author: Mr. Justice Gridley

text:
    A. Kneisel et al. v. Ursus Motor Company et al. Chicago Title & Trust Company, Receiver of Ursus Motor Company, Defendant in Error, v. Harry J. Myerson, Plaintiff in Error.
    Gen. No. 29,474.
    1. Appeal and error — dismissal of intervening petition for want of prosecution as appealable order. An order dismissing an intervening petition for want of prosecution was re-viewable where said order, and certain other orders complained of, had the effect to finally deny to the petitioner the right to moneys claimed by him as fees.
    2. Receivers — burden of proof under intervening petition. Orders in a pending receivership proceeding requiring a solicitor to either repay moneys paid him by the receiver as fees without order or approval of the court or to show cause are not the initiation of proceedings against the solicitor for the return of such moneys which throws the burden of proof as to the right of the solicitor to compensation for his services on the new receiver, but where the solicitor repaid the moneys and then filed an intervening petition alleging his right to such moneys he has the burden of proving the allegations of his intervening petition in the first instance.
    3. Equity — waiver of nonjoinder of issues by failure to object to want of answer. The formality of making up an issue by the filing of an answer to a petition in a chancery cause was waived when the petition was called for a hearing at which the petitioner’s solicitor appeared but made no objection to a hearing before the filing of an answer.

      4. Receivers — when solicitor required to establish right to fees in receivership. A solicitor who is ordered to refund moneys paid him as fees and compensation for services in receivership proceedings by the receiver or to show cause and who refunds the moneys and files an intervening petition setting up his title to the moneys is required to prove the allegations of his petition in the first instance at the hearing on his petition even though no answer thereto is filed.
    5. Receivers — possession as prima facie case of ownership. Mere possession by a solicitor of fees paid him irregularly by a receiver who has mismanaged the receivership estate and commingled its funds does not constitute a prima facie case of ownership and title to the money in question.
    6. Receivers — jurisdiction in proceeding to require solicitor to refund fees paid by receiver. The circuit court has jurisdiction in a pending receivership proceeding to enter orders requiring a solicitor to restore moneys paid him by the receiver as fees and compensation without any order or approval of court, or to show cause with leave to file intervening petition on payment, since the receiver as such and the solicitor as an officer of the court are subject to the court’s jurisdiction and the receivership proceeding is within the subject-matter jurisdiction.
    7. Discontinuance, dismissal and nonsuit — when intervening petition properly dismissed for want of prosecution. The dismissal of an intervening petition filed by one who was a solicitor for the original receiver in the case in question, for want of prosecution, was not error, where the person appointed as receiver in such case was removed and another receiver appointed, and where said solicitor, pursuant to a hearing of all causes in which the old receiver had acted as receiver, was subsequently ordered to either pay stated sums to the new receiver, subject to the right of such solicitor to be reimbursed for services and expenses, or show cause in open court why he failed to comply, and such solicitor was given leave to file said intervening petition, making claim for his services rendered by him to said old receiver, and for expenses incurred, and where said solicitor paid said money into court, and subsequently filed said petition, and when it was called for hearing and no answer had been filed by the new receiver, the petitioner, by his solicitor, refused to present any evidence to support its allegations, upon the court ruling that the petitioner had the burden of proof and should first introduce evidence.
    8. Appeal and ebbob — presumption on appeal that orders "based on sufficient evidence. Where orders recite that the court heard evidence in open court in the matter pursuant to which such orders were entered, including the testimony of named persons, but such testimony is not disclosed by any certificate of evidence, it will be presumed that the facts as found in the orders were based upon sufficient evidence.
    9. Appeal and ebbob — compliance with alternative order as rendering order functus officio. Where certain orders directed a solicitor either to pay the money mentioned to the new receiver in question or show cause why he had not so done, and the money was paid, the orders were functus officio, and were so treated on review.
    10. Receivebs — checks signed by maker as receiver as notice of character of funds drawn on. Taking money by checks signed by the maker, as receiver, constitutes notice that the funds out of which the payments were made were receivership funds.
    11. Attobneys and counselobs — when payments by receiver to solicitor properly ordered repaid without determining propriety of allowance. Payments received by an attorney as solicitor for one who acted as receiver in many estates, without obtaining a previous order of court authorizing such payments and at the time acquainting the court with the situation, tended prima facie to show an unlawful conversion by such attorney of the amounts of payments made by checks signed as receiver, and it was not improper for the court in the proceedings in question to order the attorney to repay the same before considering what amounts were properly due to the attorney for legal services rendered.
    Error by defendant to the Circuit Court of Cook county; the Hon. Kickham Scanlan, Judge, presiding. Heard in the second division of this court for the first .district at the October term, 1924.
    Affirmed.
    Opinion filed July 14, 1925.
    John A. Bloomingston, for plaintiff in error.
    Angus Roy Shannon, Michael Feinberg and Hamilton Moses, for defendant in error.
   Mr. Justice Gridley

delivered the opinion of the. court.

By this writ of error Harry J. Myerson seeks to reverse an order of the circuit court of Cook county, entered May 13, 1924, dismissing for want of prosecution his intervening petition, filed on March 11, 1924, in the pending chancery cause of Kneisel et al. v. Ursus Motor Company et al. (hereinafter referred to as the Ursus case).

The bill in the Ursus case, filed March 2, 1922, by certain minority stockholders of the Ursus Motor Company, prayed for an accounting and other relief. Myerson was one of the solicitors filing the bill, and on the day of its filing Jacob Goldman was appointed1 receiver of the company and he qualified and took possession. The Ursus case had been assigned to the calendar of Judge Rush, one of the judges of the circuit court, and Goldman was acting as receiver in many other chancery causes pending in said court. On April 20, 1923, the executive committee of the judges of the court, acting under the rules of the court, reassigned the Ursus case to Judge Scanlan, another of the judges of the court, and he conducted an investigation of Goldman’s acts and doings as receiver in the Ursus case. Subsequently the executive committee ordered that a separate chancery calendar be prepared of all causes in which Goldman had acted as receiver and that all said causes be assigned to Judge Scanlan. As a result of the investigation in the Ursus case and “upon evidence adduced and heard in open court,” the court (Judge Scanlain), on May 14, 1923, entered an order removing Goldman as receiver in the Ursus case and appointed in his stead the Chicago Title & Trust Company, and it took possession and entered upon its duties. The court reserved jurisdiction to pass upon and determine all matters or claims by or against Goldman, including all claims and liens by him for services and disbursements and further ordered that he forthwith deliver to the new receiver all property, books, etc., in his possession, and that within 10 days he file with the clerk a full and complete account under oath of his acts, doings, receipts and disbursements, together with vouchers. No account was filed by him.

On May 28,1923, the court entered a draft order, entitled in the Ursus case and containing a recital and many findings, in which Myers on in the alternative was directed either to pay to said new receiver, Chicago Title & Trust Company, on May 31, 1923, at 10 o’clock a. m., the sum of $4,883.25, subject to his right to be reimbursed for the services and expenses, or any part thereof, mentioned in the findings, “or in default * * * of such payment by him * * * that he then and there, in open court, show cause, if any he have, why he shall not have complied with this order and rule.” And it was further ordered that upon the payment of said sum to the new receiver Myerson be° given leave within 60 days “to file his intervening petition, or petitions, making claim for services and expenses rendered by him to said Jacob Goldman, as receiver, in any of the causes hereinbefore mentioned, or setting up any other lawful claim or demand he may have against any of the estates, or funds thereof, in the aforesaid causes, or contesting the propriety of this order directing the repayment, as aforesaid, of said $4,883.25, or any part thereof.” On the following day Myerson paid to said new receiver the sum of $4,883.25.

