text:
    Kidd & Company, Defendant in Error, v. The North American Provision Company, Trading as The Ashland Cold Storage & Warehouse Company, Plaintiff in Error.
    Gen. No. 32,496.

      Opinion filed May 14, 1928.
    Rehearing denied May 29, 1928.
    W. C. Kirk and A. F. Rackerby, for plaintiff in error.
    Brown,, Fox & Blumberg, for defendant in error; Karl Edwin Seyearth and Lionel A. Mincer, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff brought suit alleging breach by defendant of a contract for the safekeeping of a quantity of mustard seed belonging to plaintiff while stored in defendant’s warehouse, and upon trial by the court the damages were assessed at $940.17. The defendant seeks a reversal of the judgment for this amount.

It is first presented in defense that defendant was not acting as a warehouseman in the storage of this mustard seed; that its services in this respect were rendered to plaintiff without charge and therefore it was exempt from any claim for damages to the stored goods by virtue of a stipulation in its receipt issued to plaintiff, which was to the effect that all loss or damage was at the owner’s risk.

The evidence negatives the claim that the defendant was a gratuitous bailee. The presumption of law is that a bailment is one for the mutual benefit of both parties or for hire. 5 Cyc. 175; Harper v. Owen H. Fay Livery Co., 264 Ill. 459. Plaintiff bought the mustard seed from the defendant at a price which included storage by the defendant, which operated a public warehouse. This is established by the testimony both on behalf of the plaintiff and the defendant. An official connected with the defendant company testified that the price of six cents a pound was to include “storage of the mustard up to the end of .1925,” and Mr. Kidd testified to the same effect on behalf of the plaintiff, so that it is established without contradiction that the price paid included storage.

The bailment being one for hire, defendant cannot exempt itself from liability for negligence by the insertion of provisions to this effect in its warehouse receipt. Cahill’s St. ch. 114, ¶ 211-238; Colonial Sugar Co. v. Railway Terminal & Warehouse Co., 191 Ill. App. 40; Sibley Warehouse & Storage Co. v. Durand & Kasper Co., 102 Ill. App. 406; 200 Ill. 354.

A bailee for hire is bound to exercise ordinary care and diligence in the preservation of the property intrusted to him. Mayer v. Brensinger, 180 Ill. 110; Schaefer v. Washington Safety Deposit Co., 281 Ill. 43. The statute also defines the degree of care required of a bailee. Cahill’s St. ch. 114, ¶ 256.

What was the condition of the mustard seed on March 19,1925, at the time it was purchased by plaintiff and defendant issued its receipt therefor? Although there is some variant testimony, the most convincing evidence shows that it was in a good merchantable condition at that time. It had just been graded, cleaned and dried. Mr. Kidd, plaintiff’s president, testified that on March 19 he carefully examined this lot of seed and found it to be in excellent condition and thoroughly suitable for manufacture into foodstuff. Mr. Epstein, connected with another concern dealing in mustard seed, testified that he was familiar with this lot and inspected it at about the time plaintiff purchased it and found it in a good merchantable condition and again inspected it after it was in defendant’s warehouse in the latter part of February or March, 1925, and that it was in a “very nice, clean and sound condition.” Some time prior to September, 1925, 90 bags of seed were withdrawn by plaintiff from storage and used in the manufacture of mustard, and this was in a good, sound and clean condition.

It was established beyond reasonable controversy that in September, 1925, and afterwards the seed was found to be so badly damaged that it was wholly unfit for manufacture into food products until the dirt was removed. This damage consisted of the presence of quantities of dirt, mice and rat tracks or feces, paper, shipping tags, stones, pieces of wood, floor sweepings and other refuse of a foreign character. A witness testified for the defendant that an attempt was made to avoid the damage; that mouse-traps were set in the room and an attempt was made to repair the bags where the mice had eaten or torn holes; that the mice made a distinction as to the bags. They would ■ attack or destroy a burlap bag but would not bother cotton bags. Another witness testifying for the defendant said that he found a mouse nest in one of the bags. The defendant found that the mice had so destroyed the bags that it was thought better to remove the seed from the bags and put it into a bin, which was done. There was evidence tending to show that after the seed was placed in the bin, the defendant permitted floor sweepings, stones, shipping tags and other foreign matter to be mixed with the seed. There was testimony concerning the character and construction of the warehouse and whether or not it was practical to have dogs or cats to keep the room • free from rats and mice. It was shown that mice attacked only the burlap bags, and not the cotton bags, but defendant made no attempt to resack the seed into cotton bags nor to notify the plaintiff of the damage with the request that cotton bags be furnished, but instead dumped the seed into an open bin.

The evidence sufficiently justified the finding of the court that defendant failed to use reasonable care to keep the seed from damage and that it was liable for any ensuing loss.

Counsel for defendant questions the amount allowed as damages. The argument seems to be based on the rule of damages where the commodity has a market value, and the cited cases relate to such a situation. The mustard seed in the instant case did not have a market value. Under such circumstances the opinion of witnesses who are familiar with the value of similar goods in an undamaged condition is admissible. Where there is no market value, the value must be arrived at by the best proof to be had. Sedgwick on Damages, 9th Ed. Vol. I, par. 243, p. 491, and Vol. IV, pp. 2631, 2636; Ohio & Mississippi R. Co. v. Taylor, 27 Ill. 207; Hey v. Hawkins, 120 Ill. App. 483. In Sedgwick on Damages, 9th Ed. Vol. IV, p. 2631, it is said:

“In that case (depreciation in value of property) a witness has without doubt the right to state the value before and after the injury; and as the depreciation is a mere matter of the substraction of one of these values from the other, it involves no question of law. It is therefore held that where the amount of damages is merely the depreciation in value of property, a witness is not prevented from giving his opinion of the depreciation merely because the quantum of damages happens to coincide with it.” See also Fox v. Chicago & South Side Rapid Transit R. Co., 68 Ill. App. 417.

Three witnesses for plaintiff qualified as experts in valuing mustard seed, having been dealers for from 5 to 13 years, respectively. These witnesses were familiar with the particular seed in this case, both before and after the damage. Two of them gave their opinion that the damage amounted to three cents a pound. Mr. Kidd, the third witness, testified that it was two and a half cents a pound. No evidence was offered in contradiction. Estimating the damages at three cents a pound would have resulted in an amount over $1,000. Since the case was a fourth-class case, in which plaintiff’s recovery was limited to $1,000, the court adopted the estimate of two and a half cents a pound and entered judgment for $940.17. The amount of damages was clearly justified by the evidence and the court adopted the proper rule in estimating the same.

We find no reversible error in the record and the judgment is affirmed.

Affirmed.

Matchett, P. J., and O’Connor, J., concur.


source: Caselaw Access Project

author: Mr. Justice O’Connor

license: Public Domain

text:
    Arkansas Sweet Potato Growers’ Exchange, Defendant in Error, v. Wignall-Moore Company, Plaintiff in Error.
    Gen. No. 32,416.
    Opinion filed May 14, 1928.
    Huff & Cook, for plaintiff in error; Zwemer & Casey, of counsel.
    Stewart Heed Brown, for defendant in error.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff brought an action against defendant to recover $1,485.18, claimed to be due on account of the failure of defendant to accept and pay for four carloads of potatoes which plaintiff had sold to it. At the conclusion of the trial the jury found the issues against defendant and assessed plaintiff’s damages at $1,452.18, judgment was entered on the verdict and defendant has sued out a writ of error to this court. We think we ought to say that counsel who now represent defendant were not counsel on the trial.

It appears from the record that plaintiff is an association of potato growers in Arkansas; that on June 3, 1925, it sold four carloads of potatoes, which were loaded on the cars in Arkansas, to the defendant in Chicago. The potatoes were sold as “United States No. 1” grade and the price was $2.75 per hundred weight f. o. b. shipping point. The cars arrived in Chicago about June 8, 1925, but defendant refused to accept them and wired plaintiff to this effect, stating that the potatoes were “irregular too large percentage small and undersized two cars look rather stale probably too long in transit during the extreme hot weather,” and offering to take the four cars for $3.00 per hundred weight delivered in Chicago. Plaintiff refused this offer and had the potatoes inspected by the Produce Reporter Company of Chicago, an association to which persons engaged in the potato business, including plaintiff, belong. Defendant having refused to accept the potatoes, plaintiff had the Produce Reporter Company, which had inspected the four cars, sell them. In the meantime the market dropped and plaintiff did not receive as much for the potatoes as it would had they been accepted and paid for by defendant in accordance with the terms of sale. The amount of the judgment is for the damages thus sustained by plaintiff.

Defendant in its affidavit of merits admitted that it had purchased the four carloads of potatoes “f. o. b. shipping point” for $2.75 per hundred weight; that it did not wish to receive the potatoes in Chicago but at shipping point in Arkansas; that plaintiff billed the four cars to itself at Chicago and sent the bill of lading with drafts attached to a Chicago bank so that defendant might obtain the potatoes when the drafts were paid. The affidavit further set up that the potatoes were to be “U. S. grade No. 1,” and that they were not of that grade but were rotted and decayed.

