author: Mr. Justice Kerher

text:
    Melville N. Rothschild, Appellee, v. Village of Calumet Park, Appellant.
    Gen. No. 34,715.

      Opinion filed May 19, 1931.
    Rehearing denied May 29, 1931.
    W. Otto Wielgorecki, for appellant; Walter F. Briody, of counsel.
    John W. Creekmur, for appellee; Robert N. Erskihe and D. E. Hoopingarner, of counsel.
   Mr. Justice Kerher

delivered the opinion of the court.

Melville N. Rothschild, complainant, filed a bill against the Village of Calumet Park, defendant, for an accounting with respect to certain special assessments and for an injunction. After issue joined the cause was referred to a master to take testimony and report his conclusions of law and fact. The master filed his report, in which he recommended that a decree be entered requiring the defendant to pay complainant the amount due upon the bonds owned by complainant; that defendant be required to complete its records with reference to the collection' of instalments of special assessments so as to show the status of the moneys collected and the delinquent assessments and that defendant - be required to institute appropriate proceedings to enforce the payment of delinquent assessments. Objections to the report were ordered to stand as exceptions. There was a hearing on the exceptions, which were overruled, and the court on July 28, 1930, entered a decree in which he adjudged and decreed that complainant have and recover of and from the defendant the sum of $30,904.45 together with interest at the rate of five per cent per annum from the date of the decree, and judgment was accordingly entered against the defendant; that defendant shall forthwith pay to complainant any and all moneys that it may have and is holding to the credit of any of the several instalments of said special assessments according to the collections made by the defendant and covered by the accounting made, in proportion to which the amount of complainant’s bonds and coupons may bear to the total amount of bonds and coupons respectively remaining outstanding as against the said several instalments; and that any sums so- paid shall be credited only upon the aggregate judgment hereby entered; that judgment be entered upon each and all of the several bonds and coupons of the complainant for the amount and to the extent only found by this decree to be due and owing upon said bonds and coupons, and that said bonds and coupons shall remain outstanding as the valid and subsisting obligation of the defendant to the extent of the balance of the face value thereof over and above the amount for which judgment is so entered, but payable with interest at five per cent per annum from its date of maturity thereof only out of the funds collected and received by the defendant on account of and as the proceeds of the respective instalments of said special assessments subsequent to the collections accounted for in these proceedings; . . . that the defendant shall pay to complainant all moneys which may be collected and received subsequent to the accounting herein, by said defendant on account of collections of and from said several instalments of said special assessments out of which complainant’s bonds and coupons are payable, in the proportion which the amount of complainant’s bonds and coupons bear to all of the bonds and coupons remaining outstanding and payable from the said several instalments of such special assessments; that the defendant shall complete its records pertaining to the collection of all the instalments of all of the said several special assessments, so that the collection records shall show all collections that have been made by or in behalf of the defendant whether by the village collector or by the county collector and county treasurer either by voluntary payment or by tax sale and as to each separate lot, piece or parcel of land against which assessments have been levied, and to show the amount collected on each instalment and the amount collected for interest with each instalment and the date of payment, and so that its records may show the present status of the moneys collected and amounts remaining delinquent for each separate lot, piece or parcel of land assessed; that the defendant shall institute and prosecute appropriate proceedings to enforce the payment of delinquent and unpaid assessments and all instalments thereof by foreclosure proceedings against each and all of the lots, pieces and parcels of land assessed for said several improvements; that the defendant shall appropriate in the year 1931 by ordinance in accordance with the laws of Illinois, an amount sufficient to pay the balance then remaining due and unpaid on account of the judgment entered hereby against the defendant together with an amount estimated to be sufficient to pay interest upon such balance from the date of this decree up to July 1,1932; and said defendant shall report to this court as of the first day of the first fiscal year of the defendant for the year 1931, the balance of said judgment then remaining unpaid with the amount so estimated to be sufficient to pay interest thereon and for which such appropriation is to be made; and the defendant shall pass any and all necessary ordinances and take such further proceedings as may be required under the laws of Illinois to levy sufficient taxes to meet the appropriation so made in the year 1931, and to collect such taxes thereafter in due course of law; and the defendant shall collect such taxes levied in accordance with the terms of this decree, and pay and deliver all of such taxes to the complainant on account of this judgment and decree, and such payment shall be made from month to month as such taxes may be collected and received by defendant; and this court does hereby expressly retain jurisdiction of this cause for the purpose of enforcing this decree, compelling the appropriation of funds and the levying and collection of taxes in accordance herewith and the payment of the judgment hereby entered, requiring the payment of the balance remaining upon the bonds and coupons of the complainant out of funds collected and applicable thereto, compelling the completion of the records of said defendant in accordance with the decree and compelling the institution and prosecution of foreclosure proceedings, all at the times and in the manner herein or hereinafter provided. This appeal is prosecuted upon that decree.

The defendant is a municipal corporation and prior to November 19, 1926, was known as the Village of Burr Oak, located in Cook connty, Illinois; it caused to be levied certain special assessments for public improvements, and issued bonds to anticipate the collection of instalments of said special assessments which bear interest at the rate of 5 per cent per annum evidenced by coupons attached to the bonds, the earliest maturity of the bonds being December 31, 1922, and the latest being December 31, 1930. The complainant is the owner of said bonds aggregating original face value of $40,500 issued by defendant to anticipate the collection of certain instalments of special assessment Numbers 2, 6, 11, 12, 13 and 14. The bonds so owned by plaintiff are payable solely out of the respective instalments of said special assessments when collected; all proceedings and the issuance of said bonds were had and done pursuant to the Local Improvement Act, Cahill’s St. ch. 24, ¶ 120 et seq.; pursuant to said Local Improvement Act, the first instalment of special assessment Numbers 2 and 6 fell due, became payable and were in fact put in collection by defendant in 1920; the first instalments of special assessments Numbers 11, 12, 13 and 14 became payable and were put in collection in the year 1921, and the remaining instalments of said special assessments fell due annually thereafter until all have matured; as the instalments matured, the village collecter received payments of portions of said instalments, with interest, from the owners of the property, and also received certain moneys from time to time from the county collector in payment of certain of said instalments which have been paid to the county collector, and the said village collector has certified certain pieces of • said lands as delinquent to the county collector. Beginning with the year 1920, the defendant has collected annually a large amount of money on each of the instalments of said special assessments, in anticipation of which collections the said improvement bonds were issued, and has made payments of certain of said bonds not owned by complainant, but has failed to make payment on the bonds owned by complainant, and has failed and refuses to pay complainant his distribntive share of the moneys collected on the instalments of the assessments Numbers 2, 6, 11, 12, 13 and 14. It further appears that defendant has not kept proper records of such payments as have been made on said several instalments of either principal or interest; that certain of the records kept by defendant show that certain moneys have been collected, but do not show what disposition has been made of such funds; that no separate records have been kept by the defendant showing the collections of interest on said special assessments, or the several instalments thereof ; that said records show that on certain of said assessments, instalments have .been collected, but the proportionate part of the collections have not been paid out on the bonds held by complainant, to which such collections should have been applied; that all of the bonds owned by complainant were presented for payment to defendant in the spring of 1924, 1925, 1926, 1927 and 1928, and a demand made for payment of all of said bonds and coupons or the proportionate amount then due thereon; that the total par value of said bonds issued against all of said special assessments amounted to $108,900; that the amount of money collected and the amount chargeable to defendant for which it is liable for public benefits on the instalments of said special assessments was the sum of $63,684.57; that the proportionate amount of principal with interest to February 15, 1930, which should have been paid to complainant, amounted to $27,963.03 while only $568 was paid to him on account of the bonds held and owned by complainant.

It further appears that the books kept by the defendant consist only of the records of the village collector as to each special assessment, which show only the payment, if paid, of each instalment and the interest, or if unpaid, that it has been certified delinquent to the county collector. The village collector’s records are not completed to show subsequent collections by the county collector. In order to ascertain the total of all collections of all instalments it was necessary to examine not only the records of the village collector, but the delinquent list and the judgment sale, redemption and forfeiture records for Cook county for each of the several years in which the several instalments of said assessments have been collectible. To determine whether all instalments of an assessment against any one lot have been paid, where payment has not been made to the village collector, it was necessary to examine the records of the county collector for all of the several years in which the several instalments had been certified delinquent by the village collector. This condition permitted errors and omissions to occur in the delinquent list from year to year without detection and permitted payment to the village collector of delinquent instalments while prior instalments remained delinquent. The defendant has withdrawn certain instalments from the annual tax sale, but it did not appear that any action had been taken by the defendant to enforce payment of delinquent assessments. A large proportion of each instalment of the several assessments remained uncollected and it did not appear that the defendant purchased any delinquent lands at the several* annual tax sales or that defendant had taken any action to enforce payment of delinquent instalments of the assessments.

Defendant’s counsel urged only three points as grounds for a reversal of the decree: (1) that there are no grounds for equitable relief; (2) that there is not sufficient evidence upon which to base the amount found due complainant, and (3) that the statute governing the payment of local improvements bonds does not contemplate prorating among the bondholders. As to the first contention, the rule is well settled that a party cannot resort to equity for relief when he has a complete and adequate remedy at law. This rule is not disputed by the complainant, but it is contended that the bill alleges, and the facts prove, that the complainant is entitled to equitable relief for the reason that the instant case involves a trust fund of which the defendant is trustee. It has been held in Howell v. Moores, 127 Ill. 67, 78, that the enforcement of trusts is peculiarly within the province of a court of equity, and says (p. 79):

“A case, which has for its object the enforcement of a trust, is a case in equity. . . .

