text:
    Frank Appa, Appellant, v. The Pennsylvania Fire Insurance Company of Philadelphia, Pennsylvania and the Reliance Insurance Company of Philadelphia, Pennsylvania, Appellees.
    Gen. No. 41,259.
    Denis E. Sullivan, J., dissenting.
    Opinion filed November 20, 1940.
    Rehearing denied December 11, 1940.
    Allan R. Bloch and B. M. Steiner, both of Chicago, for appellant; B. M. Steiner, of counsel.
    McKinney, Folonie & Crear, of Chicago, for appellees.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a judgment at the conclusion of the hearing, entered by the court on the verdict of the jury, in favor of the defendants in the action. This suit was instituted by plaintiff against the defendant insurance companies to recover damages resulting from a fire in plaintiff’s place of business located at 3255 Ogden avenue, Chicago, Illinois, predicated upon two insurance policies in the face amount of $2,500 and $1,500, respectively. Vari- . ous articles of personal property were alleged to have been destroyed or damaged by fire to the extent of $3,818.95.

Plaintiff’s statement of claim alleges that the defendant, the Pennsylvania company, issued its policy of fire insurance dated February 9, 1938, for $1,500, and the defendant, the Reliance company, issued its policy of fire insurance dated January 2, 1938, for $2,500, in consideration of premiums paid and to be paid, covering contents of the said premises; that the plaintiff was then, and at the time of the fire, interested in the said contents to the amount so insured; that on June 19, 1938, the contents and property were destroyed or damaged; that the cash value°of the property was $4,654.55 and the whole loss and damage sustained was $3,818.95; that the defendants are liable for their respective proportions and are liable in those proportions as the amount of the loss is to 90 per cent of the actual cash value of the property; that the Pennsylvania company is liable to plaintiff in the sum of $1,366.22, and the Reliance company liable in the sum of $2,277.05.

Defendants filed a joint statement of defense alleging that the policies were different than alleged by plaintiff, and that each was issued not only for consideration of premium but in consideration of divers stipulations in the policy; that each policy provided that the plaintiff, as often as required, should produce for examination all books of account, bills, invoices, etc., and that no suit or action on the policy for the recovery of any claim shall be sustainable until after compliance with such requirement; that the defendants, by their adjuster, requested the plaintiff to produce for examination at plaintiff’s place of business all his books of account, bills, invoices, etc., and the plaintiff did fraudulently represent that he kept no books of account, had no bills, invoices or other vouchers except one invoice which plaintiff produced for examination; and so the defendants say plaintiff may not recover.

It is further alleged that each policy of insurance contains a provision that it shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning the insurance or the subject thereof; or if his interest in the property be not truly stated in the policy; or in case of any fraud or false swearing by the insured touching any matter relating to the insurance or the subject thereof, whether before or after a loss; that plaintiff did present a detailed list of articles to the defendants claiming total value of the property in the amount of $4,570.55, and fire loss of $3,766.95, and later in the month of December, did present a sworn statement in proof of loss in which he claimed the cash value of the property was $4,654.55, and that the loss and damage by fire was $3,818.95. Each defendant says plaintiff, by his schedule or memorandum in writing, mispresented a material fact or pircumstance in representing the supposed value and the supposed direct loss and damage by fire in sums exorbitant and excessive beyond any matter of opinion; that the plaintiff is guilty of fraud touching a matter relating to the subject of insurance and that the plaintiff is guilty of false swearing in the statement in proof of loss in alleging the value to be in excess of $4,500, and the loss and .damage by fire to be in excess of $3,700. Each defendant says that the said representations in the schedule and proofs were made with knowledge of their falsity and that the total loss and damage by fire was approximately one-fourth of the amount so claimed by plaintiff as his total loss and damage; and so each defendant says that plaintiff may not by the terms of his contract, recover.

Each defendant further says that its policy of insurance provided that the plaintiff should, within 60 days after the fire, render a sworn statement in proof of loss, etc., and that no action for the recovery of any claim is sustainable in any court of law until compliance with such provision and that plaintiff did not render the sworn statement in proof of loss within 60 days after the fire; and so each defendant says plaintiff may not recover.

From the facts, it appears that the plaintiff, Frank Appa, and Paul Appa, his brother, were in the used furniture business and maintained a place of business at 3255 Ogden Avenue, Chicago, Illinois. Apparently the business was operated by Paul Appa, but the money was furnished by the plaintiff, and at the time of the fire there was due him from Paul Appa the sum of $2,550. When the business was started the plaintiff applied for fire insurance as to the contents of the premises in question and the policies were issued by . the defendants and delivered to the plaintiff. The Pennsylvania Fire Insurance Company issued its policy in the face amount of $1,500, to the plaintiff, doing business as Independence Furniture Company on February 9, 1938, insuring plaintiff against loss or damage by fire for a period of one year. The Reliance Insurance Company issued its policy in the sum of $2,500 on January 2, 1938, insuring plaintiff, doing business as the Independence Furniture Company for a period of one year. The premiums on both policies were duly paid.

On June 19, 1938, a fire occurred in the premises and it is contended by plaintiff that much of the personal property was destroyed and damaged. Plaintiff did not arrive at the scene of the fire until the following afternoon, when he briefly examined the interior of the premises and discussed the matter with his brother. Plaintiff’s brother, Paul Appa, was in the furniture business for 11 years. As soon as he heard about the fire he went to the premises and saw many firemen on the scene, but he did not know how the fire occurred. After the fire a memorandum was prepared in the handwriting of Paul Appa in which the merchandise was listed as claimed according to the instructions of the agent of the defendants, C. T. Hynous, and each item was inspected, its value before the fire, and the loss sustained, was thereupon marked down on the inventory. This was afterwards typed and upon the trial, received in evidence as plaintiff’s exhibit 11.

Numerous conferences were held in regard to the loss sustained between the plaintiff and his brother on the one hand and Mr. Hynous as the agent for the insurance company on the other. During the latter part of November, the plaintiff claims, at one of the conferences the defendants’ agent offered plaintiff the sum of $3,000. It also appears from the facts in evidence that a sworn statement in proof of loss was duly delivered to each of the defendants, to which were appended itemized lists describing the property lost, damaged or destroyed by the fire, the value of each item before the fire, and the claimed loss; and that plaintiff’s evidence touching upon the value of the property after the fire, is the testimony of the plaintiff, Frank Appa, relating chiefly to the values of the ice boxes and refrigerators, the testimony of Paul Appa with reference to each item contained in the inventory, and the testimony of Ignatius McCauley.

It is contended that there was no dispute according to the evidence that a fire actually occurred and that some of the personal property located in the store was affected thereby; and that there is no dispute about the fact that Mr. Hynous, appeared in the premises after the fire and discussed the matter of the loss with the plaintiff and his brother. It is claimed that it was admitted by the defendant that an inventory was prepared, and the witness, Paul Appa, testified that it was prepared in accordance with Mr. Hynous ’ instructions. Each of the policies in question contained this provision:

“This entire policy shall be void if the insured has concealed or misrepresented, in writing or otherwise, any material fact or circumstance concerning this insurance or the subject matter thereof; or if the interest of the insured in the property be not truly stated herein; or in case of any fraud or false swearing by the insured touching any matter relating to this insurance or the subject thereof, whether before or after the loss.”

The affidavit of defense filed by the defendants in relying expressly upon this provision states in substance that after the fire the plaintiff represented the total value of the property on which plaintiff was insured to be in the amount of $4,570.55, and the total loss to be in the sum of $3,766.95, and states further that thereafter, in December, 1938, by the proof of loss submitted by plaintiff to the defendants, plaintiff represented that the cash value of the property was $4,654.55, and the loss and damage by fire was in the total amount of $3,818.95. Plaintiff does not deny that there is some conflict in the testimony as to the portion of the premises affected by the fire, but contends that there is no question but what all the items listed in the inventory, contained some evidence that they had been in the fire, either as a result of smoke, charring, destruction or water stain.

It does appear from the evidence that O. T. Hynous was an employee of Underwriters Adjusting Company; that he had been a fire insurance adjuster for 14 years, during which time he had adjusted on the average of about 200 claims per year where household furniture was involved in fire losses, and about 100 claims per year where stocks of merchandise were involved. He was at the scene of the fire the next morning after it happened and looked over the place generally, spoke with Paul Appa in the presence of plaintiff’s insurance broker, gave Appa instructions that claim should be presented and said something about preparing an inventory. An inventory was presented to him some days later and in this the property was divided into lots. Hynous testified that he did not say anything about dividing it into lots or listing it in lots. Paul Appa says he did. It evidently was done by a Mr. McCauley, employed by plaintiff, who testified that he arranged the property, divided it into lots and numbered the lots as was his custom.

