author: Mr. Justice Scanlan

text:
    People of the State of Illinois ex rel. Estelle Klee et al., Appellees, v. Edward J. Kelly, Mayor of the City of Chicago, et al., Appellants.
    Gen. No. 41,417.

      Opinion filed March 11, 1941.
    Barnet Hodes, Corporation Counsel, for appellants; J. Herzl Segal, Assistant Corporation Counsel, of counsel.
    Mason & Mason, George A. Mason and Isaac B. Lipson, all of Chicago, for appellees; George A. Mason, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court'.

In the above cause the respondents appeal from a judgment entered against them in a suit for mandamus. By an order of this court People ex rel. Salomon v. Kelly, Gen. No. 41,418, 309 Ill. App. 133 (Abst.); People ex rel. Glennon v. Kelly, Gen. No. 41,419, 309 Ill. App. 133 (Abst.); People ex rel. Gallachio v. Kelly, Gen. No. 41,420, 309 Ill. App. 133 (Abst.), and People ex rel. Keeler n. Kelly, Gen. No. 41,480, 309 Ill. App. 133 (Abst.), were consolidated for hearing with the instant case, entitled People ex rel. Klee v. Kelly, Gen. No. 41,417, 309 Ill. App. 72. In the order of consolidation it was provided that the abstracts and briefs filed in the Klee case should also stand as the abstracts and briefs in each of the other cases. Counsel for petitioners in the Keeler case filed a separate brief. It is conceded that the legal issues are the same in all of the five cases and that the respective judgments must all stand or fall together. The facts in the cases differ only in respect to the names of the parties, the amounts of the judgments involved and the dates they were entered. In each of the five cases the relators filed a petition for a writ of mandamus to compel the payment of a certain judgment rendered against the City of Chicago.

The respondents in the Klee case contend that the court erred in entering a judgment against them and in favor of the petitioners ordering the respondents to “pay to the petitioners from the available cash in the Judgment Bond Fund of the City of Chicago the sum of $22,039.26 upon a judgment in condemnation proceedings entered July 26, 1927, in favor of Max Klee and Simon Klee in the amount of $147)201.” It seems clear to us that this contention is a meritorious one.

The petition was filed on April 22, 1940. It alleges, inter alia, that on February 1,1921, the City of Chicago filed its petition in the circuit court of Cook county to condemn for public street purposes certain land and the improvements thereon, that belonged to plaintiffs’ predecessors in title, and that on July 26,1927, a judgment was entered finding the just compensation to-be paid for said property to be $200,000; that after deducting certain benefits levied and confirmed against the remainder of the property judgment was entered in the sum of $147,201, which was paid on July 24, 1930; that on September 28, 1933, a complaint at law was filed in the circuit court by Simon Klee and Max Klee,.petitioners’ predecessors in title, against the said City, to recover judgment for the unpaid interest due upon the aforesaid condemnation judgment, and that on February 27,1940, a judgment was entered in favor of the petitioners and against the City in the sum of $22,039.26, together with costs in the sum of $17.50; that the petitioners are now the owners of said judgment, which remains in full force and effect; that petitioners have made a written demand for the immediate payment of said judgment, and that the City has refused and still refuses to pay the said judgment. The petition contains a number of allegations in respect to various appropriations and funds of the City, but the only material one relates to the Judgment Funding Bond Fund, out of which the trial court ordered the interest which had accrued on the said condemnation judgment from July 26,1927, the date of the judgment, to July 24, 1930, the date of the payment of the judgment, amounting’ to $22,039.26, paid. The petition alleges that in the annual appropriation bill of the City for the year 1940 the city council appropriated the sum of $1,090,000 for payment of principal and interest on judgments entered against the City prior to April 1, 1931. The petition prayed that the court issue a writ of mandamus directing the City to pay to petitioners the amount of the judgment of February 27, 1940.

Respondents deny, inter alia, that there are sufficient moneys in the Judgment Tax Fund to pay petitioners’ judgment, and they set up that there are judgments against the City that were entered prior to the entry of petitioners’ judgment “in an aggregate amount in excess of $2,500,000;” that there is now on hand in the Judgment Tax Fund the sum of $83,572.50. The judgment order in the instant cause recites that petitioners, by leave of court, withdrew their claims for payment out of any funds other than the proceeds of the Judgment Funding Bond Fund.