“The jurisdiction of a court of equity for enforcing trusts is not taken away by the fact that the party has a remedy at law, especially where the party seeking relief is entitled to a discovery, or where the trustee is bound to state an account of the trust fund and its proceeds.” See also People v. Bordeaux, 242 Ill. 327, and Dorenkamp v. Dorenkamp, 109 Ill. App. 536.

“Where a trust relation exists between parties, the cestui que trust is entitled to a complete accounting from the trustee, in which all data in the trustee’s accounts, which it is his duty to keep, should be furnished, .. . . An accounting is a statement of receipts and payments by a trustee concerning the estate intrusted to his care, the detailed statement of its administration while in his hands, what has been received and from what sources, and the balance, if any, remaining.” (26 R. C. L. section 252, p. 1387.)

And it has been held that the proceeds of special assessments constitute trust funds issued in payment for the improvement. (Conway v. City of Chicago, 237 Ill. 128; Wells v. Village of Wilmette, 193 Ill. App. 30, 39; People v. Flynn, 265 Ill. 414, 427; Schoden v. Schaefer, 184 Ill. App. 456, and Harrold v. City of East St. Louis, 197 Ill. App. 121.) It is, however, suggested by defendant’s counsel that the relief sought is purely legal and that complainant has an adequate remedy at law. From the facts, as before stated, it clearly appears that the accounts involved are numerous and complicated, and under such a state of facts, equity will entertain jurisdiction. It does not follow, because a case is one in which a remedy at law is afforded, equity will not also take jurisdiction of the same state of facts to afford the same redress. Where the remedy in equity is more adequate because of some special circumstances, the jurisdiction of equity will be sustained. (Warfield-Pratt-Howell Co. v. Williamson, 233 Ill. 487; Mayr v. Chesman & Co., 195 Ill. App. 587; Cordell v. Solomon, 234 Ill. App. 430, and People v. Small, 319 Ill. 437, 445.)

It is next contended that there is not sufficient evidence upon which to base the amount found due complainant, because the computations of principal and interest are erroneous. In the case of Wells v. Village of Wilmette, supra, it was held that it was the duty of the treasurer of a municipality to keep an account of the receipts of the principal and interest of the several instalments of a special assessment fund and of the amount of bonds outstanding against the instalments, and to prorate the payment of interest where necessary even though he does not know who owns the outstanding bonds. The record in the instant case discloses that the complainant offered in evidence the records of the village collector, showing the collection of assessments, together with the delinquent lists and the judgment, sale, redemption and forfeiture records of the county collector. The records of the village collector pertaining to these assessments cover a total of 893 pages. The records of the- county collector comprise 68 exhibits and each exhibit consists of a number of pages. When this evidence was presented to the master it became his duty to ascertain the ultimate fact, namely, the totals actually received by the defendant as to each instalment of each assessment for both principal and interest, and the services of a public accountant were had who made an examination of the records kept by the defendant and the county collector, and said accountant testified that he has computed the interest collected each year with each of the instalments of the assessments, and from the computation so made the court arrived at the amount found due by the decree. No testimony was offered by the defendant. We are of the opinion from this state of the record that the chancellor had sufficient evidence before him upon which to base the decree.

Finally it is contended that the statute governing the payment of local improvement bonds does not contemplate the prorating among the bondholders of the collections made by the defendant, and that the act makes it the duty of the defendant to use the collections on hand from time to time to retire in full as many bonds as it is able to pay, and he cites section 43 of the Local Improvement Act, Cahill’s St. ch. 24, ¶ 169. We cannot agree with this contention. In Wells v. Village of Wilmette, supra (p. 42), the court said:

“And the rule seems to be firmly established that it is the duty of a trustee, in case the fund in his possession is insufficient to satisfy all the claimants having equal rights, to prorate the fund among them. In Colby v. Copp, 35 N. H. 434, 436, it is said: ‘But if he (the trustee) holds the different claims among which he is by law entitled to make the appropriation, not in his own right but as agent or trustee for others, he owes to them the duty to make a just and reasonable application of the money according to their respective equitable claims.- - Equality .is equity ordinarily between parties, who stand in similar relations. The general rule, therefore, clearly should be, that when an agent or trustee receives money generally, and he holds claims of different persons, to each of whom he is under the same obligations, he should apply the money ratably to the discharge of all the claims, and this obligation would be in no way affected by the circumstance that if the debts were all .his own, he would have the undoubted right to apply the money to either of them at his election.’ In Hewitt v. Hayes, 205 Mass. 356, 365, the court says: ‘If the total amount that can be held by all the claimants who are entitled to a charge upon the fund thus determined exceeds the amount of the fund, then that amount is to be divided among them in proportion to the amounts of their respective charges. ’ In 27 Cyc., page 1765, it is stated: ‘Several debts or, claims, all equally secured by the same mortgage, are as a general rule entitled to share ratably in the proceeds of its foreclosure, whether they are all held by the mortgagee,, or belong to as many different owners, . . . And the rule is applied as between the holders of a series of bonds all secured by the mortgage, and is also applied for the benefit of holders of interest coupons detached from the bonds.’ In Dillon on Municipal Corporations, vol. 2 (5th Ed.) p. 1390, sec. 893, that author says: ‘Under special improvement bonds the municipality was held to be a statutory trustee for collection, bound to the exercise of due diligence to collect according to law, enforcing the same through municipal machinery as an. agent of the owners of the bond and answerable for failure to perform this duty, or not paying over, or failing to pay the money collected. . . . None of the bondholders has any right of priority in the fund derived from the assessments. This is a trust fund pledged to the payment of all of the bonds, and the right of the holder of a part of the bonds is only to such portion of the fund realized as the sum of Ms bonds bears to the entire amount of the issue of bonds.’ ”

We have considered and answered all of the points raised and argued by the defendant and conclude that the errors assigned do not warrant a reversal of the decree. It is therefore affirmed.

Affirmed.

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


source: Caselaw Access Project

author: Mr. Justice Keener

license: Public Domain

text:
    Hugo Filippi, Appellant, v. Samuel Cole and B. Leo Steif, Individually and as Copartners, Trading as Cole & Steif, Appellees.
    Gen. No. 34,733.
    Opinion filed May 19, 1931.

      Loesoh, Scofield, Loesoh & Richards, for appellant.
    Gteorge A. Schneider, for appellees.
   Mr. Justice Keener

delivered the opinion of the court.

This is an appeal from a judgment in favor of Samuel Cole and B. Leo Steif, defendants, in an action by Hugo Filippi, plaintiff, to recover the amount of compensation paid by plaintiff to Carl Lighthall, one of his employees, for an injury arising out of and in the course of his employment, but which it is claimed was caused by the sole negligence of defendants. In other words, this was an action by an employer against a third party on the liability provided for by the first part of section 29 of the Workmen’s Compensation Act, Cahill’s St. ch. 48, ¶ 229. Defendant demurred generally, which was sustained, plaintiff abiding by his declaration, judgment of nil capiat was rendered against plaintiff.

The defendants contend that it is necessary for plaintiff to set out in the declaration that his employee had given notice of the accident within 30 days; that a claim for compensation was made within six months after the” alleged accidental injuries were sustained; that the declaration should recite facts showing the kind of enterprise plaintiff was engaged in or that defendants were engaged in; allege the weekly wages of Lighthall and contain a copy of the award, agreement or settlement contract.

The first count of the declaration alleges that on March 3, 1927, plaintiff was within, under and subject to the Workmen’s Compensation Act, Cahill’s St. ch. 48, ¶ 201 et seq., engaged in making alterations and repairs in and on a building in the City of Chicago, and Carl Lighthall was in the employ of plaintiff, engaged in loading two doors into an elevator propelled by electricity in said building, and in the exercise of ordinary care for his own safety, and while so engaged, within, under and subject to said Workmen’s Compensation Act, defendants were the owners of and in possession of said building and said elevator and were operating said elevator within, under and subject to said Workmen’s, Compensation Act, etc., then and there negligently caused and permitted the elevator and its machinery, etc., to be and become out of order, defective and unsafe to ride upon and as a result thereof said elevator with said Carl Lighthall therein suddenly dropped downward and Carl Light-hall was injured, etc., and he was required to spend for physicians, hospitals, etc., in endeavoring to be cured of his injuries the sum of $350; that the said injuries to Lighthall were accidental injuries and arose out of and in the course of his said employment; that said injuries were not- proximately caused by the negligence of plaintiff or any of its employees; that because of the premises and the facts and circumstances hereinbefore set forth and because plaintiff and Light-hall complied with the provisions of said Workmen’s Compensation Act, plaintiff became liable under the provisions of. said Workmen’s Compensation Act to pay Lighthall compensation and money in the amount of $350, and plaintiff did pay said sum of money to Lighthall pursuant to awards of the Industrial Commission of the State of Illinois under said Workmen’s Compensation Act and pursuant to the provisions of said Workmen’s Compensation Act.

The second count was .substantially the same as the first, except that it alleged that the defendants invited plaintiff’s employee to use the elevator in question. The third count is substantially the same as thé first and second counts, except that it alleged that defendants operated the elevator, and plaintiff used it in and about his work with the knowledge and consent of defendants.

