income from articles published in papers was $45 a week; that during the years 1928, 1929, 1930 and part of 1931, his income from plays amounted to $12,000. As to the article in question, the witness states that on July 8, 1931, he was employed on a newspaper in South Chicago, and that on that day he read the article published by defendant; that he called the editor of the defendant’s paper on the telephone and told this editor that the article published about him was untrue, and that he, the witness, asked the editor to retract the same, which the editor declined to do, and that the editor informed the witness that he, the editor, now had a chance to get even with him, and that he, the editor, intended to publish so much about plaintiff that he would run the plaintiff out of town. Plaintiff testified that he had known the editor of the defendant corporation, and that he had worked for him in 1923. He also testified to the effect that he took the theatrical troupe on a tour of the eastern States in the spring of 1931, among them being Bernice Berkowicz and Bernice Maciejewska, together with John Grbzybowski, A1 Bogucki, one Mr. Rutkowski, Stanley Slawinski and Helen Miechkowski; that he produced a play called, “John’s Wedding in the Old Country,” and that the tour started in the month of February and ended in May of the same year. Plaintiff denied that, as charged in the articles published by the defendant of which he complains, the members of the troupe were compelled to live on salt herrings three times a day, or that he ever bought a barrel of herrings for the troupe, and denies that he ever told any member of the troupe that he had no money to buy them food. He testified that he had agreed to pay them $35 a week as soon as the performances started, but that he did not agree to board them; that he told all of his troupe that they would have to have money with them because they would have to be “on their own” for about two weeks, but that shortly after starting on his tour, he ascertained that the members of the company had no money, and that he would have to provide for their board. He further testified to the effect that some time in May or June, 1931, he was associated in the “projected production” of a film play with Octave Orlowski and Mr. Chapulis; that “I had no written contract. It was an oral agreement with them that I was to get $100.00 a day for playing that motion picture and 10% net of the income, and that if the play had been published, it would have been the first Polish talking picture produced in America”; that after the articles were published in the defendant’s publication, Orlowski and Chapulis informed the witness that they would not produce the picture, and that they would have to make a scenario for another picture, and that if the witness was playing in this other picture, these persons would not have anything to do with it because of plaintiff’s reputation. He testified that things were going badly on his trip with his.troupe, that they couldn’t make any money, and that it was the opinion of the witness that they should go back to Chicago; that he stated to the members of his troupe that they would have to go back to Chicago, and that he paid but two of the men members of the troupe the $50 which he had received from them; that there was a discussion at that time between the witness and the members of his troupe concerning the $50 deposit with him as “bond money”; that when they finished up, they were without money, and that he borrowed money in Cleveland for gas. He also testified to the effect that prior to the publication of the articles complained of that he was able to produce his plays in various churches and parish houses in Chicago and elsewhere, but that in September, 1931, he was told' by a priest, having made application for the use of a hall, that he, the priest, would let him know later, but that he never heard from him again; that in September or October, 1931, he had a talk with a Father Strzycki with reference to his play, “John’s Wedding in the Old Country,” and that this priest told him that he, the witness, had a bad reputation, that the priest had read the article in the Polish Union Daily, and slammed the door on the witness. He also mentioned a number of priests who had declined to allow him to produce his plays after the publication of the article. On cross-examination, plaintiff stated that after he returned to Chicago, the two girls mentioned in the article of which he complains, asked him from time to time for the $50 refund which he had promised to pay them; that on July 8, 1931, he was arrested on a warrant issued on the complaint of these two persons, and that he was locked up in the police station.

Bernice Berkowicz, one of the women who caused the warrant for plaintiff’s arrest to be issued, testified for plaintiff and to the effect that during the tour of the troupe in Scranton, Pennsylvania, there was a discussion about wages, that plaintiff told the members of the troupe that business was very poor, that he did not think it would get any better, and that was why they were not getting paid, that he would have to give them money for food, and that the money which he intended to give them for food was the money he owed them. This witness denied that she made the statement published by defendant as to being compelled to live on herring on the tour. She admitted that she caused the warrant to be issued for plaintiff’s arrest. The editor and publisher of the paper was called by plaintiff, and denied all charges made by plaintiff as to any threats made by him against plaintiff, or that he had any feeling of animosity toward plaintiff.

In addition to the article set forth in the complaint filed, and upon which the action is predicated, the following was offered and received in evidence upon the ground that they tend to show malice, and it was admitted by defendant that they represented the matter published in his paper as of July 8, 1931:

“Interesting Story of a Barrel of Herring and Thaddeus Kantor.
“The path to dramatic fame may be strewn with roses for Ethel Barrymore, but two young ladies declared yesterday before Judge Francis Borrelli that their paths were sprinkled with salt from herrings.
“ ‘It was bad enough when we had to do dishes and platters for the whole troupe, and wash costumes without any remuneration, but when it was necessary to live a whole week by eating salted herrings — then the limit, of endurance was reached,’ declared Bernice Maeiejewska, age 22, living at 1639 North Wood Street. ‘Always herring, and herring, and herring. Three times a day we ate herrings,’ added Bernice Berkowicz, age 21, living* at 2441 South Whipple Street.
“Full Barrel of Herrings.
“ ‘He bought us a whole barrel of herrings, this our boss, (Thaddeus Kantor, living at 909 North Hermitage Avenue),’.interrupted Miss Maciejewska. ‘He said that he has no money to buy us eats, but our contract specified also with board, and so he spent 80 cents for a barrel containing 120 herrings. For breakfast we ate them with bread, for dinner with potatoes, and for supper again with bread. All of us ate herrings, that is nine people of the troupe.’
“Mrs. Maciejewska explained that she, her husband, Al Bogucki, age 26, her friend Bernice and John Brzybowski living at 1313 Julian Street, all joined a travelling troupe as actors in answer to an advertisement by Kantor in one of the Polish dailies. Kantor hired all four, and at the same time took $50 from each person, so that — as he claimed — ‘to assure himself that they will not leave him in time of need.
“ ‘What kind of play were you performing on the stage?’
“ ‘It was “John’s Wedding in the Old Country,” ’ explained Mrs. Maciejewska. ‘When I was not playing the mother’s role, I performed as a bride. We learned the roles by heart and went Bast playing performances in Polish halls.’
“Herrings and Herrings.
“ ‘After a month and a half on the road my husband, who is a painter, decided to return to Chicago and try to find a better job. He, like John, received back his bond money of $50 each and returned to their homes. I decided to still stay with the troupe and earn for myself $30 per week. But, however, Kantor did not put on any more performances and we all returned to Chicago, and Bernice and I never received our $50, nor any pay, nor anything.’
“The Judge acceded to the request of both young women, that Kantor should be arrested and issued a warrant for him.”

Plaintiff nowhere claims that he was innocent of the charge made in the warrants issued on the complaint by the two members of his troupe, and upon which the arrest was made. From what we gather from his brief filed, his charge is that the statements in the published article to the effect that his production was a vaudeville performance, that he suddenly became notorious, and that the members of his troupe were compelled to subsist on a herring diet for a number of days, were, of themselves, libelous.

The statute on Libel, ch. 38, pars. 402, 403 and 404, secs. 177, 178 and 179, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 37.348-37.350], is as follows:

“402. A libel is a malicious defamation, expressed either by printing, or by signs or pictures, or the like, tending to blacken the memory of one who is dead, or to impeach the honesty, integrity, virtue or reputation or publish the natural defects of one who is alive, and thereby to expose him to public hatred, contempt, ridicule, or financial injury.
“403. Every person whether writer or publisher, . convicted of libel, shall be fined not exceeding $500, or confined in the county jail not exceeding one year.
“404. In all prosecutions for libel, the truth, when published with good motives, and for justifiable ends, shall be a sufficient defense.”

As to the publication of the fact that plaintiff was arrested on the warrant for the offense set forth in the complaint, we call attention to the case of Watson v. Herald-Despatch Co., 221 Ill. App. 557, where a newspaper article was published in which the facts of the plaintiff’s having been arrested on a warrant was made the basis of a libel suit. In holding that the publication was qualifiedly privileged, the court said:

“The publication was qualifiedly privileged, and it purports to set forth an account of certain judicial proceedings, viz., the finding of the indictment by the grand jury and the giving of bail by appellant. No opinion is expressed and the article contains no words which per se would imply malice, but on the contrary announces appellant’s express denial of the accusation.
“Appellant on his cross-examination admitted all the facts, published as such, to be true, with two exceptions. One of these is that the amount of bail on one of the indictments is stated as being $3,000, and the other is that the stock sold was not of an ‘automobile’ concern but was of some other character of corporation. The gist of the libel, if there be one, would be' the false statement that appellant was indicted for the crime mentioned and was compelled to give bail, but appellant admitted these facts to be true. There was no libel in the misstatements of the amount of bail appellant gave and that the stock sold was that of an automobile concern. These misstatements were immaterial and formed no basis for an action for libel. . . .
“The publication being qualifiedly privileged, the burden was on appellant to prove malice, which he failed to do, and the trial court rightly directed the jury to find appellee not guilty.”