In the recital in said order it is stated that the cause came on to be heard “upon the court’s own motion” to investigate Goldman’s conduct as receiver in the Ursus case and his fitness to continue as receiver, and to determine whether he has in his possession and control the estate which came to him as receiver, and to discover and recover such of the assets of the estate as the court should find have been improperly expended by him, and that the court “heard the evidence adduced in open court, including the testimony of Jacob Goldman and the testimony of Harry J. Myerson.” Then follow findings that the court has jurisdiction of the parties and of said Goldman and said Myerson and of the subject matter; that Goldman “has commingled the assets he has collected, as receiver in this estate, with assets he has collected in a large number of other estates, including all of the estates involved in the several causes hereinafter mentioned,” in which Myerson has been paid moneys by Goldman, receiver, “without any court order authorizing the same”; that Myerson claims that such payments were for legal services and expenses as hereinafter set forth; that Goldman during all of the time has had no assets other than those belonging to the estates of which he was appointed receiver, that he kept bank accounts in the name of “Jacob Goldman” and “Jacob Goldman, Beceiver,” and that he “indiscriminately has déposited in and expended for any and all purposes out of said bank accounts the funds of this and the other estates of which he has been appointed receiver”; that each and all of said court causes in which Myerson has been paid funds by Goldman, as receiver, “are pending in this court, and have been duly assigned to this judge for hearing and determination”; that Goldman has been removed as receiver in this and in each of the other court causes, and that the Chicago Title & Trust Company has been appointed receiver in all of the causes; that Myerson is, and at the happening of each occurrence was, an attorney at law, ‘ ‘ and as such an officer of this court practicing at the bar thereof,” and that he has appeared at the bar of this court as solicitor for Goldman, as receiver, in the administration of the respective estates in said causes. Then follow findings as to various sums of money, aggregating $4,883,25, found to have been paid to Myerson by Goldman, receiver, in said several court causes, said sums being mostly for legal services claimed to have been rendered by Myerson to Goldman. One item is for $49.75 for costs in the Ursus case, claimed to have been advanced by Myerson for Goldman, as receiver. Another item is for $340 received by Myerson from Goldman for legal services claimed to have been rendered by Myerson in the matter of Standard Dry Goods Store, wherein Goldman was acting as the voluntary assignee and the proceeds of the assets of the said estate were paid into the bank account carried in the name of “Jacob Goldman, Receiver,” and the check for said $340 was signed “Jacob Goldman, Receiver.” Another similar item is for $250, similarly paid, in the matter of the Garden City Tile Company, wherein Goldman was acting as voluntary assignee. Another item is for $500, paid to Myerson and claimed by him to have been paid “on account of general services rendered by him to Goldman, Receiver, in the above and other cases pending in the Circuit Court, said payment having been made by check signed 6 Jacob Goldman, Receiver,1 upon the bank account mentioned. ’ ’ Then follows: “The court makes no finding as to whether said payments were made as above claimed by said Myerson, but does find that each of said payments was made to said Myerson without any order of this court first and obtained, * * * authorizing the same and * * * that when said payments, and each of the same, were made * * * the said Myerson knew that the said Goldman had commingled the assets of the estates, of which he had been appointed receiver.” Then follows the finding: ‘ ‘ That, the premises considered, the said Harry J. Myerson is therefore now wrongfully withholding the sum of $4,883.25 from the receiver herein, and that the court heretofore has demanded, in open court, that said Myerson pay to the Chicago Title & Trust Company as receiver, said sum, which he has refused and failed to do, and he is now insisting in open court that he is not liable to pay back to said Goldman, receiver, or to said Chicago Title & Trust Company, receiver, any part of said sum. ’ ’

Following the entry of this order further investigations were conducted by the court, and on July 5, 1923, another order was entered in the Ursus cases against Myerson, which is substantially the same as said order of May 28, 1923, except as to amount, the later order having reference to the sum of $1,250, which the court found Myerson had received from Goldman, receiver, without any order of court, for legal services claimed to have been rendered Goldman as receiver in two other pending causes. This order was also in the alternative, and on July 11, 1923, Myerson paid to the Chicago Title & Trust Company the sum of $1,250.

After the court on Myerson’s motions had extended on several occasions the time within which he might file an intervening petition as mentioned in said orders, he, on March 11, 1924, filed in the Ursus case a sworn petition, in which he prayed that the court order the new receiver to return to him said sums of $4,883.25 and $1,250. He set forth affirmatively and in detail the services which he claimed he had rendered Goldman, as receiver, in the various court causes mentioned in the two aforesaid orders, and also men-tinned many other causes pending in said circuit court in which Goldman was acting as receiver, and claimed that he had rendered legal services to Goldman in said other causes for which he had not received any compensation whatsoever. He alleged in substance that in those causes in which he had received payments from Goldman, although no order of court had been entered specifically authorizing said payments, there had previously been entered in each cause an order “permitting the receiver to employ counsel”; that said sums of $4,883.25 and $1,250 (repaid by him under the two aforesaid orders) had been paid to him by said Goldman, “doing business under the firm name and style of Jacob Goldman, Beceiver,” and were for moneys advanced and services rendered by him “to said Jacob Goldman individually and doing business as Jacob Goldman, Beceiver”; that the word “Beceiver” affixed to Goldman’s name was “merely descriptive,” and “was used by Goldman in all of his advertisements in the newspapers and in his personal correspondence, and was nothing more than the trade name under which said Goldman was doing business”; that said affix “Beceiver” to Goldman’s name “did not mean receiver of any particular estate in any particular court and had nothing to do with the cases in which he was receiver” in any particular court, or in which he was assignee for the benefit of creditors of any estate; that it is and always has been his (petitioner’s) understanding "that when a receiver “employs counsel pursuant to an order of court,” such receiver “is individually liable for the contract price of the services rendered, or the reasonable value thereof in the absence of a contract,” and such receiver “must individually discharge this liability and subsequently ask credit therefor in his final report, and that the court will allow him credit for the reasonable value of the services rendered by his counsel to him”; that petitioner believes that all fees paid to him by Goldman were paid in every instance “out of the private bank account of said Goldman, doing business as Jacob Goldman, Beceiver, in which he deposited all funds that he received from any source, including fees and commissions earned by him”; that, until the taking of the testimony before the circuit court, petitioner supposed that Goldman was a man of large wealth and of excellent business standing and integrity, and it never occurred to petitioner that Goldman was wrongfully disposing of any of the assets intrusted to him in any of said court causes; that, in addition to acting as receiver in said causes in the circuit court, Goldman also acted as voluntary assignee for the benefit of creditors in at least two cases in which petitioner was employed by him as counsel; that, in the matter of the Standard Dry Goods Store, Goldman, as assignee, received certain assets and property, sold the same and deposited the same in his said private bank account, and that in the matter of the Garden City Tile Company he did the same; that neither of these cases was ever before any court and “had nothing to do with the assets claimed by this court to be a part of the assets of the estates pending before it”; that said payments of $340 and $250, respectively, should not be confused with the cases pending before this court, and that said sums should be returned to petitioner by the Chicago Title & Trust Company, receiver; and that all the above mentioned payments made by Goldman to petitioner for legal services “are the fair, reasonable and customary charges made for services rendered in such matters.”

The new receiver, Chicago Title & Trust Company, did not file an answer to Myerson’s petition and no rule upon it to answer it was ever asked or made. There was, however, a hearing upon the petition in open court, at which Myerson was represented by his solicitor, but Myerson himself did not appear. Following the hearing the court entered the order of May 13, 1924, dismissing Myerson’s petition for want of prosecution. In the draft of the order as entered the court states that Myerson’s solicitor came, but that Myerson personally did not appear, and the court further states that “thereupon the Court calls upon said petitioner to present such evidence as he may care to adduce in support of his said petition, and the said Harry J. Myerson comes not, nor comes anyone in his behalf to present such proof.” A certificate of evidence of what occurred on said hearing is contained in the present transcript of the record, but Myerson did not preserve any certificate of evidence as to the testimony heard and the proceedings had, upon which the said order of May 28, 1923, and July 5,1923, and the findings therein contained, were predicated.

It appears from the certificate of evidence of the “proceedings had upon the calling for hearing” of Myerson’s petition, the solicitor for Myerson stated and insisted that said orders of May 28, 1923, and July 5, 1923, were “initiating papers in a new proceeding and that the burden of proof as to the ownership of the fund deposited in court is on the receiver, or the court, to prove the allegations of those orders”; and that the solicitor for the receiver stated his theory to be that the matter comes on to be heard upon Myerson’s petition, setting forth affirmative facts and asking for affirmative relief, and that if Myerson does not present affirmative proof in support of the allegations of his petition there is nothing for the receiver to meet, and the result necessarily must be the dismissal of the petition for want of prosecution. A lengthy discussion followed. Myerson’s solicitor argued that moneys paid over to the new receiver, in compliance with said orders of May 28 and July 5, were Myerson’s property, and that such property had been taken away from him which prima facie belonged to him, “as possession is all that is necessary to establish ownership.” The receiver’s solicitor argued that the purpose of the court in entering said orders on Myerson to pay back said moneys was to put him in the same position he would have been in had he not received the unauthorized payments from Goldman, and that he might properly ask the court for fees for legal services, at which time he should show what services he actually did render and give proof of the value thereof. The court in effect ruled that Myerson had the burden of proof and should first introduce evidence. The court stated in substance that said two orders of May 28 and July 5, based upon Myerson’s statements made at the hearings prior to their entry, “gave rise to the right of Myerson to file a petition for the return of the moneys, on the theory that he had rendered services and should be compensated for them and that the amounts which had previously been paid bim were reasonable”; that acting under said orders, which were in the alternative, Myerson decided that he would pay back said moneys, and exercise the privilege given him therein of filing a petition to sustain his contention that he was entitled to said moneys for fees, and that he did file such petition; and that under the circumstances it was necessary for bim to introduce evidence to sustain his position, and “either to prosecute his petition or abandon it.” Thereupon Myerson’s solicitor stated that “we will simply have to stand on the record,” and refused to introduce any evidence on Myerson’s behalf in the first instance, and thereupon the court entered the order of May 13, 1924, dismissing Myerson’s said petition for want of prosecution.