Plaintiff contends that the right of action is simply the employee’s cause of action transferred to the employer, with no other conditions to its enforcement than the requirement of freedom from contributory negligence on the employer and a limitation on the amount of the recovery, and that, so construed, the action is one for injuries to the person. This was the view of the law taken by this court in Hartman Furniture & Carpet Co. v. Chicago City Ry. Co., 218 Ill. App. 647. We considér this analysis of the right of action as fully supported by the decisions of the Supreme Court in Taylorville v. Central Illinois Pub. Serv. Co., 301 Ill. 151; Bauer v. Rusetos & Co., 306 Ill. 602; Carson, Pirie, Scott & Co. v. Chicago Rys. Co., 309 Ill. 346, and Schlitz Brewing Co. v. Chicago Rys. Co., 307 Ill. 322, in which case the court said that the right of action conferred on the employer by section 29 is the same right of action the employee had before the adoption of the Act, transferred to the employer. The declaration in the instant case stated a cause of action for wrongful injuries to plaintiff’s employee, and alleged ultimate facts showing that the injured person, at the time of the injury was an employee, that an award had been made by the industrial commission in favor of the employee and against the employer, the amount of the award, and that the injury was not proximately caused by the negligence of the employer, and the demurrer should have been overruled.

The judgment of the circuit court will be reversed and the cause remanded with directions to overrule the demurrer to the declaration.

Reversed and remanded with directions.

Scanlah, P. J., and Gridley, J., concur.


author: Mr. Justice . Keener

text:
    Philip Goldberg, Appellant, v. Jacob Hoffman et al., Defendants. Chicago Trust Company, Appellee.
    Gen. No. 35,096.
    Opinion filed May 19, 1931.
    Lester Plotkin, for appellant.
    Depress, Buckingham, Jones & Hoffman, for appellee; Vincent O’Brien and John Merrill Baker, of counsel.
   Mr. Justice . Keener

delivered the opinion of the court.

This is an interlocutory appeal from an order entered January 15, 1931, extending a receivership to protect the interests of the Chicago Trust Company, complainant in another cause pending in the superior court of Cook county. September 18, 1930, Philip Goldberg, complainant in the instant case, filed his verified bill in case No. 524249, to foreclose a trust deed dated January 12,1930, on the premises involved in this cause, which bill alleges that the trust deed foreclosed by the complainant (appellant) is subject to a prior incumbrance of $325,000, and on September 24, 1930, the court appointed Herbert M. Magnuson receiver. The petitioner (appellee) served notice on the solicitors for Philip Goldberg, complainant (appellant), that on January 15, 1931, it would appear before the chancellor and present a petition praying that an order be entered in the instant case extending the receivership to protect its interests in the premises. The petition is not verified and alleges that on November 25, 1930, petitioner filed in the superior court of Cook county, against Jacob Hoffman and others in case No. 527736, its bill of complaint seeking the partial foreclosure of trust deed Document No. 10166587, made by Jacob Hoffman and Ida Hoffman, his wife, to the National Bank of Chicago, as trustee, conveying the real estate and premises described in the bill of complaint in this cause; that the said trust deed so sought to be foreclosed in case No. 527736 is a valid and subsisting first and prior lien upon the said real estate and upon the rents, issues, income and profits thereof, which in and by said trust deed are expressly conveyed and pledged to secure the payment of the indebtedness therein described; that petitioner, as complainant in said cause, is the owner and holder of $8,000 of bonds and $9,750 of interest coupons, all of which came due under the said prior lien trust deed on' October 1, 1930, which bonds and coupons remain due and unpaid and that by reason of the premises petitioner elects to make operative as a specific charge upon the rents, issues, income and profits of said premises the conveyance and pledge thereof contained in said trust deed; that on September 24, 1930, Herbert M. Magnuson was by order of this court appointed receiver of and for said real estate and of and for the rents, issues, income and profits thereof, and that he is» now the duly appointed, qualified and acting receiver in this proceeding, and petitioner avers that the said order heretofore entered in this proceeding appointing said receiver should be extended to protect the interests of petitioner in and to said real estate and in and to the rents, issues, income and profits thereof, hereafter accruing, as complainant in said cause No. 527736.

Based on this unverified petition, it was ordered that the order appointing Herbert M. Magnuson receiver of and for the real estate described in the bill of complaint and of and for the rents, issues, income and profits thereof, be extended to protect the interests of the Chicago Trust Company, complainant in said cause No. 527736.

The appellant contends that “an order extending a receivership to protect the interests of other incumbrances is equivalent to an original appointment and must comply with all of the requirements of an original order of appointment,” and one who petitions for the extension of a receivership must find himself in the same situation as an original petitioner, that is, the petitioner must have a defaulted obligation, secured by an incumbrance on real estate, which must subject the rents, issues and profits as security for his lien; the property involved must be scant and meager security; the maker of the-security must be insolvent and that waste is being committed; that an original appointment would not be made unless the above facts are averred; that the petition in the instant case is silent as to the sufficiency of the property as security for the incumbrance and makes no mention of the financial condition of the makers of the paper secured by its incumbrance; that no charge is made that waste is being committed; that the order appealed from does not mention the giving of bond and no reason is assigned for failure to require bond. This identical contention was made in the case of Cohn v. Martin, 258 Ill. App. 248, and decided adversely to appellant’s contention; in that case we said (p. 250):

“The only statutory provision that bears upon the present contention, and the one upon which appellant must necessarily rely, is sec. 1, par. 55, ch. 22, Cahill’s Ill. Rev. Stat. (1929), . . . The statute provides for the giving of a bond only on the ‘appointment’ of a receiver, and it specifies only one person who is required to give a bond, namely, the applicant for the receiver. The appellee did not apply for the appointment of a receiver, nor does the order appoint a receiver, nor does it extend the receivership to additional property, nor does it in any way affect the ‘appointment’ of the receiver that has already been made. ’ ’

It is also contended that the petitioner (appellee) was not entitled to the extension order because it was not a party and did not become a party to the instant cause. We think the contention is without merit. The lien of the complainant (appellant), second mortgagee, on the rents was always subject to the prior lien, pledge and conveyance thereof evidenced by the first mortgage. Any exclusive right that the appellant had to rents through the appointment of a receiver at his instance is predicated not on his second mortgage contract but on his superior diligence. Such exclusive right continues, of course, only so long as the prior mortgagee refrains from asserting his prior right. (Cross v. Will County Nat. Bank, 177 Ill. 33, 39.) The court appointing the receiver has the power to determine priority and to give each party protection. (Coleman v. Wrobel, 255 Ill. App. 622.)

“All the authorities sustain the proposition that, when a court of equity acquires jurisdiction of a cause, and appoints a receiver to take charge of the property involved, then no other court of co-ordinate jurisdiction has any power or authority to interfere or meddle with the property in the hands of the receiver, but must leave the court appointing the receiver untrammeled in its administration of the same, as the law directs, regardless of whether the original appointment was or was not erroneous. This rule is essential to the orderly administration of justice, and to prevent unseemly conflicts between courts whose jurisdiction embraces the same subjects and persons, and has no reference to the supremacy of one tribunal over the other, nor to the superiority in rank of the respective claims, in behalf of which the conflicting jurisdictions are invoked. Nor is the rule restricted in its application to cases where property has been actually seized under judicial process before a second suit is instituted in another court, ...” (23 Ruling Case Law, sec. 71.)

The appointment of the receiver in the instant case deprived the appellee (petitioner) of the power which it would otherwise have possessed to choose a forum in which to assert its rights and compelled it to resort to the court in the instant case. Here the demand that the receivership be extended to protect its interests could be acted upon only by the court appointing the receiver. The appellee (petitioner), in pursuance of the, only course open to it, filed in the instant case its petition setting forth the facts showing its right to the income and containing ample prayers to entitle its claim to recognition. Parties in interest may assert their rights by intervention, notwithstanding that they may be neither necessary nor proper parties complainant or. defendant to the main cause in which the receiver has been appointed. (Coleman v. Wrobel, supra; Sage v. Memphis & L. R. R. Co., 125 U. S. 361; Minot v. Mastin, 95 Fed. 734; Odell v. Batterman Co., 223 Fed. 292; Atlantic Trust Co. v. Dana, 128 Fed. 209.)

We are of the opinion that there was no error in entering the order of January 15, 1931, extending the receivership, and the order is affirmed.

Affirmed.

Scahlak, P. J., and Gridley, J., concur.


author:
Mr. Presiding Justice
      Hebel, J.,

text:
    Minnie Shepard, Appellee, v. Kensington Steel Company et al., Defendants. Appeal of Ben T. Wright, Inc., Appellant.
    Gen. No. 34,587.
    Hebel, J., dissenting.
    Opinion filed June 15, 1931.

      Church, Haft, Robertson & Crowe, for appellant ; Burt A. Crowe, of counsel.
    Augustine J. Bowe and William J. Bowe, for appellee.
   Mr. Presiding Justice

Wilson delivered the opinion of the court.

The plaintiff, Minnie Shepard, brought her action against Ford Motor Company, Ben T. Wright, Inc., and Kensington Steel Co., to recover damages for an injury sustained by reason of the alleged negligence of the defendants.

From the facts it appears that the Kensington Steel Co. had purchased from its codefendant, Ben T. Wright, Inc., a Ford truck, .which it paid for in full on the day of the purchase and which was driven away from the place of business of the Ben. T. Wright, Inc., at 1111 North Clark street, by one Olson, an employee of the Kensington Steel Co. The car had been driven a distance of about six miles and was proceeding at a rate of speed of about eight miles an hour, when one of the wheels of the truck became detached and continued rolling down the pavement on State street in the City of Chicago, and struck the plaintiff who was standing at the southeast corner of State street, waiting for a car. The truck was supposed to have been a new truck which had recently been purchased by Ben T. Wright, Inc., the retail dealer, from the Ford Motor Company. The wheel was presumed to have been fastened to the axle with five bolts and nuts, regular standard Ford equipment. There is testimony in the record to the effect that the defect was one which an ordinary examination by a purchaser would not disclose.

For the purpose of the argument, we are assuming that the Ford car was defectively constructed; that this fact should have been discovered by a proper inspection, and that the vendor would have been liable to the purchaser or its employee while driving the car because of its defective condition and construction.