It further appears from the evidence of adjuster Hynous that he received a copy of the inventory, and afterwards went out there again, saw Paul Appa and the broker with whom he checked each item and made his personal notation on each. The original paper with these pencil notations was offered in evidence as plaintiff’s exhibit 11. At this time Hynous checked over the lot of refrigerators mentioned on the left side of the aisle. These were listed as lots 98 to 105, inclusive, in the inventory, a total of 346 boxes, which plaintiff claimed to have a total value of $1,400 and on which he made claim for $1,190. None of the panel board cartons or the crates about these respective boxes were in any way charred or burned. The only damage the adjuster saw was soiling on the outside of the cartons, and he made an allowance of $86.50 for cleaning the crates. This lot of refrigerators was not moved after the fire; none of the crates were opened; none of the paper was taken off and they remained wrapped exactly as they came from the factory. To the rear of the refrigerators were articles called stone or concrete benches. This is numbered lot 81 in the inventory, and they were in boxes, but there was no charring or burning on the boxes but the boxes were smoked. The adjuster went through all the articles which were there and made his estimate and noted in the inventory the expense of wiping off, cleaning, repairing, etc., as to each item; when an item was damaged beyond repair, he marked down his judgment of the replacement value, and in so making these figures he used his best judgment based on his experience. In the case of lot numbered 62, he guessed off an amount by taking half of the plaintiff’s claim on that lot by considering the character of the other merchandise there. The total of his figures for all loss and damage by fire and its consequences was $932.82, and his figures were his best judgment of the damage or loss to each article. He gave the broker that total figure, who reported it to Paul Appa. Sometime afterwards he gave his figures by writing them on a copy of the inventory or schedule which he gave either to Paul Appa or Mr. Bloch, the plaintiff’s attorney.

Frank Appa stated that he, his brother and Attorney Bloch went to Hynous ’ office the latter part of November and talked about the lots; that Hynous said he had made his best offer; his brother asked how he arrived at the figure and Hynous took an inventory and started marking down what he thought the loss was, and arrived at a figure of $3,000, which is the subject matter of dispute.

Plaintiff executed sworn statements in proof of loss on December 5, 1938, and the following month the suit was brought.

The plaintiff in his argument for reversal of the judgment that was entered by the court on the verdict of the jury contends that the mere fact that the assured in the proofs of loss made by him to the insurer pursuant to the terms of the policy, made an overvaluation of the property destroyed, will not defeat a recovery on the policy for the actual loss sustained. As we have already quoted from the insurance policies in question, the policies provided that “This entire policy shall be void if the insured has concealed or misrepresented in writing or otherwise, any material fact or circumstance concerning this insurance or the subject matter thereof”; . . . The plaintiff believes and points out as significant that no misrepresentation is claimed by the defendants to have been made by the plaintiff when the policies were applied for, to which the defendants have indicated that there was no occasion to assert nor was any misrepresentation made to the companies when the policies were applied for. Plaintiff urges further that the matter of fraud is limited solely to the statements as to the amount of loss suffered by the plaintiff in consequence of the fire, and further urges that while there is some conflict in the testimony as to the portion of the premises affected by the fire, there is no question but what all the items listed in the inventory, contained some evidence that they had been in the fire, either as a result of smoke, charring, destruction, or water stain.

The reply of the defendants to the issues urges that the leading issue in the case was plaintiff’s inordinate claim, excessive beyond any matter of opinion, and that the evidence of plaintiff’s fraud and false swearing clearly proved him guilty and presented a question for the jury which they decided adversely to the plaintiff. Defendants point to the plaintiff’s citation of authority in which it is claimed by plaintiff that the mere fact that the assured made an overvaluation in his proofs of loss, etc., will not defeat a recovery on the policy for the actual loss sustained; and defendant urges that in the opinion in this cited case, entitled Commercial Ins. Co. of California v. Friedlander, 156 Ill. 595, the principle of law which controls is completed by the following: “If the assured, in making proofs of loss, acts in good faith, in the honest belief that the property destroyed was worth the amount of the valuation placed upon it, and the excessive valuation was not intended to deceive or defraud the insurance company, such over-valuation cannot he held to be fraudulent, and it will not defeat a recovery. ”; so that the question in this case will largely depend upon its coming within the rule as laid down by our Supreme Court in the case cited. It was for the jury, under the instructions of the court, to pass upon the evidence as it was presented by the parties to this litigation.

It does appear that defendants presented affirmative defenses that the plaintiff wilfully and with knowledge of their falsity made representations to the defendants in his schedule or inventory, and falsely swore in proofs of loss rendered to the defendants, that his loss and damage caused by the fire was in an amount in excess of $3,700, which defendant urges is an amount excessive beyond any matter of opinion and about four times the amount of the actual loss and damage sustained. There is evidence of defendants in the record which fixes the loss in the sum of $932.82. Defendants contend that in establishing these affirmative defenses, it is only necessary that the facts establish such defenses by a preponderance or greater weight of the evidence. In the discussion of this case, it is important to have in mind the rule such as has been established by our Supreme Court in Sundquist v. Hardware Mut. Fire Ins. Co. of Minnesota, 371 Ill. 360, where it is to' be noted from the opinion of the court that;

“This court has heretofore adhered to the reasonable doubt rule requiring the facts constituting the felony to be proved beyond a reasonable doubt. (Germania Fire Ins. Co. v. Klewer, 129 Ill. 599; Oliver v. Ross, 289 id. 624; Rost v. F. H. Noble & Co., 316 id. 357.) However, in Rost v. F. H. Noble & Co., supra, we limited the rule to felonies, excluding misdemeanors, and pointed out that although followed in some of the States the principle had been generally abandoned. In the later case of People v. Small, 319 Ill. 437, we indicated a doubt as to whether or not this rule would again be applied in this State. The case before us now presents the necessity for further consideration of this principle.” The opinion then goes on to discuss the reasonable doubt rule as it originated in England and adopted in this country, and finally, after citing numerous cases, the court stated that the reasonable doubt rule, as stated in Rost v. F. H. Noble & Co., supra, and the cases therein cited, will no longer be adhered to in this court. When we come to consider this question, as to what rule should be applied, the defendants call attention to the fact that the plaintiff in the instant case did not and would not let the defendants know where the merchandise was purchased and what was paid for it except that they had bought a certain quantity of “stuff” for a certain sum of money from Greenville, Michigan, but what part of that “certain quantity” had been sold during the two years before the fire and whether they had found that the articles remaining from that purchase had no value or were not saleable, they did not tell the defendants. The plaintiff did not produce for examination books of account, bills and invoices, on request by the defendants, which was required by the provisions of the policies, wherein it is provided;

“The insured ... as often as required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable place as may be designated by this company or its representative, and shall permit extracts and copies thereof to be made.” The adjuster asked for the books and records to prove up the values, and was informed by Paul Appa that there were no books but Appa did pull out one book on which he had a typewritten account on one page respecting the Gibson refrigerators purchased in 1936. The adjuster looked through the other pages and there were some accounts about some furniture, but what it referred to he could not say. He tried to ascertain how the other articles were purchased and their costs, and was told by Appa that he had no records of where they were made and said that he did not keep any records; so that the examination was somewhat limited by the facts that were ascertained and did not aid materially in the determination of the question as it should have done. And when we consider all of the evidence in this record it was clearly a case for a jury to pass upon, and in passing upon it and finding for the defendants, we believe there was sufficient evidence to sustain the finding.

There was one further question called to the attention of this court, namely, that the court erred in.refusing to give certain instructions requested by the plaintiff, and attention is called to the fact that five instructions were given by the court relative to fraud at defendants’ request. The defendants’ reply to this contention states that the record does not show an objection was made by plaintiff to the court’s charge before the jury retired, and shows that plaintiff did not object or specifically point out any part of the charge that he objected to as erroneous or that he indicated any correction he desired to have made, and suggests that under the circumstances plaintiff may not predicate error on the giving of any certain part or parts of the charge, and cite in support of this contention the case of Paulick v. National Bank of Republic, 279 Ill. App. 160, which is based upon a like question as now before the court. In that case the court said;

“The purpose of the rule is to enable the trial court to make necessary corrections if proper objections are made, and unless the party complaining makes objections and the same appear in the record, he waives his right to complain. It does not appear from the record that the plaintiff tendered to the trial judge requests in writing for specific instructions to the jury as to matters of law, which is required by Rule 170, adopted by the municipal court of Chicago, and these requests are to be presented before the commencement of argument of counsel, or within such time as the court may permit.

. “Plaintiff, however, contends that where the errors go to the very foundation of plaintiff’s recovery and wholly control the verdict, such errors should, in the interests of substantial justice, be reviewed by this court, with or without exceptions to the ruling of the trial court.