Counsel for the receiver urge that this Appellate Court is without jurisdiction in this writ of error proceeding to review the order of the circuit court of May 13, 1924, dismissing Myerson’s petition for want of prosecution, and for the reason that the same is not such a final order as terminates the litigation regarding the moneys in question. As appears from Myerson’s preecipe filed in this Appellate Court for the writ, and also from his counsel’s brief and argument, he not only complains of said order of May 13, 1924, but also of said prior orders of May 28, 1923, and July 5, 1923. We think that the effect of all three orders is to finally deny to Myerson the right to said moneys as fees and that he is entitled to a review of the proceedings. Reviewing courts in this State in certain instances have entertained appeals or writs of error calling in question the actions of trial courts in dismissing bills, petitions or cases for want of prosecution. (Larkin v. Wiley, 312 Ill. 268; Bonney v. McClellcmd, 235 Ill. 259; Tullís v. Henderson, 26 Ill. 442; Lapka v. Chicago City Ry. Co., 139 Ill. App. 133; Meyer v. Lurya Lumber Co., 203 Ill. App. 300.)

One of the grounds relied upon by counsel for Myerson for a reversal of the order of May 13, 1924, dismissing Myerson’s petition for want of prosecution, is that the orders of May 28 and July 5, 1923, constituted the “initiation of proceedings” against Myerson for the return of the moneys, in the nature of rules to show cause; that Myerson’s petition after-wards filed should be considered rather as an answer to those rules, and that the burden of proving the allegations therein contained did not rest upon Myerson in the first instance. After reviewing the present record and considering the alternative provisions of said two orders of May 28 and July 5, 1923, and considering the further fact that Myerson decided to comply with the first alternative mentioned and paid the moneys to the new receiver, we are of the opinion that the burden of proving the affirmative facts as alleged in his petition of March 11, 1924, rested upon him, and that this is so even though said receiver filed no answer to the petition. We think that the formality of making up the issue by the filing of an answer by the receiver to the petition was waived when the petition was called for hearing, at which Myerson’s solicitor appeared but made no objection to a hearing before said receiver had filed an answer. (Jackson v. Sackett, 146 Ill. 646, 653.) Furthermore, it appears that Myerson was given full opportunity by the court to introduce evidence to sustain the allegations of his petition, and show, if he could, that he was entitled to the moneys for proper services rendered, but he saw fit not to do so, preferring, as stated by his solicitor, “to stand on the record.” And we do not think that there is any merit in counsel’s further contention that the allegations of Myerson’s sworn petition (there being no answer filed thereto) were “self-established.” Notwithstanding his claim that he Was entitled to the moneys which Goldman had paid him, we think that it was incumbent upon him to prove under the allegations of his petition that such payments had in fact been made to him by Goldman for legal services in the several estates, and that the amounts were reasonable and customary, keeping in mind the character of the services and the size of the estates. And we do not think, under the circumstances disclosed as to Goldman’s acts and conduct in administering the several estates intrusted to his care, that the fact that Myerson had become possessed of the moneys paid to him for fees by Goldman made out a prima facie case for Myerson that he lawfully owned and was entitled to keep said moneys.

Counsel also contends that notwithstanding the recital in the orders of May 28 and July 5, 1923, that the court had jurisdiction of Goldman and Myerson and the subject matter, the court was without jurisdiction to enter said orders, which in the first alternative directed Myerson to pay the amounts mentioned therein to the new receiver, and, if such payments were made, giving him leave thereafter to file an intervening petition. The argument is (citing the cases of Becklenberg v. Becklenberg, 232 Ill. 120, 122, and French v. French, 302 Ill. 152, 158) that such a recital “is a mere conclusion and is not a sufficient finding of the jurisdictional facts.” We think that it sufficiently appears from the present record that the court had jurisdiction of Goldman and Myerson, the former being the court’s receiver and the latter being an officer of the court and one of the solicitors for the complainants in the Ursus case, and that the court had jurisdiction of the subject matter, as recited in said orders. Furthermore it appears from the recital in said orders that the court had “heard the evidence adduced in open court, including the testimony of Jacob Goldman and of Harry J. Myerson.” What the evidence, including said testimony, was is not disclosed by any certificate of evidence contained in the present transcript, and it must be presumed that the facts as found in the orders were based upon sufficient evidence. (King v. King, 215 Ill. 100, 115; Richardson v. U. S. Mortgage & Trust Co., 194 Ill. 259, 264.) Furthermore these orders became, so to speak, functus officio. They directed Myerson to do one of two things, either to pay the money mentioned to the new receiver or show cause why he had not done so. He paid the money. No further action was required of him. He was, however, given leave to file a petition making claim for fees for services rendered to Goldman, as receiver. After a considerable lapse of time he filed his petition on March 11, 1924, and when it was called for hearing his solicitor refused to present any evidence to support its allegations, and under the facts and circumstances disclosed we do not think that the court abused its discretion in dismissing said petition for want of prosecution.

Counsel also contends that the mere fact that Goldman, out of receivership funds in his hands, paid moneys to Myerson for legal services rendered, without obtaining previous orders of court authorizing the payments, does not render Myerson liable to refund the amounts in such a summary proceeding as the present one. But the record discloses that Myerson did refund certain amounts received by him from Goldman. And in .considering counsel’s contention we cannot lose sight of the fact that Myerson, when he received the payments from Goldman by checks, signed “Jacob Goldman, Receiver,” knew that the funds out of which the payments were made were trust funds and that the assets of the many estates for which Goldman was receiver had been commingled and put in one bank account. Under the circumstances we think that said payments received by Myerson from Goldman, without getting a previous order of court authorizing said payments and at the time acquainting the court with the situation, tended prima facie to show an unlawful conversion by Myerson of the amounts of said payments, and that it was not improper for the court to order that Myerson repay the same before considering what amounts were properly due to Myerson for legal services rendered. (Squire v. Ordemann, 194 N. Y. 394, 396.)

Our conclusion is that the order of May 13, 1924, in question, wherein Myerson’s said intervening petition was dismissed for want of prosecution, should be affirmed, and it is so ordered.

Affirmed.

Barnes, P. J., and Fitch, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Hugh Repp, Appellee, v. A. V. Becker and Industrial Commission of the State of Illinois, Appellants.
    Gen. No. 29,834.
    1. Mandamus — when mandamus to restore records improperly issued for want of proof. Mandamus was improperly issued against the Industrial Commission, requiring it to restore an alleged record showing a prior finding and award in favor of the petitioner, where it appeared that a hearing was had before the arbitrator, on petitioner’s application, that the arbitrator subsequently drafted an award awarding weekly payment, and also “some amount for compensation,” a copy of which award, signed by such arbitrator, was filed with the Commission and a copy mailed to the respective attorneys, and that thereafter the arbitrator immediately telephoned both attorneys that there had been an error in the award and requested a return of the mailed copies, and said copies were immediately returned and the arbitrator destroyed the award and all copies thereof and the evidence shows that no record was kept of the destroyed award and that the Commission has no record book or paper from which a copy of such award can be made or issued and there is nothing showing what it contained except a purported copy of a copy of it, so that no true and certain restoration can be made.
    2. Mandamus — remedy before Industrial Commission by review as bar to mandamus. It was error to issue a peremptory writ of mandamus directing the Industrial Commission to restore a record of a prior purported award in a pending proceeding where the purported award was recalled and destroyed by the arbitrator and a new award made for review of which a petition has been filed and is pending and the petitioner’s rights are fully protected thereunder and by the provisions of the Compensation Act, sec. 19, clauses b, e and f, Cahill’s St. 1923, ch. 48, If 219.
    3. Mandamus — injury to rights of third person as grounds for denying mandamus to restore record of award. Where an employer failed to file a petition for a review of an alleged first award by the arbitrator in compensation proceedings, because such award was at once withdrawn by the arbitrator as erroneous and a new award made, and where the issuance of a mandamus to restore the old award would have injuriously affected the rights of the employer because it was debarred from having a review of the first award under clause b of section 19 of the Compensation Act, Cahill’s St. 1923, ch. 48, f 219, without fault or negligence on its part, the writ requiring the restoration of the first award was held improperly issued.
    4. Mandamus — injury to third person as grounds for denying writ. A mandamus will not be issued when the rights of third persons will be injuriously affected.
    5. Mandamus — clear right in petitioner as requisite to issuance of writ. A clear right to the writ of mandamus must be shown before the writ can properly be issued.
    Appeal by defendants from the Circuit Court of Cook county; the Hon. Philip L. Suluvan, Judge, presiding. Heard in the second division of this court for the first district at the October term, 1924.
    Reversed.
    Opinion filed July 14, 1925.
    John A. Bloomingston, for appellants.
    Stough, Harrington, Carolan & Loy, for appellee.
   Mr. Justice Gridley