Upon the trial of the cause the trial court directed a verdict of not guilty as to Ford Motor Company and the jury returned a verdict finding the Kensington Steel Co. not guilty. At the same time a verdict was returned in favor of the plaintiff and against the defendant Ben T. Wright, Inc. and plaintiff’s damages assessed at $5,000. Upon a remittitur of $1,500 judg-* ment was entered for the plaintiff and against the defendant Ben. T. Wright for $3,500, from which judgment this appeal has been prayed and perfected.

The only question involved appears to be whether or not there was such a causal relationship between the plaintiff and the automobile dealer as to create a liability in her favor against the defendant, the dealer who sold the car to the Kensington Steel Co.

The general rule is well stated in Cooley on Torts, Vol. 2, 3rd Ed. page 1486, as follows:

“The general rule is that a contractor, manufacturer, vendor or furnisher of an article is not liable to third parties who have no contractual relations with him for negligence in the construction, manufacture or sale of such article.”

A clear and concise expression of this rule has been laid down in the case of Garland v. Boston and Maine Railroad, Am. Ann. Cases, 1913, E, page 924:

“It has usually been held that facts which create a relation and therefore a duty as to one, do not establish the same obligation to all mankind. To be within the right created, the complaining party must show facts which make the reason .for claiming a relation applicable to him. The proposed rule is an abandonment of this idea and seeks to make the obligation to use care, which springs from the relationship, a duty owed to everybody who by chance comes within the range of the influence of the act complained of. The argument is that since the act is one the defendant shonld have refrained from doing, it is just that he be responsible for all its consequences. ‘ But this is a partial view of the situation only. The act is not wrongful in itself. 'Its wrongfulness is found in its probable effect upon others who are in some relation to the actor.j Remove these related parties from the situation and the act is entirely lawful. As to the unrelated parties the happening is a pure accident.”

The leading English authority in support of this rule is contained in Winterbottom v. Wright, 10 Meeson & Welsby 109. This was an action by a driver of a stage coach against a contractor who agreed with the postmaster general to provide and maintain a-- certain vehicle in repair for the purpose of conveying mail over and along a certain designated route. While it was being driven by the plaintiff in that case, it broke down and the driver was injured and brought his action to recover because of the defective construction of the coach. The court in its opinion said: “ . . . if the plaintiff can sue, every passenger, or even any person passing along the road, who was injured by the upsetting of the coach, might bring a similar action. Unless we confine the operation of such contracts as this to the parties who enter into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue.”

In the case before us there was no contractual relation between the dealer who sold the Ford truck to the Kensington Steel Co. and' the plaintiff. It is argued and insisted that, when the dealer permitted the truck to go out upon a public street in its defective condition, it permitted the use of an agency, in the hands of the vendor, which was dangerous to any person upon the street over, upon and along which the truck was proceeding. Morally this might be true, and there would appear to be an obligation on the part of the vendor of a machine, under such circumstances to the public at large. We are unable to see, however, any legal obligation existing on the part of the vendor, the defendant here, toward the plaintiff. If the law should recognize such an obligation as a legal obligation, the vendor of an automobile would be bound not only to the purchaser and those who used the machine, but to the entire public and would open the door of litigation to such an extent that it might never again be closed. Its results would be far-reaching and in most instances remote. While the remoteness might be controlled as a question of law by the court, nevertheless, this very question of remoteness, in itself, would be one involving innumerable actions, and open the door in every instance to permit a question of fact instead of law.

The law has already recognized many exceptions to the rule as in the case of the sale of poisons, explosives and deadly weapons, and things of like character which are inherently dangerous in themselves and liable to injure or destroy. The exception has also recognized the liability of manufacturers of foodstuffs to those who purchase or consume edibles containing poisonous substances or dangerous instrumentalities which have entered into their makeup by reason of the negligence of the manufacturer.

The courts have also extended the rule as announced in the English case of Winterbottom v. Wright, supra, so as to include not only the vendee, but those using the instrumentality. The rule in New York State has been extended and defined, as extended, in MacPherson v. Buick Motor Co., 217 N. Y. 382. In that case the manufacturer of automobiles sold one of its machines to a retail dealer who, in turn, resold to the plaintiff. While there was no direct contractual relation between the manufacturer and the purchaser, nevertheless, the purchaser was allowed to recover for injuries sustained by reason of the collapse of the machine while he was in the act of driving it. It was held that the manufacturer was liable because of the fact that it should have been known that when it sold the car to a dealer, that it was for the purpose of a resale and use by the vendee from the dealer. It must have been foreseen by the manufacturer that the automobile was to be used as such and, in permitting a defective machine to be placed upon the market, it was under an obligation to such prospective purchaser or user to see to it that the automobile was safe for the purpose intended. As stated by the court in its opinion, “There is no break in the chain of cause and effect. In such circumstances, the presence of a known danger, attendant upon a known use, makes vigilance a duty.”

To the same effect is Olds Motor Works v. Shaffer, 145 Ky. 616; Johnson v. Cadillac Motor Car Co., 261 Fed. 878; Colbert v. Holland Furnace Co., 333 Ill. 78. In the latter case it appears that the Holland Furnace Co. installed a hot air furnace in the home of one Colbert, the husband of the plaintiff who brought the action. A register was installed in the house for the purpose of allowing the entry of air into the kitchen. While the plaintiff was working in the kitchen she stepped on the grating or register, which gave way, and she was injured. The court in its opinion says:

“Defendant in error did not sign the contract and is not mentioned therein and cannot be regarded as a privy to the contract. In view of the contractual relation between Colbert and plaintiff in error, the latter invokes the general rule that ‘where an independent contractor is employed to construct and install any given work or instrumentality and has done the same and it has been accepted by the employer and the contractor discharged, he is no longer liable to third persons for injuries received as a result of defective construction or installation. ’ That this is the general rule is not questioned. The rule, however, has several exceptions, and the question to be here determined is whether, under the facts as shown by the evidence in this case, it comes within any of such exceptions. One of the well recognized exceptions to the rule is, that one who supplies a thing for such use by others that it is obvious that any defect will be likely to result in injury to those so using it is liable to any person who, using it properly for the purpose for which it is supplied, is injured by its defective condition. . . . The grating was installed for use as a part of the floor of the kitchen and was manifestly intended for the use of any of the inmates of the household, and especially of defendant in error, whose duties, required her frequent .presence in the kitchen. The grating was defective and the defect was of such a character that it was obvious to the one installing it that using the grating as a part of the floor would be likely to result in injury to those so using it.”

An examination of these cases in our opinion shows that the common law rule has been extended only to the extent that it includes not only the vendee, but those who might be using the instrumentality itself by or with the permission or consent of the vendee, and only in those cases where it is evident that the instrumentality was intended for the use of and by others, and so used.

The Ford truck in the case at bar was not a dangerous instrumentality in and of itself. Like any other motor propelled vehicle, it might be dangerous in the hands of incompetents, reckless or inexperienced drivers, subnormals or nitwits. The machine itself was not a dangerous machine and there is no evidence in the record to the effect that the defendant dealer in this case wilfully or wantonly placed the car upon the street in the hands of others, knowing that such an accident as occurred in this case was liable to occur. The Supreme Court of this State has held in Arkin v. Page, 287 Ill. 420:

“An automobile is not so dangerous an agency as to make the owner liable for injuries caused by it to travelers on the highway, regardless of the agency of the driver. (Danforth v. Fisher, 75 N. H. 111; Steffen v. McNaughton, 142 Wis. 49; Jones v. Soge, 47 Wash. 663.) ”

We are not prepared to extend the rule beyond that cited in the cases referred to in this opinion. There was no contractual or other relationship between the plaintiff and the defendant, Ben T. Wright, Inc., upon which, in our opinion, a legal liability could be predicated. The only relationship existent was between the plaintiff and the owner of the truck, the Kensington Steel Co., which was operating the car at the time of the accident. The jury by its verdict has absolved this defendant from any liability and the question of its liability, if any, is not before this court..

For the reasons stated in this opinion the judgment of the superior court- is reversed and judgment is entered here for the defendant Ben T. Wright, Inc.

Judgment reversed and judgment here with a finding of fact.

Finding of fact: The court finds as a matter of fact that the Ford truck in question was sold by the defendant, Ben T. Wright, Inc. to the Kensington Steel Co. without a proper or sufficient inspection. The court further finds that the plaintiff was injured by reason of a defect in the Ford truck which could have been discovered by a proper inspection by the defendant Wright, Inc. The court further finds, however, that there was no legal obligation on the part of the defendant Wright, Inc. to the plaintiff growing out of any contractual or other relationship.

Friend, J.; concurs,

Hebel, J.,

dissenting: I cannot agree with the conclusion of the court that there was no legal obligation on the part of the defendant, Ben T. Wright, Inc., to the plaintiff growing out of any contractual or other relationship, but do agree that the court is justified in finding that the defendant sold the Ford truck to the Kensington Steel Co. without proper or sufficient inspection, and that the plaintiff was injured by reason of the defect in the Ford truck, which could have been discovered by proper inspection.

The defendant before us is a distributing and selling agent of Ford automobiles and Ford trucks. The new one and one-half ton truck in question was sold and delivered by the defendant to the Kensington Steel Co., a codefendant. There is evidence in the record that unless the wheels of the truck are secure and tightly fastened to the flange of the hub of the machine, the momentum of the car while in motion will strip the threads of five bolts used to fasten the wheel, and as a result the bolts and nuts will drop off and the wheel become detached from the truck.