“While the position of the plaintiff is true, in part, failure to except may not always deprive a litigant of the right to be heard where objection is made at the proper time to the alleged improper ruling of the trial court. But to say that where no objection or exception is taken to an improper ruling this court should consider such ruling on appeal, would tend to confusion rather than to an orderly disposition of litigation. A litigant cannot stand by and permit improper -evidence or ruling of the court to take place during the course of a trial without making known his objections, and unless he does this he cannot for the first time in this court question the ruling of the trial court because he is not satisfied with the judgment. There are numerous authorities of courts of appellate jurisdiction upon the failure of a party litigant to request instructions, and the rule generally supported by the authorities is that a party cannot complain that an instruction was not given where he does not show that the court was requested to give the instruction and refused to do so. (Citing cases.) ” Defendants also cite the case of Greer v. Shell Petroleum Corp., 281 Ill. App. 238, where this subject was considered under section 67, Civil Practice Act, ch. 110, par. 195; as it then existed it is quite similar to municipal court of Chicago rule 171. The court there said that the evident purpose of the requirement of said section 67, that the objections be specific, is to point out to the court wherein the alleged error lies, to the end that same may be obviated; and an objection which fails to do so is not in compliance with the statute. And again under said section 67 of the Civil Practice Act as it then existed, the same rule is considered in Zorger v. Prudential Ins. Co. of America, 282 Ill. App. 444. The court in its opinion there said:

“As the record is silent as to the objections of the defendant, the question before us at this time cannot properly be considered in determining the question whether because of erroneous instructions a new trial should be granted.” Other cases which support the contentions that were urged by the defendants in the instant case are; Illinois Tuberculosis Ass'n v. Springfield Marine Bank, 282 Ill. App. 14, and Home Life Ins. Co. v. Franklin, 303 Ill. App. 146.

The plaintiff further contends and criticizes the court’s charge and seeks to divide the charge into instructions, and says that nine of the instructions dealt specifically with the issues in this case; that of the nine, five dealt with fraud and false swearing and only one of those presented the plaintiff’s theory, and at another place says that all five of the instructions relating to fraud were requested by the defendants. While there is some criticism of the instructions as given, from an examination of the record we think that the matter has been given to the jury who have been guided by their deliberations, and considering the facts as we have indicated, which were contraverted questions, and the case as it appears from the briefs of the parties, we are of the opinion that the court did not err in entering judgment on the verdict of the jury.

The judgment is accordingly affirmed.

Affirmed.

Burke, J., concurs.

Mr. Justice Denis E. Sullivan,

dissenting: I think it an injustice that the insured be not paid his conceded loss.


source: Caselaw Access Project

author: Mr. Presiding Justice Hebel

license: Public Domain

text:
    Karl Vieth, Receiver, Appellant, v. Chicago Title and Trust Company, Trustee et al., Appellees.
    Gen. No. 41,270.

      Opinion filed November 20, 1940.
    Rehearing denied December 11, 1940.
    Sabseield Collins, of Chicago, for appellant.
    Anderson & Clarke, of Chicago, for certain appellee.
    Frank E. Dingle, of Chicago, for certain other appellees.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

The appeal in this case by the plaintiff is from an order entered November 14, 1939, overruling plaintiff’s exceptions to the master’s report, and the order entered on November 22,1939, dismissing suit of plaintiff and the amended complaint therein, for the reason that plaintiff had not proven the allegations of his amended complaint or fraud, or the badges of fraud, therein alleged.

In April, 1935, plaintiff filed his complaint in equity to recover the whole of the proceeds of certain life insurance policies on the life of Albert T- Kramer, deceased, and held in trust by the Chicago Title and Trust Company for the benefit of Ruth E. Kramer and Margaret Kramer, daughters of Albert T. Kramer, deceased. Kramer died October 5, 1932, and his wife died on December 24, 1931, and on March 8, 1932, Albert T. Kramer established a trust of certain life insurance policies, to be held in trust by the Chicago Title and Trust Company, as trustee, making the beneficiaries of his insurance his daughters. The plaintiff’s amended complaint alleged his appointment as receiver in November, 1933, of the Commercial Oil Company, whose business was that of wholesaling and retailing gasoline and motor oils. The complaint further alleged that on February 25, 1929, a notice was sent out for a director’s and stockholder’s meeting to consider the assumption by the Commercial Oil Company of the payment of all premiums on $70,000 of life insurance on Kramer’s life; that it was there disclosed that Kramer carried $100,000 of life insurance and that the company had been paying the premiums since June 14, 1924; and that at said meeting it was proposed to release $30,000 in favor of Emma Kramer, wife of Albert T. Kramer, and that such a resolution was passed providing that the balance of $70,000 of insurance should be for the benefit of the corporation and the premiums paid by the company. It is further alleged that the company did pay the premiums until Kramer’s death and that thereafter Kramer, finding himself uninsurable, during his lifetime, failed to make the corporation the beneficiary and executed the insurance trust with the Chicago Title and Trust Company, as trustee; that Ruth E. Kramer and Margaret G-. Kramer were the beneficiaries of the insurance trust; that Kramer hid the facts from the stockholders and directors and that after his death they found that Emma Kramer during her life was the beneficiary of all of Kramer’s insurance; that at no time was the corporation beneficiary and alleged that therefore the corporation had been defrauded. It is further alleged that $62,659.85 was paid to the Chicago Title and Trust Company as trustee and beneficiary of the insurance. The complaint then prayed that all the insurance be turned over to the plaintiff:.

It is charged by the defendants that the plaintiff’s complaint contains no allegation or charge that Albert T. Kramer was ever insolvent at any time and did not allege that there was any assignment to the Commercial Oil Company; did not allege any acts charging the Chicago Title & Trust Company or Ruth E. or Margaret Gr. Kramer with any acts of fraud; did not allege that the plaintiff had exercised any remedies at law and showed on its face that the Commercial Oil Company and the. plaintiff were only common, unsecured creditors without any judgment or decree against Kramer. The complaint alleged that during her lifetime, Emma Kramer, was at all times beneficiary of all the policies and alleged that the Commercial Oil Company was never at any time made a beneficiary.

The answer of the Chicago Title & Trust Company as amended and the amended answer of the defendants, Ruth E. Kramer and Margaret Gr. Kramer, denied all the material allegations of the plaintiff’s complaint except that the insurance had been paid to the Chicago Title & Trust Company and that Ruth E. and Margaret Gr. Kramer were the beneficiaries of the insurance trust. The Chicago Title & Trust Company alleged by way .of new and additional matter in its affirmative defense that the books of the corporation were always open to an inspection by its officers, directors and stockholders, and that at no time were they hidden or changed or altered; that no fraud had been committed and that in all instances where checks of the corporation were used to pay premiums, that the amounts thereof were charged against the account of Albert T. Kramer on the books of the company and that at the time of his death the corporation was indebted to Kramer in a large amount of money after all the premiums had been charged to his account.

The defendants, Ruth E. and Margaret Gr. Kramer filed an amended answer to the amended complaint of the plaintiif and denied all the allegations and conclusions of fraud and all the other allegations of the plaintiff’s complaint as amended except that they were beneficiaries of the insurance and charged that they had no knowledge of the alleged fraud and that they were not present at the time of the alleged transactions and took no part therein; that they had no knowledge of the insurance trust until after their father’s death and then alleged new and affirmative matters of defense.

It appears from the statement of facts in the briefs that between 1925 and 1931 Albert T. Kramer took life insurance policies on his life in the aggregate amount of $100,000, some of which policies lapsed and some others were canceled after loans of the entire cash value were made. All of Kramer’s policies when originally issued, were made payable to Emma Kramer, his wife. She died December 24, 1931. Kramer died October 5, 1932. On March 8, 1932, Kramer changed his policies and made the Chicago Title & Trust Company beneficiary as trustee under its trust No. 28778 for the benefit of his daughters Ruth and Margaret. The Commercial Oil Company was never a beneficiary nor assignee of any of Kramer’s policies.

After Kramer’s death the Chicago Title & Trust Company collected $62,659.85 of proceeds on the policies held in trust. The insurance trust was created more than three years before the plaintiif filed his suit in 1935 and the trust was in the usual form and provided for periodical payments to the daughters, Ruth and Margaret Kramer, until such time as they arrived at the age of 35 years.

The Commercial Oil Company was organized in 1923, and Frank Payne was its président until 1926, when Kramer succeeded him. as president. Kramer owned 353 shares of the capital stock of the corporation and at the time of his death Kramer had purchased the shares of Payne, Iiimse and others so that Kramer and his family owned 477 shares of the capital stock. Walter C. Fisher, who in 1929 had held 13 shares of capital stock, had become deceased and William E. Frye who had owned 10 shares of the capital stock in 1929 continued to hold his shares. Outside of these 23 shares all the capital stock was held by Kramer and his family and certain officers who held shares to qualify them for their positions. All the shares that were transferred after 1929 were purchased and held by Kramer or his family. After Kramer’s death, his estate ivas probated in Cook county in October, 1932. Kramer was never insolvent and his estate is not insolvent.

Plaintiff complained that on or about June 14, 1924, there was a meeting of the stockholders and directors of the Commercial Oil Company and claimed that at that time a resolution' was passed providing that $70,000 of insurance on Kramer’s life should be held for the benefit of the corporation and that $30,000 of it should be held for the benefit of Kramer’s wife, Emma Kramer. The minutes of the meeting of June 14, 1924 contain no reference to insurance. Plaintiff further contended and alleged that on February 9, 1929, a similar resolution was passed by the directors and stockholders. The minutes of those meetings were admitted in evidence and it appears that no mention of insurance was made in the minutes of those proceedings. Plaintiff further complained that on March 4, 1929, at a special meeting of the board of directors a resolution was supposed to have been passed dealing with the subject matter of insurance. The minutes of that meeting do not mention the subject of-insurance. Plaintiff next claimed that on February 9, 1929, the board of directors improperly increased Kramer’s salary to $1,000 per month, and further alleged that also on February 9, 1929, a special meeting of the stockholders of the Commercial Oil Company was held and had approved the preceding meeting of the directors and improperly increased Kramer’s salary to $12,000 per year and made it retroactive at the rate of $1,000 per month from February 9, back to January 1, 1928, and thereby claimed that the said retroactive salary was improper and unlawful and that Kramer should be charged with the alleged unlawful retroactive salary. The plaintiff, however, did not in his amended complaint mention these resolutions concerning retroactive salary. In fact, the retroactive salary was never collected or paid for the year 1928.