delivered the opinion of the court. This appeal is prosecuted to reverse an order of the circuit court of Cook county, entered June 16, 1924, wherein the court directed that a peremptory writ of mandamus issue against the respondents, commanding them, among other things, “to forthwith correct, replace and restore the record of said Industrial Commission, in the matter of the application for adjustment of claim of Hugh Eepp, petitioner, v. William C. Meneely Co., respondent, No. 58186, so that said record shall show the decisions and awards and the proceedings and things done and had by said Commission and the arbitrators thereof,” and “to cause to be shown upon a proper docket or register that A. Y. Becker heard the matter of the application for adjustment of said claim * * * on October 29, 1923, and that on November 15, 1923, he made a finding and decision in said matter, * * * filed with the Commission on November 15, 1923”; that respondents “forthwith prepare and make up a finding, decision and award, * * * in lieu of the finding, decision and award which has been removed from the files or destroyed, * * * on blanks of the Commission used for that purpose, which, when completed shall be in words and figures as the court has heretofore in this order found said decision and award to have been when it was heretofore made and filed with the Commission on November 15, 1923”; that “respondent, A. Y. Becker, shall sign said finding, decision and award * * * and the Commission shall file the same with the Commission nunc pro tunc November 15, 1923”; that said finding, decision and award “shall become and be the decision and award of said Commission”; and that “the purported decision made by the respondent, A. Y. Becker, dated November 20, 1923, and filed with said Commission, and all records of said purported decision and all petitions for review filed thereto, and all proceedings and things done and had in the matter of said purported decision be canceled, annuled and voided.”

The petition for mandamus was filed on February 1, 1924. The respondents filed an answer to which petitioner replied. In the answer respondents stated in substance that the writ should not issue because (1) “the alleged decision and award of November 15, 1923, referred to in the petition, was not the decision of the Industrial Commission of Illinois”; (2) there is no record of said decision and award upon the books or records of the Commission from which to restore any record as prayed; (3) petitioner has an adequate remedy, exclusive of mandamus, because he has filed with the Commission a petition for review of the decision and award of November 20, 1923, and has complied with all the requirements of the Compensation Act with reference to obtaining such a review; (4) petitioner is estopped from claiming any rights under the alleged award of November 15, and has waived his rights therein because of the filing of said petition for review of the said decision and award of November 20; and (5) the rights of a third party, to wit, the Meneely Company, will be affected in the event the alleged award of November 15 is held to be the award of the Commission, and said company will be obliged to pay to petitioner a large sum of money without any right of review, said company having acted upon the award of the Commission of November 20, and not having petitioned for a review of the alleged award of November 15. Petitioner, in replication to said statement (2) above, states “there is a record upon the books and records of the Commission from which to restore the records as prayed * '* * unless such records have been erased or removed by said defendants,” and, in replication to said statement (5) above, “admits that the rights of third persons are or may be affected by the mandamus as prayed for by the said plaintiff but says that no third person or anyone else would be deprived of any just rights because of the issuance of said writ as prayed.”

On the hearing A. V. Becker, the arbitrator in the matter of Repp’s application before the Commission, and James A. Tracy, attorney for the Meneely Company, testified, and certain documentary evidence was introduced. The following facts appear:

Repp, by occupation a day laborer and a resident of Wabash, Indiana, was employed by the Meneely Company, an Indiana corporation, and, while working for it on May 15, 1922, at Staley, Illinois, suffered an injury to his left hand by reason of the second finger of that hand being caught between a belt and roller. He filed an application with the Commission, under the provisions of the Illinois Workmen’s Compensation Act, for adjustment of his claim for said injuries, and on September 22, 1923, filed an amended application. He claimed that as a result of the accident he was temporarily incapacitated for work for six weeks and further suffered and would suffer the loss of the use of his left arm for many weeks. On October 29, 1923, at Champaign, Hlinois, there was a hearing before said Becker, as arbitrator, at which the Meneely Company appeared and defended. Subsequently an award was drafted by Becker, not only awarding Repp $12.60 per week for 5 2/7 weeks, but also some amount for compensation for the loss of the use of his left arm. An alleged “copy of a copy” of said award, dated November 15, signed by the arbitrator and filed with the Commission, is attached to the mandamus petition, wherein it is stated among other things:

“That petitioner is now entitled to have and receive from said respondent the sum of $12.60 per week for a period of 5 2/7 weeks, that being the period of the temporary total incapacity for work, for which compensation is payable.

“That petitioner is entitled to additional compensation of $12.60 for a period of 200 weeks, "for the loss of the use of his left arm, which resulted from said injury; that said petitioner is now entitled to have and receive from the respondent the sum of $907.20, being the amount of compensation that has accrued from June 22, 1922, to November 9, 1923, and the further sum of $12.60 each week thereafter for the remaining period of said 200 weeks. ’ ’

It further appears from uncontradicted testimony that on the hearing of Bepp’s claim before the arbitrator it was agreed that a Dr. Mitchell (appointed by the Commission) should examine Bepp and his report should be filed with the arbitrator and considered as evidence; that after the hearing at Champaign the arbitrator came to Chicago, and, before receiving said doctor’s report, drafted an award and caused it to be filed with the Commission, and a copy mailed to the respective attorneys on November 16; that in said award some amount for compensation was allowed Bepp; that on the same afternoon Dr. Mitchell presented his report to the arbitrator which the latter considered (what the doctor’s report was is not shown); that the arbitrator immediately telephoned both attorneys, stating that there had been an error in the award and requested that the copies mailed be returned; that both attorneys immediately returned the copies; that the arbitrator destroyed them as well as the original award and all other copies; that thereafter on November 20 he made a new award and caused copies thereof to be mailed to said attorneys, as well as notices of its filing with the Commission and as to the time within which a petition for review might be filed; and that the new award did not allow any compensation to Bepp. This new award was introduced in evidence. It is substantially the same as the alleged award of November 15, attached to the mandamus petition, except that the clause awarding additional compensation to Bepp is not there, and in its stead is the following:

“That petitioner is not entitled to any additional compensation for the reason that there is no organic or pathological involvement of the left arm or hand which can be associated with the injury sustained on May 15, 1922.”

It further appears that the Meneely Company never filed with the Commission any petition for review of the alleged first award of November 15; that on December 8, and again on December 11, Repp filed with the Commission petitions for a review of the second award of November 20, and on December 14 filed an amended petition for such review; that said amended petition was set for hearing by the Commission but was continued to await the outcome of the present mandamus proceeding; and that said petition for review is still pending before the Commission. Becker, the arbitrator, who was served with a subpoena issued by Repp to bring in the records of case No. 58186, and particularly the record of the award of November 15, testified that there was no record of it; that he did not have the original award or a copy of it; and that there is no record, book or paper in the possession of the Commission from which a copy of said award can be made or issued. A photographic copy of a page of a book of the Commission, known as No. 39 Arbitration Docket, was introduced by petitioner. It is a page containing a record of the actions taken in the Repp case before the Commission. Under the heading of “orders entered” there is evidence of something having been erased. Under the heading “award on arbitration” is the following written in ink: “$12.60 per wk. 5-2/7 wks; not entitled to further compensation.” Petitioner did not prove that the alleged first award of November 15, as attached to his mandamus petition, was the award of said arbitrator, or that said award was filed with the Commission, yet the court found that said award, as so alleged, was the finding and decision of the arbitrator, and was duly filed with the Commission, and the court commanded that respondents should make an award in accordance with said alleged award of November 15.