In 17 R. C. L., par. 91, page 344, and par. 93, page 346, it is said:

“91. It is a general rule that the publication of reports of judicial proceedings is qualifiedly or conditionally privileged. Newspapers, as well as, but no more than, others enjoy this privilege. Though the publication of such proceedings may be to the disadvantage of the particular individual concerned, it is considered that the general advantage to the country resulting from having these proceedings made public more than counterbalances the inconveniences to the private persons whose conduct may be the subject of such proceeding’s. . . .
“93. It seems to be the concensus of judicial opinion that any proceeding wherein judicial action is invoked and taken is a judicial proceeding á report of which is qualifiedly privileged, though it is had ex parte and without a public hearing. ...” See also 36 Corpus Juris, page 1276, and Iddings v. Houser, 237 Ill. App. 236.

Can it be said that the statement that plaintiff’s troupe were compelled to subsist on herrings for a week, is libelous, per sel The article published states that this information was received from two women, who filed the complaints upon which the plaintiff was arrested. In the trial of this cause, each of these women denied that they made such statements in toto. They did not deny that they had made similar statements to the reporter. Even if it can be said that these statements are libelous, none of the damage which plaintiff is alleged to have sustained, seems to be predicated alone upon these statements. The damage claimed seems to be predicated upon the publication of the true story as to plaintiff’s arrest, that he and his troupe became insolvent while on the road, and that he failed not only to pay the members their salaries, but that in addition he was delinquent in failing to return to them the deposit which they gave to him.

On behalf of plaintiff, the court gave the jury the following instructions:

“The Court instructs the jury that the publication of any words which tend to charge a person with committing a. crime, or which tend to injure him in his business or profession, without lawful justification or excuse, is a libel on that person, and in such case the law implies both malice against and damages to such person by reason of such publication.
“The jury are further instructed that in actions for libel the law implies damages for the plaintiff from the publication of actionable words, and the law also implies that the defendant intended the injury the libel is calculated to effect, and the jury, in case you find a verdict of guilty, are to determine from all the facts and circumstances in the case, what damages ought to be given, and are not confined to mere financial loss or injury.” These instructions contain language which indicates that the defendant here, as a matter of fact, published words which tended to charge the plaintiff with a crime. It would be a restatement of what we have already said to suggest that the article does no such thing. It merely published the fact that a charge that plaintiff had committed a crime, had been made against plaintiff in the municipal court of Chicago, and that he had been arrested on such charge.

In Tunnell v. Ferguson, 17 Ill. App. 76, the trial court gave the following instruction: “ ‘ The court instructs the jury for the plaintiff, that if you find from a preponderance of the evidence in the case that the defendant spoke and published of the plaintiff the words alleged in the plaintiff’s declaration, you should find for the plaintiff, and assess his damages at such sum as the evidence may show him entitled to.’ ” Because of this instruction, the cause was reversed and remanded, and in so doing, the court said:

“This, instruction entirely ignores the plea of justification, and although the jury may have believed the plea of justification, yet they are told if the words were spoken they must find for the plaintiff.”

In Ambrosius v. O’Farrell, 119 Ill. App. 265, an action for libel was begun by-Tony O’Farrell against certain persons who had addressed the following communication to the mayor and city council of Collinsville, Illinois:

“We, the undersigned voters of Collinsville, do hereby petition the City Council as follows; That whereas, our Police Magistrate, Tony O’Farrell, has been guilty of the most brazen malfeasance, allowing thugs, criminals and desperadoes of all character to escape without punishment; that wheréas, our otherwise peaceful community is becoming a home and shelter for outlaws of the most desperate character, making life and property unsafe and without protection; and whereas, feeling that an emergency exists that our city needs immediate relief from this state of affairs; Be it resolved, that the City Council do hereby instruct the City Attorney, R. G-uy Kneedler, to issue all complaints in behalf of the city and arraign all criminal disturbers of the peace, in fact any and all cases in which the City of Collinsville is involved, before such justice of the peace that he may deem of sufficient good standing and ability to enforce the laws and dignity of the City of Collinsville.” In commenting upon certain instructions given, the court said: “Whether or not the plaintiff was guilty was not the question. It was sufficient in defense that the defendants had been informed and believed that the plaintiff was guilty of malfeasance in office. It matters not from what source or in what general terms the information was received.
“The second and fifth appellee’s given instructions are clearly erroneous and fatally prejudicial to the judgment even if the record were otherwise free from error. In this case they were not applicable as propositions of law and "were highly misleading. By them the privileged character of the communication was taken from the consideration of the jury. In effect it ' was tantamount to an instruction that prima facie the petition was a libel and that malice and damages should be implied. The plaintiff’s tenth instruction is erroneous, in leaving to the jury the question of whether or not the petition was privileged; but of this appellants may not complain for by their given instruction, 9a, they are committed to the same error.”

We are of the opinion that under the facts as they appear in this record, the court was in error in giving to the jury the instructions referred to, and that, therefore, the defendant did not have a fair trial. The judgment is reversed and the cause is remanded.

Judgment reversed and cause remanded.

Hebel, P. J., and Denis E. Sullivan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Denis E. Sullivan

license: Public Domain

text:
    William Fetzer, Appellee, v. Chicago Title and Trust Company and Standard Trust and Savings Bank, Administrators of Estate of Edwin B. Jennings, Deceased. Appeal of Chicago Title and Trust Company et al., Appellants.
    Gen. No. 39,794.
    Opinion filed May 11, 1938.
    George Gillette, Castle, Williams & McCarthy and Wilhartz & Hirsch, all of Chicago, for appellants; Norbert B. Tyrrell, Neil Williams and Eugene H. Nirdlinger, of Chicago, of counsel.
    Simon T. Sutton, of Chicago, for appellee.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Defendants bring this appeal from a judgment entered in the circuit court in favor of plaintiff for the sum of $25,000 in a suit in assumpsit, wherein the plaintiff alleged the loss of personal property belonging to him of the value of $100,000, through the negligence of defendants as bailees. Motions for a directed verdict and in arrest of judgment were made and overruled.

Plaintiff alleges that his goods were in a factory building at Springfield, Illinois, to which defendants obtained title in 1925, through foreclosure of a first mortgage. By his second amended declaration filed February 11, 1931, and his bill of particulars filed May 23, 1931, plaintiff’s action is against the present defendants only.

The second amended declaration alleged the ownership of the personal property by the plaintiff and the ownership of the real estate and premises by the defendants through foreclosure proceedings; that the receiver had charged the plaintiff $100 per month for the storage of the goods up to October 28, 1925, when the premises were sold to the defendants who charged plaintiff a like sum of $100 a month for storage.

Plaintiff’s theory of the case is that under the issues made by the pleadings and the facts in the record, defendants were in complete possession of the building containing plaintiff’s property, had knowledge of the fact that plaintiff’s property was in said building and they became bailees of said property; that defendants • became bailees for hire under an agreement, defendants’ Exhibit 1, whereby plaintiff was to pay $100 per month for the use and occupation of the premises and in addition to this the defendants became gratuitous bailees under all the facts in the record and were bound to exercise the reasonable care which a prudent man takes of Ms property; that the question of care is one of fact for the consideration of the jury.

Defendants ’ theory of the case is that even if plaintiff did own some goods contained in said factory at the time defendants found it necessary to take title under their master’s deed, still the relationship of bailor and bailee never existed between plaintiff and defendants; that the defendants never undertook the care, custody or possession of plaintiff’s goods and never had any duty to watch over, guard or otherwise protect said goods from loss or to account to plaintiff therefor; that plaintiff did not rely upon defendants in that respect, but, on the contrary, himself undertook such care and protection, and that if such goods were lost, it was by reason of plaintiff’s own acts and negligence.

From the evidence it appears that in 1908 William Fetzer, plaintiff herein, constructed a factory in Springfield, Illinois, where, until 1918, he conducted the business of manufacturing farm machinery under the names of Fetzer & Company and McSherry Company ; that early in 1918, he sold the factory building and grounds to one Charles A. McCann, who commenced the business of manufacturing dairy equipment under the name of National Dairy Manufacturing Company; that McCann and his wife on May 22, 1918, executed a first mortgage for $37,500, covering the real estate and also personal property used in connection with the business of National Dairy Manufacturing Company.

The evidence further shows that this first mortgage (plaintiff’s ExMbit 3) was purchased by Edwin B. Jennings of Chicago, Illinois; that later on September 17, 1918, Fetzer sold to McCann various articles of machinery, tools, supplies, etc., and took from McCann a second mortgage on the real estate, and, in the same instrument, a mortgage on the machinery, etc., therein described and so then sold to McCann (plaintiff’s Exhibit 4); that the machinery, etc., sold to McCann in September, 1918, was that used in connection with the McSherry Company line; that a few months later Fetzer sold to McCann the balance of the factory machinery, being that used in connection with the Fetzer & Company line; that in connection with this last sale Fetzer took from McCann a third mortgage.