The plaintiff sought by parol testimony to vary and alter the foregoing minutes of the meetings of the stockholders and directors of June 14, 1924; February 9, 1929; and March 4, 1929, and sought to show by parol testimony that those resolutions should have contained provisions that $70,000 of insurance was to be held for the corporation and $30,000 for Kramer’s wife. The master held that the minutes could not be altered or amended in a collateral attack and also held that the evidence and testimony submitted by the plaintiff was insufficient to show that the minutes of those several resolutions should have contained any resolution on the subject matter of Kramer’s insurance. Plaintiff then introduced as exhibits ledger sheets of Kramer’s personal account with the Commercial Oil Company, which ledger sheets showed that all premiums that were paid by checks of the Commercial Oil Company were charged to Kramer’s personal account as a debit and that at the time of Kramer’s death there was a credit balance in his favor, after deducting all the debits of life insurance premiums to his personal account. Those ledger sheets showed a net credit to Kramer on December 31, 1932, of $3,Ill.71, but after his death, October 5,1932, and on and from October 31, to December 31,1932, a number of items which are unexplained and uncontested by the plaintiff were also debited to Kramer’s personal account after his death, and by or under the direction of the officers then in charge. Deducting these later items, the ledger sheets show that on September 30, 1932, Kramer had a credit of $17,229.89, after deducting all of the insurance premiums debited to his account. Plaintiff’s exhibit 1 of January 15, 1937, shows that on June 14, 1924, the corporation owed Kramer $13,579.10. He was then given $9,900 of stock and a note for $3,679.10. It does not appear that plaintiff disputed these items,' but merely charged that those resolutions should have contained a provision about insurance. Many of Kramer’s policies were not taken out until five years after the above meeting of the stockholders on June 14, 1924. Plaintiff’s exhibit 1 of January 15, 1937, contains the minutes of the board of directors of March 4, 1929, and at page 99 the corporation became indebted, to Kramer for property purchased for the company’s station No. 5 in the amount of $21,508.85, and no question is raised by plaintiff about any unlawful purchase of this property. The master found that between 1928 and 1932 the corporation had owed Kramer the aggregate sum of $30,771.82, and that the corporation books indicated that at all times during that period the company was indebted to Kramer for more than the amount Kramer owed on any premium advances and found that the above figures did not include the unpaid back salary increase which was given Kramer on February 9, 1929. The master also found that Kramer had made loans on his policies in the amount of $7,586.32 which he had advanced as a loan to and for the use of the corporation.

The plaintiff sought to use the equitable principle of following money or property into other money or property and thereby sought to take the proceeds of Kramer’s life insurance on the ground that premiums on his policies had been paid by checks of the Commercial Oil Company. Defendants pleaded that the proceeds of the insurance were exempted property, that Kramer was never insolvent, that his estate was not insolvent, and that the premiums had been charged to Kramer’s personal account with the corporation and that he always had a greater credit than the debits on his personal account with the corporation and that he did not owe the corporation any money whatsoever for premiums paid on his insurance.

It is urged by the defendants that the proceeds of life insurance policies on Albert T. Kramer’s life, paid to the Chicago Title and Trust Company as trustee, and held.in trust for his two daughters are exempted property, and cannot be taken away by any creditor of Kramer, even if he had died leaving any creditors; and rely on the statute of March 26, 1869, Smith-Hurd’s Ann. Stat. 1935, ch. 73, sec. 231; Cahill’s Stat. 1935, sec. 342, claiming that it created an exemption of the entire proceeds of life policies payable to the wife or children of any insured person, and that under this statute, only premiums paid by the insured when insolvent, could be recovered by creditors of the insured and that insolvency of the insured had to be both pleaded and proven by the creditor who must have been a creditor at the time premiums were paid during insolvency of the insured. The theory upon which the plaintiff filed his suit is upon the equitable principle of tracing money or credits and the proceeds of physical properties into other money, credits or physical properties and thereby sought to apply that equitable principle to recover the proceeds of life insurance upon the alleged ground that the payment of premiums had been made on Albert T. Kramer’s life insurance with moneys or checks upon the Commercial Oil Company.

The plaintiff sought to apply the equitable principle of tracing money or property into other money or property, and thereby sought to apply that equitable principle to recover the proceeds of life insurance upon the ground that the payment of premiums had been made on Albert T. Kramer’s life insurance with checks of the Commercial Oil Company. The defendants pleaded that the proceeds of the insurance were exempted property, that Kramer was never insolvent, that his estate was not insolvent, that the premiums had been charged to his account with the corporation, and that he always had a greater credit than the debits on his personal account with the corporation, and that he did not owe the corporation any money for premiums paid on his insurance.

In filing his suit, the plaintiff sought to recover the principal or proceeds of the policies on Kramer’s life, originally payable to Emma Kramer, his wife, and after her death made payable to Chicago Title & Trust Company under the trust, as set forth in the statement of facts herein, to be held as a spendthrift trust for the sole use and benefit of Ruth E. Kramer and Margaret G-. Kramer, his daughters. It is suggested that in filing the suit the plaintiff entirely overlooked the statute of March 26, 1869, as well as the common-law decisions of this State which created an exemption of the proceeds of life insurance payable to a wife or child or to a trustee for a wife or children, and wholly overlooked a well-settled principle of the law, that the equitable principle of tracing money or physical properties into other money or physical properties cannot be applied in dealing with the proceeds of life insurance.-

The rule is and has been recognized by our Supreme Court that the proceeds of life insurance are not an asset even to the insured. In fact, they do not come into existence until after death. During life the insured could not by any suit recover the proceeds, and claim them as his own. The creditor can have no right where the insured possessed none. A man’s life is not property; of it he can make no gift; neither can he assign; nor can a creditor take it in payment of a debt. The fund, called proceeds, which is created with and after the act of death, is not such a fund as to which the equitable principle of tracing funds can be made to apply. The funds known as proceeds are not created by any voluntary or wilful act of the insured, nor by any omission on his part, and that being so, fraud in the ordinary sense cannot be even shown or proven. The act of death usually is wholly involuntary and against the will of the insured, and the act of death in itself is not a fraud on anyone. The creation of the so-called proceeds by the act of death is not, therefore, a violation of the statute of frauds and perjuries because that statute applies to physically existing properties, money or credits, which may become the matter of debts and credits and may be handled in the channels of commerce at large. This statement that we have quoted is made in one of the briefs in this litigation.

We will now deal with the question of the right to recover the proceeds of insurance both under the statute and under the common-law decisions, and also discuss the question of the recovery of premiums. The statute of March 26, 1869, was repealed in 1937 when the present Insurance Act was enacted. The death of Kramer occured in 1932, and the provisions of the present act are not applicable to the present case, except in so far as the new and later statute shows the public policy, with reference to insurance proceeds payable to a widow, children or dependents of the insured. For convenience, we quote the statute of March 26, 1869, which is as follows:

“It shall be lawful for any married woman, by herself, and in her own name, or in the name of any third person with his assent as her trustee, to cause to be insured for her sole use the life of her husband, for any definite period, or for the term of his natural life; and in case of her surviving such period or term, the sum or net amount of the insurance becoming due and payable by the terms of the insurance, shall be payable to her, to and for her own use, free from the claims of the representatives of the husband or of any of his creditors: Provided, however, that if the premium of such policy is paid by any person with intent to defraud his creditors, an amount equal to the premiums so paid, with interest thereon, shall inure to the benefit of said creditors, subject, however, to the statute of limitations. The amount of the insurance may be made payable, in case of the death of the "wife before the period at which it becomes due, to his, her, or their children, for their use, as shall be provided in the policy of insurance, and to their guardian if under age.”