Four witnesses testified by deposition in Arkansas, and other testimony is to the effect that the potatoes were “Red Triumphs” of good quality IT. S. grade No. 1. One of these witnesses testified that plaintiff had received through the mails, from the Produce Reporter Company, four written reports made by that company covering the four cars of potatoes, the reports showing that the potatoes had been inspected in Chicago by the Produce Reporter Company, for plaintiff. These four reports were made a part of the deposition and returned to the clerk of the municipal court of Chicago. Plaintiff and defendant were represented by counsel at the taking of the depositions and the record discloses that when these four documents were offered by plaintiff no objection was made to them on the ground that they were incompetent or that such evidence was hearsay. The record discloses that on the trial of the case when these four documents were offered, counsel for defendant objected “to the introduction of the four inspection reports herein introduced for the reason that if competent at all, this witness is not the witness to testify to these inspector’s reports.” The objection was overruled and the documents received in evidence. Some of plaintiff’s witnesses whose depositions were taken in Arkansas testified in explanation of the meaning of some of the terms used in the reports, as did also witnesses produced by the plaintiff on the trial. Defendant also called witnesses who gave testimony in explanation of the four documents.

Defendant offered evidence to the effect that it also had an inspection made of the four carloads and the written reports of the inspectors were offered in evidence, but the men who made the reports were not produced, and testimony was also given to the jury in explanation of these reports. The testimony offered on behalf of defendant was to the effect that the potatoes were not U. S. grade No. 1, but that too many of them were under size to be of that grade. On behalf of defendant a written statement prepared by C. Gr. Wignall, who appears to have been the man who had the handling of these potatoes, was read to the jury as evidence, Mr. Wignall being too ill to appear in court. The statement shows that when the four cars arrived Wignall examined some of them and his statement says that “the potatoes were very poorly graded, there being scarcely nothing in the car that would be larger than a minimum No. 1”; that some of the sacks were marked No. 2; that the bags were uneven in amount, some weighing from 60 to 130 pounds; that he examined two of the carloads but did not inspect the other two but received a report of an inspection made by inspectors employed by defendant; that he recollected that the Produce Reporter Company had inspected the potatoes for plaintiff and that “any loss was due on account of poor grading and second-hand bags which were used.” A consideration of all the evidence offered on behalf of defendant shows that the potatoes were rejected because, as defendant contends, plaintiff did not grade them properly, that they were not U. S. No. 1 grade, and that they were in second-hand bags which were uneven in size.

It is clear from a consideration of all the evidence that the material point in controversy was whether the potatoes were grade U. S. No. 1, and we think the finding of the jury in favor of the plaintiff, to the effect that the potatoes were of that grade, is sustained by the evidence. It is certain that we would not be warranted in disturbing such finding on the ground that the finding is against the manifest weight of the evidence.

But defendant contends that improper evidence was received over its objection; that the four written documents purporting to be the appraiser’s reports, as made by the Produce Reporter Company, were inadmissible because they were hearsay evidence, and that the evidence was insufficient to prove that the documents were the reports of the inspectors of the four cars. Although practically all the argument made by defendant is concerning these documents, yet we are unable to find anything in the abstract concerning these reports. We might therefore disregard the contention made because under our practice the party bringing a case to this court must file a sufficient abstract to present the matters of which he complains. But we are of the opinion that there is no merit in the objection. When these documents were offered on the taking of the depositions in Arkansas, they were received without objection, and the objection on the trial was that if the documents were “competent at all, this witness is not the witness to testify to these inspectors’ reports.” Defendant having been represented at the taking of the depositions, it was. its duty to interpose objections to evidence offered although such evidence was hearsay. Hearsay evidence is competent if not objected to. 16 Cyc. 1194-5; Pittman v. Gaty, 10 Ill. (5 Gilm.) 186; Holder v. Cannon, Mfg. Co., 135 N. C. 392; State Bank v. Wooddy, 10 Ark. 638; Nunn v. Jordan, 31 Wash. 506.

Nor do we think there was any error in the testimony of the witnesses by which it was sought to explain to the jury the written reports made by the inspectors. If the reports were not intelligible to the jury, it was proper for one qualified to give testimony in explanation of them. Kavale v. Morton Salt Co., 329 Ill. 445.

A further complaint is made that the court permitted plaintiff to offer evidence as to terms used in the correspondence passing between the parties leading up to the purchase and sale of the potatoes, such as “cars rolling” and “f. o. b.” We think this evidence was immaterial. It is obvious that such terms are understood by all. Moreover, this alleged error was obviated by an instruction given by the court.

Upon a consideration of the entire record we are of the opinion that the issue involved was very simple and easily understood by the jury, and that any error that might have ocurred ought not to work a reversal of the judgment.

The judgment of the municipal court of Chicago is affirmed.

Affirmed.

Matchett, P. J., and McSurely, J., concur.


text:
    Emil Klingbeil, Appellant, v. Fred Becklenberg et al., Appellees.
    Gen. No. 32,576.
    Opinion filed May 14, 1928.

      Leslie H. Whipp, for appellant.
    Gallagher, Shulman & Abrams, for appellees.
   Mr. Justice O’Connor

delivered the opinion of the court.

By this appeal the complainant seeks to reverse a decree of the superior court of Cook county sustaining a demurrer to his amended bill of complaint and dismissing it for want of equity. The question for decision therefore is, Does the amended bill state a cause of action?

The allegations of the bill in short compass are that on February 25, 1924, complainant and Fred Becklenberg, one of the defendants, entered into a written contract whereby Becklenberg was to construct a 200-room apartment hotel on- the premises owned by him, and as part of the same transaction the parties entered into a written lease whereby the hotel was demised to complainant for a period of 20 years beginning October 1,1924, and expiring September 30,1944, at a rental of $1,100,000, payable in monthly instalments ; that at the time complainant paid Becldenberg $4,500, being the rent for the first month for the premises as provided in the lease. A further provision was that the hotel was to be completed by October 1, 1924, or as soon thereafter as it was possible to do so; that in the hotel to be constructed there were to be stores, shops and a theater, which were not demised to complainant; that after the execution of the lease defendant Becklenberg proceeded to construct the building and to enable him to do so incumbered the premises for $1,250,000, which was evidenced by a bond issue; that the building was not ready for occupancy until about December 15, 1924, at which time it was still incomplete in some particulars mentioned, but at the suggestion and request of Becklenberg complainant rented a few rooms to tenants and they moved in about December 12, 1924; that some time after the execution of the lease the Diversey Building Corporation, one of the defendants, succeeded to Beeklenberg’s rights and advised complainant that since he had taken possession of the hotel although it was not completed, he would be required to pay the rent reserved by the lease. Complainant objected to this on the ground that the building was then incomplete and but few of the rooms could be used by him, but Beeklenberg insisted that the rent be paid or the lease would be forfeited.

It was further alleged that the building was to be constructed in accordance with plans and specifications which were attached to and made a part of the contract entered into between complainant and Beeklenberg on February 25, 1924; that complainant, in accordance with the terms of the lease, purchased and installed in the hotel $55,000 worth of furnishings, on which he executed a chattel mortgage to the defendants in the sum of $50,000 to assure the faithful performance by him of the terms and conditions of the lease; that after December 13,1924, when complainant rented out a few of the rooms as stated, he notified the defendants of the claimed incompleteness of the building and the defects in its construction, which defects defendants refused to remedy. The bill then specifies the claimed defects in the building as follows:

(1) That the roof was constructed of poor material and in an unworkmanlike manner, in consequence of which it leaks, damaging the plaster and causing the rooms on the top floor to be untenantable. (2) That defendants failed to install a Kewanee boiler with standard equipment, guaranteed 70 degrees in the coldest winter weather, as the lease provided, but installed an inferior heating plant, as a result of which the building could not be properly heated; that the grates in the fire box of such inferior plant had to be replaced every six weeks at great expense to the complainant ; that the chimney leading from the boiler was improperly constructed in an unworkmanlike manner and was not “of sufficient height to carry sufficient draft to keep the fires alive in said fire box. (3) That by reason of improper mixture and improper roofing material the promenade court was badly cracked and could not be used. (4) That the bathrooms were not according to specifications in that proper material was not used “between the bricks and casings so that the same are in an open condition, all of which leak cold water from the outside into said bathrooms ’ ’; that the bedroom doors were too small and as a result the furniture had to be put in through the windows, and that the sewage system was improperly constructed. A great many other objections of a like character are made.

The prayer of the bill was that the court decree that the contract entered into between the parties on February 25, 1924, be specifically performed; that the building be constructed in accordance with the plans and specifications: “(1) By placing the roof over the premises * * * in a condition so that it will not leak. (2) Install a Kewanee straight draft fire box boiler.. (3) Install radiators in the rooms. (4) Install a proper and sufficient hot water boiler. (5) Install calking between the bricks and windows of the building so as to prevent the same from leaking water and air from the outside. (6) Make such change in the sewage system so that the sewage from the hotel will be properly carried away. (7) Properly drain the basement of the building so that water will not stand in the basement. (8) Place the said stairways in a condition so that the same are usable. (9) Place counter-weights on the fire escapes. (10) Properly enclose the steam pipes according to the plans and specifications. (11) Place grease traps in the drug store and restaurant. ’ ’

We think it is obvious, from the allegations of the bill and the prayer for relief, that complainant is seeking to have a great part of the construction of the hotel done over, repairs made where material or workmanship have been faulty; that the building be reconstructed in part and that the court compel defendants to redecorate parts of the building. It is obvious that a court of chancery will not enter upon such a task, but will leave complainant to his remedy at law. Cromwell v. Allen, 151 Ill. App. 404. Moreover, we are of the opinion that complainant was guilty of laches. He took possession of the building about December 12,1924, and although at that time the building was not completed and although shortly thereafter he complained to the defendants that the building had not been constructed in accordance with the plans and specifications, and although the defendants refused to make any alterations or completions, complainant did not take any action until the bill was filed on September 24,1926. Complainant should have acted promptly and the defense of laches may be raised by demurrer where the same appears from the face of the bill. Gunton v. Hughes, 181 Ill. 132.