The evidence further shows that McCann occupied the factory until 1922, when Fetzer obtained a decree of foreclosure against him under the second mortgage; that under these foreclosure proceedings which under the law then in force were held 15 months after the decree, Fetzer became the purchaser of the property described in the mortgage for the sum of $550, and master’s deed issued to him under date of July 10, 1923; that Fetzer thereby became the owner of the personal property covered by said mortgage and of the real estate or equity therein, said real estate being subject to Jennings’ first mortgage.

The evidence further shows that the personal property and machinery was left in the premises for several years after July 10, 1923, the date Fetzer purchased said personal property; that defendants’ representatives wrote a letter to plaintiff dated November 11, 1925, notifying plaintiff to remove said property from said premises by December 1st, and in case plaintiff failed to do so that they would charge him for the use and occupation of said premises, until further notice from them, the sum of $100 per month, but that no answer was made by plaintiff to said letter.

Plaintiff offered in evidence a list prepared by himself of the personal property which was in the building, and opposite each item the value thereof was inserted, which made a total of upwards of $100,000.

Evidence was admitted as to the cost of the personal property when originally purchased by plaintiff, It appears that much of this property consisted of raw materials, patterns and manufactured property which consisted of specialties and had no general market value. :

Defendant claims numerous errors were made, which were preserved by proper motions and we shall consider them in inverse order.

We shall first consider one of the instructions complained of, given on behalf of plaintiff, which reads as follows:

“The Court instructs the jury that if, from the evidence of the case, and under the instructions of the Court, the jury shall find the issues for the plaintiff and that the plaintiff has sustained damages as charged in the declaration, then, to enable the jury to estimate the amount of such damage, it is not necessary that any witness should have expressed an opinion as to the amount of such damage, but the jury may themselves make such estimate from the facts and circumstances in proof and by considering them in connection with their knowledge, observation and experience in the business affairs of life. ’ ’

As we view it, there was no proof in the record to justify the giving of such an instruction. The property which plaintiff claims to have lost was not comprised of well-known articles which would have a ready market value or price with which the average juror might be familiar through previous experience or pertaining to which he could obtain knowledge by observation. There was no evidence submitted as to the physical condition of the property at the time of the claimed loss, so that the testimony regarding the original cost, which was the only testimony as to value, even if admissible in evidence at all would not be a very reliable basis upon which to fix the value several years thereafter. The sole damage claimed here was for the value of the property and when the jurors were told in fact by the above instruction that plaintiff would not have to prove the value of the property, less natural deterioration from use, age, etc., they were misled. The jurors were also told that they might make an estimate of the values in connection with their knowledge, observation and experience in the business affairs of life. This left the jurors to guess as to just what might have been the value of the property at the time of the claimed loss.

In Chicago & N. W. Ry. Co. v. Boone County Board of Supervisors, 44 Ill. 240, the court in discussing the value of certain engines which had been used some years, on page 246, said: “Though repaired constantly, and serviceable, they were not so valuable as new ones, and, in speaking of such property, nothing would tend more to mislead a jury than evidence of what it cost. The cost of an article is no evidence of its value on any certain day. Nor does the necessity of the case require they should be admitted, for it is well understood, any maker of such machines is entirely competent to speak knowingly of their cash value at the time they were listed by the company for taxation. In the case of an individual who may have purchased a carriage which has been in use three years before he is called on to list it for taxation, the injustice of holding him to its cost will be apparent; or, if the carriage has been unlawfully taken, and converted to the use of another, it is very certain the owner, on trial of his action for damages therefor, would be confined to proof of its value when thus unlawfully taken and converted, and no court would permit evidence to be given of its first cost, by reason of the tendency of such evidence to mislead the jury.”

As heretofore stated we believe the instruction which we have. quoted would not do otherwise than mislead the jury, telling them in fact that they had the right to fix the value of the property alleged to have been lost, based on something quite separate and apart from the evidence.

Many other points are raised in this case, but inasmuch as the cause must be retried, we shall refrain from passing upon any errors that may have been made as they may be corrected when the case is again tried.

We are deciding at this time nothing other than that it was error for the trial court to give the instruction which we have quoted in this opinion.

For the reasons herein stated, the judgment of the circuit court is reversed and the cause is remanded for a new trial.

Judgment reversed and cause remanded.

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


author: Mr. Justice Denis E. Sullivan Hebel, P. J.,

text:
    Rita Wittbrodt and Arthur Raymond Wittbrodt, Minors by Pearl Wittbrodt, Their Mother and Next Friend, Appellees, v. Leroy Woodland et al., Respondents. Appeal of The Retirement Board of the Park Policemen’s Annuity and Benefit Fund, Appellant.
    Gen. No. 39,806.

      Opinion filed May 11, 1938.
    Raymond A. Cavanagh, of Chicago, for appellant.
    James A. Dayton, of Chicago, for appellees.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

The circuit court entered an order quashing the return of the defendants to a writ of certiorari theretofore issued to review a finding of the Retirement Board of the Park Policemen’s Annuity and Benefit Fund. The respondents were trustees of said board at the time these proceedings were instituted and were sued as individuals who constituted said board. The cause now comes before us on an appeal of the Retirement Board of the Park Policemen’s Annuity and Benefit Fund, said appeal being from an order quashing said return and awarding to the petitioners the relief they ask.

The facts presented for our consideration are as follows:

Arthur R. Wittbrodt was a police patrolman in the employ of the board of the South Park Commissioners, a municipal corporation, from January 20, 1931, to January 17, 1932. On the latter date he died from injuries received by him on January 16th while in the performance of duty. Subsequent to his death Pearl Wittbrodt made application to the Retirement Board of the Park Policemen’s Annuity and Benefit Fund for annuity for herself as the widow of Arthur R. Wittbrodt and for Rita Wittbrodt and Arthur R. Wittbrodt, minors, as children of the deceased policeman. Pearl Wittbrodt was awarded $124.37 per month for herself and $10 a month for each of her two minor children, being the annuity provided by section 31 of the act governing the fund as passed in 1921. (Ill. Rev. Stat. 1937, ch. 105, ¶ 364, sec. 31 [Jones Ill. Stats. Ann. 100.584].) In January, 1934, the board received a communication from Stanley A. Piarowski, Fort Banning, G-a., to the effect that Pearl C. Wittbrodt was not the wife of Arthur Wittbrodt, but that she was Piarowski’s wife. Investigation established the truth of this allegation and on February 6, 1934, the board suspended further payments of annuity to Pearl C. Wittbrodt, alias Piarowski, and her two minor children. On December 3, 1936, said Pearl C. Wittbrodt made application for annuity for the two minor children, each of whom was under the age of 18 and alleged each to be the issue of the deceased policeman. Child’s annuity is provided for in section 40 of the act governing the fund. (Ill. Rev. Stat. 1937, ch. 105, sec. 373 [Jones Ill. Stats. Ann. 100.593].) The application for payment of annuity to the minor children was denied by the board on December 9, 1936.

The record filed here further shows that Pearl, the mother of the two minor children herein concerned, had been married to Stanley Piarowski prior to the assuming of relations with Arthur R. Wittbrodt, the father of the petitioners, and had never been divorced from her said husband and said husband was still living; that no ceremony was ever performed between the said Pearl Piarowsld and Arthur Wittbrodt and no license issued for a marriage between them; that Arthur Wittbrodt did not leave him- surviving any widow or any legitimate children.

The facts further show that during his lifetime the deceased cohabited with the mother of the plaintiffs as husband and wife and in his social life among his own family circle, among his own friends and acquaintances, and in the records of the South Park Commissioners under his oath, he held out the mother of the plaintiffs as his wife and the plaintiffs as his children; that he was present at the times the plaintiffs were baptized and acknowledged that he was their father and bestowed his name upon them and [quoting from' appellee’s brief] “but for his untimely decease the plaintiffs would have continued to enjoy a normal family life that ‘was no different from that of a legally constituted husband and wife family group.’ ” (Counsel’s italics.) To so hold would be contrary to the statutes and the public policy of the State. But, before we analyze the contentions on the merits of this case, we shall consider the jurisdiction of the circuit court to pass upon and review the action of the Retirement Board of Park Policemen’s Annuity and Benefit Fund. The said fund was duly created by an act entitled, “An Act to provide for the creation, setting apart, maintenance and administration of a Park Policemen’s Annuity and Benefit Fund” approved June 29, 1921, in force July 1, 1921.

Section 2 of the said act [Ill. Rev. Stat. 1937, ch. 105, § 335; Jones Ill. Stats. Ann. 100.555] provides that the Retirement Board shall be trustees charged with the duty of administering the annuity and benefit fund provided for in the act.