The driver of the Kensington Steel Co. called for the truck and had driven it a distance of about six miles, at the rate of eight miles per hour, from the shops of Ben T. Wright, Inc., when the truck sagged and he saw that the wheel had become detached and was rolling of its own motion along the street. In the course of its motion it ran into and injured the plaintiff, who was waiting for a street car at the intersection of two streets, and after striking the plaintiff it continued to roll on its course for a distance of 150 feet.

There is no evidence that the truck was negligently operated by the driver of the Ford, or that the plaintiff contributed by any act of hers to bring about the accident.

The contention is made by the defendant that there was no privity of contract between the plaintiff and the defendant; that the Kensington Steel Co. accepted the Ford truck, and the defendant incurred no liability to third parties by reason of the condition of the car; that the responsibility, if any, in using the car in its defective condition, shifted to the Kensington Steel Co.

The rule is that where there is no privity of contract between the parties, generally speaking, there is no liability. However, this rule is subject to several exceptions, one of which is that one who supplies a thing for use by others, if it is obvious that a defect is likely to result in injury to those using it, is liable to any person who, using it properly for the purpose for which it is supplied, is injured by the defective condition. Colbert v. Holland Furnace Co., 333 Ill. 78.

Assuming that the driver of the truck, as well as the plaintiff, was injured as a result of the defective condition of the machine, would the exception to the rule be so restricted that the driver could recover for injuries under the facts in this case, but the plaintiff would be without remedy? That, in my opinion, would be. an unreasonable application of this exception.

The theory of the law, as I understand it, is that the defendant owes a duty not only to the user of the car, but that he is also chargeable with the knowledge that the car is to be used upon a public highway, and that he is bound to make the machine safe for such purpose. The defendant having failed in its duty in permitting a defective machine, one which was dangerous to operate, to be used, as is indicated by the facts in this case, is liable for the injuries to the plaintiff.

The decision of the Supreme Court in the application of the law in the case of Garibaldi & Cuneo v. O’Connor, 210 Ill. 284, in principle, applies to the instant case, wherein the court says:

“Abutters upon a public street may use the sidewalks in front of their premises for the purpose of loading and unloading goods, merchandise or other like articles in which they may deal or use, but the sidewalks belong to the public and the public primarily have the right to the free and unobstructed use thereof, subject to reasonable and necessary limitations, one of which is the right of an abutting property owner to temporarily obstruct the walk by loading or unloading goods, wares or merchandise when such obstruction is reasonably necessary. Such obstruction must, however, be both reasonable as to the necessity therefor and temporary in point of time. The prior and superior right of passage is possessed by the public. . . . The negligent wrongful acts of the appellants contributing to the infliction of the injury were, all of the circumstances of the case being considered, of a nature likely to produce some such injury to passersby. When the intervening cause of an injury is of a nature which could reasonably have been anticipated, the earlier negligent act, if it contributed to the injuries, may be regarded as the proximate cause.”

This court is not concerned about the press of litigation or the number of suits which may be instituted, or that the result of our decision may be far reaching; we are only concerned with the proper administration of justice, guided by such rules as are established in order that proper and righteous judgments may be entered. The result should not be considered if the conclusion is sound. Fent v. Toledo, P. & W. Ry. Co., 59 Ill. 349.

For the reasons indicated I am of the opinion that the judgment for the plaintiff should be affirmed.


author: Mr. Presiding Justice Wilson

text:
    The People of the State of Illinois ex rel. Robert E. Crowe, State’s Attorney of Cook County, Illinois, Appellant, v. Emily Marshall, Appellee.
    Gen. No. 34,776.
    Opinion filed June 15, 1931.
    Rehearing denied June 25, 1931.

      John A. Swanson, State’s Attorney, for appellant; Edgar B. Elder, Assistant State’s Attorney, of counsel.
    Cohen & Berks, for appellee.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

The People of the State of Illinois on the relation of the State’s Attorney, filed its bill for the purpose of abating a public nuisance, a house of prostitution operated by and in possession of the defendant Emily Marshall. The action was based on an act entitled, “An Act regarding places used for the purposes of lewdness, assignation or prostitution, etc.”

Notice of the proceeding was served on one Agnes Skarda, as owner. An amended and supplemental bill of complaint was filed, and upon the hearing it developed that the property in question had been conveyed by said Agnes Skarda to Emilie Novak. From the evidence it appears that Emilie Novak was also known as Emily Marshall and that Emily Marshall was the defendant to the proceeding.

The cause was submitted to a master in chancery who found that the premises in question had been used by the defendant Marshall for the purposes of lewdness, assignation and prostitution and that such had been its reputation; that notice was served upon the defendant Marshall, stating that her premises had been used for such purposes and that if the nuisance was not abated within five days, a bill would be filed asking to have the nuisance abated; found that all the material allegations of the bill and the amended and supplemental bill had been proven and recommended a decree perpetually enjoining the defendant from maintaining said nuisance. On a hearing before the chancellor the master’s report was approved and a decree entered. The chancellor found that the court had jurisdiction of the parties; that the building in question had been a place where lewdness, licentiousness and prostitution had been practiced and permitted and had been so used for a long period of time and that its general reputation was well known. The chancellor found that notice had been served on the owner and entered a decree perpetually enjoining and restraining Emily Marshall, also known as Emilie Novak, from maintaining or permitting such nuisance and from using or permitting said building to be used for the purpose of lewdness, assignation and prostitution. From this decree the complainant appeals to this court and insists that under the statute it was the duty of the chancellor to enter a decree perpetually restraining the owner from using the building for. any purpose for a period of one year. It is insisted that the chancellor found all the facts necessary and requisite for the entry of such an order and that the act is mandatory. Cross assignments of error were filed on the part of Emily Marshall and under these assignments of error this court is asked to remand the cause with directions to dismiss the bill and supplemental bill. The section in question, chapter 38, paragraph 152, Cahill’s Illinois Revised Statutes of 1927, provides as follows:

“If the existence of the nuisance is established, the court shall enter a decree perpetually restraining all persons from maintaining or permitting such nuisance, and from using the building or apartment,, or the place in which the same is maintained for any purpose for a period of one year thereafter, unless such decree is sooner vacated, as hereinafter provided, and perpetually restraining the defendant from maintaining any such nuisance within the jurisdiction of the court. ’ ’

The decree provided that the premises should not be used for the purpose of prostitution. Complainant insists that under the findings of the master and the court in its decree, the premises should not he used for any purpose. An examination of the entire section in question shows that the word “shall”' is used in every instance. This section also contains a provision to the effect that the order of abatement shall also direct the sheriff to remove from the building all fixtures and movable property used in conducting or aiding such nuisance and to sell the same in the manner provided by law for the sale of chattels under execution. The statute is clear and unambiguous and the dnty of the chancellor well defined when the necessary jurisdictional facts have been established. Such facts were found in the decree and it was mandatory upon the chancellor to proceed in the manner therein provided.

The Supreme Court of this State in the case of People v. Abbott, 274 Ill. 380, in its opinion says:

“Counsel for plaintiff in error also argue that this law is not mandatory upon municipalities, but merely directory or permissive. The first section of the act, as we have seen, provides that ‘there shall be set apart’ moneys to constitute a police pension fund. Under the first and ordinary meaning of the word ‘shall’ the act should be construed as mandatory, and considered in the light of what we have heretofore said in this opinion as to when it was intended the act should go into effect it must be held mandatory. ’ ’

Sutherland on Statutory Construction, section 348, says:

“. . . The statute itself furnishes the best means of its own exposition; and if the intent of the act can be clearly ascertained from a reading of its provisions, and all its parts may be brought into harmony therewith, that intent will prevail without resorting to other aids for construction. ’ ’

While the word “shall” has, under certain circumstances, at times been construed to be directory or permissive and not in a mandatory sense, yet it is usually a mandatory "expression and where, as here, a public interest is involved, it has generally been construed as mandatory. The word “may” will be construed to mean “shall” when the public or a third person have a claim that the power ought to be exercised. Canal Com’rs v. Sanitary District, 184 Ill. 597.

The public has an interest in such a proceeding as the one involved in this case. The nuisance, if it is a nuisance, is a public one. The act is intended for the preservation of the morals of the community. Section 8 of the act, Cahill’s St. ch. 38, If 155, provides the conditions under which the owner may have the decree vacated, but the owner is not here by reason of any rights she mig’ht have under this section. Moreover, this court has held that where the owner is also the one guilty of conducting the nuisance, this section would offer no protection. People ex rel. Swanson v. Heitler, 257 Ill. App. 141. In the case at bar the owner Marshall is also the defendant charged with conducting the house of prostitution. We are of the opinion that the chancellor should have followed the act and proceeded in accordance with it.

We find no force in the grounds argued as cross error and, for the" reasons stated in this opinion, the decree of the circuit court is reversed and the cause remanded with directions to proceed in conformity with the statute.

Judgment reversed and cause remanded with directions.

Hebel and Friend, JJ., concur.


text:
    Western Cold Storage Company, Appellee, v. New Amsterdam Casualty Company, Appellant.
    Gen. No. 34,802.

      Opinion filed June 15, 1931.
    Rehearing denied June 25, 1931.
    Dent, Dobtns & Freeman, for appellant; Louis L. Dent and W. P. Gilbert, of counsel.
    Stearns & Jones, for appellee.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

The plaintiff, Western Cold Storage Company, a corporation, brought its action against New Amsterdam Casualty Company, a corporation, to recover for an alleged breach of an indemnity insurance contract. This insurance contract, commonly known as. the Employees ’ Fidelity- Bond, insured the plaintiff against loss arising out of the fraud or dishonesty of its employee John C. Beiber. The trial resulted in a verdict in favor of the plaintiff upon which judgment was entered in the amount of $11,006.94.