While the general rule is stated to be that a court of equity will not specifically enforce a contract for the construction of a building, yet there are exceptions to this rule, and in a proper case such a contract will be specifically enforced. 26 Am. & Eng. Encyc. of Law (2nd Ed.) 93, 94; section 23 (p. 63), Pomeroy on Specific Performance of Contracts (3rd Ed.); Story’s Equity Jurisprudence (14th Ed.), secs. 1008-1009; Jones v. Parker, 163 Mass. 564. But in the instant case the bill is not to seek the construction of a building but the alteration, remodeling and repairing of it. The building has already been constructed.

The decree of the circuit court of Cook county is affirmed.

Affirmed.

Matchett, P. J., and McSttrelt, J. concur.


author: Mr. Justice Boggs

text:
    Live Stock Exchange, Inc., Appellant, v. State Bank of Roseville et al., Appellees.
    Gen. No. 7,900.

      Opinion filed May 11, 1928.
    Charles E. Lauder and Frederick H. Lauder, for appellants.
    Safford & Soule, for appellees.
   Mr. Justice Boggs

delivered the opinion of the court.

Appellant filed a bill in the circuit court of Warren county against appellees, one Cain Owens and one Max Montgomery, charging among other things that on August 1, 1923, one Blaine H. Watson was contemplating the purchase of certain cattle through appellant; that appellant, being ignorant of the financial standing, etc., of Watson applied to appellee bank for information in reference thereto; that the cashier of said bank, with knowledge that Watson was hopelessly insolvent, etc., on said date wrote appellant the following letter:

“Mr. Blaine H. Watson of near this place has been a satisfactory customer of ours for a number of years. We have always found him very prompt in meeting his obligations and we understand he has been very successful as a Cattle Feeder. Mr. Watson is reliable, honest, and industrious and we believe any transaction you may have with him will prove satisfactory.”

The bill further charges that, relying on the inform mation contained in said letter, appellant sold to Watson 64 head of cows with 64 calves, for a consideration of $4,001.80, taking therefor Watson’s note, secured by a chattel mortgage on said stock; that on August 20, 1924, Watson, without the knowledge or consent of appellant, shipped certain of said cattle to the stock yards at Chicago, where they were sold and the net proceeds amounting to $4,407.64 were transmitted to appellee bank and credited to Watson’s account; that at said time Watson was indebted to appellee in excess of the amount of said deposit; that appellee upon receipt of said deposit, with knowledge that such funds were derived from the sale of cattle on which appellant claimed a lien by virtue of said chattel mortgage applied the same in payment of an overdraft of Watson’s in appellee bank; that at the time of the deposit of said funds, Watson had given a check to defendant Owens for $700, and a check to defendant Montgomery for $1,182.20, which said checks were afterwards presented and paid by said bank out of the funds so deposited. Said bill further averred that appellee bank received said fund with knowledge of its source, and charged that, in equity, the same belonged to appellant.

Appellee bank in its answer specifically denied that the above-mentioned letter was the letter of the bank, or that the bank as such had knowledge thereof. Said answer admitted the receipt of said fund of $4,407.64, and averred that appellee bank gave credit therefor to Watson in the due course of business, denied “that at the time of receipt of said money it knew or had notice that such money was derived from sale of. cattle sold to said Watson by complainant, or that complainant claimed or had a lien by virtue of its chattel mortgage upon said cattle.” Said answer further admitted the payment of said checks to Owens and Montgomery, and averred that, after the payment of said checks, it applied the balance on hand in the account of Watson upon his indebtedness, and denied that said fund was a trust fund to which appellant was entitled.

The bill was dismissed as to the defendants Owens and Montgomery. By leave of court, appellant filed an amendment setting forth that since the filing of the original bill the remainder of the cattle on which appellant held said mortgage was sold, and the sum of $1,009.48 was received therefor which should be credited on the claim of appellant.

Said cause was referred to a special master to take the evidence and to report the same, with his findings and conclusions of law and fact. Said evidence was so taken and reported. Objections were filed to the master’s report by appellant, which, on being overruled, were made to stand as exceptions. The court modified the fourth finding of said report, and “ordered that the Report of said Special Master is hereby modified accordingly, so as to find under said item four of said report this said Watson was indebted to said State Bank of Roseville on August 1, 1923 in said sum of $1,850.00 on his unsecured notes, in addition to the amount of indebtedness as set forth in said report; and it is ordered that in all other respects all of said Exceptions of said complainant to said Report of Special Master are overruled; and it is further ordered that said Report of said Special Master as modified above, be approved and confirmed.”

The master found that the chattel mortgage to appellant was void as to third parties for the reason that it was acknowledged before a justice of the peace of Roseville township, whereas Watson resided in and the cattle were located in Ellison township. The master further found that appellee bank received said deposit in due course; that its application on the indebtedness Giving by Watson was in the regular course of business, and that appellant was not entitled to a lien thereon.

The sixth finding of the master is as follows:

“6. That on August 21, 1924 said defendant bank had knowledge that said $4,407.64 was proceeds from sale of cattle mortgaged by said Watson to said complainant, and that subsequent to time of such knowledge, but prior to time of any change in status of account or indebtedness between said Watson and said State Bank of Roseville (except for entry of credit of said $4,407.64 to said Watson’s account as above set out) said Watson requested said bank to send $3,000.00 of said $4,407.64 to said complainant which request was refused; that afterwards on same day said bank honored and paid check of said Watson to defendant W. C. Owens for $700.00 and the check of said Watson to defendant Max Montgomery for $1,182.20 which said checks were paid out of said $4,407.64 and a certain deposit by said Watson of $495.90 made August 21, 1924, and were paid under an agreement by the said bank and said Watson without knowledge or consent of said complainant.”

This finding was not excepted to by either party. It being a finding of fact on issues made by the bill and answer, it is to be taken as true. Pennell v. Lamar Ins. Co., 73 Ill. 303-306; Gehrke v. Gehrke, 190 Ill. 166-175; Cheltenham Imp. Co. v. Whitehead, 128 Ill. 279-284; Barney v. Board of Com’rs of Lincoln Parle, 203 Ill. 397-403.

In addition to the facts found by the master, the evidence discloses that Watson had, for practically all his business life of some 20 years, been a patron of appellee bank, his confidential adviser being H. E. Lance, its cashier. The testimony of said cashier is that at the time the letter in question was written Watson owed $20,000 secured by a real estate mortgage on 80 acres of land, being all of the land Watson owned, $7,000 secured by a chattel mortgage, a balance on two unsecured notes of $1,850, and an overdraft in appellee bank of $364.41; that, from that time on until the deposit of the proceeds of the sale of said cattle, Watson had been overdrawn in said bank practically all the time.

The question for our determination is as to whether, with the knowledge appellee bank possessed, at the time it received said deposit, it can hold the same as against appellant in a court of equity.

While, as a general proposition, where a party deposits funds in a bank, the fund becomes the property of the bank and the relation of debtor and creditor is created by the transaction, yet, where a bank has knowledge that the fund being deposited belongs to another or is a trust fund in the hands of the depositor, it creates an exception to said general rule.

“A bank which has notice that a deposit is in reality the fund of another may refuse to honor the check of the depositor.” Hanna v. Drovers’ Nat. Bank, 194 Ill. 252; First State Bank & Trust Co. v. First Nat. Bank of Canton, 314 Ill. 269-273.

“Money held in a fiduciary capacity by one who places it in a bank can be recovered from the bank, although mixed with the depositor’s own money; that the person for whom he held the money can follow it and has a charge on the balance in the banker’s hands, notwithstanding the mingling of the funds. * * * Although the relation between a bank and its depositor is that merely of debtor and creditor and the balance of account is only a debt, if the money is held by the depositor in a fiduciary capacity its character is not changed by being placed to his credit with his own money in his bank account.” Woodhouse v. Crandall, 197 Ill. 104-112, 113, citing Central Nat. Bank of Baltimore v. Connecticut Mut. Life Ins. Co. 104 U. S. 54.

In Clemmer v. Drovers’ Nat. Bank, 157 Ill. 206, a bill had been filed by a shipper for the purpose of having an equitable lien decreed on the proceeds of a sale of stock through Hanna, Son & Company at the Union Stock Yards, Chicago, and which funds had been by said commission firm deposited with the proceeds of sales for other consignors, to its credit in the Drovers’ National Bank. Said bank applied the deposits of that day on an indebtedness owing to it by said commission firm. The court in its opinion discusses the fact that said bank had knowledge of the character of business transacted by Hanna, Son & Company; that they were selling live stock for their consignors, and that the funds deposited to the credit of said firm were derived from such sales, and held that while the bank did not know from what particular consignment or consignments the funds were derived, it did know or had reason to know that they were derived from sales of stock so consigned to said firm. The court at page 216 says:

“It is well settled that a factor has no right to pledge, deposit or apply the property of his principal to secure or pay his own debt. (First Nat. Bank v. Schween, 127 Ill. 573; 3 Am. & Eng. Ency. of Law, 345.) Appellee knew that the moneys collected and deposited by it on the tickets received from Hanna, Son & Co. were the proceeds of the sales of stock consigned to them for sale on commission, and was bound to know it had no right to apply these moneys in payment of its own demands against the commission merchants.

“As to the contention that it cannot be known that this balance applied by appellee on the note was the moneys of appellants, and that all of appellants’ moneys may have been drawn out by Hanna, Son & Co. ' and embraced in the $9000 checked out on the 9th day of June, it is sufficient to say that it must be presumed that they checked out their own moneys to others, rather than the moneys of appellants. Knatchbull v. Hallett, (In re Hallett’s Estate) 13 Ch. Div. 696.