Section 6, paragraph (g) of said act [Ill. Rev. Stat. 1937, ch. 105, § 339; Jones Ill. Stats. Ann. 100.559] makes it the duty of the respondent board to consider and pass upon all applications for annuities to authorize the payment of any annuity, and suspend any payment of annuity in accordance with the provisions of the act.

Section 40 of said act (Ill. Rev. Stat. 1937, ch. 105, sec. 373 [Jones Ill. Stats. Ann. 100.593]) provides that a child’s annuity shall be granted and paid for the benefit of any child less than 18 years of age the issue of any policeman whose death shall result from injury incurred in the performance of any act of duty; that such annuity shall be in the amount of $10 per month for each child while a widow of such deceased policeman survives and in the amount of $25 per month for each child if no such widow exists.

Thereafter the return to the writ of certiorari showed a demand for $25 a month against the Board by Rita Wittbrodt and Arthur Raymond Wittbrodt, minors, by Pearl Wittbrodt, their mother and next friend, and thereafter a stipulation of facts was entered into, which reads as follows :

“For the purpose of avoiding the necessity of introducing evidence in connection with the claim of Rita Wittbrodt and Arthur Raymond Wittbrodt, minors, for children’s annuity as the children of Arthur Robert Wittbrodt, a deceased park policeman, it is stipulated and agreed that the two minor children herein referred to were the children of Pearl Piarowsky, also known as Pearl Wittbrodt, and the issue of Arthur Robert Wittbrodt; that prior to the assuming of the marital relation with the said Arthur Robert Wittbrodt the said Pearl Piarowsky had been married to one Stanley A. Piarowsky and had never been divorced from her said husband; that no ceremony of marriage was ever performed between the said Pearl Piarowsky and Arthur Robert Wittbrodt, nor any license ever issued for a marriage between them; that the said Arthur Robert Wittbrodt, a park policeman, was killed while in the performance of an act of duty and left him surviving no widow and no legitimate children. ” No question is raised here as to whether or not we should consider these facts, as contained in the stipulation. In fact we are urged to do so, the decisions of the Supreme Court to the contrary.

It is agreed and the record shows that the Retirement' Board has jurisdiction of the parties and the subject matter and that it acted upon evidence submitted and did not exceed its jurisdiction.

Thereupon the trial court entered an order stating that the'cause came on to be heard upon the motion of petitioners, to quash the record of return by respondents herein, filed to the writ of certiorari issued in said cause, and on motion of respondents heretofore filed herein to quash the writ of certiorari and to dismiss the petition; and the court having heard arguments of counsel for the respective parties, and having considered and inspected said return of said respondents, and being now fully advised in the premises: The court doth find specially that the petitioning minors are the issue of Arthur Robert Wittbrodt, deceased; that the said Arthur Robert Wittbrodt during his lifetime did at all times recognize the petitioners as his own children, had the said petitioners baptized as his children and continuously had their custody and association, and provided for their care and education.

Plaintiffs ’ theory of the case is that they are entitled to annuity as the “issue” of Arthur R. Wittbrodt, the deceased policeman, in the amount of $25 each per month.

The court further finds that said record and return of said respondents is insufficient in law to sustain the defense of the respondents.

Motion of respondents to quash said writ of certiorari and to dismiss said petition was denied and it was ordered that the return of the respondents be quashed. It was also further ordered that respondents forthwith reinstate said petitioners to the child’s annuity rolls of the Park Policemen’s Annuity and Benefit Fund and pay or cause to be paid to petitioners $25 per month each, beginning with the day following the date of the death of Arthur Robert Wittbrodt, less such amounts only as have-heretofore been paid to petitioners in the form of child’s annuity.

The above finding by the trial court was based on a review of the entire proceedings which occurred before the trustees of the Retirement Board of the Park Policemen’s Annuity Benefit Fund and by its finding the trial court differed with said board as to the facts and the law and substituted its judgment for that of the board. This was error.

As was said in the case of People ex rel. Maloney v. Lindblom, 182 Ill. 241, 244: “The only office of the writ of certiorari is to bring before the court the record of the proceedings of the inferior tribunal for inspection, and the only judgment to be rendered is that the writ be quashed or that the record of the proceedings be quashed. Chicago and Rock Island Railroad Co. v. Fell, 22 Ill. 333.”

In the instant case the court ordered that respondents reinstate the petitioners to the child’s annuity rolls at $25 per month each, beginning with the day following the death of Arthur Robert Wittbrodt, less such amounts only as have heretofore been paid to petitioners as child’s annuity.

The court continuing in the case of People v. Lindblom, supra, said:

“The petitioner seems to be laboring under another misconception in regard to his rights and the power of the court in a proceeding of this character. The inferior tribunal, where the record is brought before the court by writ of certiorari, may have erred in its rulings on questions of law during the progress of the trial, or it may have erred in the application of the law to the facts in reaching its final judgment, and yet those errors cannot be reviewed and corrected in a proceeding of this character. On a return to a writ bringing the record before the court the only proper inquiry is whether the inferior tribunal had jurisdiction and proceeded legally, — i. e., followed the form of proceedings legally applicable in such cases, — and not whether it correctly decided the questions arising upon the admission or exclusion of evidence, the giving and refusing of instructions, and other like questions, during the progress of the trial. The rulings of a court may be erroneous and yet it may have jurisdiction and proceed legally. (Hamilton v. Town of Harwood, 113 Ill. 154.) The rule announced in the case cited has been fully sustained by other cases. (Donahue v. County of Will, 100 Ill. 94; Scates v. Chicago and Northwestern Railway Co., 104 id. 93.) Here the jurisdiction of the civil service commission is not disputed, and it is apparent that the tribunal proceeded according to the forms of law applicable in such cases.”

A more recent case is that of Hopkins v. Ames, 344 Ill. 527, wherein the Civil Service Commission of the city of Chicago, after hearing, discharged a policeman and a writ of certiorari was issued by the circuit court and after a hearing on the return quashed the record of the commission and ordered the man reinstated in the police force. The court in approving what was said in People v. Lindblom, supra, stated on page 532: “After a trial is had before the civil service commission in the manner pointed out by the statute and evidence is taken tending to show the guilt of the person charged, the action of the civil service commission is final and not reviewable by the courts. (People v. City of Chicago, supra; City of Chicago v. People, supra.) To allow a review of the evidence by the courts on investigations conducted by the civil service commission or under its direction would be the exercise of executive powers, which the separation of the government precludes the courts from exercising. (People v. City of Chicago, supra; City of Aurora v. Schoeberlein, 230 Ill. 496.) In this case, as in the Carroll case supra, the trial court was without jurisdiction to review the findings of the commission, and it was in error in holding that there was no evidence fairly tending to support the charges.”

In the instant case we do not believe the court had jurisdiction to review the actions and findings of the Retirement Board of Trustees.

In addition to claiming the circuit court had jurisdiction to review the action of the Retirement Board, appellees’ counsel contends that the children of the deceased policeman were entitled to be considered as legitimate children because the deceased officer stood in the petition of loco parentis. The language concerning the payment of money to children is contained in ch. 105, par. 373, sec. 40, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 100.593], which reads as follows:

“373. To whom child’s annuity may be paid— amounts.] § 40. Child’s annuity, as hereinafter provided, shall be granted and paid for the benefit of any child less than eighteen (18) years of age the issue of any following described policeman who shall die on or after the first day in the month of January of the first year after the year in which this Act shall come in force and effect; provided, such child shall have been born before such policeman shall have resigned or been discharged from the service.”

The above provision makes no mention or classification as to parties in loco parentis.

It is contended by counsel for appellee that the legislature intended by that provision of the law to include illegitimate children of which the deceased was one of the natural parents, as well as those of whom he was the legal father.

In the case of Murrell v. Industrial Commission, 291 Ill. 334, the court said:

“The words of a statute will be construed in their ordinary sense and with the meaning commonly attributed to them under such construction unless such construction will defeat the manifest intention of the legislature. When the words have a well settled meaning through judicial interpretation, they must be understood, when used in a statute, to have that meaning unless a different meaning is unmistakably indicated. It is a rule of construction that prima facie the word ‘child’ or ‘children,’ when used in a statute, will or deed, means legitimate child or children, and will not be extended, by implication, to embrace illegitimate children unless such construction is necessary to carry into effect the manifest purpose of the legislature, the testator or the grantor. Blachlaws v. Milne, 82 Ill. 505; Orthwein v. Thomas, 127 Ill. 554; and cases from other jurisdictions.
“At common law a child born out of wedlock was nobody’s child. He was without parents or kindred, without name, without heritable blood and without many rights. He could have no heirs except his own lineal descendants. He could not inherit even from his mother or she from him. . . . His parents were under no legal obligation for his support. This is his condition in Illinois today except as it has been changed by statute. . . . The Workmen’s Compensation act mentions only children, by which is ordinarily meant legitimate children, and there is no word in the act which indicates that the legislature used the word in any other than its ordinary sense. . . .
“The right to compensation under the statute of 1915 does not rest upon dependency or support as a member of the family, but upon the existence of the relation specified in the statute and the legal obligation to support or actual contribution. The right is statutory and depends upon conformity with the terms fixed by the legislature. The policy of the State toward children born outside of the marriage relation has been very considerably modified from that of the common law by statute. The extent to which such modification should go is a question for the determination of the legislative department of the State and not of the courts. ’ ’

In Marsh v. Field, 297 Ill. 251, which was a case involving the meaning of the word “issue” in the will of Marshall Field, where it was sought to secure a portion of the estate for an illegitimate child, the Supreme Court held that the word “issue” means “lawful issue” and said: “It is not conceivable that a man of intelligence and moral perception should have had the conscious intention of providing for the illegitimate issue not only of his sons and grandsons but his daughters and grand-daughters.”