The Supreme Court of Illinois very early interpreted the statute and extended the exemption therein created to all cases, where the husband himself, should take out policies for the benefit of either his wife or children or both, and in the case of Houston v. Maddux, 179 Ill. 377, the Supreme Court in part said: .“This statute is in the nature of an exemption law and should be liberally construed. (Cole v. Marple, 98 Ill. 58.) Hence, it contemplates and includes cases where the husband procures for his wife a policy on his own life. In such case he is presumed to act for her and as her agent. (Felrath v. Schonfield, 76 Ala. 199.)” It also appears that in Cole v. Marple, 98 Ill. 58, the exemption statute again came up for interpretation. Here was a suit by creditor’s bill, by one .Marple against the widow of the insured and against the Equitable Life Assurance Society and others including the executor of the estate of Cole, to reach proceeds of a $10,000 life insurance policy. The policy was made payable to insured or his executor or administrator. Shortly before his death, the insured assigned the policy to his wife and the insurance company consented to the assignment. The wife was not made a beneficiary in the ordinary way and it was contended that the assignment of the benefits did not give the protection of the statute which applied only to cases where she was made the beneficiary. The estate of Cole, the insured, was wholly insolvent and Marple, the creditor, had probated his claim against Cole’s estate. The trial court decreed that Mrs. Cole pay the full amount of the policy received from the Equitable Society with interest at 6 per cent from the day she received the money. The sole question was whether or not the assignment of the policy when the insured was insolvent was a transaction which was authorized by the statute, or whether or not the transfer was a voluntary conveyance that could be set aside as being-fraudulent. In this case the Supreme Court said:

“Here is a statute which empowers a wife, in her own name, or in the name of a third party, to obtain a policy of insurance on the life of her husband, and, in case of his death, the amount of the insurance shall go to the wife free from the claims of the husband’s creditors. There is but one saving provision in the statute in favor of creditors, and that is where a person pays the premium on the policy with the intent to defraud his creditors, an amount equal to the premium so paid, and not barred by the statute of limitations, may be recovered.” And again on page 65, the court said: “Now, while the act which allows the wife to hold a policy of insurance on the life of her husband, and protects her in the proceeds of the policy as against the creditors of her husband, is not strictly an exemption law, yet it is of that nature, and should be construed with the same liberality.

“But we are not without authority on this question. In Charter Oak Life Ins. Co. v. Brent, 47 Mo. 419, where a statute similar to our own was under consideration, it is said: ‘The statute was founded on charity, and intended to subserve a beneficien! object, and in a case falling within it, I should be disposed to give it the most favorable construction to carry out its humane principle.’ ” The court then speaks of the constitutional provision that the general assembly shall pass liberal Homestead and Exemption Laws, and said: “At the time the assignment was made, had Mrs. Cole taken out a new policy on her husband’s life, in her name, or that of a trustee, it is not denied that she would have been able to hold the proceeds regardless of creditors of the husband. What is the difference in principle between taking out a new policy and having one already in existence assigned with the consent of the company? We perceive no substantial difference, and, hence, we must hold that Mrs. Cole, under the statute, had a clear right, with the consent of the company, to accept an assignment of the policy.” We might say in this connection, that it does not appear in the statement of facts that have been called to our attention that there was any objection by the insuring company against the assignment of the policies in question at the time that they were assigned to defendant, Chicago Title & Trust Company as trustee for the benefit of the defendants, Ruth E. and Margaret Kramer.

Again, in the case of Betten v. Williams, 277 Ill. App. 353, this statute came before the First Division of this Appellate Court. A motion to dismiss in the nature of a general demurrer which was filed urged that the complaint did not state a case entitling the plaintiff to the relief sought. It was stipulated that the estate of Eddy was still pending in probate, that his indebtedness was approximately $300,000 including the claim for alimony and that one of the daughters had a claim for $119,000, and that .the face value of the securities held by the estate was $308,000. The chancellor dismissed the complaint for want of equity; the Appellate Court affirmed the decree; and the Supreme Court denied the certiorari. On page 361 of 277 Ill. App., the court said;

“Although respective counsel have argued at some length as to the insurance policies, we are of the opinion that the greater weight of authority supports the right of a parent to obtain insurance policies in a reasonable amount on his life in favor of a child, regardless of whether or not the insured is insolvent. In chap. 73 on Insurance, par. 342, Ill. Statutes (Cahill) 1933, it is provided that it shall be lawful for any wife to take out insurance policies on the life of her husband, and, in case of her surviving, the amounts payable on the policies shall be free from the claims of the representatives of the husband or of any of his creditors,” and then cited cases of courts of last resort sustaining the opinion in this case.

In the case at bar the beneficiaries did not even know of the insurance trust until after Kramer’s death. The Chicago Title and Trust Company as trustee had no knowledge whatever of any facts that would have created a suspicion of fraud. The master found that neither the Chicago Title & Trust Company, Margaret Kramer or Ruth E. Kramer had any connection with, or knowledge of any of the allegedly fraudulent actions of any of the parties described in the complaint or sought to be proved in the evidence; that the only connection with the matters involved herein which has been shown as to the said defendants, is that the Chicago Title & Trust Company agreed to receive the proceeds of the life insurance policies, as trustee for Margaret and Ruth E. Kramer in a written agreement which is Chicago Title & Trust Company Trust No. 28778, between it and Albert T. Kramer, and that after Kramer’s death the said company collected such insurance funds and retains them for the trust purposes.

It would appear from the authorities which we have cited, that the plaintiff: had no lawful claim either at common law or under the statute. He simply and wholly misconceived the foundation of his case, and also did not look at the fundamental principles upon which life insurance is founded and maintained. It further appears that under numerous similar statutes in other States, creditors of the insured cannot reach the proceeds of life insurance policies even though the insured may have been hopelessly insolvent. This, however, is not the fact in the present case. The evidence does not establish that the estate was an insolvent one. There appears to be a number of cases from other jurisdictions on this very question, which we have just discussed, and it is urged that even under the common law, and wholly regardless of the aforesaid exemption statute, the proceeds of life policies are not an asset of the estate of the insured, unless payable to the administrator, and the insured’s creditors cannot recover the proceeds. In support of this contention, the case of Gurnett v. Mutual Life Ins. Co. of New York, 356 Ill. 612, is cited, it appearing that one Ames created a life insurance trust with the Central Republic Bank & Trust Company. He reserved the right to change the beneficiary; to borrow money in accordance with the policy provisions; to use the policies as security; or to surrender the policies for their cash value, and it was also provided that the trust might be terminated in whole, or might be modi- ■ fied and amended. The trust was twice amended. Between 1906 and 1927, Ames acquired 33 life policies in an amount of more than $1,000,000. At his death, he was indebted for $324,000. The complaint to reach the proceeds, set forth the above facts and alleged that his estate was insufficient to pay his debts. His estate was in process of administration and his debts were principally to stock brokers. The validity of the trust was attacked but the defendants filed a general demurrer to the complaint and the trial court dismissed the complaint for want of equity. The decree was affirmed, by the Appellate Court, and on further appeal the Supreme Court affirmed the Appellate Court. The Supreme Court said on this question: “A policy of life insurance is not deemed an asset of the estate of the insured unless it is made payable to him, his executors or administrators. The mere fact that the insured may change the beneficiary does not make the policy or its proceeds a part of his estate. Neither the policies nor their proceeds constituted a part of the estate of Knowlton L. Ames, deceased. Since his death, the trust agreement is merely evidence of the trustee’s contract under, which it must collect the policies and hold the proceeds for the purposes of the trust.”

In another case cited, Farnum v. American Nat. Bank & Trust Co. of Chicago, 305 Ill. App. 102, where Farnum & Co. claimed that Ames was indebted to them for over $400,000, the court upon the questions that were involved said:

“In the view we have taken of this appeal, it is necessary for us to refer to only one of the special grounds urged, viz: ‘The proceeds are not available to creditors for the reason that the policies were at no time, by the allegations of the amended bill itself, assets of the deceased or payable to him, his executors or administrators. ’ In support of this special ground of demurrer, the defendants demurring cite Gurnett v. Mutual Life Ins. Co., 268 Ill. App. 518; id., 356 Ill. 612. After a careful consideration of the important question involved in this special ground of demurrer we have reached the conclusion that the special ground of demurrer is a meritorious one, and that the trial court was justified in dismissing the bill for want of equity upon that ground alone. ’ ’ There are other citations of cases in other jurisdictions where the court has passed on like questions.

It is further urged by the defendants that even under the Illinois Exemption Statute of March 26, 1869, the plaintiffs in this case, cannot recover any premiums even if it were proven Commercial Oil Company moneys were used to pay them, because the plaintiff did not comply with the statute and both allege and prove Kramer was insolvent when the respective premiums were paid; and urge that Kramer was never insolvent and his estate was not insolvent. It is urged that the inability, under both the statute, and the common law, of a creditor to reach the proceeds of life insurance does not apply to the recovery of the premiums. We now, therefore, consider the question of whether or not, and under what conditions a creditor may reach and follow moneys used in the payment of premiums, and it is necessary to return both to the statute of March 26,1869, and to the common law. As already indicated from the facts it does not appear that Kramer was indebted to the Commercial Oil Company for any money paid on premiums. Plaintiff’s exhibits 5a and 5b showed that the corporation was not a creditor of Kramer. It appears that the corporation charged the premiums to his personal account and that a balance was due to him from the corporation. But if the facts had been different and if it had been proven that Kramer did owe some money to the corporation, still the plaintiff cannot recover any such premiums, that might appear to have been paid on Kramer’s policies. This appears to be supported by the statute of March 26, 1869, which, after stating that the proceeds cannot be taken by a creditor, states: “Provided, however, that if the premium of such policy, is paid by any person with intent to defraud his creditors, an amount equal to the premiums so paid, with interest thereon, shall inure to the benefit of said creditors, subject, however, to the Statute of Limitations. ’ ’