Paragraph 33 of respondents’ answer reads as follows :

“33. Respondents further aver that with respect to the Judgment Funding Bond Fund concerning which allegations are made in paragraphs 16, 19 and 20, respondents say that there is now on hand in cash in said fund the sum of $5,846.37. The amount of unissued authorized bonds in said fund amounts to $1,064,000.00. Respondents aver that said cash in said Judgment Funding Bond Fund and any proceeds from the sale of authorized bonds when issued and sold are not applicable for the payment of petitioners’ judgment for the reason that the petitioners’ judgment was not yet entered at the time of the passage of the ordinance authorizing the issue of judgment funding bonds, and the statute in such case made and provided authorizes the funding of existing judgments only as will more fully hereafter appear. Section 6 of article V of the Cities and Villages Act of the State of Illinois (Illinois Revised Statutes, 1939, chapter 24, section 65.5) provides that the city council of cities shall have the power ‘To issue bonds in place of maturing boiids or judgment debts, or to supply means to meet the same, or for the consolidation or funding of the same. ’
‘ ‘ On December 21, 1936, the City Council of the City of Chicago pursuant to the power granted by the statute aforesaid passed an ordinance authorizing the issuance of $12,349,000.00 judgment funding bonds of the City of Chicago. The said ordinance reads in part as follows:
“ ‘ Ordinance
“ ‘Authorizing the issuance of $12,349,000.00 Judgment Bonds of the City of Chicago and providing for the levy of taxes for the payment thereof.
“ ‘Whereas, as disclosed from courts of record of the State of Illinois, from time to time prior to April 1,1931, judgments have been rendered against the City of Chicago and as of December 1, 1936, the principal of said judgments in the amount of not less than $8,685,721 with interest thereon at the rate of five per cent per annum is unpaid; . . .
“ ‘Be it Ordained by the City Council of the City of Chicago:
“ ‘ Section 1. It is hereby found and determined that of the several judgments against the City of Chicago rendered prior to April 1, 1931, and referred to in the preamble hereof, there are judgments evidencing valid and unconditional obligations against the City of Chicago for the payment of money in the principal amount of $8,685,721, and that interest upon said judgments at the rate of five per cent (5%) per annum computed to February 1, 1937, being the date when it is proposed that all of said judgments shall have been paid and satisfied, aggregates $3,663,279, totaling a judgment indebtedness for money against the City of-Chicago in the sum of $12,349,000, all of which is unpaid and constitutes a legal indebtedness of the City of Chicago.
“ ‘ Section 2. For the purpose of paying said judgments rendered prior to April 1, 1931, and interest thereon at the rate of five per cent per annum computed to February 1, 1937, being the date when it is proposed that all of said judgments shall have been paid and satisfied, aggregating the sum of $12,349,000, there are hereby authorized to be issued bonds of the City of Chicago in the principal amount of $12,349,000.
“ ‘Section 9. Money received from the sale of said bonds shall be used by the fiscal officers of the City of Chicago only for the purpose of paying valid judgments rendered against the City of Chicago prior to April 1, 1931.
‘ ‘ ‘ Section 10. This ordinance shall be in force upon its adoption and publication.’
“The judgment of the petitioner was rendered subsequent to April 1, 1931 and is accordingly not a judgment within the purview of said judgment funding ordinance. Said ordinance was passed by the City Council of the City of Chicago without a referendum. Under an act of the General Assembly of the State of Illinois entitled ‘An Act requiring cities, villages and incorporated towns to submit ordinances authorizing the issue of bonds to the voters of any such city, village or incorporated town, but authorizing the issue of bonds for certain purposes without such submission to the voters,’ approved June 4, 1909, (Illinois Revised Statutes, 1939, chapter 24, paragraph 661) it is provided that no ordinance passed by the City Council of any city or board of trustees of any village or incorporated town which provides for or authorizes the issue of bonds shall become operative, effective or valid until any such ordinance has been submitted to the voters of any such city or village with certain ex- ■ ceptions, one of which exception is bonds to refund any existing judgment indebtedness. The judgment of the petitioner was not an existing judgment indebtedness on December 21,1936, when the judgment funding bond ordinance was passed, and consequently could not lawfully be funded by any ordinance passed without having been submitted to the voters of the City of Chicago.
“For the foregoing reason respondents aver that the judgment of the petitioner cannot be paid out of any cash in the Judgment Funding Bond Fund of the City of Chicago or from the proceeds of the sale of authorized bonds when issued and sold pursuant to the terms of the ordinance aforesaid.”

