text:
    Eugene L. Cribb, Plaintiff in Error, v. Chicago Railways Company et al., operating as Chicago Surface Lines, Defendants in Error.
    Gen. No. 32,895.

      Opinion filed February 27, 1929.
    A. U. Forman, for plaintiff in error.
    Brown, Fox & Blumberg, for defendants in error; Frank L. Kriete, John E. Kehoe, Charles Le Roy Brown and James L. Coleman, of counsel.
   Mr. Presiding Justice Holdom

delivered the opinion of the court.

This is an action on the case for personal injuries in which the plaintiff lost his right leg between the knee and the ankle by being run over by a car of defendants. The declaration consisted of two counts, in which it is averred that at the time of the accident the relation of passenger and carrier existed between the parties; that the accident took place on the 15th day of April, 1924, while the plaintiff was as he alleged a passenger on a 75th street car of defendants, and that he was lawfully riding in and upon said street car as a passenger for hire, and that desiring to alight at the intersection of Ellis avenue and 75th street informed the servant .of defendants of such intention, and that-defendants, by their agents and servants in charge of said car, wholly neglected their duty to stop said car at said street crossing and so carelessly, negligently and improperly managed and operated the same that the car failed to stop at the street crossing, and failed to give plaintiff, while in the exercise of all due care and caution for his own safety, sufficient time to safely and properly alight therefrom, and that through such negligence on the part of defendants in the operation of said street car plaintiff was thrown to the ground and under the wheels of said car and his right leg was cut off and completely severed from his body, etc., to his damage in the sum of $50,000.

To this declaration defendants pleaded the general issue. There was a trial before court and jury, a verdict finding the defendants not guilty, and a judgment thereon after the court overruled a motion by plaintiff for a new trial, and from that judgment plaintiff prosecutes this writ of error.

It is not controverted but that plaintiff lost his leg by being run over by a street car of the defendants, but it is denied that plaintiff at the time of his injuries was a passenger on a car of defendants. While it is assigned for error that the verdict is not supported by the evidence and is contrary to the law and the evidence, the principal error argued for reversal is the examination of plaintiff regarding certain accident insurance policies and their admission in evidence and arguments thereon before the jury.

We will first dispose of the contention of plaintiff that the verdict against him is not supported by the evidence. There was no eyewitness to the accident, so that plaintiff’s testimony regarding the manner in which he lost his leg is unsupported by other direct testimony on his part. Counsel for plaintiff in his brief states that:

“The plaintiff, after accounting for his movements during the evening of April 15, 1924, up to the time of. the injury, testified that at about eleven o’clock in the evening of that day and while a passenger on the car complained of he pressed the button for the car to stop, walked to the front platform, said to the motorman, ‘Next stop, please’ and when the car stopped or almost stopped and the door opened, descended upon the step to alight. Before completely alighting, however, the motorman applied the power with a sudden jerk, throwing plaintiff from the step, whirling him around facing the opposite direction from that in which the car was moving, hurling him to the ground and his foot went on the track, whereupon the rear trucks of the car passed over and severed the right leg at the ankle. ’ ’

Plaintiff further testified that he was taken by the Grand Crossing police patrol wagon to the South Shore Hospital and his leg was amputated at a point “midway” between the knee and ankle. He also testified as to his business and that his earnings were about $175 a week, and as to the payment of his surgeon’s, nurse’s and hospital bills.

This testimony was met by defendants in an explicit denial that plaintiff was a passenger on defendants ’ street car, or that he was injured while alighting therefrom. The motorman, police officers McNaughton and Quish, Conductor McCann and nine passengers in the car at the time of the occurrence testified as witnesses for defendants. There was an unanimity in the testimony of these witnesses that the car which ran over plaintiff’s leg after stopping at Drexel boulevard, two blocks west of the accident, ran at a speed of between 10 and 18 miles an hour along 75th street and across Ellis avenue without making any stop at the west side of Ellis avenue and without any perceptible change in speed, although the witness Horka put the speed at 15 to 10 miles just before reaching Ellis ave- _ jvue. A cry of distress was heard by defendants’ witnesses, upon which the car halted. It was the conductor’s opinion that the cry came just as the rear steps of the car passed plaintiff, and that the car was then on the building line just east of the crosswalk of Ellis avenue; the conductor gave the usual signal for an emergency stop, three bells, and the car came to a stop about 50 feet east of the east line of Ellis avenue; that the motorman on hearing the emergency signal pulled the reverse and stopped the car within 75 or 80 feet, which brought the car to a standstill so that its rear end was between 45 and 50 feet east of Ellis avenue. All of defendants’ witnesses testified that the car made no stop for Ellis avenue, and did not decrease its speed until the cry of distress was heard.

The motorman not only denied plaintiff’s statements regarding his being a passenger and giving a signal and making a verbal request to stop the car at Ellis avenue, but did state that the car had run uninterruptedly at a speed of from 14 to 16 miles an hour approaching and crossing Ellis avenue; that he made no stop until the emergency bell sounded, and that no one came to the platform or signaled or asked him to stop in order that he might alight at Ellis avenue. In this testimony the motorman was corroborated in every material detail by officers McNaughton and Quish, who were on the front platform of the car with him at the time when plaintiff testified that he signaled the motorman to stop the car at Ellis avenue and attempted to alight, resulting in his falling and being run over and losing his leg. All of defendants’ passenger witnesses by their testimony supported and corroborated in every essential detail the testimony of the motorman and the two officers.

From this testimony there was but one conclusion to be arrived at, and that is that plaintiff was not a passenger upon the car of defendants at the time immediately preceding his being run over by the car. The testimony was overwhelmingly in complete denial of plaintiff’s evidence that he was a passenger upon the car. The testimony of defendants in contradiction of that of plaintiff as to his being a passenger was by unimpeached, disinterested witnesses who had no connection whatever with the defendants, and whose testimony there is not any cause for disbelieving. It may be said that the motorman was an interested witness. Be that as it may, without his testimony plaintiff’s evidence regarding the occurrence is not only completely overcome, but discredited.

Therefrom the jury could honestly and intelligently come to but one conclusion, which was, that plaintiff was not a passenger upon the car of defendants at the time immediately preceding the moment of his losing his leg. After an examination of all the testimony, pro and con, we agree with the conclusion to which the jury arrived. Plaintiff not being a passenger, as averred in his declaration, upon the car of defendants immediately preceding the accident, did not maintain any of the material averments of his declaration, and consequently was not entitled to a verdict in his favor.

The cross-examination of plaintiff by defendants’ counsel regarding his having policies of accident insurance was not for the purpose of showing that he had received compensation for his injuries, but for the purpose of discrediting his testimony. Defendants proved that plaintiff had made a statement regarding the accident in the making of proof of claim in the accident insurance policies. This statement was offered in evidence and read to the jury, and is as follows:

“April 21st, 1924.
“I, Eugene Louis Cribb state and declare I was on an eastbound 75th St. street car on April 15, 1924, at about 11 P. M. having boarded the street car at 75th St. and Cottage Grove Ave., intending to go to Illinois Central Railroad Station and take a train to the City. That after boarding 75th St. car I changed my mind and decided to return via the 75th St. and Cottage Grove to 63rd St. and then take the Elevated Railroad to Sheridan Road Station and return to my home.
“That as the street car arrived at 75th St. and Ellis Ave. I got off the front end of street car and in some manner stumbled, where as in trying to regain my balance I threw both hands against the side of the car to protect myself and regain my balance and in so doing I was thrown on my back and both of my legs went under the car, quickly jerking my left leg out, my right leg was caught by the rear end of car and cut off at the ankle.
“I, Eugene Louis Cribb state and declare the above to be the facts as to the best of my memory and belief of the accident.
Eugene Louis Cribb.
Witness C. J. Smith.
Witness E. McFarland, E. N.”

Such statement was properly admissible on cross-examination as directly affecting his credibility.

Plaintiff was asked this question on cross-examination :

“ Q. Well now, under your policy with the Continental Casualty Company and under your policy with the Employers’ Liability Company, if you could show them, and prove to them that you were hurt getting off the street car on which you were riding as a passenger, you were entitled to twice the amount that you would be entitled to if you were on the street and not riding on a street car?”

to which plaintiff answered that there was no double indemnity on the Continental policy or on the Employers’ policy. He was then shown Policy No. 143454 of Employers’ Liability Insurance Company, dated March 15,1924, for $6,000, and admitted that section D thereof did provide that if the insured shall sustain injuries while boarding or alighting from a street railway car, the insurance company will pay double indemnity. ’ ’ Plaintiff on further interrogation admitted that the policy provided that the loss of his “foot” above the ankle would entitle him to double indemnity, if the result of an accident on a street car; that his broker presented his claim to the Employers’ Liability Insurance Company for double indemnity, but that he settled for single indemnity. He was then shown the Continental Casualty Company policy and admitted that it contained a provision that the insurance ' company would pay double indemnity for an injury which occurred while riding as a passenger in a passenger conveyance, and he stated that he settled for single indemnity and had made no claim for double indemnity.' This testimony was received without objection by plaintiff’s counsel.

This evidence was not admitted for the purpose of showing that plaintiff had received any indemnity for his injuries by the loss of his leg, but to test his credibility, and could not be received for any other purpose, because it is immaterial, so far as defendants were concerned, as to what compensation he may have procured for his injuries from any source other than that of defendants. We do not think the jury could have understood that the evidence was extracted for the purpose of showing that plaintiff had been compensated from other sources for the loss of his leg. There is no complaint that the jury were not properly instructed as to the law upon the questions of fact submitted to them for their decision.