So, also, in the instant case, it is inconceivable that the legislature intended by the language employed in the act to include therein any natural child of a policeman, since deceased, which said child was born oat of wedlock and not subsequently legitimatized by marriage or adoption and who could after the policeman’s death come forward and prove its own illegitimacy and secure public revenue to be paid for its support and maintenance. Such an interpretation of the language of the act is not justified, and it would be destructive of the sanctity and security of the marriage relationship.

The petitioner Pearl Wittbrodt, so called, has already obtained for herself and her illegitimate children public revenue from the Park Board by a false affidavit. No cross-petition having been filed in this case seeking the return of said funds, therefore, as to such sum of money we can do nothing under the present condition of the record.

For the reasons herein given the judgment order of the circuit court of Cook county is reversed and the cause is remanded with directions to quash the writ of certiorari issued by the circuit court.

Judgment order reversed and cause remanded with directions.

Hall, J., concurs.

Hebel, P. J.,

specially concurring: I specially concur with the conclusion of the court but not with all that is said in the court’s opinion.


text:
    In re Estate of Luther W. Conover, Deceased. First National Bank of Chicago, Appellant, v. Edward Morris and George S. Conover, Executors under the Last Will and Testament of Luther W. Conover, Deceased, Appellees.
    Gen. No. 39,815.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    Nat. M. Kahn, of Chicago, for appellant.
    John M. Lee, of Chicago, for appellees Edward Morris and George S. Conover; Earl V. Brown, of Chicago, of counsel.
    C. Lysle Smith, of Chicago, for appellee Mary Bobbitt Conover.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

The First National Bank of Chicago filed a claim against the estate of Luther W. Conover, deceased, in the probate court of Cook county and the claim was allowed in full as of the sixth class for $24,032, to be paid in due course of administration. The estate appealed to the circuit court of Cook county, and upon a trial de novo, the claim was disallowed.

It is claimed that the deceased was individually liable as a member of a partnership and also liable as one of the managing committee of the Highlands Company, an unincorporated association.

The form of the claim filed consists of a copy of a note which contains the signature of the deceased, L. W. Conover, as one of the five persons constituting the managing committee of the Highland Company, and after a description of the collateral securing the payment of said note, and affidavit of claim, appear the following particulars: ‘ ‘ Balance of principal due on one certain principal promissory note of Highlands Company, a co-partnership comprised of the following partners, to-wit: William J. Harahan, Frank B. Harriman, Francis B. Bowes, George C. Bour, Clyde L. Day, Howard W. Hayes, George J. Williams, Garrietta C. Bour, Anna H. Bennett, Frances B. Scofield, George it. Bennett, Jr., Luther W. Conover, and others unknown to this claimant, dated September 4, 1935, payable to the order of Foreman-State National Bank, ninety days after date, in the amount of $28,000.00, with interest after maturity at 7 per cent per annum, and endorsed by said Foreman-State National Bank to The First National Bank of Chicago, which said note was executed by Frank B. Harriman, Chairman Managing Committee and by Clyde L. Day, Frank B. Harriman, Anna H. Bennett, Francis B. Bowes and Luther W. Conover, Managing Committee, Highlands Company, copy of which said note is attached hereto and made a part hereof, and marked ‘Exhibit B’ . . . $24,000.00; Interest on said note at 6% per annum from March 15, 1937, to date of allowance, $32.00; Total amount of claim $24,032.00.”

It is the theory of the claimant that the estate of Luther W. Conover, deceased, is liable for the entire obligation, evidenced by the note, as a member of a partnership consisting of a number of persons who associated themselves together in a speculative real estate business under the trade name of “Highlands Company,” and that the claim should have been allowed in its entirety as a claim of the sixth class, to be paid in due course of administration after creditors having claims against the decedent individually would first be paid in full. It is the further theory of the claimant that the estate is so liable for the payment of said obligation irrespective of Mr. Conover’s signature on the note as a member of the managing committee of the Highland Company.

It is the theory of the defendants, being the executors under the will of Luther W. Conover, deceased, that the Highlands Company was not a partnership but a business trust, and that the decedent, Luther W. Con-over, was not liable individually as a partner for the payment of said obligation. It is the further theory of the defendants that the decedent, Luther W. Con-over, as a member of the managing committee of the Highlands Company at the time the obligation in question was incurred, was, in effect, one of the trustees of the Highlands Company, and that said committee, as such trustees, controlled the company.

The claimant further contends that if the Highlands Company was a trust, the decedent was personally liable for the payment of the note as one of the trustees of the company, because of the failure of the articles of association of the company to exempt said committee from personal liability.

There is no dispute as to the facts; this leaves the question of law as to the nature of the entity of the so-called “Highlands Company,” that question being, Was it a partnership 1

The cause was tried on an oral stipulation of facts stated by the attorneys for the parties, in addition to the testimony and statements of one Mr. Johnson for the appellant and a Mr. Day, an original and continuous member of the Highlands Company since its incorporation, which stipulation of facts and testimony were made subject to objections as to materiality and relevancy.

The obligation was evidenced by the note introduced as Exhibit F, said note representing the balance of a debt for moneys loaned originally in 1928 to the company by the State Bank of Chicago. The deceased, Luther W. Conover, at the time of his death, during October, 1935, had been continuously since 1905, associated with a number of other persons in a speculative real estate business called the “Highlands Company.” Said Highlands Company was organized August 15, 1905, and was to continue for a period of 20 years. The original parties forming this company conveyed certain land to the State Bank of Chicago, as trustee, which was subdivided and called “Jackson Park Highlands, ’ ’ and the dealings in this subdivision constituted the business of the Highlands Company. The original organization ivas evidenced by an agreement in writing which at the time of the trial was introduced in evidence as Exhibit “A,” being the “Articles of Association.” Originally there were 11 persons, including the deceased, who formed this organization and they conveyed the real estate to the aforesaid bank as trustee. The articles of association also provided for a managing committee which was vested with the sole and complete power to carry out the purposes of said association. The interest of the parties in the association was divided into 32nds, and by certificates issued by said trustee to the various members into fractional parts of said entire interest; The trustee named was merely to hold title to the real estate subject to the direction and control of the so-called ‘‘Highlands Company.” The State Bank of Chicago was the first trustee and subsequently was succeeded by the First National Bank, appellant herein. The initial trustee, State Bank of Chicago, by the terms of the instrument was exempted from personal liability for any of the mortgages assumed by the Highlands Company. In this contention it may be said that nowhere in this agreement or in any documents introduced in evidence were the members of the association or the managing committee also exempted from personal liability.

We also think another question for our consideration and determination is whether the original parties to this transaction in the formation of the Highlands Company, created a trust known as a common law or Massachusetts trust.

If. by the actions of said owners of the properties, a Massachusetts trust was created, or one with similar exemptions to it, then it follows there was no liability on the part of any of the certificate holders. But, on the contrary, if it remained a voluntary association or partnership, then it follows they would jointly and severally be liable and the estate of the deceased would be liable as a partner. Much has been said and written in determining the distinguishing difference between a partnership and a so-called common law or Massachusetts trust. The instrument under which Conover and his associates were acting was dated August 15, 1905, and was for a period of 20 years, and on January 19, 1925 was extended to December 12, 1934.

It appears from the original agreement that the articles of association were between Edward P. Skene, William J. Harahan, Frank I, Bennett and Charles J, Bout, all of the city of Chicago, and were known as parties of the first part, and William J. Mohr, Luther W. Conover, Clyde L. Day, Frank B. Harriman, Samuel G-. Hatch, William L. Smith and Francis B. Bowes, who were also of Chicago, Illinois, and were known as parties of the second part. The State Bank of Chicago, trustee, was called the party of the third part.