The judgment order entered on May 10, 1940, in the instant case is as follows:

“This cause coming on to be heard upon the verified petition for mandamus heretofore filed and upon the verified answer thereto of the respondents, Edward J. Kelly, Mayor of the City of Chicago, Thomas S. Gordon, Treasurer of the City of Chicago, Robert B. Upham, Comptroller of the City of Chicago, Barnet Hodes, Corporation Counsel of the City of Chicago, and City of Chicago, a Municipal Corporation, and upon the motion of petitioners to strike paragraph 33 of the said answer and for a writ of mandamus as prayed in said petition, and the court having read the said petition and answer and having heard the respective arguments of counsel as to the sufficiency in law of the matters of defense alleged in said paragraph 33; and the petitioners having elected to waive and relinquish any and all claims under and by virtue of a certain judgment entered February 27,1940, in favor of petitioners and against the City of Chicago in case No. B-278263 in the Circuit Court of Cook County for the sum of $22,039.26 and costs of said suit, together with interest on said judgment, in consideration of prompt payment of the sum of $22,039.26, being the full amount of interest accrued upon a judgment in condemnation proceedings entered July 26, 1927, in favor of Max Klee and Simon Klee in the case entitled City of Chicago v. W. A. Wieboldt, et al., Circuit court of Cook County No. B-71144, and the petitioners by leave of court having withdrawn their claims for payment out of funds other than proceeds of the judgment bond fund provided in the ordinance of the City of Chicago passed December 21, 1936, all without prejudice to the petitioners in the event that this writ of mandamus is not obeyed in accordance with the tenor and effect hereof, and the court being fully advised in the premises, Doth Order and Adjudge:
“1. That the City of Chicago, a Municipal Corporation, Edward J. Kelly, Mayor of the City of Chicago, Thomas S. Gordon, Treasurer of the City of Chicago, and Robert B. Upham, Comptroller of the City of Chicago, do forthwith and without further excuse or delay pay to the petitioners from the available cash in the Judgment Bond Fund of the City of Chicago the sum of $22,039.26 upon a judgment in condemnation proceedings entered July 26, 1927, in favor of Max Klee and Simon Klee in the amount of $147,201 (after deduction of assessment for benefits) in the cause entitled City of Chicago v. W. A. Wieboldt, et al., Circuit Court of Cook County No. B-71144.
“2. That the City of Chicago, a Municipal Corporation, Edward J. Kelly, Mayor of the City of Chicago, Thomas S. Gordon, Treasurer of the City of Chicago, and Robert B. Upham, Comptroller of the City of Chicago, do issue, sign and deliver to the petitioners its checks, vouchers or warrants on deposits of funds in the said Judgment Bond Fund of the City of Chicago until the sum of $22,039.26 is paid.
“3. That the cash now in said Judgment Bond Fund be first applied toward the payment of said sum of $22,039.26 and that the then remaining balance of said sum of $22,039.26 be paid out of the first proceeds of the sale of presently unissued bonds in said fund when further bonds are issued and sold under said ordinance of December 21,1936.
“4. It Is Further Ordered and Adjudged that a peremptory writ of mandamus issue forthwith out of the office of the clerk of this court, under the hand of said clerk and the seal of this court, and directed to said City of Chicago, a Municipal Corporation, and Edward J. Kelly, Mayor o'f the City of Chicago, Thomas S. Cordon, Treasurer of the City of Chicago, and Robert B. Upham, Comptroller of the City of Chicago, ordering and commanding them and each of them that they do forthwith without excuse and delay pay and apply the available cash in said Judgment Bond Fund to the said sum of $22,039.26, and that the then remaining balance of said sum of $22,039.26 be paid out of the first proceeds of the sale of the presently unissued bonds in said fund when further bonds are issued and sold.
“5. It Is Further Ordered and Adjudged that upon payment by the respondents to the petitioners of said sum of $22,039.26 the judgment entered February 27, 1940, in favor of petitioners and against the City of Chicago in the Circuit Court of Cook County, case No. B-278263, together with interest and costs, be fully satisfied by a proper instrument to be filed of record in said cause.”