It is well settled that a witness may be impeached by showing that before the trial he made statements regarding facts inconsistent with testimony given on the trial as to the same facts. Probasco v. Crane Co., 238 Ill. App. 287. In Illinois Cent. R. Co. v. Wade, 206 Ill. 523, it was held that statements of a witness made out of court, oral or in writing, if contradictory of a material point in his testimony in court, may be introduced in evidence after sufficient foundation is laid, as tending to discredit the witness.

Even were testimony elicited from plaintiff regarding Ms accident insurance not material, and were disregarded by this court, still plaintiff utterly failed to maintain Ms cause of action, as set forth in Ms declaration, that he was a passenger upon the car of the defendants. This being so, under no circumstances were defendants liable to plaintiff for the loss of his leg.

A consideration of the cross-errors assigned by defendants not materially affecting their defense, we pass over without comment.

There being no error of a reversible character in the record in this ease, the judgment of the superior court is affirmed.

Affirmed.

Wilson and Ryner, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Holdom

license: Public Domain

text:
    D & P Publishing Corp. and Kardex Rand Sales Corporation, Appellees, v. H. H. Conway et al., Appellants.
    Gen. No. 32,969.

      Opinion filed February 27, 1929.
    Kirkland, Fleming, Green & Martin, for appellants H. H. Conway and H. H. Conway Co.; J. B. Martineau, Jr., of counsel.
    Follansbee, Shorey & Schupp, for appellees; Robert W. Schupp and Frederic Barth, of counsel.
   Mr. Presiding Justice Holdom

delivered the opinion of the court.

The bill avers inter alia that for more than 30 years plaintiffs, both Delaware corporations and licensed to do business in Illinois, and their predecessor, Library Bureau, have been continuously and uninterruptedly “performing a certain unique printing and filing service for the Chicago Board of Underwriters”; that about 10 years prior to March 1, 1926, defendant Conway had been general manager, assistant treasurer and director of Library Bureau, and since that time has been general production manager of complainant D & P Publishing Corp., which with the other complainant, Kardex Rand Sales Corporation, acquired all of the assets, good will, etc., of Library Bureau about March 1,1926; that in the course of Conway’s employment he had direct supervision of the services rendered to Chicago Board of Underwriters, and had obtained full knowledge and information in reference to the nature of that service; that Conway resigned as general production manager on May 19,1926, and that his resignation was accepted as of its date; that thereafter Conway continued to act in an advisory capacity for complainants; that Conway in violation of his agreement to act in “an advisory and co-operative manner” and in violation of the trust and confidence reposed in him by complainants, entered into negotiations with the Chicago Board of Underwriters the latter part of May or the early part of June, 1926, for the purpose of inducing it to terminate its relation with complainants and to take its work or service from them and to give it to Conway or his proposed company, and that Conway enticed away certain of complainants ’ employees; that the first notice had of Conway’s action was in a letter of July 17, 1926, from the Chicago Board of Underwriters, which was received July 19, 1926; that on July 8,1926, Conway organized the H. H. Conway Company, the defendant company in this case; and it is further alleged that by reason of his wrongful acts and in violation of his contract and the trust and confidence reposed in him by complainants, Conway had obtained for himself or his company some order or contract from or with the Chicago Board of Underwriters for rendering the service theretofore performed by complainants, which contract belongs in equity and good conscience to complainants, who stand ready, willing and able to continue to perform such services; and the bill prays that defendants be decreed to turn over to complainants any order or contract which they may have with the Chicago Board of Underwriters for the rendering of service and that the defendants be enjoined pendente lite and perpetually from rendering any of such service to the Chicago Board of Underwriters under any order or contract, and from interfering in any manner with the business relations between complainants and said Board of Underwriters.

Defendants filed an answer in which, so far as the same is essential to our decision of this appeal, is as follows:

That the business conducted since March 1, 1926, in the name of the complainants has been conducted in reality by the “Band Kardex Bureau, Inc.,” a foreign corporation, not licensed to do business in Illinois, and having its principal place of business in Tonawanda, New York; that the Band Kardex Bureau, Inc., is not a party to this suit (as is patent without reference to this allegation in the answer); that the officers, agents, and directors of Band Kardex Bureau supervise, manage and control the business pretended to be done in the name of complainants, which corporations are dummies and are owned by the Band Kardex Bureau; that Conway had never been employed by complainant D & P Publishing Corp., as general production manager or in any capacity whatever, but on the contrary Conway about January 15, 1926, became general production manager of Band Kardex Bureau; that as such general production manager Conway directed the work done at the printing plants owned by Band Kardex Bureau all over the United States, including the production work done at the printing plants of D & P Publishing Corp.; that all of Conway’s compensation came from Band Kardex Bureau, and that he never received any compensation whatsoever from the D & P Publishing Corp.; that it was with the Band Kardex Bureau alone that Conway had any contact or relations whatsoever.

The answer further sets forth Conway’s resignation May 19, 1926, as general production manager of the Band Kardex Bureau, and at the time Conway told S. M. Knapp, treasurer of the Band Kardex Bureau, who came to Chicago for the purpose of accepting Conway’s resignation, that he wanted his resignation to be effective as of May 19,1926, and although he would accept his regular salary up to June 30,1926, in return for his help in turning over his work to his successor and giving his successor such information as would be necessary to carry on his duties, he wanted it distinctly understood that from May 19, 1926, his time was his own; that Knapp replied that the Band Kardex Bureau would pay Conway $100 a month for ten months by way of a retainer, to commence July 1, 1926; that Conway told Knapp that he did not wish to take this sum because he would undoubtedly be a competitor or be connected with a competitor; that Knapp assented, to this, -and said that the Band Kardex Bureau would naturally expect Conway to place himself and to begin at once on his future work, but that Band Kardex wanted to keep him on the pay roll so that it would feel free to ask him questions concerning the nature of the work that Conway’s successor might carry on; that Knapp carried Conway’s letter of resignation back to Tonawanda, New York, the home office of the Band Kardex Bureau, from which place, on May 25, he wrote the letter accepting Conway’s resignation; that Conway never received any sum of $100 for the month of July, 1926, or at any other time, nor has he asked or sought to receive it; that Conway only visited the office of D & P Publishing Corp. for the purpose of giving information and advice to his successor, and to receive his personal belongings, left there by consent of his employer, and has never had access to any lists, records or employees of complainants; that on July 6, 1926, Chicago Board of Underwriters notified Conway that after June 30,1926, he or a company to be organized by him, might take over the work or service required by the Board, and that on July 8, Conway organized the H. H. Conway Company. Denies that he accepted any compensation from either of complainants, or that he ever made use of any secret knowledge or information by reason of his former employment with either Library Bureau or Band Kardex Bureau; that all negotiations with Conway and the Board occurred long after Conway’s resignation and the acceptance thereof by Band Kardex Bureau, which had been upon the understanding that he was to begin at once, May 19, 1926, to work on his own account, with the understanding that he would be a competitor of Band Kardex Bureau, or be connected with a competitor ; and that Conway did not entice away any of complainants ’ employees, and neither of defendants obtained any contracts with the Chicago Board of Underwriters, but they have received an order to do such work beginning July 1,1926, as directed by the Board; such order was, from day to day, to be canceled at the will of the Board at any time.

There was a hearing before the chancellor and a reference to a master, who found the issues of fact and law in favor of complainants, and recommended that a decree be entered in accord with his report. Objections before the master and exceptions before the chancellor were overruled, and a decree entered confirming the master’s report granting the relief in that report recommended.

Defendants bring the record to this court for our review by appeal.

The testimony in the record does not establish any contractual relationship between the complainants, or either of them, and the defendant H. H. Conway. The Library Bureau, an Ulinois corporation, the capital stock of which was owned by a New Jersey corporation of the same name, owned complainant companies; about November 1, 1925, J. H. Band, Jr., acquired the capital stock of the Library Bureau of New Jersey, and thereafter acquired control of the Library Bureau of Illinois, and also by the same token acquired control of the complainant D & P. Publishing Corp.; the capital stock of the D & P Publishing Corp. was owned by the Library Bureau of New Jersey,'which had been organized to act as a dummy competitor for the Library Bureau of Illinois; thereafter there was a merger in which the Rand Kardex Bureau acquired-all of the stock of complainants, and Conway became the general production manager; that company was organized in January, 1926, a foreign corporation having its principal office and place of business in Tonawanda, New York, and not licensed to do business in Illinois. While Conway had no contract of employment with Rand Kardex Bureau, his employment was one at will with a salary in excess of $12,500 a year. Conway had no employment with complainants, or either of them, and never received compensation of any kind from them, or either of them. Complainants were owned by the Rand Kardex Bureau, and Conway at no time worked for complainants, or received any compensation from them for any service which he rendered, as his employment was solely with the Rand Kardex Bureau, the stock of both complainants being held by Rand Kardex Bureau. Among the companies and businesses owned by Rand Kardex Bureau were complainant D & P Publishing Corp. of Chicago and Danville, The Globe Wernicke Company at Cincinnati, Ohio, State Cabinet Company, Marietta, Ohio, and the Rand Kardex Bureau Factories, at Tonawanda and Brooklyn, New York, and in Massachusetts.