The articles recited that whereas the parties or some of them are the owners of certain premises and they contemplated that the title to said premises be vested in the State Bank of Chicago, trustee, subject to the conditions of the deeds of conveyance and certain other restrictions and liens specifically mentioned therein, the same is conveyed to said trustee; that the trustee shall not become personally liable for the payment of any such incumbrance, charge or lien and that the conveyances to the said trustee are made and to be made for the purpose of carrying out the agreements made by and between the parties thereto, named as the parties of the first part and parties of the second part, forming and constituting the Highlands Company as therein mentioned shall be taken to include all the parties of the first part and the parties of the second part and that said parties, except said trustee, “hereby form themselves into a voluntary association, for the purpose of acquiring, holding, managing, improving, selling, disposing of and handling the premises above described, or any other real estate or personal property which may be acquired for the benefit of the Company and all improvements which may be placed on such real estate.”

The agreement further recited that “for the purpose of procuring funds with which to make payment of the balance of the purchase price of said premises, making necessary street improvements and erecting houses thereon, certain members of the Company have respectively and previously acquired title to and have encumbered various lots and portions of said premises (a list of which encumbrances, showing by whom the same have been made, the character, date, amount, terms of interest and maturity of such encumbrances, is hereto attached, marked 1 Schedule A,’ and made a part hereof), and simultaneously with the execution of this agreement, they respectively convey said various lots and portions of said premises to the said State Bank of Chicago, Trustee, for the purposes herein and in the deeds to said Trustee expressed, and for the benefit of the Company.”

The agreement further recites:

“It Is Hereby Agreed that the personal liability of the makers of the notes and bonds executed by the various members of the Company, or any of them, and secured by trust deeds or mortgages on said premises, or any part thereof, shall become and be and the same is hereby declared to be the liability of the Company; and the Company hereby assumes and agrees to pay the indebtedness evidenced by such notes and bonds to the extent that its assets may reach.”

The agreement then sets forth the interest of the parties in fractions of 32nds as their entire interest in the company.

The agreement further continuing, provides:

“It Is Further Understood and Agreed that the charges against said premises or any part thereof, including all expenses of improving, managing, operating and handling the same, shall be borne by the members of the Company, in proportion to their respective interests, and the avails and profits arising from the sale or disposal of said premises shall be divided among the members of the Company according to their respective interests, as shown by the records of the Company at the time of such division, and may be distributed in whole or in part among the members as the Managing Committee may, from time to time, decide upon.”

With relation to the business affairs of the Company, the agreement provides as follows:

“The business and affairs of the Company shall be conducted by a Managing Committee, which shall consist of five (5) members of the Company, who shall hold office for one (1) year and until their successors are elected. . . . are declared to be the first Managing Committee and shall serve until the first Monday in November, 1906. Thereafter on the first Monday of November in each year, at an hour and place to be designated by the Managing Committee, an annual meeting of the members of the Company shall be held, at which time the members of a new Managing Committee shall be elected, and the out-going Managing Committee shall make a full and detailed report of the business of the Company for the fiscal year ending on the 30th day of the previous September. . . .
“A majority of the Managing Committee shall have full power to manage and control the business and affairs of the Company and to do all things, of every nature and character, incidental or conducive to the object of the Company, and to direct the Trustee in the disposition of the real estate herein described, or of any property which may hereafter be acquired or reacquired by the Trustee in accordance herewith, as said Managing Committee may deem it to the best interests of the Company, and also, through its treasurer, to receive and disburse all moneys and securities belonging to the Company; said Managing Committee shall pass on all contracts for improvement of said premises and construction of buildings thereon, and shall have full power to employ all agents for the sale of said premises, engage the services of any person or corporation in and about the business and operation of the Company that said Managing Committee may see fit. It shall be the duty of the Managing Committee to, from time to time, fix the prices at which said premises may be sold, as well as the terms of sale thereof, and the said Committee shall have full power to contract for the sale, exchange or disposal of said premises, or any part or parts thereof, or any securities derived by the Company from the sale of said premises, in such manner and upon such terms as to such Committee shall appear to be to the best interests of the Company.
" . . .
“It Is Further Hereby Provided that whenever it shall, in the opinion of all of the members of the Managing Committee, be necessary or expedient to borrow money for use in making improvements, or constructing buildings on said premises, or on any premises which may be acquired for the benefit of the Company, or to pay the principal sum or interest on any indebtedness secured by any lien on any such real estate or improvements, or to pay any taxes or special assessments which may be levied thereon, and interest or charges growing out of such taxes or assessments, or to pay any indebtedness, of any kind or nature, owing by the Company, or for use for the benefit of the Company, then such Managing Committee shall be and it is hereby authorized and empowered to borrow such money as may be necessary for such purposes and to, from time to time, obligate the Company for the repayment of the sums which may be so borrowed, together with lawful interest thereon, by the execution, in the name of the Company, of note or notes, or other evidence of indebtedness, and any instrument in writing to secure the payment of the same, which shall be countersigned by a majority of the members of the Managing Committee; and all of the assets and property, of every kind and nature, belonging to the Company shall thereupon be liable for the payment of such indebtedness.”

The agreement further provides that the managing committee is authorized to levy a pro rata assessment upon each member of the Company as his interest appears on the records of the Company on the date levy is made and that the managing committee shall cause a written notice thereof to be mailed to each member 30 days prior to the time such assessment shall become due and payable; that such notice shall state the nature, amount of and purpose of levy and each member shall, within 30 days after the mailing of such notice pay or contribute to the treasurer of the Company, his, her or its portion of the total assessment; that in the event any member shall remain in default for a period of 10 days after such assessment shall become due and payable, as aforesaid, the other members of the Company, or any of them, may without notice advance said sum so due to the treasurer of the Company, and whether the amount of such assessment has been so advanced or not, the interest of such member in the Company and in the assets and property, of every kind and nature, belonging to the Company, or sufficient part of such interest, may be sold by the managing committee for the best price to be obtained, either at public or private sale, upon mailing to such defaulting member a notice of such intention to sell and from the proceeds of such sale there shall be paid the amount of such assessment and any other liability attaching to the interest, so sold, and the remainder, if any, be returned by the managing committee to such defaulting member on demand, upon the return of the certificate representing the interest of such defaulting member. And in case only a part of the interest of such defaulting member shall be sold, a new certificate, evidencing the interest remaining unsold, shall be issued to such member.

As before stated, the question here to be determined is whether a trust or a partnership existed. A very enlightening opinion defining the difference between the two was written in the case of Schumann-Heink v. Folsom, 328 Ill. 321, 325, wherein the court said:

“The trust is a very comprehensive institution. It is as general and as elastic as contract. It originated and was reduced to practice under the jurisdiction of courts by the civil law, was expended and developed in the courts of chancery, and has been employed in nearly every field of human activity. Of late years it has been and is utilized in the field of commerce and trade as a substitute for the corporate or partnership organization. Such a trust is created by the execution of a declaration of trust by one or more trustees, to whom there has been or will presently be transferred the property or money which is to constitute the corpus of the trust. The interests of the several cestui que trust are represented by certificates showing the proportionate shares of the holders. Thus the corpus of the trust corresponds to the capital of the incorporated company, the trustees to the board of directors, the beneficiaries to the stockholders, the beneficial interests to shares of stock and the declaration of trust to the charter. But there are material differences, to be noted later, in each of the five instances of comparison. When the express trust is used as an agency of commerce it is commonly known as a business trust. Because of its development and common use in the State of Massachusetts it is often called a Massachusetts trust, and because it finds its basis in the law of contract and does not depend upon any statute for its existence it is sometimes called a common law trust. It may be stated as a general proposition that anyone competent to contract may make such disposition of the legal title to his property as he pleases, may annex such conditions and limitations to its enjoyment as he chooses, and may vest it in trustees for the purpose of carrying out his intention. He has the same power to create trusts as he has to alienate the legal title to his property. (1 Perry on Trusts, — 5th ed. — sec. 28.) Since 1880 the legality of the business trust has been recognized in England and for more than forty years it has been in use in Massachusetts. Sears, in his work on Trust Estates as Business Companies, (2d ed. sec. 19,) says: ‘It is by no means novel or unusual that trust estates should be created either for embarking in a new business or continuing an old one, and the legal and equitable status of such estates are well defined, as also the relations they and their trustees and their cestui que trust bear to each other and to third persons with respect to their acts and contracts arising in the course of the existence of such estates. ’ Wrightington, in his work on Unincorporated Associations and Business Trusts (2d ed. sec. 4,) says: ‘The newest law today concerns the application of old principles to the new problems created by associations for profit, and trusts, and the distinctions between these two forms of business organization. ’ If the declaration of trust involved in this case creates a trust and there is nothing in it which is against the public policy of this State, then the decision of the case depends upon the application of well established principles of the law of contracts and trusts. Because a new use is being made of the trust does not mean new principles of law are to be applied in determining the rights of the trustees, the cestui que trust or persons dealing with the trustees.
‘ ‘ The business trust is fundamentally different from the corporation. The stockholders of the corporation control, through the board of directors, the business of the corporation, while the unit holders of a business trust have no mutual rights and obligations and do not control the action of the trustees. The trustees of a business trust are analogous to the directors of a corporation in that both are the managers of the business of their respective institutions but there is an essential distinction between a trustee and a director, founded on the very nature of things. A trustee is the holder of the legal title of the trust estate and deals with it as principal, subject only to an equitable obligation to account to the beneficiaries of the trust estate. A director does not deal with the funds of the corporation as principal but deals with them as the agent of the company of which he is a director and for which he is acting. A trustee is personally liable on his contract, but a director is not as long as he acts within his authority. A trust is no entity at all, while a corporation is an artificial person. A trust is an estate the legal title to which is vested in a trustee and the equitable title to which is held by individuals who bear no contractual relations among themselves. A corporation is an artificial body composed of individuals who own its capital stock and whose rights and liabilities are fixed by statute.
“There are also essential differences between a business trust and a partnership, but there are times when it is difficult to determine whether the declaration of trust relieves the trustees and shareholders from liability as partners. A partnership is, in effect, a contract of mutual agency, each partner acting as a principal in his own behalf and as agent for his co-partner. (State v. Cosgrave, 36 Ida. 278, 210 Pac. 393; Fougner v. First Nat. Bank of Chicago, 141 Ill. 124.) Where under the declaration of trust the unit holders retain control over the trustees and have authority to control the management of the business the partnership relation exists. (Frost v. Thompson, 218 Mass. 360, 106 N. E. 1009; Hart v. Seymour, 147 Ill. 598; Dunnon Business Trusts, sec. 140 et seq.) On the other hand, where the declaration of trust gives the trustees full control in the management of the business of the trust and the certificate holders are not associated in carrying on the business and have no control over the trustees, then there is no liability as partners. (Smith v. Anderson, 15 Ch. Div. 247; Williams v. Inhabitants of Milton, 215 Mass. 1,102 N. E. 355; Mayo v. Moritz, 151 Mass. 481, 24 N. E. 1083; Rhode Island Hospital Trust Co. v. Copeland, 39 R. I. 193, 98 Atl. 273; Betts v. Hackathorn, 159 Ark. 621, 31 A. L. R. 847; Kramer & Co. v. Cummings, 225 Ill. App. 26; Home Lumber Co. v. Hopkins, 107 Kan. 153, 10 A. L. R. 879.)”