Upon the facts as we have quoted them in calling attention to the fact that Kramer was not indebted to the corporation and that his premiums were charged to his account and that a balance was due him from the corporation, we wish to call attention to a portion of the suggestions made by the plaintiff that the master, in the consideration of the questions which were involved, had stricken from the record plaintiff’s exhibits 5a and 5b, and that therefore there was no evidence which would justify the conclusion as we have stated. It appears that the defendant, Chicago Title and Trust Company, trustee, under point 10 of its brief and argument, states;

“Plaintiff’s Exhibits 5A and 5B are in the record. They are the accounts between Kramer and the Commercial Oil Company. They were introduced in evidence by Mr. Collins after the ruling by the Master that the books of the Commercial Oil Company could not be introduced in evidence and after the court had sustained the Master. Upon a further offering by plaintiff, the Master allowed them in evidence and the court approved his report based thereon. Plaintiff takes the position in his brief that nevertheless the books are not properly in evidence and tries to raise error upon the former action of the court. He cannot ignore his own action. He cannot rely upon his own error. ’ ’ There is no question but what the master let the exhibits in evidence, and that after they were stricken his ruling was approved by the chancellor, subsequently, by order of November 14,1939, whereby the master’s report was in all things approved. It appears that after the ruling of the master and the court as to the admissibility of the books complained of by the plaintiff, Mr. Collins again offered the books which he wanted in evidence and they were received. The error, if any, was cured by the court’s approval of the master’s report. The court had the right to change its mind. In the case of Clark v. Carr, 45 Ill. App. 469, the court said;

“If the court became satisfied that an erroneous ruling had been made in the admission of the notes, the only course open for the correction of the error was to strike out or withdraw the evidence. ’ ’ In this case, after having stricken the books from the record, the master subsequently admitted in evidence upon the motion of the plaintiff and the court approved the action. These books so in the record show the facts found by the master, and prove that Kramer paid the premiums. In this connection, the case of Bartlett v. Goodrich, 153 N. Y. 421, says:

“It is undisputed that the policies were issued to the deceased in his own name, and made payable to him, his executors, administrators and assigns, and that up to the time of the assignment hereinafter referred to, he had the apparent legal title. It is quite true that the premiums were paid from the funds of the firm, but the deceased had furnished all the capital for the business, and there was always a large balance due to him upon the books of the firm. He had the right to draw against that balance, and it is quite immaterial whether he received a portion of it from the firm in cash, or applied it to the payment of premiums upon the policies. The result was that, in equity, he paid the premiums himself. Nor is it important now that the premiums were not charged to the deceased upon the firm books, but credited in a special insurance account. The real nature and substance of the transaction did not depend upon the methods of bookkeeping adopted. It was a circumstance to be considered by the trial court, but, in view of the finding, it has ceased to be of much importance, and cannot be given any conclusive effect in the determination of this appeal.” The evidence and findings show that Kramer had been in the same position.

There is a further question that we believe should be considered and that is the contention of the plaintiff that the cases that are cited by the defendants to support their contention, that the proceeds of life policies on Albert T. Kramer’s life, paid to the Chicago Title and Trust Company as trustee and held in trust for his two daughters are exempted property and cannot be taken away by creditors of Kramer, are creditor cases only. Plaintiff contends that in none of the cases cited are the rights of a corporation claimed by a receiver in its behalf, distinguished from those of the corporate stockholders and creditors; and that in these cases there was raised no question as to the right of the cestui que trust to follow the property purchased with its misappropriated funds, and that the cases cited do not apply to the case on appeal. Plaintiff further contends that there is a distinction between the cases cited and the present case, because in the present case the receiver represents the corporation alone, and not its creditors or stockholders, and that, if plaintiff as receiver, represents the corporation solely, and if the corporation primarily had the right to call its directors to account in a court of equity for breaches of trust, then the receiver on behalf of the corporation can do likewise; and further that the defendants are unable to recognize the distinction between the rights of the corporation itself, claimed by its receiver, and the rights of stockholders and creditors. A number of authorities are cited by plaintiff on this question. However, we are of the opinion that the receiver is seeking to recover, not as a creditor, but to establish that the insurance fund is a part of the property of the Commercial Oil Company, and points to the fact that in the plaintiff’s case the amended complaint charged not upon information and belief, but directly, that Commercial Oil Company had been defrauded of the benefits of $70,000 of life insurance, for which the corporation had paid the premiums, by reason of the changes in, substitution of, and destruction of certain books and records of the corporation, and through the failure of officers and directors of the corporation to cause the corporation to be named as direct beneficiary, under the policies of insurance, as directed by the directors. Assuming that the action was as stated by plaintiff, still the facts do not establish that Kramer’s insurance provided any fund of the corporation, but rather it appears from the facts that the amount of the premiums for the insurance that became due was paid by and charged to Kramer’s account. There is no evidence which would justify the conclusion that there was any agreement by Kramer in his lifetime that the beneficiary of the life insurance policies was to be the Commercial Oil Company, and as a matter of fact the beneficiaries were named by Kramer in his lifetime as has been stated in the facts that appear in the record of this case. The facts are that Kramer, at the time of his death was not insolvent, but the facts establish that he had to his credit upon the books of the Commercial Oil Company a considerable amount of money that was due his estate.

There is one further question that it might be well to consider and that is the contention by plaintiff that the defendants having closed their case without any proof as to the honesty and fairness of Albert T. Kramer’s dealing as a trustee with the funds of the corporation on and after February 9, 1929, that they are not in a position to ask this court to give them a chance to do so at another trial. It does not appear from anything that we noted in the record that he concealed any facts that were dishonest, nor that there was any conflict between the rights of the beneficiaries of the trustee and the rights of the Commercial Oil Company to this insurance fund. As we have indicated, the fund upon the death of Kramer was property and was paid to the Chicago Title & Trust Company, and by it to be administered according to the terms of the trust agreement.

In conclusion, upon consideration of the questions that are called to our attention by the parties to this litigation, we are of the opinion that the court did not err in entering an order dismissing the suit of the plaintiff for want of equity, and under the circumstances, such as we have outlined in our opinion, the direction of the court will be affirmed.

Decree affirmed.

Burke, J., concurs.

Denis E. Sullivan, J., dissents.


text:
    John W. Walker et al., Appellees, v. Marie L. Walker, Appellant.
    Gen. No. 41,294.

      Opinion filed November 20, 1940.
    Weightstill Woods, of Chicago, for appellant; James Gr. McConaughy, of Chicago, of counsel.
    Coburn & Coburn, of Chicago, for appellee John W. Walker; Louis T. Hereon, of Chicago, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

The appeal in the above entitled cause was brought upon two respective notices of appeal. The first notice of appeal was filed on May 27, 1939, and purports to appeal from an order entered April 24, 1939, directing the sale of real estate involved in the original affirmed decree of partition, the claim of homestead having been reserved in said order until the further order of court, and also from an order entered May 17, 1939, directing the division of certain cash and securities involved in the original affirmed decree of partition and accounting. The second notice of appeal filed on August 1, 1939, purports to appeal from an order entered August 1, 1939, affirming and approving the master’s report of sale and distribution, and from a finding in said order that both plaintiff and defendant are entitled to homestead in the real estate, and providing that the $1,000 reserved from the purchase price be divided equally among plaintiff and defendant, and also from a further order entered August 1,1939, directing the defendant to indorse over a certain beneficial certificate for 10 units in a certain liquidation trust and upon default thereof, that the master in chancery indorse over said beneficial certificate.

On December 16,1937, a final decree of partition and accounting was duly entered in this action by the circuit court of Cook county, and on appeal by the defendant, the decree was affirmed by the Supreme Court of Illinois in Walker v. Walker, 369 Ill. 627.

These notices of appeal were taken directly to the Supreme Court for the reason that a freehold estate of homestead and title to real estate was claimed to have been involved. The Supreme Court, in discussing the questions involved, filed an opinion on the 21st day of February, 1940 (Walker v. Walker, 373 Ill. 339), and, upon the question as to the jurisdiction of the court to consider the appeal of the defendant, Marie L. Walker, recited the following facts:

“John W. Walker, an appellee, brought a suit in the circuit court of Cook county against his wife, Marie L. Walker, appellant, asking partition of certain described real estate, the title of which was in the name of both parties, and for an accounting as to certain personal property. A decree was entered finding each entitled to an undivided one-half interest and partition was ordered and commissioners appointed. On appeal this decree was affirmed. 369 Ill. 627.

“The mandate of this court was filed in the trial court, and, thereafter, on April 24, 1939, the commissioners reported the premises indivisible and appraised the same. On that day appellant filed a petition alleging she had an estate of homestead in the premises and asked the property be sold subject to her homestead rights. On the same date a decree of sale was entered which recited that the question of homestead was reserved until the further order of the court. On May 17, a decree was entered in reference to the accounting feature of the litigation, and on May 27, appellant filed a notice of appeal to this court from the decree of sale of April 24 and the accounting decree of May 17. A praecipe for record was filed June 6 and on July 26, appellant presented a short record and obtained an extension of time within which to file a complete transcript of the proceedings. On May 29, the master sold the real estate and thereafter filed a report of sale. On June 14, appellant filed objections to the report of sale urging that the sale was held after she filed the notice of appeal from the decree of sale; that her petition for a homestead was undisposed of at the time of sale, that there were irregularities in the sale which affected the sale price and asked that the report be not approved.