In March, 1925, Conway moved his office from Chicago to the home office of the Rand Kardex Bureau in Tonawanda, New York, taking a desk in the office of the D & P Publishing Corp. for his use while he was in Chicago directing the productions at that company. Conway never was employed by either of the complainants, his employment was with the Rand Kardex Bureau, who paid his salary, who hired him and who had the power to discharge him at any time they saw fit, as his employment was of no definite duration. When Conway resigned he sent his resignation to the Band Kardex Bureau, at Tonawanda, and by that company it was accepted. His resignation was not submitted to complainants, or either of them, as he was not in their employment, but that of the Band Kardex Bureau,- and the Band Kardex Bureau paid Conway’s salary up to the time of his resignation. Conway’s letter of resignation was addressed to Mr. J. H. Band, Jr., president of Band Kardex Bureau, and was accepted by Knapp, the treasurer, as effective May 19, 1926. Conway’s salary for May and June was paid by check of the Band Kardex Bureau, issued from the Tonawanda office, the home office of the company, and each check was for $1,041!66, and the checks were received by Conway respectively on June and July 1,1926. The Band Kardex Bureau is not a party to this suit and therefore the rights of Conway, as an employee of that company, are not presented for adjudication in this suit.

We ground our decision upon the point of the superior court decree argued for reversal that “Conway owed no duty, legal or equitable, to complainants, because he was never employed by them.”

It is not disputed but that the Band Kardex Bureau owns all of the stock of the complainant companies, and that in effect those companies are dummies representing Band Kardex Bureau; that Conway’s employment was not with the complainant companies, or either of them, but was with the Band Kardex Bureau; that whatever Conway did in such employment was for or in the interest of his employer, the Band Kardex Bureau, and not for complainants, or either of them.

Counsel for complainants cite Davis v. Hamlin, 108 Ill. 39, to sustain their contention that what Conway did for his employer inured to the benefit of complainants, and say “the principles stated in Davis v. Hamlin are applicable in a great variety of cases. The relation between the parties and the duties involved need not be legal. It may be moral, social, domestic or merely personal.” The difficulty with this contention is that Conway owed no moral, social, domestic or personal duty to complainants. His whole duty was to his employer, the owner of the complainant companies, the Band Kardex Bureau, Inc.

In the Davis-Hamlin case, Davis was the employee of Hamlin, and Hamlin was entitled to all of his service, and during such service he negotiated a lease for himself of a theatre which Hamlin had operated for years, and which lease was obtained by Davis about the time Hamlin’s lease was expiring. In the Davis case, Davis was untrue to his employer and instead of working for, worked against his interest. Conway owed a duty to his employer, and not to complainants. When Conway resigned, he did not tender his resignation to complainants, but to the Band Kardex Bureau, who accepted it and his employment terminated by that resignation. We concede that the quotation from the decision of Lord Chancellor Cottenham, cited in the Davis ease, supra, states the correct rule, where he said:

“The rule was one of universal application, affecting all persons who came within its principle, which was, that no party could be permitted to purchase an interest when he had a duty to perform which was inconsistent with the character of a purchaser. . . . Whenever one person is placed in such relation to another, by the act or consent of that other, or the act of a third person, or of the law, that he becomes interested for him, or interested with him, in any subject of property or business, he is prohibited from acquiring rights in that subject antagonistic to the person with whose interests he has become associated.”

The difficulty in the case at bar is that Conway held no relationship to complainants, and in no way was connected with their affairs, except as the business transacted by complainants was that of Conway’s employer, the Band Kardex Bureau, and all the cases cited by complainants in their brief are to a like effect and likewise inapplicable to the facts of the case at bar.

The doctrine that a third person may maintain an action on a promise made by one person to another for his benefit is limited to contracts which have for their primary object and purpose the benefit of a third person and which are made for his direct benefit. Ken-field Pub. Co. v. Baumgartner, 189 Ill. App. 413.

In City of Herrin v. Stein, 206 Ill. App. 339, it was held that in order to entitle a party to recover under a rule of law that a third party may recover under a contract entered into between two other parties for his benefit, it is necessary that such contract should have been entered into for his benefit, and if it appears from the terms of the contract that the contract was solely for the benefit of the parties thereto, such third party cannot recover under its provisions.

The latter ruling is applicable to the case at bar. The contract of employment between Conway and the Band Kardex Bureau was in no way for the benefit of complainants, but was inter partes, in which complainants had no interest. The business of complainants and all of its stock being owned by the Band Kardex Bureau, all the service of Conway under his employment was for the benefit of his employer, who paid his salary, who hired him and who could have discharged him but did not, but did accept his resignation. The business which complainants transacted was that of the Band Kardex Bureau.

The relationship of master and servant existed between Conway and the Band Kardex Bureau, and none other. He was employed at a fixed salary, he rendered, services in accord with the terms of his employment, and resigned from such employment by tendering his resignation in writing to his employer, Rand Kardex Bureau. There was no relationship at all, either of employment or otherwise, between complainants and Conway. They neither hired him nor paid his salary, nor discharged him; neither did they receive a letter of resignation from him. There is no element of relationship of master and servant between the complainants and Conway. Therefore Conway owed no duty of any kind to complainants. His duty was to the Rand Kardex Bureau, and none other, so that if Conway has been guilty of the derelictions of duty charged against him in complainants’ bill, they are derelictions of duty to the Rand Kardex Bureau, for which the latter only have a right of action against Conway.

It therefore follows from what we have said that there being no contractual relationship of any kind between complainants and the defendant Conway, the decree against the defendant is erroneous, and is therefore reversed with directions to the superior court to dismiss the bill for want of a proper party complainant.

Reversed with directions.

Wilson & Ryner, JJ., concur.


text:
    Mary M. Hack, Appellee, v. Bernard W. Snow, Bailiff of Municipal Court of Chicago, et al., Appellants.
    Gen. No. 33,001.

      Opinion filed February 27, 1929.
    Sinden & Hassell, for appellants; Clyde C. Fisher, of counsel.

      Ode L. Rankin, for appellee.
   Mr. Presiding Justice Holdom

delivered the opinion of the court.

This is an appeal by one of the defendants, Wladyslaw Liesik, from a decree entered on a bill filed by the complainant, Mary M. Hack, to quiet her title. The material facts may be briefly stated as follows :

In answering the bill to foreclose a mortgage the defendant Liesik, a judgment creditor of the mortgagor, appeared and made proof of the lien of his judgment. The court decreed his judgment to be a lien on the mortgaged property subordinate to the lien of the mortgage in the foreclosure proceeding. At the foreclosure sale Liesik did not bid to protect his lien. The mortgagee complainant bid in the property for the amount of the decree and costs, leaving no surplus to satisfy Liesik’s judgment. Within twelve months after the sale the grantees of the mortgagor redeemed. Thereupon Liesik levied an alias execution upon the mortgaged property and proceeded to sale. Thereupon complainant filed her bill to quiet her title. Defendant Liesik interposed a general demurrer to the bill. Upon a hearing that demurrer was overruled and Liesik electing to stand by his demurrer, the bill was taken as confessed and the decree found in the record was entered, granting the relief prayed and removing the claim of Liesik from the record as a cloud upon complainant’s title, we presume upon the theory as argued that the lien of the judgment passed from the land to the proceeds of sale in the foreclosure proceeding, and that the grantees of the mortgagor upon redemption took the property free and clear of Liesik’s judgment. The integrity of that decree is involved in this appeal.