“We think it clear, from the evidence, that this balance really belonged to appellants, and that they had the right to recover it in some appropriate action cannot well be doubted.”

In Union Stock Yards Nat. Bank v. Gillespie, 137 U. S. 411, 34 L. Ed. 724, being a case somewhat similar to this, the court at page 423 (L. Ed. 727) says:

‘ The question here is not as to the character of the obligation of factor to principal, but as to the liability of one who takes from a factor, in payment of his debt, moneys which he knows equitably belong to that factor’s consignor and principal. Justice forbids the upholding of such a transaction, and demands that the Bank, receiving from the factor in payment of a debt from the factor to itself, moneys which it must have known were the proceeds of the property received from his consignor and principal, account to that principal for the moneys so received and appropriated. * * *

“It cannot be doubted that an element of a fiduciary nature enters into the obligation of the factor — an element different from that which exists in case of vendor and purchaser. There is a confidence beyond that in the capacity and willingness of a debtor to pay; there is a reliance of a principal on his agent, a confidence that the agent will do as his principal directs, and be loyal to the duties springing from such relation. * * * While it may be true that a legal title to the moneys received on such sale is in the factor rather than in the principal, so that the principal may not maintain an action at law as against one receiving such moneys from the factor, yet, equitably, those moneys belong to the principal, and equitably they may be followed into the hands of any person who receives them chargeable with notice of their trust character.” Citing Central Nat. Bank of Baltimore v. Connecticut Mut. Life Ins. Co., 104 U. S. 54, 26 L. Ed. 693.

To the same general effect in principle is First Nat. Bank of Jerseyville v. Belt, 29 Ill. App. 194. In Hanna v. Drovers’ Nat. Bank, supra, the court at page 257 says: “Had the bank, with knowledge of the fact that the money belonged to Olemmer and others, paid it upon the checks drawn to Hess Bros, and others, it would have thereby aided and abetted the plaintiffs in perpetrating a fraud upon those parties * * *.

“It may be conceded that, as a general rule, it is the duty of a banker to pay money on deposit with it to the party in whose name it is deposited; but where it has notice of the fact that the fund belongs to another, it may refuse to pay it to the depositor and be compelled to pay it to the real owner. That is settled by our decision in the chancery suit (Clemmer v. Drovers’ Nat. Bank), supra.”

In State Nat. Bank v. Payne, 56 Ill. App. 147, being a suit instituted by a mortgagee against a bank to recover the proceeds of certain mortgaged property which had been sold by the mortgagor and checks taken therefor in the mortgagor’s name, it was held that the bank having notice of the source thereof could not apply the proceeds of said checks on an indebtedness owing to it by said mortgagor. The court at page 148, in discussing this question, says:

“The defense is that the bank is not liable because there was no privity between it and appellee. This action is for money had and received by appellant for use of appellee, which is of an equitable character and lies wherever the defendant has money which, ex equo et bono, belongs to the plaintiff. In this case, though the legal title to the money was in Diggs, if the bank, through its officer, Jones, who received it, had notice that it was impressed with a trust in the hands of the party from whom he received it, we understand that the cestui que trust may recover it in this action at law as well as in equity. ’ ’

While the chattel mortgage in question was void as to third parties, it was a valid and subsisting lien as between appellant and Watson.

Upon a review of the foregoing authorities, we hold that the sale of the cattle in question without the knowledge, consent or acquiescence of appellant created in the proceeds a constructive trust in the hands of Watson for the benefit of appellant under said mortgage, and that appellee bank, having knowledge of said indebtedness, and that the proceeds of said sale were the proceeds of cattle covered by the mortgage held by appellant, received said funds charged with said trust, and was not authorized to apply the same on said overdraft.

Counsel for appellee bank strenuously insist that no notice was brought to the bank, of the right of appellant in the proceeds in question, sufficient to impress said fund with an equitable lien in appellant’s favor. Under the holding of our Supreme Court in Clemmer v. Drovers’ Nat. Bank, supra, and of the United States Supreme Court in Union Stock Yards Nat. Bank v. Gillespie, supra, we hold that this point is not well taken. If there was sufficient notice in those cases, certainly, under the finding of the master in this case, to which no exception was taken, and under the undisputed evidence in the record, there was a sufficient notice here to so charge appellee bank. Appellee bank had done nothing on the faith of said deposit to prejudice itself, prior to the demand made by Watson for said draft of $3,000 to send to appellant. At the time Watson made the demand for said draft, he had not then made the deposit of $495.90, which appears from the books of the bank to have been entered therein prior to the entry of the $4,407.64 item; in other words, before the entry had been made in the books of the bank giving credit to Watson, Watson had made the demand for the $3,000 draft to send to appellant. While appellee’s officers informed Watson that they had received the credit from the bank at Chicago, they refused to honor his draft.

In the correspondence of appellee bank with appellant with reference to the disposition of the proceeds of the sale of said cattle, appellee bank took the position that the checks to Owens and Montgomery were paid in the regular course of business out of said funds. These checks were paid subsequent to the demand made by Watson for the draft to send to appellant. It cannot be said that the regular course of business was pursued in refusing to issue a draft on Watson’s demand, and thereafter paying subsequent checks out of funds on hand at the time the draft to be sent to appellant was demanded.

It was strenuously urged by counsel for appellant that the letter of said cashier, with reference to the standing, etc., of Watson, was the letter of the bank •and appellant having relied thereon was entitled to a lien on the funds in question. We are not passing on the question as to whether or not the letter of Lance was the letter of the bank. It is only necessary to say that the court had the right to take it into consideration, together with all the other facts and circumstances, in determining whether appellee bank had notice with reference to the trust character of the funds in question.

For the reasons above set forth, the decree will be reversed and the cause remanded, with directions to enter a decree in favor of appellant for an equitable lien on the funds deposited to the credit of Watson in appellee bank on August 21, 1924, for $2,912.32, with interest thereon from September 18, 1924, at the rate of five per cent per annum. Appellant is not entitled to an attorney’s fee as against said bank.

Reversed and remanded with directions.


author: Mr. Presiding Justice Shurtleff

text:
    James M. Ellis and Abbie B. Ellis, Appellees, v. U. G. Orendorff, Appellant.
    Gen. No. 8,099.

      Opinion filed January 25, 1928.

      Glenn Ratcliee, for appellant.
    Claude E. Chiperfield, Burnett M. Chiperfield and Robert B. Chiperfield, for appellees.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

Appellees filed their bill in equity in the circuit court of Fulton county to restrain appellant from prosecuting his suit in ejectment in the same court to establish title in fee in appellees and to recover possession of 160 acres of land, conveyed by warranty deed by appellees to appellant on June 2,1922, to have the said deed construed as a mortgage, securing certain indebtedness owing by appellees to appellant, and praying for an accounting and general relief.

It appears from the bill, answer and proofs in the record that prior to June 2, 1922, appellee James M. Ellis and his brother owned the farm together, and that on February 28, 1921, appellee Ellis wrote to appellant as follows: “I received your letter yesterday in regard to who is interested in the farm. Just John and me. Us two own the farm individually. We owe $3000 at Peoria, $2000 at Plattenburg. John offers me his share of everything, farm stock, and all, for $6000. I owe some at Canton. I wanted to put it all in one mortgage to one man. I don’t want the drainage. $13500.00 will buy John out and take up the other two mortgages and put the loan to one man.”

The record leaves a doubt as to whether appellant sought the opportunity to aid appellees, or whether appellee Ellis first applied to appellant for assistance. It is not important. The lands in question bordered upon Rice Lake, an arm or affluent of the Illinois River. About one-half of the farm was low, wet and swampy land and the balance was upland and tillable. The appellees had resided upon the lands for a great many years. Appellant had gathered together 1,500 to 2,000' acres of adjacent lands, upon which he had constructed a clubhouse and the lands were used for a private hunting ground and fishing preserve. The witnesses Amos Beebe and Elizabeth Beebe, his wife, who was a sister of appellee James M. Ellis, had had charge of appellant’s clubhouse. Until the commencement of the ejectment suit there had been certain friendly intimacies between these families.

In the winter of 1921 and 1922 there was a mortgage on the Ellis farm in the amount of $12,500, and it appears that appellee Ellis had a considerable number of debts in various amounts, which were causing him annoyance. There was a series of correspondence between appellee Ellis and appellant, who was then in California, in reference to the debts and a sale or mortgage of the farm, some of which correspondence we shall revert to later. The result was that upon appellant’s return from California the debts and liabilities of appellee Ellis were computed, and appellees executed and delivered to appellant a warranty deed of the farm for a stated consideration of $1. Appellant executed and delivered to appellees a contract, agreeing to convey, by quitclaim deed, the said lands to appellees, provided the appellees made the payments and performed the covenants and agreements later set forth in the contract. The contract provided: “The parties of the second part (appellees) covenant and agree to pay to said party of the first part the sum of $20,250 one year after date, with interest at the rate of seven per cent per annum, payable semiannually, and all taxes, assessments or impositions that may be legally levied or imposed on said lands subsequent to the year 1921, and in case of their failure this contract shall, at the option of the first party, be forfeited and determined, and first party shall have the right to re-enter and take possession,” etc.

Appellees did not pay the semi-annual interest provided for in the contract, except that it may have been shown that appellees delivered a small quantity of corn to appellant in the fall of 1922, amounting to less than $100 in value, and did not pay anything upon the principal of said contract, so that on November 10, 1923, appellant, by written notice served, demanded the immediate possession of the premises, and on November 26, 1923, commenced his ejectment suit, returnable to the January term, 1924, of said court.