We think we need go no further than the above authority to show that the agreement between the parties herein was a partnership. By the terms of said contract they did not exempt themselves nor did they make any mention of exempting themselves from personal liability. When the property was conveyed to the trustee they retained control over the trustee and the management of the business in relation thereto. As we view the situation, it seems to have been nothing more than the association of several parties for the purpose of carrying on a business and, under the law, their liability was a joint and several one. The appointment of a managing committ.ee did not exempt them from any liability as said committee was merely an agent of the individuals composing the company and the managing committee was under the control of the individuals themselves so far as transaction of business elections, removals, etc. In our opinion there was nothing contained in said instrument of agreement which would relieve any of the members from their liability in this association or from complying with the rules governing that of a partnership. This being true, it follows that the claim against the estate of Conover was properly filed in the probate court and that court properly allowed it as a claim against the estate. Upon appeal to the circuit court that court erroneously decided contrary to the probate court and disallowed the claim,

For the reasons herein given the judgment of the circuit court is reversed and the cause is remanded for a new trial with directions to proceed in harmony with the views herein expressed..

Reversed and remanded with directions.

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


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    Benjamin G. Kilpatrick, Plaintiff, v. Walter O. Anthony et al., Appellees, Ethel Dess, Appellant. Robert C. Fenner et al., Cross Appellants. J. Kehres and Ethel Dess, Cross Appellees.
    Gen. No. 39,825.

      Opinion filed May 11, 1938.
    Carl Pomerance, of Chicago, for appellant Ethel Dess.
    Kirkland, Fleming, Green, Martin & Ellis, of Chicago, for certain appellants.
    Carl Pomerance, of Chicago, for appellees J. Kehres and Ethel Dess.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Ethel Dess, one of the interveners, brings this appeal from a decree entered in the circuit court confirming’ the master’s report of sale of certain real estate located in Chicago, Illinois, and approving proposed distributions of proceeds of sale, including a plan of reorganization.

The facts presented for our consideration are as follows :

Benjamin Kilpatrick as successor trustee and plaintiff filed his bill on June 28, 1931, to foreclose the lien of the trust deed executed by Walter O. Anthony and Estelle Anthony, his wife, securing an indebtedness of $82,500. The property is known as the Prairie Avenue Apartments, 6817-21 South Prairie avenue, Chicago, Illinois.

On November 12, 1932, an amended and supplemental bill of foreclosure was filed and a decree of foreclosure was entered in this cause on August 28, 1935. Subsequently on March 31, 1937, the premises were sold by a master in chancery in accordance with the decree of foreclosure for the price of $59,900, and on April 13, 1937, leave having been given, J. Kehres and Ethel Dess filed their appearance and intervening petition setting forth that they were the owners of bonds in the sum of $2,200 as evidenced by certificates of deposit, and their objections to the master’s report of sale and distribution.

After said objections were filed the bondholders’ committee filed its appearance and its intervening petition seeking to have its plan of reorganization approved, and to confirm "the sale under the foreclosure decree, and also approve the plan. The case was heard by the chancellor upon the intervening petition of the committee, its plan, the report of sale, and the objections of the objecting defendants to the plan of reorganization and to the foreclosure sale. On June 19, 1937, the court overruled all objections, and approved the sale and plan, with slight modifications, but allowed J. Kehres, one of the objecting interveners, to withdraw his bonds, but Ethel Dess, the other dissenter, was not permitted to withdraw her bonds from the depository. Under the terms of the decree approving the report of sale and distribution, the sale price of $59,900 was confirmed but nondepositing bondholders were to receive only their proportionate share of $35,750, which is termed the “true value price.”

There is no issue as to the pleadings.

Appellant’s theory is that the court has jurisdiction over the bondholders’ committee, the plan of reorganization, and the acts of the bondholders’ committee in relation thereto, and since both dissenting bondholders made the necessary and proper tenders and gave the necessary notice to the proper parties required by the plan of reorganization, that equity will often relax rigid requirements of time and form and only require substantial compliance, and further contending that since the court did allow the withdrawal of one dissenter’s (J. Kehres) bond, no evidence having been introduced or offered to substantiate the refusal of the withdrawal of the other dissenter’s (Dess) bond, the court -should have ordered the withdrawal of the appellant’s bond; that the deposit agreement is a unilateral contract which lacks mutuality, and whether or not the deposit agreement and plan of reorganization was void or voidable is of no importance, as the appellant rescinded the contract and it was the duty of the court to declare the contract void and direct the return of the bonds.

Further, appellant contends that the decree of June 19, 1937 approved the sale price of $59,900, but ordered distribution to nondepositing bondholders on the basis of the “true market price,” fixed at $35,750, thus establishing two separate prices, which the appellant further contends is contrary to law; that further, the reorganization committee did not comply with its duties and obligations as a fiduciary and that, therefore, the court should have refused to confirm the bid and should have ordered the withdrawal of the appellant’s bonds. Appellant asks that the decree of June 19, 1937, be reversed and remanded.

The theory of the appellees and cross appellants is that the chancellor has no authority or discretion to alter or modify the contractual rights existent among the depositing bondholders inter sese and between snch depositing* bondholders and the committee; that the chancellor has the equitable discretion, in connection with the foreclosure of a mortgage or trust deed which secures interests not all held by the same person, to distinguish between the price bid at the foreclosure sale and the fair cash market value of the property; that the former figure to govern the rights as among the mortgage bondholders, taken as a class, and all other parties, and the latter figure to form the basis of distribution as among* the nondepositing mortgage bondholders.

Appellees rely upon the following errors for reversal on the cross-appeal, namely, that the chancellor exceeded his authority when he altered the contract existent between cross appellant and its depositors by ordering the withdrawal of cross appellee’s bonds and by reducing* the fees and expenses of cross appellant.

It appears from the evidence presented in this case that the property was bid in at the master’s sale by John T. Pain, representing the bondholders’ committee, for the sum of $59,900; that upon this master’s report coming before the court it entered a decree confirming the master’s report of sale and approving the distribution of the proceeds of sale and entered a deficiency decree and approved the plan of reorganization which provided, among other things, that the intervening petitioner Kehres be permitted to withdraw his bonds amounting* to $200 and become entitled to his so-called “full pro rata share” of the full cash market value of the property; that the other intervening petitioner Ethel Dess, was not an original purchaser but acquired the certificate of deposit representing the bonds held by her on what the trial court called a speculative basis and she was not permitted to withdraw her bonds amounting* to $2,000 from the depository.