Upon the trial of the cause the petitioners offered in evidence an order passed by the city council of the City of Chicago directing the corporation counsel of the City of Chicago to prepare a bill for an act to empower the City to issue Judgment Refunding Bonds. The order reads as follows:

“Journal of the Proceedings
“of the
“City Council
“of the City of Chicago, Illinois
“Regular Meeting, May 20, 1936.
“Page 1756.
“Direction for the Preparation of a Bill for an Act to Empower the City of Chicago to Issue 20-Year Judgment Refunding Bonds.
“Alderman Arvey presented the following order:
“Whereas, The Supreme Court of Illinois in recent decisions has held the city liable for the payment of interest on judgments in condemnation proceedings under the Local Improvement act from the date such judgments became final until their payment; and
“Whereas, Such judgments were paid in the past when and as special assessments were collected from the owners of property benefited by the public improvements and in many cases the payment of condemnation judgments was thereby delayed; and
“Whereas, Pursuant to the rulings of the Supreme Court of Illinois the City of Chicago will be compelled to pay interest on such judgments aggregating many millions of dollars as soon as the amounts thereof are ascertained and fixed by Courts of competent jurisdiction ; and
“Whereas, There are now outstanding and unpaid judgments for the taking and damaging of property for public use, for public benefits assessed against the city in special assessment proceedings, for injuries to person and property due to negligence, and for other debts and obligations of the city aggregating in amount for principal and interest on such judgments, exclusive of interest on judgments in condemnation proceedings under the Local Improvement act, in a sum approximating $18,000,000; and
“Whereas, The annual revenues of the city from all sources are insufficient to meet the current expenses of the city government and to pay any substantial sum on account of such judgments and interest thereon; and
“Whereas, Interest is accumulating on all judgments outstanding against the city at the rate of five per cent per annum from the date of entry of such judgments until the same shall be paid; and
“Whereas, In the opinion of the city comptroller the City of Chicago could effect a considerable saving in interest if the city were authorized to issue 20-year judgment refunding bonds bearing interest at a rate less than five per cent per annum; and
“Whereas, The governor has called and convened an extraordinary session of the General Assembly of the State of Illinois to commence on Tuesday, the 19th day of May, A. D. 1936, to consider and adopt laws with respect to certain subjects, including the borrowing of money and issuance of bonds by municipal corporations and political subdivisions of the state for immediate local corporate purposes and the validation of proceedings therefor heretofore taken and bonds heretofore issued, now, therefore,
“It Is Ordered, That the corporation counsel be and he hereby is directed to prepare and submit for passage by the General Assembly of the State of Illinois in said special session any bill or bills necessary or desirable to empower the corporate authorities of the City of Chicago to issue 20-year judgment refunding-bonds in place of or to supply means to pay judgment debts or for the funding of such judgment debts without submitting* the question of the issue of such bonds to the legal voters of the city for approval.
“Unanimous consent was given to permit action on said order without reference thereof to a committee. “Alderman Arvey moved to pass the order.
“The motion prevailed.”