Appellees’ bill alleges that said warranty deed was executed and delivered by way of a mortgage, to secure advancements that were to be made by appellant to appellees, in the sum of $20,250, for the period of five years, and that appellant had never paid any moneys to appellees in pursuance of said security, or made any advancements in any sum whatever to appellees. The bill then sets out a statement .made by appellant to appellees, purporting to show the indebtedness of appellees to appellant, “as of date May 1st, 1923,” amounting to the sum of $30,337.02, and charges various acts on the part of appellant such as posting upon the land notices — “Private Property,” “No Trespassing Under Penalty — U. Gr. Orendorff, Owner,” and sets out a lease which is shown under date of about June 2,1923, by which appellant assumed to be the owner in fee of said lands. The bill charges other acts and fraudulent and oppressive conduct by which appellant had sought to dispossess appellees of their rights in said lands, and charged that appellant, as a part of a plan, had asserted that he was the owner of the premises and proclaimed the same publicly, so that the same had resulted in slandering the title of appellees and they had lost several opportunities to sell said lands and pay whatever debts they did owe, not only to the appellant but to other persons. The bill set out the deed and contract and charged that appellees owned no other property, except the small amount of personal property necessary to carry on said farm. The bill charged that appellant “did not furnish to or on behalf of the complainants, or either of them, the sum of $20,250, although these complainants aver that he did discharge some indebtedness which was due and owing by the said James M. Ellis, but to whom said payments were made or the amount of such payments are to these complainants unknown.” The body of the bill charges “that the defendant be required to render a true and accurate account of any and all sums paid out by him for the complainants or either of them, in order that the complainants may be advised and informed of such amount, and that the court may thereupon determine to what, if any, extent these complainants are liable to the defendant by reason of such payment, and these complainants aver that they will pay to the defendant such sums as this court shall determine are fairly, legally and equitably due the said defendant.”

The bill prays that the deed be determined to be a mortgage to secure the payment of such sums of money as have properly and rightly been advanced and paid to the complainants by defendant. The bill further prays that an accounting be had and for general relief.

Appellant answered the bill, "admitting certain allegations to be true, but denying all of the allegations as to fraud and oppressive conduct, and avers that in pursuance of said deed and contract and at the request of appellees appellant paid off over $30,000 of indebtedness owing by said appellees, including the mortgage on said lands for and on behalf of appellees. The original answer filed denied that said deed was given as security, but averred that it conveyed the title in fee of said lands to appellant. Upon exceptions being made to the answer, which were sustained by the court, appellant amended his answer, in which amended answer appellant reiterates “that it was the intention and understanding of this defendant that the same was to be treated as an absolute sale and conveyance of the real estate therein described, with an option on the part of the complainants to repurchase said lands upon the payment of the sum of twenty thousand and two hundred fifty dollars, within the time specified in said contract and upon the terms therein set forth. “Further answering this defendant says that he is now advised by his solicitors that the legal effect of said transactions would constitute said deed and contract as a security for the money advanced by this defendant for the complainants in the nature of a mortgage, and in case the court should find that said deed and contract should be treated as security for said indebtedness, then this defendant asks that the court, without delay ascertain the amount of money due from the complainants to this defendant, and order that the same be paid by the complainants to this defendant by a short day fixed by the court, and this defendant avers that he is willing to accept payment of the amount of money so advanced by him, for the complainants with interest thereon under and by virtue of said deed and contract and release to the complainants any interest he may have in the lands described in said deed and contract

Appellees then withdrew the special prayer of their bill praying an accounting, filed a replication and the cause was referred to the master in chancery to take the proofs and report his findings of law and fact. The proofs were heard, the master reported and the court found by its decree, after overruling various exceptions by appellant, that said deed and contract constituted a mortgage security for certain advancements made by appellant for and on behalf of and at the request of appellees, amounting to the sum of $21,510.99. The master’s report and the decree itemize the amounts, the persons to whom paid and the purpose of and date of payment. It was further found and decreed that by the act of the parties said indebtedness was made to mature one year from June 2, 1922. Over the exception of appellant, the court refused to allow interest upon said sums.

It was further decreed that it was the duty of appellant to credit appellee James M. Ellis for whatever sum of money has been or may be collected by said appellant on a policy of insurance held by appellant upon the buildings on said premises, for a loss by fire which had occurred, as set forth in the master’s report. The decree also perpetually enjoined appellant, his agents, servants and attorneys from taking or attempting to take possession of said lands, and from in any way exercising any acts of ownership with reference to said premises, and from going into or upon said premises for the purpse of disturbing the possession of the owner thereof — James M. Ellis — or from in any way doing any other act in connection with the said premises, or any part thereof, which in any way interferes ivith the occupancy of the said James M. Ellis and Abbie B. Ellis, and from further prosecuting at law the said suit of ejectment. The court did, however, reserve to appellant the right, “permitting the said Orendorff in such manner as may be lawful and appropriate, to foreclose upon the said deed so given as a mortgage, in such proper tribunal as he may select, and to take any and all laAvful action in connection thereAvith.” The court decreed the costs be taxed to the appellant. The appellant was not permitted at the close of the ease to file a cross-bill, which Avas held to be appellant’s only method of obtaining affirmative relief. The master refused to recommend and the court to decree payment of an item of $2,056.24 for drainage assessments of the Wakonda Drainage Dis- ■ trict, for the want' of sufficient proofs. Objections •• taken before the master were, made exceptions before the court, and appellant has brought the record to this court for review. Appellees do not except to the decree of the court below and have not appealed.

Counsel have argued this case upon the theory that the main contention of fact was whether the deed given was intended as a mortgage. This contention does not seem to be borne out by the record. Appellees had the right at any time after the amendment to the answer was filed to take a decree on bill and answer, declaring the transaction a mortgage security. The court below refused to allow interest upon the items for which it was found the deed was given as security, amounting to the sum of $21,510.99. The decree found that said items and sum were properly and rightfully paid out and advanced by appellant for appellees, by virtue of said security, and no reason is advanced why the said items should not draw interest from the date of advancement, as found in the decree, at the rate of 7 per cent per annum, as covenanted in the contract. This was error and interest should be added to and computed on each item from the date of its payment or advancement, at the rate of 7 per cent per annum upon the principal sum mentioned in said contract, to the amount of $20,250.

Appellant presented the formal receipt of J. J. Mc-Nally, treasurer of the Wakonda Drainage and Levee District, showing or tending to show that appellant had paid the sum of $2,056.24 on May 1, 1923, for 25 per cent of the special assessment tax for the year 1922 on said lands for the benefit of said drainage and levee district. Appellant offered the original receipt, asked that a copy be made and attached to the record, and that the original be returned to appellant for his files. Appellees objected “as incompetent, immaterial and irrelevant, and that no proper foundation has been laid, and it does not tend to prove any of the issues of the case, and further object to the original being withdrawn from the files.” The court refused to allow this item and held that it was not secured by said mortgage, “there being no satisfactory proof of the levying, legality and validity of said assessment.” It is now insisted by appellees that the pretended receipt in the original bill of exceptions on file in the circuit clerk’s office of Fulton county is a typewritten copy and that the record shows no order permitting appellant to withdraw the original receipt. The original bill of exceptions is not before us, and appellees do not appear to have objected to the offer in evidence on the ground that it was not an original and genuine receipt. It is further insisted that appellant should have proven a legal and lawful assessment by the record. We do not think that the authorities so hold.

In Schlencker v. Risley, 3 Scam. (4 Ill.) 483, 486, it is held: “The general rule of law is, when an officer justifies an act complained of, purporting to be done in his official capacity, that it is necessary that he should aver and prove, in his defense, not only that he was an acting officer, but that he was an officer in truth and right, duly commissioned and qualified to act as such; while as to all others, it is sufficient for them to aver and prove that he was acting as such officer. And the reason of the rule is that the officer himself is bound to know whether he is legally an officer, and if he attempts to exercise the duties of an officer, without authority, he acts at his peril; whereas it is sufficient, so far as the rights of third persons or the public are concerned, that the officer is acting in his official capacity, and under color of title; for it would be unreasonable and oppressive, to compel them, before they put faith in his official acts, to go into a minute examination of all of the evidence of his title to the office, and see that he has complied with all the necessary forms of.law.” People v. Collins, 7 Johns., 549.

In People v. Ammons, 5 Gilm. (10 Ill.) 105, 107, the court held: “There.is no law making the certificate of. the County Commissioner’s Clerk the only evidence of the official character of the person professing to act as Probate Justice. We have no doubt it was competent to prove lie was such Justice by parol, when the question arose between third persons, and that in such a case such proof is just as satisfactory as the Clerk’s certificate. The proof offered would have shown that he was an officer de facto, and as such his acts were as binding and valid, when the interests of third persons or the public were concerned, as if he had been an officer de jure. The People v. Collins, 7 Johns., 548; McIntyre v. Turney, 9 do. 135; Berryman v. Muse, 4 T. R. 366; Gilliam v. Reddick, Iredell, 355; Fowler v. Bebee, 9 Mass. 331; Lowell v. Flint, 20 Maine, (7 Shepley,) 404; and in this Court, Schlencker v. Risley, 3 Scam. 485. Had the question arisen directly in a suit against the Justice and his right to the office involved, the rule would have been different.”

Following these rulings the court has held that a special assessment is entitled to the same presumptions as to its legality as any other tax levied by law. Hurd v. People, 221 Ill. 398, 402; and Aldridge v. Matthews, 257 Ill. 202, 207.