“On August 1, a decree was entered overruling appellant’s objections, approving the report and directing a deed. The court found that neither appellant nor appellee had abandoned their homestead and directed that all the proceeds, including the $1,000 homestead valuation be divided equally. Appellant immediately filed a second notice of appeal from the two decrees entered August 1, one approving the master’s report of sale, the other directing division of said securities. The complete transcript, filed September 12, includes not only the proceedings up to the time of filing the first notice of appeal but also the proceedings entered by the court subsequent thereto, including the decrees of August 1 and the second notice of appeal.

“The case is brought direct to this court [Supreme Court] on the theory a freehold estate is involved. The only points appellant urges in her original brief are in reference to her claim of homestead estate and the accounting feature.”

From a consideration of the remainder of the opinion, the Supreme Court reached the conclusion that since the petition did not present a question of freehold, the objections, which were overruled by the decree approving the report of sale, likewise failed to raise a question involving a freehold, and that, therefore, no freehold is involved in this proceeding; and further that the other question involved in this proceeding is with reference to the accounting and distribution of the personal property as directed by the decree of August 1, 1939. Therefore, the Supreme Court, being without jurisdiction, transferred the cause to this court.

The first question that is to be considered is the motion to dismiss filed by appellee, which was reserved to the hearing. The appellee calls attention to the opinion of the Supreme Court in the case of Walker v. Walker, 369 Ill. 627, where the court said:

“From a consideration of the entire record we are of the opinion that the chancellor was correct in holding appellant and appellee were joint tenants and in ordering an equal division of the property.” Appellee further calls attention to paragraph 25 of the decree, which finds:

“That from the findings of fact and under the law, the court concludes and finds that the plaintiff, John W. Walker, and the defendant, Marie L. Walker, are each entitled ... to an equal division and partition of the said real estate and securities.”

Thereafter, on a further appeal to the Supreme Court, the court said in the case of Walker v. Walker, 373 Ill. 339:

“The decree of partition, having settled the rights of the parties as to the nature and extent of their various interests, could not be subjected to a review by appealing from a subsequent order made in carrying the original decree into execution. (Navigato v. Navigato, 268 Ill. 453; White v. VanPatten, 280 id. 215). There is no freehold involved in the notice of appeal from the order of sale. . . .

“The other question is in reference to the accounting and distribution of the personal property as directed by the decree of August 1,1939.” Therefore, it is suggested by the plaintiff that the pending appeal in this court relates only to the accounting feature of the personal property and securities involved, and should be determined and adjudicated by the finding and ruling of the Supreme Court with respect to the real estate, namely that the final decree as affirmed by the Supreme Court on October 17, 1938, “settled the rights of the parties as to the nature and extent of their various interests” in the personal property involved in the instant appeal.

We are of the opinion that the pending appeal relates only to the accounting feature of the personal property and securities involved. While the final decree as affirmed by the Supreme Court on October 17, 1938, settled the rights of the parties as to the nature and extent of their various interests in the property involved in this appeal, still the question remained as to questions which might and did arise between the parties over the division of the personal property and accounting to be had pursuant to the decree. Therefore, the motion to dismiss is denied.

It is well to consider the questions that were passed upon by the Supreme Court in the two appeals that were passed upon by that court. In the first appeal, entitled Walker v. Walker, 369 Ill. 627, the court held in that case that where one claims to be sole owner of securities purchased by his wife and taken in their joint names, the allegation of sole ownership does not preclude a decree providing for a division of the securities, the defendant in her counter-claim alleging she is the sole owner, as the question of ownership of the property is clearly put in issue, and the chancellor is warranted in adjudicating the rights of the parties in the property. And further the court held that when property is taken in the joint names of husband and wife and the consideration is furnished by one of them, there is a presumption of a gift from the one furnishing the consideration, clear and convincing evidence being required to overcome the presumption and establish a resulting trust, and where each party furnishes some of the consideration, one giving more than the other, the presumption is strengthened. And finally, it was held by the court that where property is taken jointly in the names of husband and wife after their marriage, the conduct of the parties may be considered in determining their intention and although it may be conceded that the wife furnished most of the consideration it may be held that the property was intended to be jointly owned where the circumstances in evidence warrant such conclusion. And lastly, in that appeal, the court said:

“ . . . Attorney Edwards (a witness) explained the meaning of joint tenancy at the time the real estate was conveyed to the parties, and she (the defendant) said she was satisfied and still wanted it done that way. When, knowing the meaning of joint tenancy, she took the deed and continued to purchase securities in their joint names without placing a restricted meaning on the term, she cannot now be heard to say she did not intend to create a joint tenancy.

“From a consideration of the entire record we are of the opinion that the chancellor was correct in holding appellant and appellee were joint tenants and in ordering an equal division of the property.”

Subsequently, on a further consideration of the case by the Supreme Court on a second appeal, Walker v. Walker, 373 Ill. 339, the court said:

“The decree of partition, having settled the rights of the parties as to the nature and extent of their various interests, could not be subjected to a review by appealing from a. subsequent order made in carrying the original decree into execution. (Navigato v. Navigato, 268 Ill. 453; White v. VanPatten, 280 id. 215.) There is no freehold involved in the notice of appeal from the order of sale.

“The objections to the report of sale, and the ruling on which furnishes the basis for the second notice of appeal, were confined solely to the question of homestead interest and the rights claimed to have been presented by the petition. Since the petition did not present a question of freehold the objections which were overruled by the decree approving the report of sale likewise failed to raise a question involving a freehold. Therefore, no freehold is involved in this proceeding.

“The other question is in reference to the accounting and distribution of the personal property as directed by the decree of August 1, 1939.

“This court, being without jurisdiction, the cause is transferred to the Appellate Court of the First District. ’ ’

It is upon the question of the distribution of the personal property as directed by the decree of August 1, 1939, that this court will now consider. On December 16,1937, a final decree of partition and accounting was entered and on appeal by the defendant, the decree was duly affirmed by the Supreme Court in Walker v. Walker, 369 Ill. 627, to which we have referred in this opinion. The provisions in that decree, which are material and relevant to the issues herein involved are as, follows:

A. “That from the findings of fact and under the law, the court concludes and finds that the plaintiff, John W. Walker, and the defendant, Marie L. Walker, are each entitled to one-half interest in the real estate and securities mentioned and described in this Decree and accordingly are entitled to an equal division and partition of the said real estate and securities.”

B. “That the defendant, Marie L. Walker, forthwith account and pay unto John W. Walker, Plaintiff, the sum of $1,074.50, representing the amount equitably due plaintiff as his one-half share of the rentals, interests and other monies heretofore collected and retained by the defendant.”

C. “That the defendant he and herein is ordered and required to account to plaintiff for any and all other monies, interests and rentals by her collected and retained in excess of the amount accounted and stated in the decree and that an amount equal to one-half of such excess be paid to plaintiff within twenty days after the entry of the Decree.” Then the decree specifies the specific securities involved and directs that the same be sold at public or private sale and the proceeds divided among plaintiff and defendant, share and share alike; and, as' to the division and partition of the real estate, commissioners were appointed to make partition if same could be divided without manifest prejudice to the parties in interest, and if same could not be so divided, then to appraise the value of the property and make their report to the court. Upon the filing in the circuit court of the mandate of the Supreme Court, affirming the decree of partition and accounting, the chancellor referred this cause to a master in chancery to take a further account of all excess income from rental, moneys and interests collected by the defendant after October, 1937, and otherwise, to carry into force and effect the provisions of the decree.

The defendant having filed her petition for homestead, and the appointed commissioners having made due report that said premises were not susceptible of division and were accordingly appraised at $5,500, a decree for the sale of the premises pursuant to the decree of partition was entered and provided “that the question of homestead, if any, be hereby and herein reserved until the further order of the court.” Pursuant to the decree of sale, the premises were struck off and sold for the sum of $3,750, being in excess of two-thirds of the appraised valuation. No question of fraud has been raised by defendant. The master deducted and retained the sum of $1,000 from the proceeds of sale pending the question of homestead. Plaintiff, in his answer to defendant’s petition for homestead, denied under oath that he abandoned the premises including his homestead therein and averred that he was compelled to separate from the defendant because of ill-treatment and his fear for the safety of his life, and that he left the greater part of his personal apparel and all of Ms furMture and furnisMngs in the premises with the intention to return; and that immediately after the alleged date of separation, he filed his action against the defendant for partition and accounting.

On August 1, 1939, the chancellor affirmed and approved the report of sale and further found that plaintiff at no time abandoned the premises and that both parties were equally entitled to homestead and that the $1,000 retained by the master be divided equally between plaintiff and defendant.