The bill sets up inter alia that complainant, Mary M. Hack, acquired title to the real estate in the bill described from one Teodor Mitkowski and Susanna Mitkowski, Ms wife, and that the Mitkowskis derived their title from Dominick Horvath and Vilma Horvath, his wife, by warranty deed dated August 31,1923, and duly recorded September 4, 1923; that on October 31, 1924, the defendant Liesik obtained a judgment in the municipal court of the city of Chicago against Teodor Mitkowski, and the judgment remained unsatisfied; on November 17, 1924, an execution was issued thereon and returned thereafter unsatisfied. By trust deed dated May 24, 1923, and recorded May 25, 1923, Dominick Horvath and Vilma Horvath, his wife, the then owners of the property, conveyed the same to Ednyfed H. Williams, as trustee, to secure the Horvaths’ note for $1,700, and that thereafter on December 18, 1924, a bill was filed in the circuit court of Cook county by Ernest W. Bock, owner of the note and trust deed, against the said Dominick and Vilma Horvath, said- defendant Liesik, said Teodor and Susanna Mitkowski and others, to foreclose said trust deed, whereby said circuit court obtained jurisdiction over the parties by service of summons, and that the said defendant Liesik' appeared and made proof of his judgment against Teodor Mitkowski, and such proceedings were had in said foreclosure suit that thereafter on March 31,1926, a decree was entered finding that said trust deed was a lien upon the property conveyed thereby, and also finding that the judgment of the said defendant Liesik was a lien upon the property subordinate to the lien of said trust deed, and ordered and decreed that the defendants or some one of them pay the amount found to be due within a day fixed therein, and that in default of such payment said property be sold, or so much thereof as might be sufficient to realize the amount due complainant, principal, interest, costs, etc.; that in pursuance of said decree a'master in chancery of said circuit court on April 27,1926, sold the real estate in the trust deed conveyed and in said foreclosure decreed to be sold, at public vendue to one Ernest W. Bock for the sum of $1,830, and said master issued his certificate of sale dated April 30, 1926, to the said Bock, which said" certificate was on May 4,1926, duly recorded in the recorder’s office of Cook county; that the aforesaid Teodor and Susanna Mitkowski conveyed their interest in said property after the master’s sale and the confirmation thereof, and that their title passed through mesne conveyances to complainant, Mary M. Hack; that on April 25, 1927, complainant was the owner of an undivided half interest in said property and August Swarz was the owner of the other undivided half interest, and on that date complainant and the said August Swarz paid into the office of the master the sum of $1,940.26 as redemption money to redeem the said property from said sale. Thereupon the said master in chancery issued his certificate of redemption dated April 25,1927, to complainant and the said August Swarz, certifying that complainant and said Swarz on that date did redeem said property from said sale in accord with the provisions of the statute in such cases made and provided, and that thereafter on April 27, 1927, said certificate of redemption was recorded in the recorder’s office of Cook county aforesaid, and that subsequent to making such redemption and the issuing of said certificate the said August Swarz conveyed his undivided interest in said property to complainant, Mary M. Hack; that thereafter said Liesik issued an alias execution upon his judgment in the municipal court against said Teodor Mitkowski and placed the same in the hands of Bernard W. Snow, bailiff of said municipal court, and that said bailiff made a levy of said execution on the property in the bill described; that said Snow, as bailiff, gave notice as required by law that by virtue of said alias writ of execution he would at 10 o’clock a. m. Central Standard time on July 27, 1927, at the west entrance on North La Salle street of the City Hall, Chicago, offer for sale at public vendue all of the right, title and interest of the said Teodor Mitkowski in and to the property described in the bill, and complainant for the first time on July 26, 1927, learned that said sale was to be held as above set forth and advertised; and complainant averred that by virtue of the sale and the foreclosure proceedings above recited and of the redemption made therefrom, the property has been relieved of the lien of the judgment of said Liesik, and that such judgment is no longer a lien thereon, and that the proceedings to sell the property under the alias execution of said Liesik is a cloud upon the title of complainant to the said property, and .that she is entitled to have the sale of said property forever enjoined and restrained, and the proceedings under said judgment removed as a cloud upon her title, and prayed that the court may decree a removal of the same as such cloud, and that Liesik be perpetually enjoined and all persons claiming by, through or under him, from in any manner enforcing or attempting to enforce the aforesaid judgment against the property in the bill described, and for other and further relief.

A decree was entered in accord with the prayer of the bill. As all the facts were well pleaded in the bill, they stand as confessed. The only question for our determination is whether the court was warranted in overruling the general demurrer to the bill. There be.ing no question of fact before us, the question is whether, applying the law to the admitted facts, the court did right in overruling defendant Liesik’s demurrer to the bill.

It is patent that so far as the real estate is concerned defendant Liesik is precluded from asserting any right under his execution against said real estate by the decree in the foreclosure suit, which adjudged the rights of all the parties, including Liesik, and defendant Liesik is bound by the decree in the foreclosure suit. A sale under the foreclosure suit divested Liesik of any rights to a lien upon the real estate in virtue of his judgment. Thereafter he must look to the surplus proceeds of the sale, if there be any after satisfying the decree, and the decree operated to divest all prior incumbrances with notice whether by mortgage, judgment or otherwise, except the right to participate in any surplus which might remain from the sale, after paying the amount found due the mortgagee by the decree of foreclosure. Lightcap v. Bradley, 186 Ill. 510; Hart v. Wingart, 83 Ill. 282; Ridenour v. Shideler, 5 Ill. App. 180.

Complainant’s title is by mesne conveyances from, the mortgagor in the foreclosure suit under the redemption as set forth in the bill, so that the title acquired through1 the foreclosure proceeding inures to the benefit of complainant. Defendant Liesik had his day in court in the foreclosure suit, wherein his rights were determined, and the decree in that case is binding upon him,, and he is bound by all subsequent proceedings had in virtue of such decree, which freed the real estate from the lien of Liesik’s judgment, as by that decree all the liens subordinate to that of the mortgage being foreclosed, were effectually cut off and any rights which Liesik, as a judgment creditor, might have were transferred from the land, and would attach to the excess of the money necessary to pay the amount found due the mortgagee in the decree of foreclosure, and as there was no such excess derived from the sale, the rights of defendant Liesik are effectually ended, and he has no remedy other than against the defendant in his judgment as to property other than the mortgaged property, which he may own, and which under the law is subject to sale under such an execution. The act in force at the time of the execution of the mortgage foreclosed and the rendition of Liesik’s judgment was the Act of 1921, entitled “An Act in regard to judgments and decrees- and the manner of enforcing the same by execution and to provide for redemption of real estate sold under execution or decree.” Section 16 of said Act, Cahill’s St. ch. 77, ffl6, provides:

“When any real estate is sold by virtue of an execution, judgment or decree of foreclosure of mortgage or enforcement of mechanic’s lien or vendor’s lien, or for the payment of money, it shall be the duty of the Sheriff, Master in Chancery, or other officer instead of executing a deed for the premises sold to give to the purchaser a certificate describing the premises purchased by him, showing the amount paid therefor or, if purchased by the person in whose favor the execution or decree is, the amount of his bid, the time when the purchaser will be entitled to a deed unless the premises shall be redeemed as provided in this Act.”

And section 18 of the same Act, Cahill’s St. ch. 77, 1i 18, provides for redemption as follows:

“Any defendant, his heirs, administrators, assigns, or any person interested in the premises through or under the defendant, may within twelve months from said sale redeem the real estate so sold by paying .to the purchaser thereof, his executors, administrators or assigns, or to the Sheriff or Master in Chancery, or other officer who sold the same, or his successor in office for the benefit of such purchaser, his executors, administrators or assigns, the sum of money for which the premises were sold or bid off, with interest thereon at the rate of six per centum per annum from the time of such sale, whereupon such sale and certificate shall be null and void.”

Defendant Liesik did not bid at the foreclosure sale. Therefore, so far as the mortgaged property is concerned, his rights in the premises are ended, and he is cut off effectually from any relief therefrom. The defendant, so far as the property in question is concerned, has no right of claim thereto nor therein. Neither has he a right to attempt to subject the said real estate to the payment of his judgment by the alias execution levied by him upon such real estate, and which constitutes a cloud upon complainant’s title to such real estate.

In Ogle v. Koerner, 140 Ill. 170, it was held that a sale of land under a decree of foreclosure is an absolute discharge of the premises from the lien of a mortgage or trust deed, and every lien thereon subordinate thereto.

In Lightcap v. Bradley, supra, it was held that:

“Such a sale is a sale of the land and of all interests, both that which the mortgagor had at the execution of the mortgage and the interest of the mortgagee and other parties to the suit. It is made by the court as vendor, and a sale discharges the land from the lien and transforms it into the statutory lien by the certificate-of purchase. (Smith v. Smith, 32 Ill. 198.) It is true that if the premises are redeemed by the mortgagor they become like any other property owned by him and may be subject to execution and sale for deficiency ■ but that is because they belong to the debtor, and not on account of any lien by virtue of the mortgage. A redemption by any person not liable for the debt would free them absolutely so that they could not even be levied upon by execution for a deficiency.”

In Heinroth v. Frost, 250 Ill. 102, it was held that:

'' The sale of land under a decree of foreclosure is a sale of every interest in the land belonging to any party to the suit and discharges the land from every lien of such party. All are merged in the certificate of purchase. (Ogle v. Koerner, 140 Ill. 170; Lightcap v. Bradley, 186 id. 510.) Subsequent judgments do not become a lien on the property. The right of a creditor to redeem does not depend upon any lien on the property, but exists solely by reason of section 20 of chapter 77 of the Revised Statutes of 1874. (Commerce Vault Co. v. Barrett, 222 Ill. 169.) ”

And in Hart v. Wingart, supra, in discoursing on judicial sales, it is said:

“All persons having an interest in the equity of redemption and in the distribution of the surplus are highly proper if not indispensable parties. Such are subsequent purchasers and encumbrancers; they are entitled to redeem. They have the right to show payment of the mortgage, or any o.ther matter which will lessen the amount required to redeem or increase their interest in the surplus. If a sale is ordered the surplus, instead of going to the mortgagor, should be applied in the first place to the extinguishment of their liens.”

In Kaster v. Holcomb, 221 Ill. App. 485, it is said:

'' There is no provision of the statute allowing a levy and sale of a debtor’s equity of redemption prior to the expiration of one year from the date of sale. From this we draw the conclusion that at any time prior to one year from the date of sale under an execution the judgment debtor can convey his equity of redemption free and clear of any judgment liens.”

And in Commerce Vault Co. v. Barrett, 222 Ill. 169, it was held that the:

“Right to redeem from the sale at any time within twelve months and. to continue in possession for a period of fifteen months. This right was not such an interest as to be subject to levy and sale under execution. ’ ’

Under the decree in the foreclosure suit the defendant Liesik’s rights were determined, and the sale under that decree cut off any right which Liesik may have had by virtue of his judgment, and the levying of the said execution and che attempt to sell the real estate foreclosed in the foreclosure proceeding created a cloud upon the title of complainant, which a court of equity could on application, as in the case at bar, remove as such a cloud.

In order for the defendant Liesik to preserve any right he may have had in his judgment against the mortgaged property, he should have hid at the foreclosure sale, as provided by statute. Having failed so to do, he lost all interest and lien upon the real estate sold in the foreclosure proceeding.