The principal point relied upon for a reversal of the judgment is that the plaintiff did not give the defendant notice of its loss in accordance with the terms of the policy within 10 days after the discovery of said loss. The indemnity contract provided, among other things, that it would pay the plaintiff the amount of any loss which John Gr. Beiber, who, while in the continuous employ of the plaintiff, directly or by collusion with others, caused to the plaintiff not to exceed $10,000, by reason of any act or fraud or dishonesty on the part of the said Beiber. The contract of indemnity also provided that the employer within 10 days after the discovery of loss, under the contract of indemnity, should notify the surety of the fact and within 90 days thereafter present proof of loss.

From the evidence it appears that the plaintiff was engaged in conducting an egg storage business; that eggs were stored in cans in three forms — yolks, whites and mixed. These cans which weighed approximately 30 pounds each, were stored in lots of 1,000 in plaintiff’s warehouse; that at the time when stored the date and amount were recorded on a stock card; that loans were made by the plaintiff on the eggs so stored up to approximately 90 per cent of their value; that upon the storage of the eggs a receipt was issued to the customer. When a loan was desired by a customer, a note was executed for the amount so loaned, which was signed by the customer and the warehouse receipt indorsed as security; that these loans were passed upon and approved either by John Beiber or Charles Krum, the vice president of the plaintiff; that five loans were made by Beiber to Sam Somerman & Company during the year 1927; that the records show that these loans were made upon full 1,000 cans of eggs; that in fact the lots did not contain the full 1,000 cans of eggs as shown by the receipts, vouchers and notes; that the loss suffered by reason of the acts of Beiber amounted to approximately $26,000, growing out of these deals with Somerman & Company. There is testimony in the record by Somerman that he gave Beiber approximately $1,200 in cash and agreed with Beiber to give him one-third of the profits, if any, resulting from Somerman’s transactions on the Chicago Mercantile Exchange.

There is no need to go into the evidence in detail as, in our opinion, there was ample evidence to support the verdict, finding that Eeiber had been guilty of fraud in his dealings with Somerman & Company, as a result of which the plaintiff had sustained a loss considerably greater than the amount, upon which the plaintiff was covered by the indemnity policy involved in this proceeding.

January 30, 1928, Eeiber left the premises of the company and, at the same time, placed a note upon the desk of Krum, vice president of the plaintiff corporation. In this letter Eeiber stated that he was sick and was going home and that he had something very serious upon his mind, although it had come about through no fault of his; that if Somerman should come in and want to make a deal that he was to be “turned down cold.” Krum saw Eeiber the next day and was told by Eeiber that he desired time to get in a more settled condition and that there had been an honest mistake. Krum then began to make an investigation of the books and, on March 28, 1928, a communication was addressed to the defendant company by the plaintiff, through its president, Morton, stating that the company had learned on the day preceding, from a committee appointed by the Chicago Mercantile Exchange, which had been investigating the reported irregularities in the handling of the eggs stored by Somerman & Company, that Eeiber had been receiving money from Somerman & Company. In this communication the plaintiff company stated, “Up to yesterday, we believed there was no fraud on Eeiber’s part in this transaction, but that it was merely a case of disobedience of orders.”

From the record it would appear that the first information received by the plaintiff company, to the effect that there was any irregularity in the conduct of Eeiber, was when the note referred to, dated January 30, 1928, was left by Eeiber upon the desk of Krum, the vice president of the company. The question is whether this information was such in its character as to apprise the defendant of the fact that the bonded employee, Eeiber, was guilty of fraud.

There is a wide distinction between mere suspicion and an actual knowledge of fraud. It would be a poor business policy on the part of a corporation to charge an employee with an act involving the character of an employee which, if untrue, would subject it to an action in libel for damages. Eeiber had been in the employ of the plaintiff corporation for a number of years and it was under an obligation not to make any false accusation against him which might blacken his future career. Perpetual Building & Loan Ass’n v. United States Fidelity & Guarantee Co., 118 Iowa 729. The court in its opinion in that case said:

“In a case like this some time may elapse after a well-grounded suspicion before the employer ought, in prudence, to make any charge of fraud or dishonesty. Mere laches or inefficiency in business, consistent with integrity, are not enough. Knowledge of a defalcation frequently depends on a long train of events, or the examination of extended accounts. Discrepancies or irregularities, confirmatory in themselves of guilt, are often explainable, or turn out to be entirely inconsistent with innocence. The confidence of years is not ordinarily shattered in an instant, and the employer may be commendably slow to be convinced of the depravity of the person whom he has implicitly trusted. Unjust inferences and false accusations are always to be avoided. The truth, only after being ascertained with reasonable certainty, can be safely made known. Character is too sacred to permit of tolerating a less liberal rule. It is only of facts which may create a loss for which the surety is responsible — that is, a loss arising from fraud or dishonesty — that immediate notice is exacted. Pacific Fire Insurance Co. v. Pacific Surety, Co., 93 Cal. 7 (28 Pac. Rep. 42); Aetna Life Insurance Co. v. American Surety Co. (C. C.), 34 Fed. Rep. 298. As said in Surety Co. v. Pauly, 170 U. S. 160 (18 Sup. Ct. Rep. 552, 42 L. Ed. 987), the obligee is bound to give notice ‘only when satisfied that he had committed some specific act of fraud or dishonesty likely to involve loss to the association. ’ Of necessity, resort must be had to the facts of each particular cáse in determining whether notice was given within the time stipulated. And it is to be borne in mind that the condition relating to notice is not one precedent to the loss, but following it, and pertains more especially to the performance of the contract. Washburn-Halligan Coffee Co. v. Merchants’ Brick Mut. Fire Ins. Co., 110 Iowa 423. Such conditions, as they relate to the remedy, are not usually as strictly construed as those involving the essence of the agreement. Peele v. Society, 147 Ind. Sup. 543 (44 N. E. Rep. 661).”

An employer is not required to act until he has knowledge of the existence of such facts as would justify a careful and prudent man in charging the employee with wrongdoing. Mere suspicion by the employer is not sufficient. Outlook Farmers’ Elevator Co. v. American Surety Co., 70 Mont. 8; American Surety Co. v. Pauly, 170 U. S. 133; Rankin v. United States Fidelity & Guaranty Co., 86 Ohio St. 267.

It was a question of fact for the jury as to whether or not the plaintiff notified the defendant of its loss by reason of the dishonesty of it's employee Reiber within 10 days after it had such knowledge of the facts as the law required. As has already been pointed out, this knowledge was based upon such facts and circumstances as would justify a reasonably prudent person in making the charge. The jury was properly instructed as to the rule and found that the notice answered the requirements of the policy and we see no reason for disturbing the judgment because of an insufficient notice.

Objection is made to the fact that Krum, the vice president, when testifying on behalf of the plaintiff, stated that up to the time that he learned of the transaction in question he had never known of any dishonest or fraudulent acts on the part of Reiber. Cases are cited holding that it is error to permit witnesses to give their personal opinion as to the general character of a party litigant. The character of Reiber was not involved in this proceeding. The fact as to whether he had been guilty of fraud was, however, an issue. The testimony of Krum was not for the purpose of placing in evidence the character of Reiber, but for explaining the state of mind of the officers of the plaintiff corporation. It was the purpose of the evidence to negative the question of knowledge on the part of the officers of the company of any knowledge of fraud on the part of Reiber prior to the date stated by the witness in his testimony. It was not necessary that such testimony should have been given because it would have been presumed, unless otherwise shown, that the man’s character prior to the commission of the act in question was good. No harm was done by the admission of this testimony.

Objection is urged to the giving of instruction number four on behalf of the plaintiff. This instruction stated a correct abstract proposition of law. It would have been better if it had not been given. The correct proposition of law for the consideration of the jury, however, was stated in defendant’s given instructions and we do not believe that the giving of this instruction was error sufficient to warrant the reversal of the cause. Taylor v. Felsing, 164 Ill. 331.

Our attention is called to the case of Sugar v. Marinello, 260 Ill. App. 85. The instruction in that case left the construction of the contract to the jury. In the case at bar, however, while the jury by the instruction given was told that such contracts were construed most favorably to the insured, nevertheless, by other instructions, the jury was directly told as to what it was necessary for plaintiff to prove in order to recover.

Courts do not favor the invalidation of indemnity contracts, particularly through breach of conditions subsequent. In the case at bar there is no question but that the plaintiff lost heavily by the actions of its employee Eeiber and there is ample evidence to sustain the proposition that' his acts were a fraud upon his company and the cause of financial loss to it. Under all the circumstances it would appear that the verdict was fairly rendered and in justice the judgment should be affirmed.

For the reasons stated in this opinion the judgment of the circuit court is affirmed.

Judgment affirmed.

Hebel and Friend, JJ., concur.


author: Mr. Justice Friend

text:
    Bernard Metal, Appellee, v. George D. Gamm, Appellant.
    Gen. No. 34,698.

      Opinion filed June 15, 1931.
    Rehearing denied June 25, 1931.
    Francis E. Hinckley, for appellant.
    Bernstein & Gordon, for appellee; Maxfield Weisbrod, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Bernard Metal, as plaintiff, brought suit against George D. Gamm, as defendant, in the municipal court of Chicago, for $2,000, alleged to be due for services rendered to the defendant. The case was tried before the court, without a jury, resulting in a finding and judgment in favor of plaintiff for $2,000.

The judgment is based upon plaintiff’s second amended statement of claim, which alleges in the first paragraph thereof that:

’ “Plaintiff’s claim is for the sum of $2,000 and being for services rendered to the defendant, George D. Gamm, at his special instance and request.” Subsequent portions of the second amended statement of claim further allege an express oral agreement entered into between the parties on August 5, 1926, under which defendant is alleged to have engaged the services of plaintiff in and about effecting an adjustment of a controversy then existing between defendant and one Arthur B. Moloney, arising out of the dissolution of a copartnership then subsisting between Gramm, Moloney and one Thomas K. Yalos, and known as Northwestern Extension Bealty Company, pursuant to which defendant agreed to pay plaintiff as compensation the sum of $2,000.