When intervening petitioners filed their objections to the master’s report they claimed that the price of $59,900 was too high. Said objection was apparently-sustained by the court for it announced that the distribution would be on the basis of the “fair cash market value” of the property and that it would be necessary to take proof to establish that basis. Thereafter the court permitted the intervener J. Kehres as heretofore stated to withdraw his bonds of $200 face value from the depository and from the protective committee. The court having granted J. Kehres request to withdraw his bonds, he does not complain in this court. We do not believe cross appellants’ complaint of the court’s action in this regard is justified. As to the $2,000 in bonds of Ethel Dess, the evidence in the record shows that there is some question as to whether or not she was the rightful owner or assignee of the certificate of deposit which was presented to the court as the basis of her claim. The court instructed counsel representing Ethel Dess to bring in further evidence to show who was the real owner of the bonds, but according to the record that was not done. We do not think the court erred in refusing to permit Ethel Dess to withdraw the bonds amounting to $2,000 face value.

As was said in the case of First Nat. Bank v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409, 426: “The court is concerned with the fairness of the bid as to those bondholders who have not adopted the plan. In this it must be borne in mind, however, that non-depositing bondholders are not to be aided in an effort to create a maneuvering* value for their bonds or give them a nuisance value by attempting to obstruct re-organization.”

It is next contended that the bonds held by the receiver of the bank were of the approximate value of $19,000 which should be subordinate to the other bonds under the said mortgage for the reason claimed that the money in the bank of issue was used for the purpose of buying these bonds. We fail to find any evidence of such use. In addition thereto it is noted that one of the provisions of the trust deed which was merged in the decree of foreclosure of August 28,1935, provided:

“All of the bonds herein described are equally in all things secured by the said Trust Deed, without any preference or priority whatsoever of the lien thereof in favor of any one or more of said bonds over any one or more of the others.”

This finding was made in the original decree of foreclosure dated August 28, 1935, and no appeal having-been taken from that decree it is final and it is too late for the intervener to make complaint thereof at this time.

At the time the court approved the master’s report and the plan of reorganization, it modified the fees in connection with such plan to read as follows:

Committee fee reduced from $1,568 to $750;

Share of G-eneral Committee expense allowable to this issue reduced from $813.99 to $50;

Depository fee of Reliance Bank and Trust Company reduced from $295.50 to $100; and

Fees of First National Bank of Chicago reduced from $591 to $200.

Complaint is made on the cross-appeal here that the adjustments of the fees and costs contained in said plan of reorganization as adjusted by the court are in violation of the contract between the depository and the depositing bondholders. When a bondholders’ committee applies to a court of equity for the approval of their plan of reorganization, they come into court seeking equity and must show that they have a plan that is fair and equitable to all parties concerned. Such bondholders ’ committee would be estopped to invoke a rule of law that the court has no power to change or adjust and supervise the costs and fees because in doing so the court would violate a contract made with the depositors by said committee for the amount of such fees. A court of equity must necessarily, and especially in cases of this kind, have wide discretionary powers in the matter of fees and costs, and to say that the court could have jurisdiction in a matter of this kind for one purpose and not for all purposes, would prevent the court from making the necessary equitable adjustments between the various parties and their interests and if such restriction were upheld, it might and would no doubt in many instances prevent the administration of complete justice between all the parties. The court necessarily has full power in supervising- the plan of reorganization and to do whatever in the exercise of reasonable discretion as may be necessary in its judgment in order that the plan of reorganization, as so corrected, may be fair to all parties in interest.

As the court said in First Nat. Bank v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409, at page 419: “It may be further observed that an attempt to carry out a bondholders’ plan of re-organization without the approval and. supervision of a court of equity would be attended with so many dangers and uncertainties that few bondholders would be willing to enter the arrangement, though convinced that, properly supervised, the plan would retrieve for them the greatest possible percentage of their investment. Certainly, to secure such percentage to the mortgagee bondholders cannot be said to be outside the scope- of equity jurisdiction. ’ ’

We cannot say from the record before us that the court’s adjustment and allowance of fees for appellee is inequitable or erroneous.

Complaint is also made on the cross-appeal that the court erred in permitting Kehres to withdraw his bond. As Kehres did not appeal from the court’s order and is not before this court at this time, so-called cross errors cannot be assigned as to him.

Objection is also made to the approval of the bondholders’ plan of reorganization in toto. We think paragraphs one and two of such plan of reorganization proposed and the court was advised that the representative of the bondholders’ committee intended going before the master at the time of sale and bid the lowest price, etc. This recitation of their activities and purposes could well have been left out of said proposed plan as given to the court, as the proper time to ask the court’s supervision of a plan is after the sale, at the time the court is asked to approve such master’s sale, when it may consider the whole matter including the proposed plan of reorganization. Evidently the approval by the court of paragraphs one and two was not necessary, but was not harmful to intervener-appellant.

From a review of the entire record and having in mind the necessarily wide discretion a court must have in adjusting the interests involved when considering plans of reorganization, we cannot say that the trial court did any substantial injustice to anyone which should be corrected. For that and other reasons herein expressed, the decree of the circuit court is hereby affirmed.

Decree affirmed.

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


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    In re Estate of William S. Murphy, Deceased. Susie Vernon, Appellant, v. Martin J. O’Brien, Administrator of Estate of William S. Murphy, Deceased, Appellee.
    Gen. No. 39,849.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    Zedrick T. Braden, Houston H. Hall and George S. Barnes, all of Chicago, for appellant. .
    I. J. Berkson, Otto W. Ulrich and Eugene A. Weinberg, all of Chicago, for appellee.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

Susie M. Vernon brings this appeal from an order of the circuit court disallowing her claim against the estate of William S. Murphy, deceased. The cause was tried before the court without a jury.

It is alleged by the claimant Susie M. Vernon that during his lifetime William S. Murphy, since deceased, had money belonging to her in the amount of $3,240 and that that sum was due and owing and unpaid at the time of said Murphy’s death; that prior to June 1, 1930, plaintiff was a school teacher in Tennessee over a period of upwards of 16 years; that she saved her earnings and accumulated several thousands of dollars; that thereafter she came to Chicago and secured employment at a hotel on West Madison street where she became acquainted with William S. Murphy to whom she turned over $3,240, for the purpose of investment; that she subsequently left the hotel and William S. Murphy retained her money and sent to her interest and dividends thereon until the time of his death.

On June 8, 1937, appellant made a motion to vacate the order denying the allowance of the claim which motion was denied by the court and from which plaintiff appeals.

Claimant’s theory is that the deceased was her financial agent and that the sum of $3,240 belonging to her was placed in the hands of William S. Murphy during his lifetime and that the money was never returned to her.

The theory of the defendant administrator is that the claimant had the burden of proving the allegations of her claim which were material and essential before she could recover; that the evidence introduced by claimant not only failed to establish a preponderance of the evidence in her favor, but it further demonstrated that her claim had neither merit nor substance and that a consideration of the entire evidence shows that the same failed to establish even a prima facie case in support of her claim, whereas the defense was able to show by uncontroverted facts the existence of circumstances which proved that the claim was properly disallowed; that the deceased had not been the financial agent of the claimant and that claimant could not have been possessed of the large sum of money she claims to have placed in the hands of the said William S. Murphy and that the claimant signed affidavits which clearly showed that, except for these proceedings, this claim was nonexistent.

The evidence in this case shows that plaintiff had formerly been a school teacher in Tennessee and came to Chicago where she was employed as a chambermaid on Madison street just west of the Chicago river; that she was destitute at the time and became an applicant for relief. Plaintiff contends, however, that she had entrusted to William S. Murphy during his lifetime the sum of $3,240 for investment purposes and that he paid her interest from time to time. There were no documents tending- to prove any such contention.

There was introduced in evidence on behalf of plaintiff postal cards and letters from the said Murphy which were of no probative force, merely showing an acquaintanceship. Witnesses were produced by plaintiff who testified they heard the deceased admit that he had money belonging to plaintiff for investment, and some of them testified to receiving money from the deceased to be given to plaintiff, the same being income on her investments. Such evidence is not convincing.

The administrator of the estate of William S. Murphy offered in evidence photostatic copies of the application made by plaintiff to the Chicago Belief Administration to obtain relief during* the period it is now claimed the said Murphy had her money. In reply to an interrogatory, in order to determine in said application as to whether or not she was entitled to relief, she answered that she had no personal property, no bonds, no stocks, no mortgages and that she was destitute. It is claimed that her signature was not proven to be authentic on these questionnaires, but we think sufficient proof is shown identifying her to be the person named in the questionnaire and that she was a pauper.

In view of the evidence we are quite convinced that plaintiff failed to substantiate her claim and we are of the opinion that the circuit court was correct in its decision. Therefore the order of the circuit court in disallowing plaintiff’s claim against the estate of William S. Murphy is affirmed.

Order affirmed.

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