After reviewing the present record we are of the opinion that the order granting the writ of mandamus should be reversed, first, because it does not sufficiently appear that there is any record, copy or memorandum of the alleged award of November 15 from which it is possible to make a true and certain restoration thereof (Ackerman v. Desha County, 27 Ark. 457, 459; Bice v. Walker, 44 Iowa 458, 462; Ex parte Morgan, 114 U. S. 174, 175); second, because a petition filed by Bepp for review of the second award is pending and undisposed of before the Commission and the rights of Bepp can be fully protected under said petition and the statutes applicable thereto (see section 19, Compensation Act, clauses b, e and f, Cahill’s Stat. 1923, ch. 48, ¶ 219); third, because the rights of the Meneely Company will be injuriously and inequitably affected. It filed no petition for the review of the alleged award of November 15. It had no opportunity to do so, for, when its attorney received notice that an award had been made and filed, he also received on the same day the further notice that such award was erroneous and had been withdrawn and that a new award would be made, which was filed on November 20, and which was in favor of the Meneely Company. The writ commands respondents to enter an award in favor of Bepp, nunc pro tunc as of November 15, 1923, in an amount and in the form as it is alleged (but not proved) to have been made. As the Meneely Company filed no petition for review of the alleged award of November 15, the issuance of the writ injuriously and inequitably affects it, in that it will be foreclosed, under clause b of section 19 of the Compensation Act, from having a review of said first award before the Commission, and this without any fault or negligence on its part. “The method of review provided by section 19 is exclusive.” (St. Louis Pressed Steel Co. v. Sehorr, 303 Ill. 476, 478.) And it is generally the law that a mandamus will not be issued when the rights of third persons will be injuriously affected. (26 Cyc. 149; People v. City of Bloomington, 38 Ill. App. 125.) Furthermore, petitioner has not shown that he has a clear right to the writ and such a showing must be made before the writ can properly be issued. (26 Cyc. 151; People v. Johnson, 100 Ill. 537; Reddick v. People, 82 Ill. App. 85, 92; People v. Blocki, 203 Ill. 363, 374.)

For the reasons indicated the order of the circuit court entered June 16, 1924/ awarding said writ of mandamus is reversed.

Reversed.

Baenes, P. J., and Fitch, J., concur.


text:
    Joseph Kavanagh, Complainant and Appellee, v. New England Mutual Life Insurance Company and Lucy Kavanagh, Defendants. Lucy Kavanagh, Appellant.
    Gen. No. 29,846.
    1. Insurance — sufficiency of proceedings to effectuate change of beneficiary. Under a life insurance policy giving the right to change beneficiaries and providing the change should take effect only when indorsed thereon by the insurer, a change of beneficiary became effective, where the insured made written request for the change of beneficiary, which was received by the home office of the insurance company and the letter acknowledged receipt thereof during the lifetime of the insured, with the statement that the change would be indorsed upon the policy when received, but where the insured’s wife, the original beneficiary, who had shot the insured and was charged with his murder, had possession of the policy and refused to give it up, and the insured died before any indorsement could be made thereon, the letter from the company having been received on the day of his death, since the insured had done everything within his power to effectuate a change, exact compliance with all requirements being prevented only by the wife’s refusal to surrender the policy.
    2. Insurance — rights in proceeds of life insurance policy. Where the beneficiary was held entitled to the insurance in question, he was required to pay to the former beneficiary, out of the amount of the policy, the amount which such old beneficiary had loaned to the insured, and for which she held the policy as security, together with certain premium payments made by her.
    3. Costs — when costs taxed equally between parties. The costs of the litigation for the proceeds of life insurance were evenly divided between the old and the new beneficiaries, where the amount
    of the policy was awarded to the new beneficiary, but he was required to pay to the old beneficiary money advanced by her to or for the insured.
    Appeal by defendant from the Superior Court of Cook county; the Hon. Oscab Hbbel, Judge, presiding. Heard in the second division of this court for the first district at the October term, 1924.
    Reversed and remanded with directions.
    Opinion filed July 14, 1925.
    Leslie H. Whipp, for appellant.
    Warren Pease, for appellee.
   Mr. Justice Gridley

delivered the opinion of the court.

This appeal is prosecuted to reverse a decree of the superior court of Cook county, entered August 8, 1924, wherein the court ordered that the New England Mutual Life Insurance Company of Boston, Massachusetts (hereinafter referred to as the Insurance Co.), pay to complainantvor his solicitor the sum of $4,911.50, and that Lucy Kavanagh pay the costs of the proceeding.

Complainant’s original hill was filed on April 27, 1923, to which the Insurance Co. filed an answer, and, after complainant had filed an amended bill, Lucy Kavanagh filed her answer thereto. It is alleged in substance in the amended bill that Patrick H. Kavanagh, brother of complainant, died at a hospital in Chicago, Illinois, on February 9, 1923, his death being the result of Wounds received on February 3, 1923, when Lucy Kavanagh, his wife, shot him with a pistol; that she was arrested, charged with the crime of murder, and afterwards indicted by the Grand Jury of Cook county on said charge and released on bail; that on January 29, 1921, the Insurance Co. issued to Patrick H. Kavanagh a policy of life insurance, No. 421,051, for the sum of $5,000, by the terms of which, in consideration of the application and the payment in advance of an annual premium of $129.50, it agreed at- his death to pay said sum to Lucy Kavanagh, his wife “(with the right reserved to the Insured to change the Beneficiary) less any indebtedness to the company on the policy and less any unpaid portions of the premium for the then current policy year; that the policy provided that “when the right to change the Beneficiary has been reserved, the Insured, subject to any assignment, upon written request filed with the Company at its Home Office, may from time to time designate a new Beneficiary hereunder, or have the Policy made payable to his estate, such change to taTte effect only when endorsed hereon hy the Compcmy”; that upon receipt of the policy Patrick H. Kavanagh delivered it to his wife and she has since had possession of the same; that he paid the premiums required to keep it in force and that there is now due on the policy, after making certain proper adjustments, the sum of $4,911.50; that on February 5, 1923, when he was lying in the hospital suffering from the effects of said pistol shot, but being in full possession of all his mental faculties, he directed a representative to procure from the Chicago office of the Insurance Co. the usual blank in use for requesting a change of beneficiary to be made in a policy; that said blank was procured and on the same day he signed such paper as follows: “In accordance with the right reserved to me under Policy No. 421,051 to change the beneficiary thereunder, I hereby revoke the appointment of my wife, Lucy Kavanagh, as beneficiary, and request that said policy be changed so as to be payable to my brother, Joseph Kavanagh, if he shall survive me, with right of revocation by me”; that such paper was in proper form for making a change of beneficiary according to the rules of the Insurance Co., and on February 6, 1923, was mailed to the Insurance Co. at its home office at Boston, Massachusetts, and accompanying it was a letter written to the Insurance Co. by said representative, in which the latter mentioned the details of the shooting, the serious condition of Patrick, the improbability of his living, his anxiety to have a change of beneficiary made in the policy at once, and stated that Patrick “is unable to procure the policy owing to the fact that his wife is in jail and has possession of the policy,” and that “his wife would not give it up under any circumstances”; that, at the time said request and letter were mailed, the policy had not been assigned to any person and that there was no restriction or impediment to Patrick’s right to change the beneficiary to such person as he might designate; that on February 8, 1923, the Insurance Co. from its home office wrote a letter, signed by its assistant secretary, to Patrick’s said representative in Chicago as follows: “In reply to your letter of the 6th inst. relative to Policy No. 421,051, on the life of Patrick H. Kavanagh, we will state that the form for change of beneficiary executed by the insured, revoking his wife, Lucy Kavanagh, and requesting that the policy 'be made payable to his brother, Joseph Kavanagh, if he shall survive him, with right of revocation, is received, and has been placed on file with our record of the policy. Upon receipt of the policy we will endorse the change in accordance with the request”; that this letter was received by Patrick’s representative in Chicago on February 9, 1923, the day that Patrick died; that by reason of the foregoing Patrick did all that it Was possible for him to do to effectuate the change of beneficiary in the policy; that on February 15, 1923, complainant executed and sent to the Insurance Co. due proofs of the death of Patrick and notice of complainant’s claim; and that .Lucy Kavanagh has also made claim to the whole amount due under the policy. The substance of the prayer of the amended bill is that the court enter a decree that Patrick, during his lifetime, made said change in the beneficiary under the policy, that Joseph Kavanagh became the beneficiary and is entitled to the entire amount due, and that Lucy Kavanagh has no right or interest therein.