The chancellor did not err in overruling the demurrer to the hill and entering a decree pro confesso, and therefore the decree of the superior court is affirmed with costs here and below against the defendant Liesik.

Affirmed.

Wilson and Ryner, JJ., concur.


text:
    Charles A. McDonald, Appellant, v. Chicago Daily News Publishing Company, Appellee.
    Gen. No. 33,012.

      Opinion filed February 27, 1929.
    Brundage, Landon & Holt, for appellant.
    Deneen, Healy & Lee, for appellee; John J. Healy, of counsel.
   Mr. Presiding Justice Holdom

delivered the opinion of the court.

This is an action of libel in which the declaration of one count charges as the gravamen of the offense that at the time of the publication the plaintiff was a duly licensed and qualified attorney at law, and also a “special State’s attorney for the County of Cook and State of Illinois,” and that he was a resident and citizen of the City of Chicago and of good name, credit and reputation, etc., in the usual form; and also that he was a public man having been elected to public offices in the said City of Chicago, and that he was in the discharge of his duties as such special State’s attorney and in the investigation concerning the death of one William H. McSwiggin.

To this declaration defendant interposed a general demurrer. This demurrer on hearing by the court was sustained and the plaintiff was ruled to file an amended declaration within 20 days. The foregoing order was entered on March 3, 1928; thereafter and on April 20, 1928, plaintiff came into .court by his attorney and elected to stand by.his declaration. Thereupon the court ordered that the suit be dismissed with a judgment of nil capiat and for costs, from which latter order plaintiff brings the record to this court for review by appeal.

The question presented by the record for our review and determination is, — did the declaration state a cause of action in libel against the defendant?

Plaintiff argues for reversal that the article counted upon in the declaration imputes to the plaintiff want of integrity in the discharge of his duties as an attorney at law and as special State’s attorney of Cook county, and prejudices the plaintiff in his profession and in his office. Plaintiff insists that by the interposition of a general demurrer defendant admitted all the facts alleged in the declaration, or which can by fair and reasonable intendment be implied from its allegations. This is true to a limited extent. Such admission is restricted in its application to the matters which are well and sufficiently pleaded. Cerveny v. Chicago Daily News Co., 139 Ill. 345, in which a per curiam opinion holds that ’’the demurrer admits all such facts alleged in the declaration as are well pleaded. ’ ’

It is our opinion that the ruling of the trial court on the demurrer was correct and without error. The charge is that plaintiff was injured in his professional capacity as an attorney at law and in his public office as a “special State’s attorney for Cook County.” The law requires precision in charges of libel and in this case we find an utter lack of any averment that the plaintiff was a practicing attorney, licensed to practice his profession in Illinois, or that he practiced the same in the City of Chicago. For aught the court may know to the contrary, he was not practicing his profession within the limits of the State of Illinois. Therefore he could not be damaged professionally within the jurisdiction of this State. Furthermore there is no such office created by the statutes of this State as “special State’s attorney of Cook County.” There being no such office as “special State’s attorney of Cook County” the plaintiff could not sustain any damage by reason of such publication.

It is true the court may appoint a person to act for 'the State’s attorney on his application or that of any other citizen in interest where the State’s attorney is interested in the subject matter of the litigation, or for any other reason made known to the court disqualified from conducting the litigation in hand. Such appointment is special and confined to one case or to a series of cases, beyond which such appointee has no power of action. However, he is not a special State’s attorney. He is really acting in the place of the State’s attorney, and such appointments, when challenged, have been held to be legal by our Supreme Court. Nevertheless it is not an office any more than is that of an assistant to the State’s attorney. The appointment of the plaintiff was to conduct an investigation, as appears from the so-called offending publication, into the matter of the murder of William H. McSwiggin. He could not be financially damaged because there is no law establishing such office or providing for any emolument therein,

The article counted upon in the declaration is not lihelous per se, and to maintain an action for libel in such circumstances special damage must be alleged. The averment, without special inducement by way of extrinsic recital, that the plaintiff was injured in his profession or in his public office is a conclusion of the pleader and makes the pleading vulnerable to a demurrer. In Eggleston v. Whitlock, 242 Ill. App. 379, the court announced the rule of pleading in a slander case, which is likewise applicable to a case in libel. It said:

“We are of the opinion that the trial court correctly sustained the demurrer to the first count, for the reason that the words are not per se slanderous., and the count contains no inducement alleging that the plaintiff was engaged in a trade, business or profession, and no colloquium averring that the words were spoken of and concerning the plaintiff in his trade, business or profession. ’ ’

And further said:

“In general the rules applicable to libel are the same that would apply to verbal slander. ’ ’

In People v. Spielman, 318 Ill. 482, the court said:

“Where the alleged defamatory words are ambiguous or equivocal and require explanation by reference to some outside or extrinsic matter to show that they are actionable, it must be expressly stated that such matter existed and that the defamation related thereto. The allegation thus required is called the inducement or statement of extrinsic matter. The colloquium is an averment which connects the defamatory words with the complaining party and with the extrinsic matters, if any, set forth by way of inducement. The office of ' the innuendo is to aver the meaning of the language published. (McLaughlin v. Fisher, 136 Ill. 111; Newell on Slander and Libel, — 4th ed. — secs. 527, 538, 542, 543.)”

None of these requirements is furnished by the averments of the declaration before us. The most that can be said for the so-called libelous article is that it charged the plaintiff with neglecting his duty as prosecutor and not effectively prosecuting the investigation in the McSwiggin case. In Davis v. Ferguson, 246 Ill. App. 318, it was expressly held that such a charge is not libelous per se. In the Davis case, supra, the court quotes from the rule laid down in 36 Corpus Juris 1168, as follows:

“The conduct charged must be of such a nature as to reflect upon the character and integrity of the plaintiff and to subject him to a loss of public confidence and respect; and a writing, although charging wrongful conduct or dereliction of duty, is not libelous per se, within the meaning of the rule, unless it imputes a dishonest or fraudulent motive or interest.”

In the publication complained of there is no imputation of dishonesty or fraudulent motive against plaintiff. This doctrine is forcefully expounded in City of Chicago v. Tribune Co., 307 Ill. 595, in which the court inter alia said':

“It follows, therefore, that every citizen has a right to criticise an inefficient or corrupt government without fear of civil as well as criminal prosecution. This absolute privilege is founded on the principle that it is advantageous for the public interest that the citizen should not be in any way fettered in his statements, and where the public service or due administration of justice is involved he shall have the right to speak his mind freely. .
“We consider the question solely from the standpoint of public policy and fundamental principles of government. For the same reason that members of the legislature, judges of the courts and other persons engaged in certain fields of the public service or in the administration of justice are absolutely immune from actions, civil or criminal, for libel for words published , in-the discharge of such public duties, the individual citizen must be given a like privilege when he is acting in his sovereign capacity. This action is out of tune with the American spirit and has no place in American jurisprudence. ’ ’

It may be urged that the cases quoted are not applicable because the plaintiff held no public office, but we quote them for the purpose of demonstrating that the office which he claimed to hold could not by any legerdemain be construed into being a public office in the absence of a statute creating such office. While plaintiff did not hold a public office, he did hold a public position and therefore his conduct was properly the subject of criticism. Salinger v. Cowles, 185 Iowa 874, and State v. Grinstead, 10 Kan. App. 74, are to a like effect.

On the point in question, as to criticism of a public officer, as in the Tribune case, in Limbach v. Reinbold, 239 Ill. App. 49, this court said:

“A consideration of the following cases, City of Chicago v. Tribune Co., 307 Ill. 595; Sullivan v. Illinois Publishing & Printing Co., 186 Ill. App. 268; Herrick v. Tribune Co., 108 Ill. App. 244, leads to the conclusion that the publication in question was not libelous. Printed and published criticism of an official, such as a village attorney, is not necessarily libelous, simply because it is unjust. To be actionable, a fair interpretation of it must bring about the conclusion that the one to whom the publication pertains may be hurt in some serious and substantial manner.
“All good men in offices of public trust are, and should be, hypersensitive to unjustifiable derogatory criticism; and that they generally are is evidence of their anxiety that the truth alone should be known and published; nevertheless, the law having regard to what is efficacious and practical, as well as to what is right and true, does not shield them, at least in political campaigns, from all that hurts, but only from that which being untrue, tends quite directly to material and substantial harm.”

Many other authorities in this State might be cited which would sustain the rule in the cases above cited.

Neither in Lavin v. Cook County Com’rs, 245 Ill. 496, nor in People v. Newsome, 291 Ill. 11, did the court pass upon the question of the existence of the office in law of ‘ ‘ Special State’s Attorney. ’ ’ The point was not raised in either case, nor decided. The cases simply held that the court did not err in appointing in one case Mr. Loesch and in the other Mr. Miller to act in the place of the State’s attorney in the proceedings there named. There is no case in our reports which decides that there is an office created by law of ‘ ‘ Special State’s Attorney.”

The superior court did not err in sustaining the demurrer of defendant to the plaintiff’s declaration, and on plaintiff’s electing to stand by his declaration, did nor err in entering the judgment of nil capiat and for costs involved in this appeal.

For these reasons the judgment of the superior court is affirmed. .

Affirmed.

Wilson and Byner, JJ., concur.


author: Mr. Justice Ryner

text:
    Woodlawn Security Finance Corporation, Appellant, v. John P. Doyle, Appellee.
    Gen. No. 32,987.