Upon the hearing of the cause the trial court held that he could not order the amount of the judgment of February 27, 1940, paid out of the Judgment Funding Bond Fund. The petitioners, in their brief, state that “the trial court refused to order the assumpsit judgment of February 27, 1940, paid out of the bond ordinance fund [Judgment Funding- Bond Fund] but ordered that only the interest which had accrued on the condemnation judgment from July 26, 1927, to July 24, 1930, amounting to $22,039.26 be paid out of the bond issue, ...” The trial court was clearly right in refusing to order the judgment of February 27, 1940, paid out o'f the Judgment Funding Bond Fund, and after he had so ruled he should have dismissed the petition for want of equity. The petition is based upon the judgment of February 27, 1940, and the prayer of the petition is that the respondents be ordered to pay said judgment out of the Judgment Funding Bond Fund. The answer of respondents properly assumes that the foundation of petitioners’ claim for a mandamus was the judgment of February 27,1940. As the judgment of the relators was not rendered prior to April 1,1931, it is plain that it is not a judgment within the purview of the Judgment Funding Bond ordinance. After the trial judge had decided that the judgment of February 27, 1940, could not be paid out of the Judgment Funding Bond Fund counsel for petitioners stated, “All we are asking is that a writ issue to compel the City to pay the interest that had accumulated on the old condemnation judgments, between the date of their entry and the date of their payment.” The trial court thereupon stated that he was inclined to do what counsel asked, and that he was “largely influenced by this resolution which shows what the city had in mind when it asked for the enabling legislation — the meeting of these very judgments.” The able trial judge then evolved the theory that if the petitioners waived any claims they had by virtue of the judgment of February 27,1940, if respondents promptly paid “the sum of $22,039.26 ” he would then have the right to allow the petitioners $22,039.26 as interest upon the old judgment of July 26,1927, that is, interest that accrued between the time of the entry of the said judgment and the payment of the same, and that he could order respondents to pay said interest out of the Judgment Funding Bond Fund. It is plain from the judgment order that the trial court attempted to create a claim for petitioners that would come within the purview of the Judgment Funding Bond ordinance. In addition to the fact that the pleadings did not support the judgment order there are other good grounds for holding that the court erred in entering that order. At the time of the filing of the petition petitioners had no claim for interest against the respondents. Their claim for interest had merged in the judgment order of February 27, 1940, and the only claim they thereafter had against the City was that judgment. The able counsel for petitioners were aware of that fact when they drafted the petition. But aside from the fact that the claim of the petitioners was based upon the judgment of February 27, 1940, and that petitioners had no claim for interest against the City after said date, there is a further reason why the petitioners ’ claim could not prevail. In order to give a semblance of justification to the action of the trial court in holding that the amount of interest that accrued upon the judgment of July 26, 1927, between the time of the entry of the judgment and the payment of the same was properly payable out of the Judgment Funding Bond Fund, it was necessary for the court to hold that the said interest was an integral part of the original judgment and therefore could be considered as an existing judgment indebtedness at the time of the passage of the Judgment Funding Bond ordinance. In the case of Blakeslee’s Warehouses v. City of Chicago, 369 Ill. 480, 481-484, the court said:

“Appellant’s intestate was awarded $58,152 in a special assessment proceeding for land taken, and judgment was entered in her favor for that amount February 16, 1926. After deducting $3,598 for benefits, the net judgment amounted to $54,554. This amount was paid October 28, 1926. More than five years afterwards, to-wit, December 5, 1934, this, suit was brought in the circuit court of Cook county against appellee for interest on the full amount of the award from February 16, 1926, to the date when payment was made and for interest on such unpaid interest after October 28,1926. The trial court entered a judgment for interest on $54,554 from February 16, 1926, to October 28, 1926, in the sum of $1,909.24, but it refused to allow interest on that sum. The city of Chicago appealed to the Appellate Court. That court held that whatever claim for interest plaintiff had was barred by the Statute of Limitations. The judgment was reversed and the cause is here on leave to appeal.
' ‘Appellant’s contentions are that interest on a judgment is a part of it; that a judgment cannot be satisfied unless the face of the judgment, interests and costs are paid; that this proceeding is a cause of action based upon a judgment, and that such an action is barred only by the twenty-years’ Statute of Limitations. On the other hand, appellee contends that appellant’s claim is solely for interest; that it is purely of statutory origin, and is not a part of the judgment, and comes within the purview of ‘ all civil actions not otherwise provided for’ and is barred by the five-years’ limitation in section 15 of the Statute of Limitations.
‘ ‘ The record conclusively shows the claim is for interest, and being for interest, only, she could in no event recover interest on interest. The trial court and the Appellate Court correctly so held. If she is entitled to recover interest at all, it is only upon $54,554 from the date the judgment was entered to the date it was paid. Blaine v. City of Chicago, 366 Ill. 341.
“In determining whether interest on a judgment is a part of it, the character of a judgment and the authority for imposing interest are important factors to be considered. A judgment is the sentence of the law pronounced by the court upon the matter contained in the record. (3 Blackstone’s Com. 395.) It is the law’s last word in a judicial controversy and may be defined as the final consideration and determination of a court upon matters submitted to it in an action or proceeding. (15 R. C. L., Judgments, 569.) A judgment is the judicial act of the court. (Dorman v. Usbe Building and Loan Ass’n, 115 N. J. L. 337, 180 Atl. 413.) On the other hand, the right to interest apart from contract, such as interest on a judgment, does not emanate from the controversy, or from the judgment, or from anything of a judicial nature. At common law, interest could be recovered in no case except where there was an express agreement therefor. Because of losses occasioned by delay in the payment of final judgments the legislature provided a remedy for such losses by way of interest thereon as fair compensation for such delays. The remedy is found in section 3 of the Interest act. The recovery of interest in this State, not contracted for, finds its only authority in the statute. It is purely statutory. Blaine v. City of Chicago, supra; Feldman v. City of Chicago, 363 Ill. 247; Turk v. City of Chicago, 352 id. 171.
“Section 3 of the Interest act, (Ill. Rev. Stat. 1937, chap. 74, par. 3,) provides: ‘Judgments recovered before any court or magistrate shall draw interest at the rate of five (5) per centum per annum from the date of the same until satisfied. When judgment is entered upon any award, report or verdict, interest shall be computed at the rate aforesaid, from the time when made or rendered to the time of rendering judgment upon the same, and made a part of the judgment.’ It is to be observed that two classes of interest are contemplated by the statute, — i.e., that which accrues prior to judgment, and interest which accrues after the judgment is entered. Interest accruing before judgment is expressly made a part of the judgment, but no such provision is made as to interest accruing on a judgment after it is entered. It is a cardinal rule of statutory construction that the expression of one thing or one mode of action in a statute excludes other things or modes though not expressly prohibited. (People v. Wiersema State Bank, 361 Ill. 75; Sammis v. Clark, 13 id. 544.) That rule is applicable here, and excludes interest on a judgment as a part thereof. Furthermore, it is obvious that at the time the judgment was entered there was no interest due. Hence, the subsequently accruing interest, recoverable by virtue of the statute, could not be a part of the judgment when it was entered. How the interest could afterward modify the judgment by increasing it in amount is not suggested, and no logicál interpretation of the law can reach any such result. A judgment stands in amount as it is entered, and the only way in which it may be modified is by a direct proceeding for that purpose. Interest on a judgment is to be distinguished from costs in a proceeding, for which judgment is entered as a part of the principal judgment in the cause. The conclusion in inescapable that interest on a judgment is not a part of it. It is further to be noticed that, under the distinction between the two classes of interest mentioned in section 3 of the Interest Act, the interest on the judgment cannot be considered a part of the value of the land taken, for which the judgment was entered. (Blaine v. City of Chicago, supra.) Therefore, if appellant is entitled to interest on the judgment it is not by virtue of the judgment or the judicial proceeding culminating therein, but arises solely under the provisions of the statute. Turk v. City of Chicago, supra.”