It would appear from the authorities that the production of the original tax receipt made out a prima facie case as to the payment of the tax. Hinchman v. Whetstone, 23 Ill. 185; Bacon v. Peoria & E. Ry. Co., 162 Ill. App. 162, 165; Brockway v. McClun, 243 Ill. 196, 198. In Bacon v. Peoria & E. Ry. Co., supra, the court held: ‘ ‘ The evidence admitted by the court over objections of defendant consisted of certain tax receipts offered by plaintiffs showing the payment of taxes for the last twenty-five years or more. Defendant insists that there was no proof that the party signing these receipts was a tax collector or that the taxes were paid by the parties named in the receipts. While this may have been the rule of evidence in common law the statute now provides that these receipts shall be admissible as evidence and be prima facie evidence that the taxes were paid by the parties therein named. Stacey v. Randall, 17 Ill. 466; section 163, page 103, Rev. Statutes, 1874; Walcott v. Gibbs, 97 Ill. 118.” Indeed, under the authorities, the payment of the tax may be shown by parol. Hinchman v. Whetstone, supra.

City of Chicago v. Middlebrooke, 143 Ill. 265, 268, cited by appellees, is not applicable to the facts in this case for reasons too numerous to go into. But appellant insists that the payment of these drainage assessments is an immaterial issue in this case and that the question is not raised by the pleadings. As to the first contention, the record shows that the lands were conveyed by warranty deed by appellees to appellant on June 2, 1922, free and clear of all incumbrances. Under appellant’s contract to reconvey made on the same date, at the end of one year it was stipulated that the conveyance should be subject to any drainage assessments and other taxes that may have been levied or imposed against said land. This contract was signed by appellees. It is a fair inference that the drainage assessments were levied after the execution of the deed. In any event, the terms of the deed and contract rendered the assessments the indebtedness of appellees. The record is full of references to this drainage matter, which added about $8,000 additional indebtedness against the land. Under date of February 15, 1921, appellant wrote appellees : “It looks very much as though the drainage proposition would go through,” and under date of February 28, 1921, James M. Ellis replied:' “I don’t want the ■ drainage. ” Appellee James M, Ellis testified: “I never had any conversation on the subject of paying the Wakonda Drainage District tax. I never requested or authorized him to pay it.” Appellees produced a witness, John Beckstead, who testified: ‘ ‘ The drainage assessment had been spread against it. In 1922 the drainage assessment had been spread on the Ellis lands. In 1922 lands in the Wakonda District were selling between $50 and $75 an acre. People were wanting to get out of the drainage. I sold to get out of the drainage.” Beckstead had testified for appellees that at the time of the trial lands in the lake district were of the value of $300 per acre.

Appellees are in the position in a court of equity of desiring to force the appellant to pay the drainage assessments against the land, amounting to about $8,000, and then charge appellant $300 per acre for lands which before the drainage were worth only $50 to $75 per acre, and which appellees and their neighbors were trying to sell at that price to avoid the drainage assessments. This is not equity. As to the contention that the item was not covered by the bill and answer and was not properly one of the issues in the case, it is sufficient answer to say that the court below did undertake to render an account between the parties in connection with said lands, and that every item of indebtedness due to either and covered by said contract should have been included in said accounting. It was not necessary that appellant should have filed a cross-bill to obtain a decree in his favor on such accounting. Wilcoxon v. Wilcoxon, 199 Ill. 244, 250; Thomas v. Turner, 157 Ill. App. 16, 21; House v. John Linn & Co., 179 Ill. App. 114, 115; Clinton v. Winmard, 135 Ill. App. 274, 278. The fact that appellees withdrew their special prayer for an accounting in no wise changed the issues in the case. The whole tenor of appellee’s bill of complaint demanded an accounting, and that relief was comprehended in the prayer for general relief. Appellant paid the special assessment on May 1,1923, to the amount of $2,056.24, at a time when it was a lien upon the land, and appellees, under the statute, were in default and the decree should be modified to allow appellant the amount of such payment, with interest at the rate of 5 per cent per annum from the date of such payment.

Appellant assigns error upon said decree in that it perpetually enjoins him from doing any act or attempting to take possession of said lands, as set out, and from prosecuting said ejectment suit. In defense of this portion of the decree appellees contend that the main issue in the case was whether appellant held the title to the lands in fee or by way of a mortgage security. We do not so read the record as a matter of fact, but this would not obviate the assignment of error. Appellees’ bill alleged that the deed was intended to be a mortgage, and averred their willingness to pay the appellant such sums as the court should determine were fairly, legally and equitably due appellant. In other words, the bill offered to do equity on the part of the complainants. The decree does not do equity.

The law is that where a party seeks in a court of equity to divest another of legal title to lands, the court will impose equitable terms on which the relief will be granted, and if there is a debt due, which the legal title was given to secure, the court will require its payment as a condition precedent to the relief prayed. (O’Connell v. O’Conor, 191 Ill. 215, 224; Galbraith v. Tracy, 153 Ill. 54, 64; St. Patrick’s Catholic Church v. Daly, 116 Ill. 76, 82; Carpenter v. Plagge, 192 Ill. 82, 97; Springfield & N. E. Traction Co. v. Warrick, 249 Ill. 470, 476; Shrontz v. Thyfault, 231 Ill. App. 228, 232; De Walsh v. Braman, 160 Ill. 415, 422.)

Where the debt is due, the proper decree to enter in such cases is to allow the parties to redeem from a conveyance which is held as a mortgage, upon payment of the sum found to be due, within a reasonable time to be fixed by the decree, with costs, and directing the mortgagors to discharge the mortgage — or to convey the property to the complainants, if the defendant holds a deed instead of a mortgage as security — ' on the payment of the money, and that, in default of such payment within the time specified, the bill be dismissed. (Carpenter v. Plagge, supra, p. 100; Chicago & C. Rolling Mill Co. v. Scully, 141 Ill. 408, 418; Henderson v. Kibbie, 211 Ill. 556, 567; De Walsh v. Bra- man, supra; Bremer v. Calumet & C. Canal & Dock Co., 127 Ill. 464, 491; O’Connell v. O’Conor, supra, p. 224; Decker v. Patton, 120 Ill. 464, 468; Massachusetts Mut. Life Ins. Co. v. Boggs, 121 Ill. 119, 127.) The decree . contained no such provision, was inequitable in that respect, and it follows that all that part of the decree providing for an injunction restraining appellant from “taking or attempting to take possession of said lands and from in any way exercising any acts of ownership with reference to said premises and from going into or upon said premises for the purpose of disturbing the possession of the owner thereof, James M. Ellis, or from in any way doing any other act in connection with the said premises or any part thereof, which in any way interferes with the occupancy of the said James M. Ellis and Abbie B. Ellis,” should be eliminated and stricken from the decree, for the reason that no such acts were proven by the record to have been committed by appellant in pursuance of the deed, as a deed in fee, inconsistent with appellant’s rights, under the contract and deed, construed as a mortgage. The prosecution of the ejectment suit having been brought by appellant, claiming title in fee to the lands should be enjoined. It is contended by appellant that he has and has had, under the mortgage indebtedness and the deed construed as a mortgage, since June 2, 1923, and after condition broken the right to bring ejectment to recover possession of said lands, as a mortgagee, under the rule laid down in Esker v. Heffernan, 159 Ill. 38, 42; Ware v. Schintz, 190 Ill. 189, 193; Kranss v. Uedelhofen, 193 Ill. 477; Bradley v. Lightcap, 201 Ill. 511, 519, and that he may at the same time prosecute his foreclosure suit in equity. Bradley v. Lightcap, supra. Whatever rights appellant may have, under the deed and contract, construed as a security, to enforce his mortgage debt, are to be hereafter determined. It is the opinion of this court that the ejectment suit pending, having been brought to recover the fee title to the lands, should be enjoined. After appellant filed the amendment to his answer, there was no occasion for further litigation in this case, as to the question of said deed constituting a mortgage, by way of security, to which subject we shall again refer.

In Carpenter v. Plagge, 192 Ill. 82, 95, it is held: “If a person, entitled to redeem, goes into equity for that purpose, and he owes the mortgagee other sums than that secured by the mortgage, relief will be granted only on the payment of the total amount of his indebtedness, in accordance with the maxim that ‘he who asks equity must do equity, ’ and to prevent circuity of action,” citing numerous authorities.

While the bill presented is not strictly a bill to redeem, under the authority of Carpenter v. Plagge, supra, and the other cases cited, the decree should provide that the indebtedness found to be owing by appellees, to appellant, under the terms of the deed and contract, amounting to the sum of $21,510.99, including interest thereon, on the sum of $20,250, computed on each item from the date of its payment at the rate of 7 per cent per annum and including said payment for drainage taxes amounting to the sum of $2,056.24, with interest thereon at the rate of 5 per cent per annum from the date of the payment of said tax, should be fixed and determined by the decree, and the appellees should be adjudged to be in default and ordered to pay said sum and sums to the appellant within 90 days from the entry of the remanding order in this cause. In default of such payments, however, the bill in this cause should be dismissed for want of equity.

Appellees made the issue in the bill of complaint that it was the agreement and understanding of the parties that said mortgage indebtedness should run for a period of five years from June 2,1922, which was denied by appellant who contended that the terms of the contract were controlling upon that question. This issue was submitted to the master, who made no recommendation upon it, and upon that question was based one of the exceptions before the chancellor upon the master’s report.

The exceptions before the chancellor were argued on October 15,1926, and the cause was submitted to and taken under advisement by him. On January 22, 1927, the chancellor passed upon the exceptions and found that under the terms of the contract the amount of said advancements became due one year after the making of said contract and entered a decree.