Considerable evidence was adduced by both parties with reference to the agreement alleged in the second, third and fourth paragraphs of plaintiff’s second amended statement of claim and the services rendered by plaintiff on behalf of defendant. Inasmuch, however, as counsel for defendant states in his brief that:

‘ ‘ This court is not asked to weigh the evidence in this case and the point is not made that the plaintiff failed by a preponderance of evidence to establish a disputed question of fact,” we are not required to review the evidence appearing in the record, but shall proceed to consider only the questions of law, as applicable to the various contentions of the parties.

Defendant insists that the second amended statement of claim is based on an alleged oral agreement between the parties; that there is no proof of an antecedent agreement of the kind or nature alleged, nor any definite promise to pay money, and no proof of the reasonable value of the services of plaintiff, if any, rendered to defendant. Two legal propositions are stated in defendant’s brief and relied upon as grounds for reversal: (1) where a state of facts is found, it is a question of law as to what judgment should follow; (2) where only a special contract is declared on, plaintiff cannot recover upon another contract or upon quantum meruit.

With reference to the first contention four cases are cited. These cases apparently have no application to the question before us, however. As to the second proposition, several other cases are cited. They are generally to the effect that there can be no material variance between the contract set forth in the declaration and the evidence adduced in support thereof. This is a sound rule, but is likewise not applicable to the situation here presented.

Plaintiff, on the other hand, contends that the first paragraph of his second amended statement of claim, hereinbefore quoted, is sufficient as an indebitatus assumpsit count under the rules of the municipal court, and that a finding and judgment having been made upon this second amended statement of claim, and no question being raised by defendant as to the weight or sufficiency of the evidence, every intendment should be resolved in favor of sustaining the judgment.

With respect to these contentions, it is urged as a rule of law that where a contract has been performed and it only remains for the contract price to be paid, recovery may be had under the common counts or allegations equivalent thereto, such as are contained in the first paragraph of plaintiff’s second amended statement of claim. The authorities sustain this proposition.

In Expanded Metal Fireproofing Co. v. Boyce, 233 Ill. 284, there was a written contract upon which the action was based. The declaration consisted only of the common counts. The court held that where a contract has been performed and it only remains for the contract price of labor or property to be paid, plaintiff may sue and recover under the common counts, and the special agreement may be read in evidence for the purpose of showing its terms.

The court in the foregoing case cited Shepard v. Mills, 173 Ill. 223, which was an action in assumpsit on the common counts. It was there urged that a recovery could not legally be had without declaring specially on the contract. The court, however, said:

“The law is well settled that where a contract has been performed and nothing remains to be done but pay the amount due under it, a recovery may be had under the common counts” and quoted from Adlard v. Muldoon, 45 Ill. 193, holding to like effect.

In Sands v. Potter, 165 Ill. 397, action was brought in assumpsit upon a declaration containing only the common counts. In passing on the assignments of error that the trial court should not have allowed the plaintiff to introduce in evidence his special agreement under the declaration, the court said:

“While a contract continues executory the plaintiff must declare specially, but when it has been fully per-. formed on his part, and nothing remains to be done under it except for the defendant to pay, the plaintiff may, at his election, declare generally in indebitatus assumpsit. . . . And the stipulated price due on a ■special contract may be recovered in indebitatus assumpsit where the contract has been so completely executed as that only the duty to pay the money remains.” (Citing cases.)

As applicable to the instant case, the first paragraph of the second amended statement of claim under the rules of the municipal court is, in substance, a declaration on the common counts in indebitatus assumpsit, and would have been sufficient without any further allegations to sustain a finding and judgment for money due upon services rendered by plaintiff for defendant. This conclusion finds further support in the well established doctrine that after judgment all pleadings will be construed liberally in favor of the pleader to sustain the judgment. (Roumbos v. City of Chicago, 332 Ill. 70; Smith v. Rutledge, 332 Ill. 150.) Since no contention is made as to the weight and sufficiency of the evidence, we are of the opinion that the judgment may be sustained on the allegations of .the first paragraph of the second amended statement of claim.

Several findings of fact and propositions of law were submitted to the court, some of which were allowed and others rejected, and it is argued that there is an inconsistency between the judgment and the findings under several of these propositions. However, the court evidently relied upon the first paragraph of the second amended statement of claim and entered judgment on the theory that these allegations were equivalent to a declaration on the common counts upon an executed contract and sufficient to sustain the judgment. On this theory the judgment is not inconsistent with the court’s rulings on the various propositions.

Plaintiff asks that the statutory penalty be imposed on the ground that the appeal herein is prosecuted solely for purposes of delay. The record shows that judgment was entered on March 27, 1930; appeal prayed for and allowed on April 16, 1930; appeal bond filed and approved April 26, 1930; that on May 27, 1930, defendant obtained an extension of time within which to file his bill of exceptions, which was presented to the court and filed on July 2, 1930; that after filing his record in this court, defendant obtained an extension of 60 days within which to file his abstract and brief, and a further extension of 20 days for the same purpose thereafter. While it is true that some delay ensued in praying the appeal, obtaining an extension for filing bill of exceptions in the trial court, and briefs and abstracts here, we do not regard this delay as vexatious within the meaning of the statute, and consequently are not disposed to allow statutory damages.

For the reasons stated the judgment of the trial court will be affirmed.

Affirmed.

Wilson, P. J., and Hebel, J., concur.


text:
    National Weeklies, Inc., Appellee, v. Ernest L. Klein, Appellant.
    Gen. No. 34,731.
    Opinion filed June 15, 1931.
    Rehearing denied June 25, 1931.

      Maxwell Landis, for appellant; Arnold Davidson, of counsel.
    Tenney, Harding, Sherman & Rogers, for appellee; John H. McBride, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

National Weeklies, Inc. brought suit in the municipal court of Chicago upon two promissory notes for $100 each, unconditional in their terms, against Ernest L. Klein, the maker thereof, resulting in a judgment for plaintiff.

The defendant filed his affidavit of merits setting up the defense of total failure of consideration through the non-performance by plaintiff of parts of the contract entered into between plaintiff and the German American Press Association, in which defendant was an officer. When the cause came on for trial plaintiff introduced the notes in evidence and defendant offered proof purporting to show that plaintiff had violated provisions of the aforementioned contract. The court then ordered defendant to file an amended affidavit of merits, and continued the case. Defendant’s "amended affidavit of merits was identical with the first in that it alleged a total failure of consideration, and differed only in that it set out in detail most of the provisions of the contract alleged to have been violated by plaintiff. The court struck the amended affidavit of merits from the files on motion of plaintiff and denied defendant’s motion to amend a second time, and entered judgment for plaintiff on its affidavit of claim.

Within the time prescribed by statute defendant submitted to the court what purports to be a statement of facts in accordance with the provisions of section 23 of the Municipal Court Act, Cahill’s St. ch. 110, ¶ 411. This act provides that upon application made at any time within 30 days after the entry of a final order or judgment, it shall be the duty of the judge by whom such final order of judgment was entered to sign and place on file in the case in which the same was entered, if so requested by either of the parties to the suit, either a correct statement to be prepared by the party requesting the signing of the same, of the facts appearing upon the trial thereof, and of all questions of law in such case and the decisions of the court upon such questions of law, or a correct stenographic report of the proceedings at the trial and a correct statement of such proceedings in the case as such party may desire to have reviewed by the Supreme or Appellate Court; and specifies that no order or judgment so sought to be reviewed shall be reversed unless the Supreme or Appellate Court, as the case may be, shall be satisfied from said statement or, stenographic report signed by said judge, that such order or judgment is contrary to the law and the evidence, or that such order or judgment resulted from substantial errors of said municipal court directly affecting the matters at issue between the parties.

The statement of facts signed by the judge recites the nature of plaintiff’s claim and that the defense as set forth in defendant’s affidavit.and amended affidavit of merits “is to the effect that the consideration for the defendant making and executing the aforesaid notes was, that the plaintiff would make, execute and perform a certain written, agreement entered into between it and the German American Press Association. This aforesaid agreement was executed but not performed in certain provisions.” The statement further recites that the cause came on for hearing before the court and that after the testimony of two of plaintiff’s witnesses was partially heard, the court ordered defendant to file an amended affidavit of merits within five days and postponed the hearing of the cause; that when the cause again came on for hearing plaintiff moved to strike defendant’s amended affidavit of merits and for judgment; that thereupon defendant asked leave to amend, instanter, his amended affidavit of merits by inserting the word “perform” after the words “make and execute” which motion was overruled and judgment entered in favor of plaintiff; that exceptions were duly entered by the defendant to the court’s ruling and an appeal prayed.