Under the ruling in that case it seems plain that the-said interest upon the old judgment was not an integral part of said judgment. • Petitioners argue that the Blakeslee case passed only upon a question of the Statute of Limitations and it is not in point in the instant case because no question of limitations is here involved. But the Supreme Court" in passing upon the question of the Statute of Limitations was confronted with the contention of the appellants in that case “that interest on a judgment is a part of it; that a judgment cannot be satisfied unless the face of the judgment, interests and costs are paid; that this proceeding is a cause of action based upon a judgment, and that such an action is barred only by the twenty-years ’ Statute of Limitations.” In deciding the question of the Statute of Limitations it was necessary for the Supreme Court to hold that interest on a judgment is not a part of the judgment. Under the Judgment Funding Bond ordinance the bonds and the proceeds from the sale thereof constituted a trust fund for the purpose of paying judgments entered prior to April 1, 1931, and still outstanding and unpaid on December 21, 1936, the date when the ordinance was passed. Neither the bonds nor the proceeds thereof can be diverted to pay a claim for interest upon a judgment the principal of which was paid prior to December 21, 1936, and which claim for interest was not reduced to judgment until after December 21,1936. The city council under the resolution of May 20, 1936, undoubtedly desired to fund interest claims not reduced to judgment. But the only power that the legislature gave the city council, in the enabling act, was “To issue bonds in place of matured bonds or judgment debts, or to supply means to meet the same, or for the consolidation or funding of the same.” After the enactment of the enabling act the ordinance in question that was passed by the city council was enacted for the purpose of paying judgments rendered prior to April 1, 1931.

There is no merit in the contention of petitioners that the order of May 10, 1940, is not before this court for review. The notice of appeal specifically recites that the respondents “appeal to the Appellate Court of Illinois, First District, from the final judgment order for writ of mandamus entered in this cause on, to-wit, the 10th day of May, 1940, ’ ’ etc. It is true that on May 27, 1940, after the trial court had lost jurisdiction of the cause, the respondents, at the request of the trial judge, consented that an order be entered that the recital in the judgment order of May 10, 1940, relating to the waiver and relinquishment of the claims of petitioners and paragraph five of said judgment order be expunged from said judgment order and held fo'r naught. Respondents are not appealing from the order of May 27,1940, nor could they. When the consent order was entered they had already prayed their appeal from the order of May 10, 1940, and their appeal and the questions they here raise are not affected by the consent order.