There are other allegations in the amended bill to the effect that on February 5, 1923, Patrick duly executed on one of the company’s forms an assignment of all his right, title and interest in the policy to Joseph Kavanagh, which on the same day, together with the affidavit of Patrick on one of the company’s forms and a letter of said representative, were forwarded to the company’s home office. Also other allegations to the effect that on February 5, 1923, at said hospital, Patrick and Joseph entered into a verbal contract whereby Patrick agreed to make Joseph the beneficiary under the policy,' in consideration of Joseph agreeing to pay for the expense of hiring a private room for Patrick and for other hospital expenses, and that said contract was performed on the part of Joseph. In view of the position taken by complainant’s counsel in this Appellate Court, namely, that complainant is not relying for a recovery on said contract or said assignment, except' in so far as the assignment tends to disclose an intention on the part of Patrick to effectuate a change in the beneficiary of the policy to Joseph, we deem it unnecessary to further consider said allegations or the evidence introduced on the hearing relative thereto.

In the answer of the Insurance Co. it admitted the issuance of the policy on January 29, 1921, and that $4,911.50 was due thereunder, but alleged that it did not know whether Lucy or Joseph was the rightful beneficiary, or who had or who has possession of the policy; that no indorsement had ever been made thereon by it for a change of beneficiary.; that when the said written direction or request of Patrick H. Kavanagli of February 5, for a change of beneficiary from Lucy to Joseph Kavanagh was received by it, the policy was not produced, nor had it since been, “so as to enable this defendant to endorse said change of beneficiary on said policy”; that Lucy Kavanagh had made claim on it for the proceeds of the policy; that it had always been willing, without risk to itself, to pay the proceeds to whomsoever was entitled to it; and that it “hereby offers to bring said proceeds into court as the Court may direct.”

In the answer of Lucy Kavanagh she alleged in substance that she was living separate and apart from her husband for several months before his death; that before the separation he had borrowed certain moneys from her which he had refused to return; that after the separation he had refused to contribute to her support; that on February 3, 1923, she visited him at his business office and demanded the return of the moneys borrowed and also support money; that they had a heated dispute, and in the struggle which followed a revolver, which she carried, was accidentally discharged and he was so seriously wounded that he died on February 9; that before his death no person had made any demand upon her for the policy of insurance which was in her possession; and that she was arrested on the charge of murdering her husband and was afterwards released on bail pending the trial on an indictment which had been returned. She denied that any change of beneficiary in said policy had properly been effected prior to her husband’s death and claimed that she was entitled to the entire proceeds of the policy. She afterwards filed an amended and supplemental answer in which she alleged that in December, 1923, she was tried on said indictment in the criminal court of Cook county, and on December 19, 1923, was found not guilty of said murder charge by a jury and discharged.

On January 17, 1924, the cause was referred to a master in chancery to take evidence and report his findings of fact. At the hearing considerable evidence, oral and documentary, was introduced. Complainant’s evidence sufficiently established such of the allegations of his amended bill as are first above set forth. Lucy Kavanagh showed by the proper record that she was acquitted by a jury of the murder charge. She testified in substance that she was married to Patrick H. Kavanagh on August 6, 1914, at which time he was working as a bartender; that after that he was a bell boy in hotels for about five years; that at the time of his death he and another were engaged in the business of running the so-called “National Club” on West Madison street, Chicago; that about February 1, 1921, he gave her the insurance policy and she placed it in her safety deposit box and never thereafter took it out until she gave it to her attorney to bring to court; that when he gave her the policy she gave him $2,100 in cash, and also paid him in cash $33.50 for the first payment on the first annual premium; that on two subsequent occasions she made payments to him to be applied on premiums due, on the first occasion $27.41, and on the second $28.75, and that on all three occasions her husband gave her the company’s receipts for the payments (introduced in evidence by her); that she made these premium payments for him because he didn’t have the money at the time they became due; that no part of the $2,100, or of said premium payments, had ever been repaid to her; that at the time she “loaned” him the $2,100 and received the policy, she “did not get a note or anything except the policy”; that no one ever made a demand upon her for the policy before her husband’s death; and that “it would have been useless to make a demand for the policy without the. payment, of the money.” Her testimony in these; particulars, was • uncontradicted.

After the master’s report, making certain findings of fact in accordance with the evidence and containing a transcript thereof, had been filed, the court overruled all exceptions to the report and found in the decree that ‘ during his life Patrick H. Kavanagh, in accordance with the right which he had under said policy of insurance, * * * changed the beneficiary under said policy from Lucy Kavanagh to Joseph Kavanagh, so that Lucy Kavanagh ceased to be the beneficiary thereunder, and Joseph Kavanagh became such beneficiary, and was such beneficiary at the time of the death of said Patrick H. Kavanagh, and * * * that said Joseph Kavanagh is now rightfully entitled to the moneys due under said policy of insurance, and that the amount thereof is $4,911.50.”

Exhaustive briefs, supplemented by oral arguments, have been presented by respective counsel. The main contention of counsel for Lucy Kavanagh is that no change of beneficiary of the policy was effected according to its terms, because no indorsement of any change was made on the policy by the company at its home office. On the other hand complainant’s counsel contends that where, as here, the insured did all that was within his power under the circumstances to change the beneficiary, equity will regard that as done which should have been done and decree that the beneficiary was changed before the death of the insured. After reviewing the evidence and many adjudicated cases we have reached the conclusion that that portion of the decree appealed from, wherein it was decreed that Patrick H. Kavanagh, in accordance with the right which he had under the policy, changed the beneficiary thereof before his death from Lucy Kavanagh to complainant, is correct, and is in accordance with the general current of authority in cases where the provisions in the policies were substantially the same as in the present policy. (See State Mut. Life Assur. Co. v. Bessett, 41 R. I. 54; John Hancock Mut. Life Ins. Co. v. Bedford, 36 R. I. 116; Quist v. Western & Southern Life Ins. Co., 219 Mich. 406; White v. White, 194 N. Y. Supp. 114; Mutual Life Ins. Co. v. Lowther, 22 Colo. App. 622, 126 Pac. 882; Garrett v. Garrett, 31 Cal. App. 173, 159 Pac. 1050.) Counsel, for Lucy Kavanagh cites the case of Freund v. Freund, 218 Ill. 189, as evidencing that the law in this State is to the contrary, but we think that the Freund decision is distinguishable from the present case and the cases above cited. As we read the Freund decision it was based largely on the facts that there was a statute of the State of New York, in which the insurance company was incorporated and had its home office, requiring the consent of the company to a change of beneficiary, that the insured’s application for such a change did not reach the home office of the company until after the insured had died, and that the company never consented to the change. The insurer in the present case is a corporation of a different State and there is no evidence of the existence of a similar statute in that State. Furthermore, in the present case, the insured’s proper written application for a change of beneficiary was received and acknowledged by the home office of the company before the death of the insured. And in the letter of acknowledgment the company wrote that “upon receipt of the policy we will endorse the change in accordance with the request.” In the Freund case, after referring to certain decisions cited by counsel in that case, the court said (p. 204): “In many of these cases the assured was required to surrender the old certificate, that had been issued to him, before a new certificate was issued, and the facts showed that the beneficiary had refused to surrender the old certificate, so that the insured was unable to deliver it up to the company when he applied for a new certificate; and in such cases it was held that the assured had done all he could do, and that it would be inequitable to allow a beneficiary to take advantage of his own wrong. No such state of facts exists here.” And, as to the distinguishable features in the Freund case from those of the present case, see also, State Mut. Life Assur. Co. v. Bessett, 41 R. I. 54, 61; Gross v. Strzyzowski, 124 Ill. App. 300, 305; O’Connell v. Supreme Tent of Knights of Maccabees, 153 Ill. App. 232, 235.

But there is another maxim to the effect that he who seeks equity must do equity. And we have reached the further conclusion that complainant is not entitled to the entire amount due on the policy, $4,911.50, tendered by the Insurance Co. into court. We think it sufficiently appears from the uncontradicted evidence of Lucy Kavanagh, as to the transaction she had with her husband at the time the policy was issued to him and delivered by him to her, that she was given the policy as security for a loan from her to him of $2,100, no part of which he ever repaid. And we think that, in equity and good conscience, out of the $4,911.50, there should be paid to her the sum of $2,100, together with the amount of said three premium payments so made by her, aggregating $89.66,' in all $2,189.66, and the balance $2,721.81 paid to Joseph Kavanagh (see Conner v. Conner, 145 Ill. App. 608; Supreme Council Royal Arcanum v. Tracy, 169 Ill. 123, 128); and that the costs of the litigation in the superior court, as well as the costs in this Appellate Court, should be divided equally between Lucy Kavanagh and Joseph Kavanagh.