On May 17, 1939, the master’s revised report of the division and distribution of the cash and securities specified in the decree, was duly approved and confirmed by the court. In this report, the master overruled defendant’s claims for “management services,” “support money” and “family expenses” by way of set-offs or counter-claims; reported an accounting for all additional income from the real estate since October, 1937; found that the cash and securities were susceptible of a fair and equitable division among the parties with the exception of item 6, being a certificate of beneficial interest for 10 units in the joint names of plaintiff and defendant, which beneficial interest certificate is in property located at 1255-57 N. Central avenue, Chicago, Illinois, and the amount appearing in the exhibit is $30. In pursuance to the decree the master divided the securities among the parties and taxed costs against both plaintiff and defendant, equally, as ordered and provided by the decree. The defendant refusing to indorse item 6 for its conversion into 2 beneficial certificates of 5 units each, the chancellor ordered the master to so indorse said certificate in the event the defendant failed or refused to do so, within 7 days thereafter.

In a further discussion of the division and distribution of the cash and securities specified in the decree which was approved and confirmed by the court, the defendant complains, first, that the master in chancery and the court should have allowed to defendant support money in the amount of $1,080 due to her from plaintiff up to the accounting date, May 1, 1939, which item is in the following words:

“Support money due to Marie L. Walker from her husband John Walker who deserted her about May 1, 1937, (measured by. one-half of pension at rate of $90 per month which John W. Walker has received during said period of desertion) . . . $1,080.” This item was refused by the master and his action approved by the court.

The next item that the defendant suggests that she should have been allowed is a claim of $4,600 for family expenses claimed to have been advanced by her, which item is in these words:

“To family expenses at the rate of one hundred dollars per month supplied by Marie L. Walker from income received by her from her Kirkland Avenue property, and other sources, and expended by her from June, 1933 to April, 1937, a period of forty-six months, during which John W. Walker was not employed and was not in receipt of any income, and never made any provision for the family expenses . . . $4,600.00.” This item was also disallowed by the master and the court approved the master’s report, in the refusal of this item.

A further item which defendant contends should have been allowed to her is the sum of $11,650 for management services rendered by her for the benefit of all property herein involved, which claim as filed with the master is in these words:

“To compensation for management services rendered by Marie L. Walker, (who had exclusive charge, management and control of all real estate, and all said property before delivery of securities and moneys to Suburban Trust and Savings Bank,) from August 1, 1919, to January 6, 1938, a period of 233 months, said services being reasonably worth, a rate of $100 per month; to one-half thereof; $11,650, ’ ’ which item was likewise disallowed.

It does not appear from the record that at any time during the course of this litigation, which has been on appeal twice, were the items such as we have detailed ever claimed; nor is there anything in the record to indicate that the defendant was entitled to these various items because of any agreement between the parties. Her theory in this litigation was that she was the sole owner of both real and personal property that was accumulated and paid for by the moneys of the plaintiff and in part by the defendant, and the only time that the claims for compensation were made was after the court had passed upon the questions involved in the litigation and after the matter was remanded to the trial court by the Supreme Court upon the accounting feature of the income from the real estate as well as the division of the personal property. The plaintiff states that these purported claims were at no time alleged in the original pleadings by way of counter-claim or set-off, nor were they supported by any proof or evidence in the original record of proceedings, nor were such claims included in the final decree of partition and accounting; and further points to the fact that the decree of partition is a final determination of the respective rights and interest of the parties in and to the subject matter specified in the decree to the period therein fixed, namely, October, 1937. As we have already indicated, upon a re-reference to enforce the terms and provisions of a final decree, new claims by way of set-off or counterclaim are properly disallowed. In the instant case, a re-reference to the master was had and taken pursuant to the decree, for the sole purpose of taking an account of the rentals from the property, collected and retained by the defendant after October, 1937, and to otherwise carry into force the terms and provisions of the decree, and it is well said, that to receive evidence upon any one or all of these purported claims on such re-reference, or to allow any one or all of these alleged claims, would in effect open up a final decree. So that upon consideration of the question, we are of the opinion that the court was fully justified in sustaining the master’s report and affirming the disallowance of the claims which are now the subject of controversy between the parties.

On the question as to the provision made in the decree for the division of the homestead between the plaintiff and defendant, the Supreme Court in Walker v. Walker, 373 Ill. 339, in considering the objections which were made to the report of sale, found that the objections to the report of sale, and the ruling on which furnishes the basis for the second notice of appeal, were confined solely to the question of homestead interest and the rights claimed to have been presented by the petition, and that, since the petition did not present a question of freehold the objections which were overruled by the decree approving the report of sale likewise failed to raise a question involving a freehold. Further, the court in that opinion said:

“The pleadings which preceded the decree of partition contained no reference to a homestead interest. On the issues then presented a decree was entered finding each of the parties seized of an undivided one-half interest as tenants in common, and partition was ordered. The effect of appellant’s contention that she has a homestead estate in the property was to make appellee John W. Walker’s one-half interest contribute one-half of the homestead. As between the parties, the decree of partition was a final adjudication of the nature and extent of the interests which the parties held in the premises. After the entry of such decree the only matter remaining was the entry of such orders as were necessary to carry the decree into effect.” On the question of the division of homestead, the case of Hertz v. Buchmann, 177 Ill. 553, has been called to our attention, which involved an action of partition of certain premises between the daughters and heirs of the deceased as owners of an undivided one-half interest in the premises, and the surviving widow of deceased, who owned in fee simple the remaining undivided one-half interest in the premises, where the court said: “It has been held, that there can be a homestead in an undivided interest in land, or in other words, that an estate in co-tenancy will support a right of homestead in one of the co-tenants. But this doctrine is never enforced to the prejudice of the just rights of the co-tenants. The exclusive possession of one co-tenant, claiming homestead, is rightful as against the claims of the creditors, but cannot be set up as against the demand of the other co-tenant to be let into joint possession. A co-tenant claiming a homestead right, not having an exclusive right as against the other co-tenant, can be compelled by the latter to make partition. If the property is capable of fair partition, so as to preserve the homestead and protect the co-tenant, the rights of both parties can be easily adjudged. But if the premises are not capable of partition, a court of equity has the power to order a sale for the purpose of a division of the proceeds of such sale. (Brokaw v. Ogle, 170 Ill. 115).” The question of homestead was a right as between plaintiff and defendant, and upon a partition of the property in question, which involves homestead, the court in decreeing a sale of the property could retain jurisdiction of the amount of $1,000 for the purpose of passing upon the division of same. Under the circumstances, we are of the opinion that the court was justified in dividing the homestead equally between the plaintiff and defendant, and there is no error that would justify our reversing this order — not alone from what the Supreme Court stated, to which we have alluded, but for the other reasons herein stated, and more especially on the language of Herts v. Buchmann, supra, as follows: “If the property is capable of fair partition, so as to preserve the homestead and protect the co-tenant, the rights of both parties can be easily adjudged. But if the premises are not capable of partition, a court of equity has the power to order a sale for the purpose of a division of the proceeds of such sale. (Brokaw v. Ogle, 170 Ill. 115; Clements v. Lacy, 51 Tex. 150; Kaser v. Haas, 27 Minn. 406; McGrath v. Sinclair, 55 Miss. 89). We are, therefore, of the opinion that the defendants in error were not precluded from exercising their right to a partition of the premises by the existence of any homestead interest in the plaintiff in error.”

There is also a question called to our attention by the defendant that the partition statute requires that the plaintiff shall pay all costs because the master and the court found that the rights and interests of plaintiff were not properly set forth by the amended complaint, and that appellant made a substantial defense to said complaint. Defendant urges that the provision of the statute that the court may apportion the costs does not apply to the partition statute, ch. 106, sec. 40, Ill. Rev. Stat. 1939, State Bar Ass’n Ed. [Jones Ill. Stats. Ann. 109.489], which is as follows:

“In all proceedings for the partition of real estate, when the rights and interests of all the parties in interest are properly set forth in the complaint, the court shall apportion the costs among the parties in interest in the suit, including the necessary expense of procuring such evidence of title to the real estate as is usual and customary for making sales of real estate, and a reasonable solicitor’s fee for plaintiff’s solicitor, so that each party shall pay his or her equitable portion thereof, unless the defendants, or some one of them, shall interpose a good and substantial defense to said complaint. In such case the party or parties making such substantial defense shall recover their costs against the plaintiff according to equity.”

In answer to defendant.’s contention plaintiff cites the case of Marx v. State Bank of Chicago, 294 Ill. 568, being an action of partition, wherein the question of costs was put in issue, where the court said:

“That a court has authority to apportion the costs we have no doubt, and, believing the apportionment indicated to be just and equitable, the judgment of the Appellate Court will be reversed and the cause remanded to the circuit court, with directions to enter a decree for distribution in accordance with this opinion.” The statute, above quoted, itself provides for the recovery of costs “according to equity.” As we view the facts in this matter, the court was fully justified in entering the order apportioning the costs between the parties.

Taking into consideration all the questions which have been called to our attention, the court did not err in entering the decree of sale, entered April 24, 1939, together with the order confirming and approving the master’s report of sale and distribution entered August 1,1939. For the reasons stated in the opinion, the decree of sale and order confirming and approving the master’s report of sale and distribution are affirmed.

Affirmed.

Denis E. Sullivan and Burke, JJ., concur.