      Opinion filed February 27, 1929.
    Noble & Martin and McElroy, Rollo, Eberhardt & Quigley, for appellant; Charles F. McElroy, of counsel.
    West & Eckhart, for appellee.
   Mr. Justice Ryner

delivered the opinion of the court.

The plaintiff, on October 24,' 1927, obtained a judgment by confession against the defendant for $335 in the municipal court of Chicago. The action was upon a note signed by the defendant. Upon motion duly made, the judgment was opened and the defendant was given leave to defend and file a jury demand. The jury found the issues against the plaintiff. The usual motions for a new trial and in arrest of judgment were made and overruled. The court thereupon vacated the judgment of October 24,1927, and entered a judgment in favor of the defendant. The plaintiff appealed.

The note, as originally executed, followed, on the same sheet of paper, an order or contract for the furnishing by the payee to the maker of the note of advertising space on the dial of a clock, for a consideration of $25 per month. There was a perforated line between the two instruments. They read as follows:

“Federal Publicity Company
Chicago, Illinois Accepted by..........
Date July 1st 1927.
“You are hereby authorized to place one advertisement on the dial of the Kei-Lac Advertising Clock installed 71st St. & Jeffery Ave. This contract is for a period of twelve months from the date of the first display of the advertisement. In consideration of the services rendered hereunder,..........agree to pay you the sum of $25.00 per month. You agree to keep the clock mentioned herein operating regularly and in good order during the life of this contract. If, for any reason, the exhibition of the advertisement should be interrupted, the advertising will be extended for such interrupted service, and in no case shall such interruption constitute a breach of this agreement.
“There are no understandings, agreements, representations, or warranties, expressed or implied, made by any representative of this Company not printed herein.
“All contracts subject to approval of Home Office.
“In case wish to discontinue 30 day written note
H. J. Klein
[Perforated line.] ................................
$300.00 . July 1st, 1927.
“I promise to pay to Federal Publicity Company, or order, Three Hundred Dollars ($300.00) for value received, payable on August 23,1927, and $25.00 on same date of each month thereafter until paid in full. All payments are due and payable on default of any.
“And to secure the payment of said amount....... hereby authorize, irrevocably, any attorney of any Court of Record to appear for........in such Court, in term time or vacation, at any time hereafter, and confess a judgment, without process, in favor of the holder of this Note, for such amount as may appear to be unpaid thereon, together with costs and ........ dollars attorney’s fees, and to waive and release all errors which may intervene in any such proceedings, and consent to immediate execution, upon such judgment, hereby ratifying and confirming all that ....... said attorney may do by virtue hereof.
Name J. P. Doyle
By ..........................
Address 7050 Jeffery Ave
Payable at..........”

About three weeks after the execution of these documents, the note was sold by the payee, Federal Publicity Company, to the plaintiff for a valuable consideration. The note had been detached from the contract at the perforated line, and the plaintiff did not receive or see the contract. By whom the separation was made is not disclosed by the evidence. The original contract was not produced upon the trial of the case and there is some doubt whether it contained the notation at the bottom providing for a discontinuance of the service upon 30 days’ notice, found in the copy retained by the defendant.

Upon the trial of the case, counsel for the defendant ■insisted upon presenting his evidence first. He was permitted to do so. This is not the correct practice. Upon the opening of a judgment by confession the parties should proceed to put in their proofs in the usual order. The method pursued, however, did not prejudice the rights of either litigant. Morris v. Taylor, 199 Ill. App. 588.

The plaintiff contends that it was a holder, in due course, of the note within the meaning of the Negotiable Instruments Act and held it free from any defense which the maker might interpose against the payee. The principal contentions of the defendant are that the note, with the contract attached, was non-negotiable; that the separation of the two instruments constituted a material alteration; that the plaintiff, at the time it brought the note knew that it was executed in connection with a contract between the maker and the payee; that the defendant’s signature to the instrument was obtained through fraud and circumvention and that the plaintiff failed to establish that it was a holder in due course of the paper.

The defendant testified that when H. J. Klein, the representative of the assignor of the note, presented the two instruments for his signature, they were on the same piece of paper with the contract at the top; that he signed the contract and was requested to sign his name again at the bottom of the paper; that he started to read the note but was told that it was just the same as the contract; that he accepted Klein’s word and signed the note without reading; and that he assumed that the note was a duplicate or copy of the contract. Klein did not testify. The evidence shows that the defendant had followed the occupation of salesman for 28 years and that he had no difficulty in reading and understanding the American language. He admitted that he could have read the note if he “wanted to.” No evidence was introduced showing that the plaintiff had any knowledge of the circumstances under which the defendant’s signature was obtained.

Section 10 of the Statute of 1874 relating to promissory notes, bonds, due bills and other instruments in writing, Cahill’s St. ch. 98, If 11, provides that:

“If any fraud or circumvention be used in obtaining the making or executing of any of the instruments aforesaid, such fraud or circumvention may be pleaded in bar to any action to be brought on any such instrument so obtained, whether such action be brought by the party committing such fraud or circumvention, or any assignee of such instrument.”

This section was not, by express terms or by implication, repealed by the Negotiable Instruments Act of 1907. Section 57 of the latter Act, Cahill’s St. ch 98, H 77, provides that a holder in due course of an instrument holds it free from any defect of title of prior parties and also free from defenses available to prior parties among themselves, except the defect and defense specified in section 10 of the Act of 1874.

In the case of Homes v. Hale, 71 Ill. 552, the Supreme Court of this State held that the exercise of due diligence and attention on the part of a maker of negotiable paper is a necessary element in his defense that the execution of the instrument was obtained by fraud and circumvention, when such defense is interposed in an action to recover upon the instrument brought by an innocent assignee before maturity. See also the case of Bezely v. Searl, 230 Ill. App. 393, and cases cited.

The law has long recognized the commercial necessity for encouraging the free and unrestricted circulation of negotiable paper among those who act in good faith and without notice of infirmities. The defense specified in the statute was not designed to protect the maker of negotiable paper from his own negligence to the prejudice of an innocent third party.

The defendant failed to avail himself of the opportunity to read the note. He could read but did not. He preferred to rely upon the representations of a stranger. The only excuse he offered for his carelessness was that he was in a hurry. The jury, if properly instructed, could hardly have found otherwise than that the defendant was guilty of negligence.

The court gave two instructions to the jury on this issue. They read as follows:

“3. You are further instructed as a matter of law that if the signature to a note is obtained by trick, artifice, fraud, duress or undue influence, then the party signing such note is not liable for its payment, and if said note should come into the hands of a third party, the party signing the note is nevertheless not bound by its terms.”
“4. You are further instructed as a matter of law that if a document, by way of note or contract, or anything else, is submitted to a man for his signature, and that man is in possession of his faculties, and if he can read and write the language contained in that document, he is chargeable with the contents of that document, even though he did not read it, unless he was prevented from reading that document by some trick or artifice or fraud, or some substitution of that document, of any kind or character.
“You are further instructed that a man under those circumstances must act as a reasonable prudent man would act under like circumstances. ’ ’

It is urged that instruction number 3 was erroneous because it ignored the duty of the maker of a note to use due care, and that the language used in the instruction is descriptive of the character of fraud, which by the terms of the Negotiable Instruments Act, renders the title to negotiable paper defective but valid in the hands of a holder in due course. The first alleged defect was to a certain extent cured by instruction number 4. As to the second objection, the instruction informed the jury that obtaining the signature to a note by “trick, artifice, fraud, duress or undue influence” makes the instrument unenforceable in favor of a third party. The jury were not told whether it made any difference if the third party happened to be a holder in due course. Under section 10 of the Statute of 1874, Cahill’s St. ch. 98, If 11, “fraud, or circumvention” . used in obtaining the making or execution of a note bars recovery by an assignee. Under section 55 of the Negotiable Instruments Act, Cahills’ St. ch. 98, If 75, if a note or the signature to it is obtained by “fraud, duress, or force and fear, or other unlawful means,” etc., the title to the paper is defective but good in the hands of a holder in due course. It is impossible to determine from a reading of the instruction whether it was designed to state the law relating to defective instruments, or to those wholly void. What significance the jury attached to the words, “duress or undue influence,” we cannot know. There was no proof of either.

On the issue as to whether there was a material alteration of the note, the court instructed the jury as follows:

“5. You are further instructed that an instrument will be vitiated by any alteration affecting its negotiability, or detaching a condition from a note, where doing so renders the note negotiable.”
‘'6. The court instructs the jury that that is a material alteration which so changes the terms of an instrument as to give it a different legal effect from that which it originally had, which works some change in the rate of interest or the obligation of the parties.”
■ “7. The court instructs the jury that the cutting off of a memorandum of contract attached to a note, which expresses the consideration upon which the note was given or made, is such a material alteration of the contract as will render the note void.”

Instructions numbered 5 and 6, in effect, submitted issues of law for the determination of the jury. It was left for them to decide as a matter of law what condition in a note, if detached, renders the instrument negotiable and also what alteration in its terms will result in changing its legal effect. This was error. Doggett v. Greene, 254 Ill. 134. On the question of alteration there were two principal issues of fact. One was whether the original contract contained a provision for discontinuance of the advertising service upon the giving of 30 days’ notice. The other was whether the plaintiff had knowledge that the parties had entered into a contract in connection with the execution of the note. Neither issue was referred to in any of the instructions. By this omission the jury were left uninformed as to what effect, if any, their findings upon these issues should have in arriving at a verdict.