Accordingly the decree of the superior court is reversed and the cause is remanded to that court with directions to enter a new decree in accordance with the views herein expressed.

Reversed and remanded with directions.

Barnes, P. J., and Fitch, J., concur.


text:
    N. H. Last, Appellee, v. William A. Brams, Appellant.
    Gen. No. 29,910.
    1. Accobd and satisfaction — settlement of damage claim by liability insurer as accord and satisfaction. Where the defendant, in an action to recover for damages to plaintiff’s automobile in a collision with defendant’s car, sent a statement of his own damage to plaintiff, which the latter forwarded to an insurance company with which he carried liability insurance, and that company paid the bill and took defendant’s written release against plaintiff, such settlement did not operate as an accord and satisfaction between the parties.
    2. Releases — admissibility of release of damage in action against releasing party. In an action for damages arising out of an automobile collision in which both vehicles were damaged, a release given by defendant to the insurance carrier of plaintiff’s liability on account of damage resulting from the collision was properly excluded where it did not purport to settle any claims of plaintiff against defendant but on its face was limited to defendant’s claims against plaintiff.
    3. Evidence — insurer as agent of insured to malee admission in settling liability claim with third party. Where the defendant, in an action to recover for damages to plaintiff’s automobile in a collision with defendant’s car, sent a statement of his own damages to plaintiff, which the latter forwarded to an insurance company with which he carried liability insurance, and that company paid the bill and took defendant’s written release against plaintiff, the transaction was not in effect an admission of plaintiff’s negligence and of his liability for the accident by his agent, there being nothing in the evidence to show that the insurance company was plaintiff’s agent, or that plaintiff ever sanctioned or ratified the act of that company in paying the money to defendant and taking his release.
    Appeal by defendant from the Municipal Court of Chicago; the Hon. James W. Gobdon, Judge, presiding. Heard in the second division of this court for the first district at the October term, 1924.
    Affirmed.
    Opinion filed July 14, 1925.
    Rehearing denied July 23, 1925.
    Max F. Allaben, for appellant; George W. Lennon, of counsel.

      No appearance for appellee.
   Mr. Justice Gridley

delivered the opinion of the court.

In an action in tort to recover damages to plaintiff’s automobile occasioned by its collision with defendant’s automobile on December 30, 1923, at the intersection of Fullerton and Kimball avenues, Chicago, the court found defendant guilty and assessed plaintiff’s damages at the sum of $88.25, and entered judgment on the finding against defendant. This appeal followed. Plaintiff has not filed any brief and argument in this Appellate Court.

Plaintiff was driving his car east on Fullerton avenue and, as he was making a turn to the north onto Kimball avenue, defendant’s car, approaching from the east on the north side of Fullerton avenue, collided with plaintiff’s car, causing damage to both ears. Each of the parties claimed that the other’s negligence was the cause of the accident. Defendant presented to plaintiff a written claim for $43.65 for the damage to defendant’s car occasioned by the collision, and plaintiff forwarded the claim to an insurance company with which he carried liability insurance. On February 2, 1924, the insurance company, by virtue of plaintiff’s insurance policy, settled defendant’s said claim by paying him $43.65, and taking his written release. On April 28, 1924, plaintiff commenced the present action.

On the trial, defendant offered in evidence the said release but the court refused to admit it. By its terms defendant, in consideration of $43.65 paid to him, did “release and forever discharge” plaintiff, “of and from all claims and demands of every kind and nature * * * and particularly on account of any claims for personal injuries or damage to property arising from p,n accident which occurred on or about December 30,1923, at the intersection of Fullerton and Kimball avenues, Chicago, Cook County, Illinois, caused by collision of motor cars of the said William A. Brams and H. 1ST. Last.”

Defendant’s counsel do not contend here that the finding and judgment are against the weight of the evidence on the questions either that defendant was guilty of negligence or plaintiff of contributory negligence, but the point is made that the judgment should be reversed because “the settling of defendant’s claim was an accord and satisfaction between the parties and operated as a discharge of plaintiff’s claim.” We do not think that the point is well taken or that the trial court erred in refusing to admit the release in evidence, and for the reason that the release on its face does not purport to settle any claims which the plaintiff had against defendant, but only such as defendant had against plaintiff. Defendant’s counsel further contend that, when the insurance company paid said sum to defendant and took the release from him, it was acting as plaintiff’s agent in the transaction, and that the transaction was in effect an admission of plaintiff’s negligence at the time of the accident and of his liability therefor. We cannot agree. There is ■ nothing in the evidence tending to show that the insurance company was acting as plaintiff’s agent in said transaction. It only appears that the insurance company, for reasons not disclosed, decided on its own account to pay defendant’s claim and take his release. The policy was not introduced in evidence, and it does not appear that the insurance company had any authority, express or implied, from plaintiff to settle or compromise plaintiff’s claim against defendant, or that plaintiff ever sanctioned or ratified the act of the insurance company in paying said sum to defendant and taking his release. (See Burnham v. Williams, 198 Mo. App. 18, 25.)

The judgment of the municipal court is affirmed.

Affirmed.

Barnes, P. J., and Pitch, J., concur.


author: Mr. Justice Partlow

text:
    John A. Dahlin, Defendant in Error, v. The Maytag Company, Plaintiff in Error.
    Gen. No. 7,469.
    1. Defaults — amendment of pleading as setting aside. Where after a pro oonfesso order has been entered against a defendant, defaulted for want of a plea or answer, the pleadings are amended in a matter of substance, the effect of such amendment is automatically to set aside the default and the order pro confesso, and an increase in the ad damnum constitutes an amendment in a matter of substance.
    2. Pleading — necessity for rule to plead to declaration amended after default for want of a plea. The presumption that after the service of the summons the defendant is constantly present in court and has notice of all that takes place does not dispense with the necessity of ruling defendant to plead where after default for want of a plea the declaration is amended in a matter of substance.
    3. Sales — recovery for prospective profits on nondelivery by seller. On failure of the seller to deliver in conformity with its contract the buyer may recover for prospective profits where there is any criterion by which the probable profits may be estimated with reasonable certainty, and all that is required is that such profits be established by competent proof.
    Error by defendant to the Circuit Court of Winnebago county; the Hon. E. D. Reynolds, Judge, presiding. Heard in this court at the April term, 1925. Reversed and remanded.
    Opinion filed May 28, 1925.
    Rehearing denied October 6, 1925.

      Knight & Mohr and Welsh & Welsh, for plaintiff in error.
    Garrett, Maynard & Fell, for defendant in error.
   Mr. Justice Partlow

delivered the opinion of the court.

On January 19, 1923, plaintiff in error, The Maytag Company, a corporation, through E. J. Romans, its salesman, entered into a written contract with defendant in error, John A. Dahlin, by the terms of which plaintiff in error agreed to manufacture and ship to defendant in error “on or before January 19, 1924, 300 Maytag Gyrafoan washers, at list, less 33-% per cent, less 5 per cent, less 5 per cent, f. o. b. Rockford, Illinois, one car to be shipped at once as follows: 74 Model 80 — $90.25, $5,778.50; one Model 83 — at once, $135.37, total $5,913.87. Terms: Sight draft, B-L attached. Remarks: In consideration of this order placed, The Maytag Company grants John Dahlin, Rockford, Illinois, exclusive agency on the Maytag line for the life of this contract in Rockford and vicinity. When the amount of machines ordered above have been taken and settled for, The Maytag Company agrees to refund to John Dahlin on the settlement of the last car, the difference between the above discounts of 33-% per cent, less 5 per cent, less 5 per cent, f. o. b. Rockford, and 40 per cent, less 5 per cent, f. o. b. Newton, Iowa.” This contract was signed by Dahlin and Romans. Up to October 15, 1923, 225 machines were received by defendant in error under the contract and paid for in full. On October 15, 1923, defendant in error claims he ordered the fourth carload of 75 machines, being the balance of the contract, but the machines were never shipped to nor received by defendant in error. It is contended by defendant in error that in December, 1923, plaintiff in error established an agency in Rockford for the sale of machines of this kind and placed in charge a relative of Maytag, and that the establishment of this agency was the reason plaintiff in error refused to further fulfill its contract with defendant in error.