It was error in the decree to order appellant to credit the complainant James M. Ellis for whatever sum of money has been or may be collected by appellant on the policy of insurance set out in the decree. In the proofs it was shown that appellant and appellee James M. Ellis each claimed the fund, and that it had never been paid to either of them. It will be in sufficient time to direct the application of this fund whenever it is in the hands of some person over whom the court has jurisdiction.

Appellant complains because the costs in the court below were taxed to appellant, and assigns error. This assignment of error involves very much the merits of the entire controversy. That appellant was strongly interested in purchasing the lands in question and attaching them to his preserve is beyond question, and he frankly so testifies. That appellant was more than generous in his desire to aid appellees was, without doubt, largely prompted by the desire to secure the title of these lands. That he believed that the deed in question gave him good title to the lands unless appellees repurchased within the year, we have no question. Appellees, also, were not lacking in guile. Appellee Ellis wrote appellant as late as March 24, 1922: “There is two more tracts of land joins me I think you can buy right, if you want to. John is still here watching the lake to see that it don’t run away.” What does he mean by the word “more” unless he refers to his own tract? Under date of February 27,1922, Ellis wrote appellant and made out a list of his total indebtedness and stated that all he owed was $18,019, and said: “If you want to take a second mortgage for the balance, say $6,000 (above mortgage of $12,500), for four years, they would both come due the same time. Then if I get ahead and can pay out all right. If not, I could sell the farm to you. I think some fellows at Galesburg and a bunch at Kingston want to buy the farm. I will want to talk with you before I try to sell. There are several fellows here who have done all the dirt they could, thought they could run me out. Now they will never get it, if me and you can deal. I will sell to someone else before they shall run me out, and if I can deal with you, we will head them off.”

On February 16, 1922, Ellis writes that he is in debt about $17,000 and will sell for $26,000 and says: “I am going to sell out the farm of 160 acres. I am writing to you first. We will give you the first chance at it.” On March 14, 1922, Ellis again writes appellant: “I got all my business affairs fixed up, and when you come back come down and we will talk things over. I want to get all my money matters in one person’s hands. I can go ahead and make money better.” We have already set out one of the most violent intrusions charged by appellees — that appellant nailed up signs warning trespassers to keep off from the farm and signed by appellant as owner. Ellis states further in this letter of March 14th: ‘ ‘ Since I put up them signs you gave me there has not been one car come in here hunting. I told everybody you leased my hunting ground.” This softens some of the sting from appellees’ charge of violence.

Appellees made different statements to appellant as to the amount of their indebtedness varying in amount, and their testimony is especially corroborative of the testimony of the witness Beckstead, whom they vouched for, that “people were wanting to get out of the drainage in 1922,” and the neighborhood has met with varying success.

Appellees, by bill and by testimony, urged that appellant never advanced to them or for them any of the principal of the loan named in said contract, and that the loan was to extend for a period of five years. On both issues appellees were defeated.

As to the costs, appellant should pay the costs up to the filing of the amendment to his answer, and as an accounting between these parties, growing out' of the nature of their transactions and the attitude of each, became necessary, the costs in the lower court should be apportioned equally between appellant and appellees. The costs in this court should be taxed to appellees.

For the reasons stated, the decree of the circuit court of Fulton county is reversed and the cause remanded, with directions to modify the decree to conform to the views expressed in this opinion, and to enter a decree finding that the appellees are indebted to the appellant, under the terms of the said deed and contract in the sum of $21,510.99, including interest thereon, on the sum of $20,250, computed on each item from the date of its payment, at the rate of 7 per cent per annum and in addition thereto, including said payment for drainage taxes, amounting to the sum of $2,056.24, with interest thereon at the rate of 5 per cent per annum from the date of the payment of said tax, and said interest to be computed to the date of said decree to be entered on the remanding order herein, and that by the terms of said decree, the appellees, complainants in said bill of complaint, be decreed to be in default, in the payment of said sums, and that, upon the failure of said appellees, complainants in said bill of complaint, to pay said sum and sums to the appellant, defendant, within 90 days from the entry of said decree, then that appellee’s said bill of complaint he dismissed for want of equity.

Reversed in fart and affirmed in fart, and remanded with directions.


text:
    John G. Gray, Defendant in Error, v. North America Mutual Union, Plaintiff in Error.
    Gen. No. 8,130.
    Opinion filed January 25, 1928.

      P. M. Hamilton, for plaintiff in error.
    Sumner & Reardon, for defendant in error.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

The president and secretary of plaintiff in error on May 16, 1925, purported to issue a certificate of membership in plaintiff in error, corporation, to one William Gray of Jerseyville, Illinois, which certificate recites that “in the event of death of said member entitles, John Gray of Jerseyville, Hlinois, named as Beneficiary to an amount not to exceed the sum of One Thousand Dollars on Class B certificates and Five Hundred Dollars on Class A certificates, Subject however to the conditions herein named and it is understood that any benefit mentioned in this policy is conditioned, that prompt and full payment by the MEMBER be made to the North America Benefit Corporation, at its office in Springfield, Illinois, of any and all contributions that may become due hereon pursuant to the provisions of the application for this policy and the By-Laws of this Corporation, AND PROVIDED FURTHER, that the holder of this contract shall have fully complied with the conditions and agreements contained in the application, and in this certificate and in the By-Laws of the North America Benefit Corporation hereinafter set forth.”

It is further alleged in the declaration: “And thereupon on, to-wit, the 16th day of May, 1925, the defendant made and executed its certain contract and delivered the same to the said William Gray, and thereby then and there in and by said contract for insurance the defendant promised and agreed to pay to the plaintiff, John G. Gray, upon the death of the said William Gray the sum of money set forth in said contract, the said sum being so payable by the defendant upon the terms and conditions in the said contract. ’ ’

It is averred that after the execution of said certificate and contract, on the 26th day of June, 1926, in the county of Greene and State of Illinois, the said William Gray departed this life, and that during his life the said William Gray did observe and comply with all of the provisions and terms of the contract on his part to be kept and performed by the terms thereof, and that he, the plaintiff (defendant in error) has at all times, since the death of said William Gray, kept, observed and complied with all of the provisions and terms of the contract on his part, by the terms thereof, to be by him kept and performed, and it is averred that plaintiff in error became liable to pay to the defendant in error the sum of $500, after alleging due and sufficient proofs of death. The declaration sets out the certificate in full and a copy of the by-laws of the corporation, among which is section two of article one as follows:

“Membership — Any person, male or female, between the ages of 6 months and 74 years, inclusive, at nearest birthday, of good moral character and in good health, if accepted by the corporation, may become a member of this Corporation by signing the application and paying a membership fee and one assessment in advance. ’ ’

Section three of article one is a follows: “Certificate — When an application is accepted by this corporation and the membership fee and one assessment in advance are paid, the Corporation will issue to such applicant a certificate, but no liability shall arise thereon against the corporation, nor any benefit be due to the applicant until the issuance of such certificate and its delivery to and acceptance by the applicant while such applicant is in good health.”

Section four of article one is as follows: “Application- — It is understood that a certificate is issued based on the fact that the answers in the application submitted are true, if it is found that the answers to any of the questions are untrue, then the entire contract becomes null and void.”

Defendant in error also filed the common counts. There was a plea of the general issue and plaintiff in error filed two special pleas, in which the application was set out in full, which contained the following provisions :

“I hereby declare and agree that I am strong and in good mental and physical condition, and that the above statements as to my occupation, age and physical condition are true, and correct, and are made to enable me to obtain a membership certificate in NORTH AMERICA MUTUAL UNION, of SPRINGFIELD, ILLINOIS.

“The age and condition of health as stated herein are warranties.

“In case of fraud or misrepresentations the liabilities of NORTH AMERICA MUTUAL UNION shall not exceed the amount paid in by the applicant.

“It is hereby provided and mutually agreed that this application shall be considered as part of the contract for membership and should this application be accepted and the certificate issued thereon, I hereby accept the by-laws and regulations with all amendments and additions governing the Union and hereby appoint and constitute A. C. Littlejohn, of Springfield, Illinois, to be my lawful attorney in fact, and in my stead, is hereby authorized and empowered to cast my vote at any meeting. The proxy shall continue in force until revoked by me by notifying A. C. Little-john by registered mail at least ten days prior to any meeting of the members.

“I affirm that I have read or heard read the foregoing questions and the answers are true.”

There was a trial by jury and a verdict and judgment in behalf of defendant in error in the sum of $475, and plaintiff in error has brought the record by writ of error to this court for review. Various assignments of error are made. For a full statement of the plans, purposes and methods of plaintiff in error corporation, reference is had to the case of Laughlin v. North America Benefit Corp., 244 Ill. App. 391. It is said that since the rendering of that opinion some minor changes have been made in the charter and bylaws of the corporation. It is noticeable that the span of life for membership has been much broadened to include infants 6 months of age, to citizens 74 years of age with no limitation upon their intelligence or lack of intelligence, or capacity to read or write, except that all are required to make truthful answers to a series of questions and to sign the application to secure membership.

It is assigned as error that the declaration does not state a cause of action, and that defendant in error did not charge or offer any testimony to show that the said certificate was issued and delivered to the applicant while such applicant was in good health. This was a condition precedent to defendant in error’s right to recover. (Hartsock v. Kaskaskia Livestock Ins. Co., 223 Ill. App. 433, 437; Laughlin v. North America Benefit Corp., supra.) However, plaintiff in error raised this identical issue in one. of its special pleas, and the rule is that although a material allegation may be omitted from a declaration, yet if a defendant, by a special plea, tenders an issue on the very allegation which was omitted in the declaration, and a replication is filed to said plea putting the same in issue, then such plea cures the omission in the declaration. (Wallace v. Curtiss, 36 Ill. 156; Rubens v. Hill, 213 Ill. 523, 537.)