Where it appears that an instrument has been altered, questions as to when the alteration was made and what the surrounding circumstances were, present issues of fact for the consideration of the jury. What constitutes a material alteration is a question of law for the court’s decision, and it is error for the court to submit this issue to the jury. Milliken v. Marlin, 66 Ill. 13; Snell v. Davis, 149 Ill. App. 391.

Instruction number 7 was peremptory and told the jury that the detaching from a note of a memorandum of contract expressing the consideration for the note constituted a material alteration and rendered the instrument void. This instruction is bad for several reasons. Under section 133 of the Negotiable Instruments Act, Cahill’s St. ch. 98, ft 145, a holder in due course of an altered instrument may enforce payment of it according to its original tenor. It is not void. There is evidence in the record tending to show that the plaintiff knew from other transactions that its assignor was engaged in negotiating notes which were executed in connection with contracts for advertising space. Knowledge of this general character, however, would not be sufficient to impute to it notice that in the particular case the usual form of contract had been departed from and that the' solicitor had altered the terms contrary to the express inhibition against so doing, contained in the printed form.

Under section 3 of the Statute on Negotiable Instruments, Cahill’s St. eh. 98, If 23, a note is not rendered non-negotiable by virtue of the fact that it contains “a statement of the transaction which gives rise to the instrument.” In the case of Doyle v. Considine, 195 Ill. App. 311, a promissory note contained a statement that it was given in accordance with a land contract of the same date between the maker and the payee. An assignee brought suit upon the note. The court held that the instrument was negotiable and that any inquiry as to what was done under the contract was incompetent.

In the case of Siegel, Cooper & Co. v. Chicago Trust & Sav. Bank, 131 Ill. 569, the Supreme Court of this State held a promissory note negotiable which read as follows:

“$300. Chicago, March 5, 1887.
“On July 1, 1887, we promise to pay D. Dalziel, or order, the sum of three hundred dollars, for the privilege of one framed advertising sign, size.....x..... inches, one end of each of one hundred and fifty-nine street cars of the North Chicago City Railway Co., for a term of three months, from May 15, 1887.
Siegel, Cooper & Co.”

The facts disclosed that Dalziel, the payee of the note, after its negotiation, forfeited his right to use and furnish the advertising space referred to in the instrument. An assignee of the note brought suit and the plea of failure of consideration was interposed. The court held the plea bad, saying:

“It is not contended that the indorsee had any other notice than that contained in the instrument itself, and it is apparent that at the time of its indorsement, which was the day of its execution, no right to the consideration had accrued to the makers. It is a promise to pay a certain sum of money at a day certain, for a consideration thereafter to be rendered, and depends for its validity upon the implied promise of the payee to furnish the consideration at the time and in the manner stipulated, — that is, it is a promise to pay a sum certain on a particular day, in consideration of the promise of the payee to do and perform on his part. A promise is a valuable consideration for a promise.
“But the question remains, whether the statement or the recital of the consideration on the face of the instrument impairs its negotiability, and, in this -instance, amounts to a condition precedent. The mere fact that the consideration for which a note is given is recited in it, although it may appear thereby that it was given for or in consideration of an executory contract or promise on the part of the payee, will not destroy its negotiability, unless it appears, through the recital, that it qualifies the promise to pay, and renders it conditional or uncertain, either as to the time of payment or the sum to be paid.” See also Weber v. Keith Ry. Equipment Co., 248 Ill. App. 258, and cases cited.

The statute,. Cahill’s St. ch. 98, 1Í146, defines what are material alterations. An alteration is material which changes:

“(1) The date.
(2) The sum payable, either for principal or interest.
(3) The time or place of payment.
(4) The number and the relations of the parties.
(5) The medium or currency in which payment is to be made.
Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration. ’ ’

The contract in question contains no reference what-' ever to the note. Furthermore, there is no inconsistency or repugnancy between the two instruments. Even if we assume that the discontinuance clause was indorsed upon the original contract, there is nothing in the instrument changing or modifying in any respect the terms of the note.

Furthermore, even if defendant’s assumption that the provision for discontinuing the service should be read into the note be adopted as correct, the failure of the assignee to perforin or the exercise of the defendant’s right to stop the service would at most constitute merely a failure of consideration. The plaintiff was not bound to anticipate either contingency, and the note was not made non-negotiable because of the mere possibility of failure of consideration after it had purchased the note. Siegel v. Chicago Trust & Sav. Bank, supra; Henneberry v. Morse, 56 Ill. 394; Ehrler v. Worthen, 47 Ill. App. 550.

In the Siegel case the court said:

“The most that can be said of a recital in the instrument itself, of the consideration upon which it rests, is, that the indorsee, taking it before maturity, is chargeable with notice of the recital. Such recital, however, is not sufficient, of itself, to advise him that there was, or would necessarily be, a failure of consideration, but if, at the time of the indorsement, the consideration has in fact failed, the recital might be sufficient to put him upon inquiry, and, in connection with other facts, amount to notice.”

Finally, there are authorities holding that even if the plaintiff had actual notice of the provisions of the contract, the defense of failure of consideration would not be available to the defendant. The reason given for the rule is that where the consideration for an instrument is the promise of the payee to perform certain acts in the future, the consideration cannot fail because it is the promise to perform, and not the performance, which constitutes the real consideration. Gage v. Lewis, 68 Ill. 604; Stellwagen v. Schmidt, 234 Ill. App. 325, and cases cited.

Instructions numbered 5, 6 and 7 were the only instructions given purporting to advise the jury as to the law on one of the vital issues in the case. They were clearly erroneous.

The judgment of the municipal court of Chicago is, accordingly, reversed and the cause remanded.

Judgment reversed and cause remanded.

Holdom, P. J., and Wilson, J., concur.


author: Mr. Justice Wilson

text:
    Angelina County Lumber Company, Plaintiff in Error, v. Michigan Central Railroad Company and Manufacturers Finance Company, Defendants in Error.
    Gen. No. 32,793.

      Opinion filed February 27, 1929.
    Rehearing denied March 19, 1929.
    Boyle & Mott, for plaintiff in error.
    Winston, Strawn & Shaw and Teller, Levit, Silvertrust & Levi, for defendants in error.
   Mr. Justice Wilson

delivered the opinion of the court.

The Angelina .County Lumber Company, a corporation, plaintiff, brought its action in replevin in the municipal court to recover possession of two carloads of lumber located in the Kensington yards of the Michigan Central Railroad Company in Chicago, charging that the railroad company wrongfully took and now detains the said goods and chattels. The Michigan Central Railroad Company answered and admitted that it. had the two cars of lumber at its Kensington yards and stated further that it had refused to accept the lumber as consigned and had afterwards tried to receive disposition orders from the parties interested but had been unable to do so.

Defendant further states in its affidavit of defense that on April 19, 1926, it received a communication from the Manufacturers Finance Company, defendant herein, in which it was stated that the said Manufacturers Finance Company had purchased invoices covering lumber which is the subject matter of the suit and advised the Michigan Central Railroad Company to that effect. The Manufacturers Finance Company, a corporation, defendant herein, answered and stated that on January 12, 1926, at Cleveland, Ohio, it received a written assignment from W. R. Hickman Lumber Company of all sums due from the Michigan Central Railroad Company to the W. R. Hickman Lumber Company, by virtue of the sale of the two carloads of lumber in question by the W. R. Hickman Lumber Company to the Michigan Central Railroad Company.

The abstract filed herein on behalf of the plaintiff in error fails to contain any of the documents or records relied upon by the plaintiff in error and we have been compelled to search the record in order to arrive at a decision in the case. This court searches the record on a writ of error, but it is better practice to aid and assist the court in its search by including necessary exhibits in full in the abstract, or so much thereof as is necessary for a full consideration of the case. The additional abstract of record filed herein by the defendant, Manufacturers Finance Company, is devoid of an index, which is contrary to the rule of this court and it has, therefore, been of little avail to this court in its effort to arrive at a correct conclusion.

The facts, however, show that the W. R. Hickman Lumber Company of Cleveland, Ohio, communicated with the plaintiff, whose plant was located at Keltys, Texas, asking quotations on lumber of a certain kind and classification, resulting in a sale by the Angelina County Lumber Company to the W. R. Hickman Lumber Company of two carloads of lumber at terms of 80 per cent less 2 per cent upon receipt of invoice and balance on arrival and inspection.

December 30, 1925, car No. 23592 was received by the Angelina & Neches River Railroad Company, consigned to the Michigan Central Railroad Company, in care of B. W. Griffith, storekeeper, Junction Yards, West Detroit, Michigan.

December 31,1925, car No. 86760 was received by the same carrier consigned to the Michigan Central Railroad Company in care of L. M. Stark, Storekeeper, Marshall, Michigan. There appears to be some confusion in the record as to the number of this last car— it is sometimes referred to as car No. 86760 and at times as No. 48283 — but no point is made in the record as to this variance and, from the facts, it undoubtedly appears that two cars of lumber consigned by the plaintiff were, ultimately, received by the Michigan Central Railroad Company and, at the time of the bringing of the suit, were stored in the Kensington yards of that railroad company, and have been considered as the correct cars of lumber by all the parties concerned. These cars arrived at Kensington, in care of the Michigan Central Railroad Company, as carrier, on or about January 20,1926, and were inspected and rejected.