It thus appears that defendant has preserved neither the affidavit, which was stricken from the files, nor the proposed amended affidavit in a bill of exceptions or in the statement of facts, which, under the Municipal Court Act, is intended to preserve for review the errors relied upon. It has been frequently held that in order to present properly for review a ruling of the trial court striking from the files defendant’s affidavit of merits, defendant should preserve his affidavit by bill of exceptions and the court’s ruling thereon. A pleading which has been stricken from the files is no longer a part of the common law record and can be brought to the attention of the court of review only by bill of exceptions. (Harris v. Willis, 209 Ill. App. 401.) Under the aforementioned statute the statement of facts may preserve for review such errors as are otherwise required to be incorporated in the bill of exceptions. The statement in the instant case, while referring to an amended affidavit of merits and a motion to amend the second time, contains neither of these documents, and therefore the question as to whether or not the proposed second amendment constituted a defense to plaintiff’s claim is not properly presented to the court. Moreover, the statement of facts fails in other respects to comply with the statutory requirement. It is at best a brief summary of the case with only a short reference to the proposed amendment and the nature of the defense sought to be interposed. It contains no facts or questions of law whatsoever. It was said in Hurford v. Rosie, 151 Ill. App. 605, wherein the defendant filed a statement of facts, which was neither a correct statement nor a stenographic report of the trial proceedings, that “Under this provision we can look only into such statement or stenographic report as the act provides for and requires to ascertain whether the judgment is contrary to the law and evidence, or resulted from substantial errors of the court, and it follows, that unless there is in the record such statement or stenographic report, the judgment must be affirmed.”

It is stated by defendant in his reply brief, however, that the statement “although informal yet is sufficient where counsel for plaintiff below signs his approval and should not now be heard to complain that it is incorrect, having waived the defect, if any there was.” The approval of plaintiff’s counsel thus referred to appears at the bottom of the statement of facts signed by the court, and reads as follows: “Attorney for plaintiff present and waives notice.” Manifestly this is in no sense an approval of the statement nor a waiver of the statutory requirement.

Counsel by their briefs present arguments pro and con touching upon the validity of the proposed second amended affidavit of merits as a defense to plaintiff’s claim, and plaintiff by its brief urges other grounds in support of the judgment. In view of our conclusion upon the insufficiency of the statement of facts, however, only one of these questions need be considered.

Defendant’s motion was a request to file a third affidavit after the trial had commenced. The allowance of such motion has been held to be largely discretionary with the court, and it has been expressly held that denying leave to file a third affidavit of merits cannot be said to be an abuse of discretion. (Harris v. Willis, supra; Scovill Mfg. Co. v. Cassidy, 195 Ill. App. 448, affirmed in 275 Ill. 462.)

For the reasons stated, the judgment of the municipal court will be affirmed.

Affirmed.

Wilson, P.J., and Hebel, J., concur.


author: Mr. Presiding Justice O’Connor

text:
    Hinsdale State Bank, Appellee, v. Albert P. Lytle, Appellant.
    Gen. No. 34,833.
    Opinion filed June 22, 1931.
    Rehearing denied July 6, 1931.
    Loucks, Eckert & Peterson, for appellant; Tom Deeming, of counsel.
    Short, Eothbart, Willner & Dewis, for appellee; Edward Eothbart, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion'of the court.

Plaintiff, the payee of a promissory note, brought an action against the defendant, the maker, to recover $1,500, the face of the note with interest. There was a trial before the court without a jury and a finding and judgment in plaintiff’s favor for the amount of its claim, viz., $1,607.42.

The defendant contends that the judgment is wrong and should be reversed because the evidence shows that the note was without consideration, and that the finding and judgment in favor of plaintiff is against the manifest weight of the evidence.

The record discloses that prior to 1925 the defendant was a stockholder, a director, and the cashier of the plaintiff bank; that before defendant became connected with the plaintiff he had been employed by Crandall & Co., a corporation, which dealt in commercial paper; that after his connection with plaintiff bank it purchased from Crandall & Co. $31,000 worth of commercial paper and sold $20,000 of this to customers of the bank; that shortly thereafter Crandall & Co. was in financial difficulty and on January 26, 1925, plaintiff’s board of directors met to consider what should be done in regard to the $20,000 worth of commercial paper. All the evidence is to the effect that it was unanimously agreed that the bank should recall the $20,000 worth of commercial paper from the persons to whom it had been sold, giving them the amounts that they had paid respectively in money or other securities; that this would be to the best interest of the bank, which was located in a small community; that at that time it was further unanimously agreed by the directors that the $20,000, or such part of it as might be necessary, ought not to'be taken from the surplus of the bank, but that each of the eight directors should execute his note in the sum of $2,500 payable to the bank, due on demand, without interest; that the bank would loan each of the directors the $2,500 on his note; that at that time it could not be ascertained how much would be received from Crandall & Co., which was about to be placed in charge of a committee of its creditors. Thereupon the following resolution was adopted: “Written requests were presented from the following directors for collateral loans of $2,500 each, upon the several notes of said directors payable on demand, each note to be secured by twenty-five hundred dollar par value of 6 per cent Collateral Trust Cold Bonds of Crandall and Company, Inc., viz: E. A. Amacker, Randall W. Burns, Lawrence P. Con-over, Walter Davidson, John C. Fetzer, Albert P. Lytle, Charles E. Raymond and John C. Wood. On motion duly seconded said requests were granted and the above loans approved. ’ ’ Each of the directors then executed his note for $2,500, payable to the bank on demand.

The evidence further shows that afterwards the defendant as cashier of the bank carried out the instructions of the directors, called in its customers, received from them the securities and paid them the $20,000 ; that afterwards dividends were paid by Crandall & Co. to the bank and they were credited pro rata on the eight notes given by the directors; that the bank made its report to the bank examiner, showing it held the eight notes as a part of its assets, and reports to this effect were published as required by law; that in 1928 the bank examiner complained about the notes being long overdue, and each of the directors on July 2, 1928, made his note for $1,500, being the balance unpaid on the original note after crediting the dividends received from Crandall & Co., payable to the bank with interest at 3 per cent. On the note made by defendant plaintiff sues. The evidence further shows that each of the directors, except the defendant and another, paid his $1,500 note.

There is a dispute in the evidence as to what was said by the directors at their meeting on January 26, 1925. Defendant’s version of the matter, as testified to by himself and another director, is that it was understood and agreed by all of the directors of the bank that the bank would never call upon the makers of the notes to pay them or any part of them, but that after all dividends received from Crandall & Co. were applied towards the payment of the notes, the balance, if any, would .be charged to the bank and not to the individual directors. Other directors testified, denying that anything was said that the notes would not have to be paid by the makers of them. The court found in favor of the plaintiff, thereby finding in effect that there was no agreement by the directors that the notes should not be paid by the makers of them.

We have carefully considered all the evidence in the record and while the question in dispute is not free from difficulty, yet we are of the opinion that we would not be warranted in holding that the finding is against the manifest weight of the evidence.

The defendant contends that the note was without consideration and therefore there is no liability to the bank. In support of this the argument is that the bank was under no obligation to purchase the $20,000 commercial paper; that defendant did not owe the bank anything; and that since there are no rights of creditors involved, the bank was benefited by the giving of the note and therefore cannot recover. We think the contention that the note was without consideration cannot be sustained. The defendant was a stockholder, a director, and the cashier of the bank; it was to his interest to see that the assets of the bank would not be impaired by taking $20,000 of its funds to pay its customers for the Crandall Co. paper. Anything that would tend to advance the standing of the bank in the community was of benefit to the stockholders. In Tegtmeyer v. Nordlund, 259 Ill. App. 247, in considering the question of the consideration of a note, we referred to the case of Straus v. Citizens State Bank, 164 Ill. App. 420, affirmed in 254 Ill. 185 (which is cited by the defendant here), and said that the note involved in the Straus case was an accommodation note and without consideration. We then referred to State Bank of West Pullman v. Hovnanian, 250 Ill. App. 144, and said: “There, as here, the note was given by one of the directors to make good an impairment of the bank assets due to the inclusion therein of certain worthless paper. It was held that such note was not for accommodation but was given for a valid consideration for the purpose of making good the impairment of the bank’s capital and thus restore its solvency and avoid the necessity of levying an assessment against the stockholders.” What we there said is pertinent here and we hold that the note here was not without consideration. The case of Ruvenacht v. German-American Bank, 287 Ill. 266, cited by the defendant, is not in point because the note involved in that case was without consideration. It was made and delivered by Ruvenacht to the defendant bank to take the place temporarily of another note held by the bank so that the bank examiner would be satisfied. Ruvenacht was in no way connected with or indebted to the bank to which he gave his note. The note was purely an accommodation.

The note in suit not being without consideration, parol evidence was not admissible to vary its terms. Hesch v. Dennis, 194 Ill. App. 663; Clinton v. Royal, 203 Ill. App. 248; Bradley v. Progressive Metal & Refining Co., 205 Ill. App. 552; First National Bank of Beecher v. Wolf, 208 Ill. App. 283; Weinstein v. Sprints, 234 Ill. App. 492; Handley v. Drum, 237 Ill. App. 587; Tegtmeyer v. Nordlund, 259 Ill. App. 247; Miller v. Wells, 46 Ill. 46; Mason v. Burton, 54 Ill. 349, In the cases cited it is held that, in an action to recover . on a promissory note absolute on its face, evidence of an oral contemporaneous contract in contradiction of the note is inadmissible. In the late case of Tegtmeyer v. Nordlund, supra, we said, p. 251: “We are of the opinion that parol testimony to the effect that defendant was told that he would not have to pay the note was inadmissible as tending to vary the terms of the written instrument. The note says, ‘Four months after date I promise to pay.’ The testimony that it was stated that the bank would take care of it tends to contradict this agreement. In Handley v. Drum, 237 Ill. App. 587, the court considered this ques: tion with a thorough study of many cases.” We then quoted with approval the rule stated in the Handley case. In the instant case the note says, “On demand after date for value received I promise to pay.” The offered testimony of the defendant’s witnesses, that it was stated by the directors at their meeting that they would not have to pay the notes but that the bank would assume any deficiency there might be after receiving the dividends from Crandall & Co., contradicts the express words of the note quoted and, since the note was not without consideration, this cannot be done under the parol evidence rule.

The judgment of the municipal court of Chicago is affirmed.

Affirmed.

Hatchett and HcSukely, JJ., concur.