The testimony in this case shows that the beneficiary, defendant in error, and one Dieter Damm, agent of plaintiff in error, made out the application in this case, Damm writing the answers to the questions and defendant in error signing the purported applicant’s name to the application, and the purported applicant, William Gray, never knew anything about it. The certificate was delivered to the defendant in error, who has made all the payments required to be made by the by-laws of defendant in error. The only knowledge that William Gray ever had that any such certificate was in existence, or that he was a member of the corporation is that defendant in error testifies that he thinks he showed the certificate to his father at one time, but he states that his father never had the paper, and the testimony is undisputed that the father, purported member, never gave his consent to joining the corporation. In this connection the following portion of the testimony of Dieter Damm, agent for plaintiff in error, is highly enlightening and morally of interest: ■

Q. “You say you had written a large number of applications for this Company — I ask you if it has been your custom with this Company to fill out these applications and have them signed in the same manner as this one.”
A. “Yes, sir.”
“ (Question objected to as improper by Defendant— objection sustained, and Plaintiff excepts to the ruling of the court.)
Re-cross Examifiation
“I stopped and talked with Gray on the day this application was made. Had application with me. ’ ’
Q. “Why did you not have him sign it while you were talking to him?”
A. “Because he didn’t have to.”
‘ ‘ The company gives the parties who take out the insurance the right to sign the parties ’ application.
“I could sign it myself but he was not related to me; people related to him could take out insurance; had the right to sign any application in any Mutual Insurance. Got that authority from the company, they told me to write anybody asking insurance on their parents. Littlejohn told me by letter. I have not got that letter, do you think I would hold a letter four years. Got that authority four years ago.”
Q. “He told you anybody could sign an application, it made no difference?”
A. “I said anybody could take out an application, not sign it, on their relations.”

Plaintiff in error on its motion for a new trial insisted that the verdict was not supported by the evidence, and it is assigned as error that the verdict and judgment are not supported by the evidence. Plaintiff in error now insists that no certificate of membership was ever issued and delivered to the said William Gray. This, defendant in error was required to prove under the plea of the general issue. We are of the opinion that the court erred in not granting a new trial.

Plaintiff in error, being a corporation not for profit, organized under the general law, had the right in its by-laws to fix and determine the rules to be complied with to attain membership, and one not complying with these rules does not become a member. Plaintiff in error is not an insurance company. Some light is thrown upon the nature of plaintiff in error’s organization by what is said in Peterson v. Manhattan Life Ins. Co., 244 Ill. 329, 1337:

“In the ordinary sense a fraternal order is not an insurance company. Fraternal organizations exist which have nothing in the nature of insurance, others which issue no certificate and yet pay a death benefit, others which issue certificates and pay death benefits to some of its members and not to others, and others organized for the purpose of benefiting the widows, orphans, relatives or dependents of deceased persons. The latter have some of the characteristics of insurance companies, the chief resemblance consisting in the fact that a sum of money is payable upon the death of the member in the one-case, the insured in the other, to the beneficiary. But the two classes of corporations are organized under different acts and for different purposes. A life insurance policy may be obtained either by the insured or anyone having an interest in his life, may be payable to his estate, to a creditor or to a beneficiary named, and upon his death the amount is an ordinary debt, subject to garnishment or other process of the law. The certificate of a beneficiary society may be obtained only by the member. It cannot be made payable to his estate, but only to his widow or children or some one belonging to the classes mentioned in the statute, and the amount of the benefit is not an ordinary debt, subject to the claims of creditors by any legal or equitable process, but is expressly exempt from appropriation to the payment of any debt or liability of a certificate holder, or of any beneficiary named in a certificate, or of any person having any right thereunder. The insurance company is an ordinary business corporation and its policies are obtained for ordinary business purposes, for investment, for security, for the benefit of credit, as well as for the protection of the family. The beneficiary society is organized not for purposes of profit. Its certificates cannot be used for business purposes. Its members can receive no pecuniary advantage from its certificates. Creditors cannot reach such certificates, and the only purpose of the society is the benefit of the widows or orphans of its members or persons within the other classes mentioned in the statute.”

In W. G. Press & Co. v. Fahy, 313 Ill. 262, 265, the court held:

“ A corporation not for pecuniary profit has a right to adopt rules prescribing the only mode in which membership therein can be maintained, and no one can rightfully claim membership who has not been admitted in the mode thus prescribed; nor has a court of equity any power to compel the corporation to issue a certificate of membership to an applicant who has not complied with such mode. (American Livestock Com mission Co. v. Chicago Livestock Exchange, 143 id. 210). The ownership of a certificate of membership does not constitute the holder a member nor entitle him to any rights as such, and the only way in which he can avail himself of such certificate is by tendering it in lieu of the prescribed initiation fee in case he is admitted to membership, or, in case his application is rejected, then by selling it for a consideration to some other person who may desire to become a member. (10 R. C. L. 1202.) A membership in an exchange for some purposes and in some aspects is regarded as property, while for other purposes it may be regarded otherwise. Although it is something more than a mere personal license or privilege, it is not property in the concrete or in the broad sense of that term. ’ ’

Under the by-laws of plaintiff in error and the holdings of the court, the purported applicant, William Gray, never made application to join plaintiff in error’s corporation, never did join it, and never was a member of the society or corporation of which defendant in error now claims the benefit. The application was a fraud, the signature of William Gray to the instrument fictitious, and because some one, claiming to act as president, and another, purporting to act as secretary, signed their names to a purported certificate, did not bring into being a new member of the corporation, in invitum, who had never applied for membership and who was in utter ignorance that he was riding a mythical goat. If the document in question, called an application, can be accorded any virtue or force, it must be construed as a speculative contract contrary to public policy and within prohibited lines as to wager agreements. The testimony of Dieter Damm tends to show that it was so used and considered. This construction of plaintiff in error’s method of admitting members is accentuated by its modified by-law to accept infants six months of age. Just how it is intended that they shall express their wish or intention to join plaintiff in error’s corporation, read and truthfully answer the questions asked in the application, and sign the same is not made clear. The interest of infants six months of age, in the welfare of widows and orphans and their next of kin, is no doubt of great public benefit, but just why those of a more tender age are excluded by plaintiff in error from this beneficent charitable work, speaking subjectively, we cannot understand. It has been the settled law of this State for two generations that a son, merely from the status of parent and child, did not have an insurable interest in the life of his father. (Guardian Mut. Life Ins. Co. v. Hogan, 80 Ill. 35; Schwerdt v. Schwerdt, 141 Ill. App. 389; Zeigler v. Illinois Trust & Savings Bank, 150 Ill. App. 85, 91; Dresen v. Metropolitan Life Ins. Co., 195 Ill. App. 292, 294; Bruce v. Illinois Bankers Life Ass’n, 207 Ill. App. 555, 558.)

Guardian Mut. Life Ins. Co. v. Hogan, supra, has been affirmed in Hawley v. Aetna Life Ins. Co., 291 Ill. 28, 30, where it is held: “The courts have uniformly held that one having no insurable interest in the life of another cannot procure a policy of insurance on such life, and the policy so procured is void at its inception. (Guardian Mutual Life Ins. Co. v. Hogan, 80 Ill. 35; Golden Rule v. People, 118 id. 492; Connecticut Mutual Life Ins. Co. v. Schafer, 94 U. S. 457; Warnock v. Davis, 104 id. 775; 3 Am. & Eng. Ency. of Law, — 2d ed. — 929.) ”

It has been held that one may effect insurance upon his own life and assign it to one having no insurable interest. (Guardian Mut. Life Ins. Co. v. Hogan, supra; Hawley v. Aetna Life Ins. Co., supra; Bloomington Mut. Benefit Ass’n v. Blue, 120 Ill. 121.) But a person cannot effect insurance on the life of another in which he has no insurable interest for the reasons as stated in Grigsby v. Russell, 222 U. S. 149, where the court said: “The ground suggested for denying the validity of an assignment to a person having no interest in the life insured is the public policy that refuses to allow insurance to be taken out by such persons in the first place. A contract of insurance upon a life in which the insured has no interest is a pure wager that gives the insured a sinister counter interest in having the life come to an end. And although that counter interest always exists, * * * the chance that in some cases it may prove a sufficient motive for crime is greatly enhanced if the whole world of the unscrupulous are free to bet on what life they choose. The very meaning of an insurable interest is an interest in having the life continue, and so one that is opposed to crime. And what, perhaps, is more important, the existence of such an interest makes a roughly selected class of persons who, by their general relations with the person whose life is insured, are less likely than criminals at large to attempt to compass his death.”

Plaintiff in error is not an insurance company, but the same principle of public policy applies to its certificates and contracts. The member, acting in his own behalf and voluntarily, may make such provisions of charity for his widow and orphans or next of kin as he may desire to make, but when others, without his knowledge or consent, undertake to direct his charities, based upon the period of his life in which their only interest welcomes a speedy death and their enjoyment of his involuntary bounty, such contracts are mere wagers and gambling contracts and void at their inception. In the opinion of this court defendant in error did not establish that William Gray ever became a member of said corporation, and the certificate issued constituted a mere wager and gambling contract and was void at its inception. Under the proofs submitted, defendant in error in any event was not entitled to recover any greater sum than he had paid in to said corporation. Other issues are raised but it would serve no useful purpose to extend this opinion in their consideration. .

For the reasons stated, the judgment of the county court of Jersey county is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Beversed and remanded.