Petitioners contend that the judgment of May 10, 1940, was a consent judgment and that appellants cannot assign error upon it. We find nothing in the record that would justify us in holding that said judgment was entered by consent. In our opinion the corporation counsel of the City of Chicago would have been derelict in his duty if he had not appealed from the judgment of May 10, 1940.

The judgment order of the circuit court of Cook county entered on May 10, 1940, is reversed.

Judgment order entered on May 10, 1910, reversed.

Friend, P. J., and John J. Sullivan, J., concur.


source: Caselaw Access Project

author: Mr. Justice John J. Sullivan

license: Public Domain

text:
    William V. Schnur, Appellant, v. Florence Bernstein et al., Appellees.
    Gen. No. 40,673.
    Opinion filed March 11, 1941.
    Rehearing denied March 27, 1941.
    Virgil Livingston and Cameron Latter, both of Chicago, for appellant.
    Max M. & Samuel Grossman and Ode L. Rankin, both of Chicago, for appellee.

      Ode L. Rankin, of counsel.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

Personal service having been had on them, a deficiency judgment for $4,197.65 was entered by default against Alvin and Florence Bernstein, who were joined with others as defendants in a foreclosure proceeding instituted by plaintiff, William V. Sehnur. Execution issued against the Bernsteins pursuant to said personal judgment entered against them for the deficiency and same was returned by the sheriff “no part satisfied” on April 21, 1936. On December 20, 1938, plaintiff filed his affidavit for garnishment charging that the First National Bank in Joilet had in its hands money belonging to defendant Alvin Bernstein. The answer of the garnishee bank to plaintiff’s interrogatories and additional interrogatories stated that as of the date of the service of the summons in garnishment it had $5,182.39 on deposit with it in an account credited to “American Credit Discount Co., 189 W. Madison street, Chicago,” subject to the check of either Alvin Bernstein or Eunice Smolek. Plaintiff traversed this answer, averring that Bernstein was the real owner of the funds on deposit, that “American Credit Discount Co.” was a trade name used by Bernstein to conceal his assets from his creditors and that Eunice Smolek had no real interest in the fund. Eunice Smolek filed an intervening petition, claiming that the only person other than herself who had any interest in the fund was one Borns, who is not a party to this cause, and that Bernstein had no interest in the bank deposit but was permitted to sign checks thereon as a matter of convenience. Her petition prayed for an adjudication to this effect and for the discharge of the garnishee. Plaintiff filed an answer to the intervening petition reiterating that Eunice Smolek was merely an employee of Bernstein and that the arrangement between Bernstein and Eunice Smolek with reference to the bank account in the hands of the garnishee was a device to defraud Bernstein’s creditors.

In addition to her intervening petition Eunice Smolek, on January 26,1939, filed the following motion to dismiss the garnishment proceeding: “Now comes Eunice Smolek, intervening petitioner herein, and, by leave of court first had and obtained, files this her Motion to Dismiss the garnishment proceeding filed herein and to discharge the garnishee, and, in support of said motion, alleges that the judgment which forms the basis of said garnishment proceeding is void for the reason that the court entering said judgment against the defendants Alvin Bernstein and Florence Bernstein was without jurisdiction to enter the same; that said lack of power and jurisdiction to enter said judgment against the defendants named appears from the records in said cause.

“Intervening petitioner further shows that the proceeding in which said judgment was entered, as appears from the complaint on file herein, is one solely in foreclosure; that it appears from said complaint that Alvin Bernstein and Florence Bernstein were merely guarantors of the note secured by the trust deed sought to be foreclosed; that the liability of the said Alvin and Florence Bernstein is in assumpsit in a suit at law; that the proceeding involved, in which said judgment was rendered, was a chancery proceeding; that the prayer of said complaint is for foreclosure of the trust deed and for a deficiency judgment against the makers of the note; that said defendants, Alvin and Florence Bernstein, are not the makers of the note, and that therefore no deficiency judgment could have been rendered against them in said chancery proceeding.

“Intervening petitioner further shows that there are no allegations in the complaint as to the defendants Alvin and Florence Bernstein upon which a deficiency judgment could be entered against them, and that there is no prayer for any relief as against the defendants Alvin and Florence Bernstein.