February 20, 1926, plaintiff drew a sight draft on the W. R. Hickman Lumber Company of Cleveland for the amount of the price quoted on said cars, which was returned unpaid. January 12, 1926, the W. R. Hickman Lumber Company assigned a list of accounts to the Manufacturers Finance Company and included in this list of accounts were two accounts against the Michigan Central Railroad Company for $1,340 for goods sold by the W. R. Hickman Lumber Company to that railroad. This assignment stated that in consideration of $5 and other valuable consideration, the W. R. Hickman Lumber Company sells, assigns and sets over to the Manufacturers Finance Company, all its right, title and interest in and to the open accounts and contracts named therein, represented by invoices and shipping documents, aggregating $4,050, including all moneys due and tp become due upon the same, and absolute title to the merchandise represented thereby including all merchandise returned, rejected or reconsigned, together with the right of stoppage in transit. It is uncontradicted that a valuable consideration was paid for the assignment of these accounts. Notice of this assignment was sent to the Michigan Central Railroad Company by the Manufacturers Finance Company and received by the Michigan Central Railroad Company on April 19,1926, but no notice of the assignment appears to have been sent to the plaintiff and the first notice received by the plaintiff was after the filing of this suit in replevin.

The Manufacturers Finance Company billed W. R. Hickman Lumber Company for these accounts assigned to them from time to time during January, February and March and received part payment on account. This fact appears in the testimony of Elmer V. Hammer, adjustment manager of the Manufacturers Finance Company, contained in his deposition and made a part of the record, herein.

The W. R. Hickman Lumber Company went into bankruptcy the latter part of April, 1926, and the plaintiff received notice of said bankruptcy proceedings on or about May 1, and, thereupon, paid the freight due upon the said cars of lumber and demanded possession, which was refused.

E. L. Kurth, a witness on behalf of the plaintiff, testified that he was the vice president and general manager of the plaintiff company and that the plaintiff had never authorized nor consented to the diversion of the lumber from its original destination in Michigan to the Kensington yards at Chicago. It appears from the facts that the W. R. Hickman Lumber Company of Cleveland, after the purchase of the lumber, resold it to the Michigan Central Railroad Company subject to inspection and that the Michigan Central Railroad Company, defendant herein, had received it from a connecting carrier and conveyed it to its Kensington yards at Chicago, Illinois, as carrier, but that after inspection it rejected the lumber and never held it other than as a carrier until it was unloaded for the purpose of saving demurrage charges. It was never received by the W. R. Hickman. Lumber Company nor accepted by that company, nor'was it ever received or "accepted by the Michigan Central Railroad Company, as, purchaser, from the W. R. Hickman Lumber Company, and, so far as the record discloses, was still in transit and in the possession of the Michigan Central Railroad Company, as carrier.

In our opinion it makes no difference whether the Michigan Central Railroad Company held the lumber as carrier or as bailee, as there had never been a delivery to any one and the right to repossess itself of the goods was still in the vendor, plaintiff in this ‘action, unless that right may have been defeated by the assignment made by the W. R. Hickman Lumber Company to the Manufacturers Finance Company, January 12, 1926. The Michigan Central Railroad Company claims no interest in the property and the question for consideration is as to which has the superior right, vendor or assignee.

The original bill of lading in this case is not in evidence, so that this court has not the opportunity of passing upon the question as to whether or not it was a negotiable or non-negotiable instrument. It does not appear to be in the possession of the assignee and, upon the oral argument of the cause, counsel for the assignee took the position that they relied upon their assignment and not upon the bill of lading. Counsel for both the vendor and the assignee have cited and relied upon the Uniform Sales Act, Cahill’s St. ch. 121a, fifí 4r-81, in force in the State of Illinois. The contract of purchase, however, was made in Texas and the Uniform Sales Act of this State has no application. At the time of the making of the contract for the delivery of lumber, between the W. R. Hickman Lumber Company and the Angelina County Lumber Company, there was no Uniform Sales Act in Texas, and the conditions surrounding the sale necessarily are governed by the common law and not by any statutory enactment. The Manufacturers Finance Company was engaged in the business of buying and selling accounts and not in the business of dealing in lumber and commodities.

After the assignment of January 12,1926, the W. R. Hickman Lumber Company dealt with the Michigan Central Railroad Company and the Angelina County Lumber Company in regard to the disposition of the lumber at the Kensington yards, continuously up to the time of the filing of the replevin suit. The assignee at no time took any steps to obtain possession of the lumber, nor did it pay the freight, nor communicate with the vendor in regard to the disposition of the property and did nothing other than to advise the Michigan Cen- ’ tral Railroad Company on April 19, 1926, of the fact that it had an assignment from the W. R. Hickman Lumber Company and that the account was payable to it as assignee. While the assignment contains words to the effect that the title to the merchandise represented by the invoices and shipping documents was conveyed to the assignee, a careful reading of the instrument, together with the actions of the parties, would indicate that the assignment was an assignment bf the account and not a conveyance of the property. In the construction of an assignment the main object is to ascertain the intention of the parties and this intention is derived, not only from the instrument, but from surrounding circumstances. 5 Corpus Juris, p. 943. Moreover, the W. R. Hickman Lumber Company could not have conveyed any greater title or interest in and to the property by assignment, greater than the W. R. Hickman Lumber Company itself had, in the subject of the assignment. Delta Bag Co. v. Kearns, 112 Ill. App. 269; 5 Corpus Juris, p. 963.

The assignee took subject to the obligations imposed upon the assignor and subject to the same defenses that the vendor would have against the assignor. Pioneer Loan & Land Co. v. Cowden, 128 Minn. 307; 2 Ruling Case Law, p. 626.

The plaintiff’s right to recover, if it has such a right, appears to be based upon the right of stoppage in transitu, and the further fact that the transaction having been a sale for cash on delivery it had a lien upon the property sold until this condition was met and the money paid for the goods. The right óf stoppage in transitu was originally an equitable right but adopted by the comman law as a common-law right because of the apparent injustice to a seller whose goods would be lost before arrival at their destination in the event of the insolvency of the purchaser. This right is based upon the fundamental doctrine allowing rescission and restitution where there is actual or prospective failure of consideration. This right may be defeated by the issuance of a bill of lading coming into the hands of an innocent purchaser. In the case at bar, however, the assignee has not produced such an instrument nor, as stated in the oral argument, is it relying upon any original negotiable bill of lading. The normal termination of the transit is, under usual circumstances, the arrival of the goods at their destination and the delivery to the buyer or his representative. The mere arrival, however, of the goods at a fixed terminus does not necessarily end the transit, for the goods may well be in the possession of the carrier or of an intermediate bailee. The delivery of the goods in this case to the Michigan Central Railroad Company, consigned to itself, through its storekeeper, at the points of destination in Michigan, was not a delivery which would defeat a right of stoppage in transitu. The Michigan Central Railroad Company received the goods as carrier and conveyed them to its Kensington yards, whereupon, after inspection, rejected the goods and never accepted them as a purchaser from the W. R. Hickman Lumber Company or anyone else. When the cars were unloaded at Kensington and placed under the control and custody of the Michigan Central Railroad Company’s storekeeper at that point, the goods were received by the railroad company as bailee and were legally still in transit and subject to the right of stoppage in transitu. Williston on Sales (2nd Ed.), §§ 526, 532.

The plaintiff in this action, moreover, had an .additional claim in support of its position, namely, that the sale having been for cash and the condition not complied with, the vendor had a lien upon said goods for the amount of the purchase price and could take the property itself upon failure of the vendor to meet the condition of payment. The old rule appears to be that, where goods were shipped by means of a common carrier to a purchaser and the condition of the sale was payment of cash upon delivery, the title of the goods remained in the vendor until that condition was complied with and payment made. The modern rule, however, appears to be that the title passes to the vendee, subject to the lien of the vendor in the event .that payment is not made when the goods are offered for delivery. Canadian Bank of Commerce v. McCrea, 106 Ill. 281; Williston on Sales (1st Ed.), § 343. The sale of the lumber in question by the plaintiff to the W. R. Hickman Lumber Company was 80 per cent less 2 per cent on delivery. Not only was this amount never at any time paid by the vendor, but no amount of any kind was ever paid or tendered.

Under the circumstances as we find them from the record in this case, there being no original negotiable bill of lading in the hands of an innocent third party, and the assignment being that of a simple chose in action, namely, an account, we are of the opinion that, under the assignment from the W. R. Hickman Lumber Company, the Manufacturers Finance Company was placed in the position of the assignor and subject to all the rights in and to the lumber that existed in favor of the plaintiff in this action. As to the W. R. Hickman Lumber Company, the assignor, the plaintiff had both the right of stoppage in transitu and a lien by reason of the failure to pay the purchase price and was, therefore, entitled to the possession of the lumber in the hands of the Michigan Central Railroad Company, defendant herein, in the replevin action.

For the reasons stated in this opinion the judgment of the municipal court is reversed and judgment here for the plaintiff, finding the right of possession to the lumber in question in the plaintiff at the time of the suing out of the writ of replevin herein, together with judgment for one cent damages and for costs of this proceeding against the defendant, Manufacturers Finance Company.

Judgment reversed and judgment here for plaintiff with judgment for damages of one cent and for costs against defendant, Manufacturers Finance Company.

Holdom, P. J., and Ryner, J., concur.