On January 8, 1924, defendant in error began an action of assumpsit against plaintiff in error to the April term, 1924, of the circuit court of Winnebago county, to recover damages for the alleged breach of this contract. The praecipe alleged damages in the sum of $5,000. A summons was served on plaintiff in error in which $5,000 damages were claimed. A declaration was filed February 19, 1924, with an ad damnum clause in the sum of $2,500. No pleas were filed by plaintiff in error during the April term, 1924, but it was not formally defaulted. The October term, 1924, continued until January 10, 1924, and no pleas were filed and no formal default was entered against plaintiff in error. On January 10, 1925, defendant in error moved the court to amend the declaration, which was granted, and the ad damnum clause was changed from $2,500 to $5,000. No notice of this amendment was given to plaintiff in error and it was not ruled to plead to the declaration as amended, but after the amendment was made plaintiff in error was immediately defaulted. Romans and defendant in error testified to the contract and its alleged breach.

The evidence showed that the net cost of each machine to defendant in error was $86.50; that it cost defendant in error $20 to sell each machine, and that the retail price was $150; that the loss on each of the 75 machines which were not delivered was $43.50, or a total loss of $3,262.52 on the 75 machines not shipped; that on the whole 300 machines, defendant in error was entitled to an additional 5 per cent discount which amounted to $1,145, making a total loss to defendant in error of $4,407.52, for which amount judgment was entered against plaintiff in error. On the same day that judgment Was entered court adjourned for the term. To review the judgment a writ of error has been prosecuted from this court. :

As grounds for reversal it is urged that the amendment of the declaration increasing the ad damnum was an amendment in a matter of substance which created in the plaintiff in error the right to plead de novo, and required the court, before entering a default, to enter an order granting leave to plead, or to enter a rule to plead, within a certain fixed period; that it was reversible error to permit default to be immediately taken, proofs to be heard and judgment to be rendered; that the judgment is not sustained by the evidence in that there was no legal evidence sustaining the item of $3,262.50 included in the judgment; that in an action for a breach of a contract for failure to deliver goods or chattels at a certain place, the measure of damages is the difference between the contract price of the goods and the fair cash market price at the time and place, stipulated for delivery.

The first question is whether or not the judgment was properly entered.

The rule is, that where the defendant to a suit has been defaulted for want of a plea or answer and there is a pro confesso order entered against him, and the pleadings are subsequently amended in a matter of substance, the effect of such amendment is to automatically set aside the default and the order pro confesso. Increasing the ad damnum is an amendment of substance. Where such an amendment is ma.de, it becomes essentially a new declaration, which the party has the right to defend. Brown v. Smith, 24 Ill. 197; Gibson v. Bees, 50 Ill. 383; Lyndon v. Lyndon, 69 Ill. 43; South Chicago Brewing Co. v. Taylor, 205 Ill. 132; Wende v. Chicago City Ry. Co., 271 Ill. 437; Meyer v. Meyer, 255 Ill. 436.

In Brown v. Smith, supra, the declaration was for $500. There was a verdict for $1,131.09. After verdict the plaintiff entered a motion for leave to amend the declaration by increasing the ad damnum. The motion was granted and judgment was entered. A motion was then made in arrest of judgment and overruled. The court said:

“And hy the uniform rule of practice, the court has no power to permit an amendment in the declaration, in a matter of substance, without granting a continuance of the cause, if desired by the defendant. To do so would operate as a surprise and defeat the object in requiring the declaration to be filed ten days before the term. Where such an amendment is made, it becomes essentially a new declaration, which the party has the right to prepare to defend. There was this material amendment to the declaration, entitling the defendant to a continuance. In that as originally filed, the whole claim of damages amounted to but $500, while it as amended claimed over $3,000. When it was filed, the defendant had a right to believe that no more than, the damages there claimed would be insisted upon at the trial. This amendment authorized a greater recovery, and was as material an amendment as if there had been added a new breach, or count in the declaration, to make it conform to the proof. Nor has the court any power, after verdict, to permit amendments of substance, except upon terms of the payment of costs, setting aside the verdict, and granting a new trial. * * * To permit such a practice would enable a plaintiff to claim a small amount in his summons and declaration, and to recover a larger amount on the trial. It may be that the appellants have a complete defense to all the damages above $500, and may have been induced, by no more being claimed, to make no preparation to establish it.”

Where there is an amendment to the declaration in a matter of substance, the defendant should not be defaulted until after he has been ruled to plead to the declaration as amended. Gage v. Brown, 125 Ill. 522; Adams v. Gill, 158 Ill. 190; Brown v. Tuttle, 27 Ill. App. 389.

In Gilbert v. American Trust & Savings Bank, 118 Ill. App. 678, the original ad damnum was on a note for $2,500, Subsequently the declaration was amended so as to cover two other notes, and the ad damnum was changed to $15,000. No notice was given to the defendant of this amendment, and no rule to plead was entered against him to the amended declaration. On page 681 it is said:

“Where, however, a new substantive cause of action is set up by amendment, it has frequently been held that it is in the nature of a new suit, and for some purposes is treated as such, the commencement of which dates from the filing of the amendment and does not relate back to the bringing of the original suit. Of such new cause of action the defendant is not required to take notice until a rule to plead has been laid upon him. * * * As to the amended declaration, plaintiff in error was not in default when the judgment was taken. The plaintiff, when he filed his amended declaration was in no better position than he would have occupied if he had filed his original declaration after the commencement of the second term. In that state of the record it has been held error to render judgment by default without a rule, and service of it, requiring him to plead. Pratt v. Grimes, 35 Ill. 164.”

Defendant in error insists that in" the absence of rules of court to that effect, no special notice is required of any amendment of any part of the record of the current term, as the presumption of law is that by reason of the service of the summons the defendant is constantly present in court, and, therefore, has notice of all that takes place. In support of this contention several cases are cited. We have examined these cases and are of the opinion that the weight of authority is that where the pleadings are amended in a matter of substance that any prior default is set aside and that before judgment is entered the defendant must be ruled to plead, which was not done in this case, and for that reason the judgment was erroneously entered.

The next question is whether the evidence sustains the item of $3,262.50 included in the judgment.

The general rule is that in an action for breach of contract for a failure to deliver goods and chattels, f. o. b. at a certain place, where the purchase price has not been paid, the measure of damages is the difference between the contract price and the market price at the time and place stipulated for delivery. 2 Sedgwick on Damages, sec. 734; Driggers v. Bell, 94 Ill. 223; Farson v. Buder, 187 Ill. App. 318; O ’Pizsi v. Valley Fruit Co., 213 Ill. App. 162. There is, however, a well-known exception to this rule. A recovery may be had for prospective profits where there is any criterion by which the probable profits may be estimated with reasonable certainty. All the law requires is that such profits be established by competent proof.

Van Arsdale v. Bwndel, 82 Ill. 63, was a suit to recover for the nondelivery of certain pottery at seven cents per gallon. The evidence showed that wares of that kind could not be purchased in the open market for less than ten cents per gallon, and that plaintiff had orders for 5,000 gallons at ten and one-half cents per gallon. It was held that plaintiff’s damages consisted of the difference between seven cents per gallon and ten and one-half cents per gallon.

In Barnett v. Caldwell Furniture Co., 277 Ill. 286, it was held that a recovery may be had for prospective profits when there are any criteria by which the probable profits can be estimated with reasonable certainty.

In Armeny v. Madson & Buck Co., 111 Ill. App. 623, defendant sold plaintiff 2,000 dozen gold pens, but failed to complete his contract. Plaintiff at great expense had advertised the pens for sale, had taken orders therefor and sold the same to divers persons. Upon the failure of defendant to deliver, plaintiff was unable to purchase other pens in the open market. Under the facts proven it was held that plaintiff had the right to recover his prospective profits.

In Black Diamond Fuel Co. v. Illinois Fuel & Phosphate Co., 219 Ill. App. 150, this court held that upon breach of a contract by a wholesale coal dealer to supply coal to a retailer, the latter was entitled to recover for the loss of profits on coal which the seller failed to deliver according to the contract if he was unable, by the exercise of reasonable diligence, to procure coal elsewhere to supply his customers.

In view of the fact that this case will have to be tried again we refrain from expressing any opinion as to whether defendant in error by his evidence brought himself within the rule above announced entitling him to prospective profits. We merely announce the rule applicable to the facts so that on the next trial the parties may submit their proof accordingly.

For the errors indicated the judgment will be reversed and the cause remanded.

Reversed and remanded.