“Intervening petitioner further shows that it appears from the pleadings on file in this cause that the court had no power to enter any judgment against the defendants Alvin and Florence Bernstein, and that said court was entirely without power and without jurisdiction to enter said judgment.

“Wherefore, this intervening petitioner prays ' that the garnishment proceeding filed herein on said judgment be dismissed and that the garnishee herein be discharged. ’ ’

After a hearing on said motion to dismiss the court entered an order, the pertinent portions of which are as follows:

‘ ‘ That the court was without jurisdiction to enter a deficiency judgment against the guarantors of the notes secured by the trust deed foreclosed in this proceeding.
“That said deficiency judgment heretofore entered in this cause on the 2nd day of April, A. D. 1936, against Alvin Bernstein, and Florence Bernstein, his wife, is void.
< Í
“It is further ordered that the garnishment proceeding heretofore instituted by William V. Sehnur, plaintiff against the First National Bank in Joliet, garnishee, be and the same is hereby dismissed and said garnishee discharged.”

This appeal is from the foregoing order.

The mortgage notes and the trust deed securing same were executed by the Foreman Trust & Savings Bank, trustee, and provided that there should be no personal liability on the part of the mortgagors. The notes recite that they are “payable only out of the property specifically described in said Trust Deed securing the payment hereof, by the enforcement of the provisions contained in said Trust Deed. No personal liability shall be asserted or be enforcible against the promisor or any personinterested beneficially or otherwise in said property. . . . The sole remedy of the holder hereof . . . shall be by foreclosure of the said Trust Deed ... in accordance with the terms and provisions in said Trust Deed set forth.” (Italics ours.)

The following indorsement appeared on the reverse side of each of the notes:

“For value received we hereby guarantee the payment of this note and all expenses of collecting the same, including attorneys’ fees, and waive protest and notice of nonpayment and diligence in collecting the same, and consent that security may be taken or the time of payment be extended without impairing this guarantee.
“ (Signed) Florence Bernstein (Signed) Alvin Bernstein.”

In plaintiff’s complaint to foreclose filed January 14, 1936, the substance of the trust deed was alleged, the notes were described, the guaranty was set out as part of the description of the notes and a copy of one of the notes was attached to the complaint as an exhibit. The complaint averred that plaintiff claimed a valid and subsisting first lien upon the property for the arúount due under the trust deed and the notes. There were no allegations in the complaint charging the Bern-steins with liability upon their guaranty for a personal judgment upon any deficiency that might exist. The only allegation against them in the complaint was that “Florence Bernstein and Alvin Bernstein . . . have or claim to have some right, title, interest or lien to or upon said real estate . . . but that the right, title, interest or lien, if any ... is subject, subordinate, junior and inferior to the rights and interest of plaintiffs.”

The prayer of the complaint was for an accounting of the amount due plaintiff and that defendants or some of them be required to pay the amount found due; that in default of such payment the land be sold and defendants foreclosed of all title or interest in said land; and that plaintiff have a deficiency judgment against “such of the defendants as may be found personally liable to pay the same and . . . for such other and further relief in the premises -as equity shall require.”

Plaintiff’s theory as stated in his brief is that “since the Circuit Court of Cook County acquired jurisdiction of the person of the defendant, Bernstein, in the proceeding to foreclose the mortgage, in the course of which the deficiency decree was entered against him, in personam, and since the Circuit Court had jurisdiction of the subject matter of that cause, in the sense that it had the power to hear and determine that class of causes and to enter that judgment; and since Bernstein did not, if he felt the judgment to be erroneous, seek its reversal or modification by way of appeal, it cannot, in this proceeding, be attacked, though it might be grossly erroneous or irregular.”

The intervening petitioner states her theory as follows: “The jurisdiction of equity to render a deficiency decree or judgment in a mortgage foreclosure is not a general equity power but a statutory power; and the jurisdiction of the Court to award a deficiency judgment in a foreclosure case is limited to the obligation which the mortgage or trust deed is given to secure; that such statutory jurisdiction does not extend to the rendition of deficiency money decrees upon collateral obligations, and any judgment rendered in excess of such power is void, and may be attacked collaterally, and challenged anywhere for want of jurisdiction and power to render it.”

The principal question presented is whether the circuit court sitting in chancery had jurisdiction in the foreclosure proceeding to render a deficiency judgment based upon a written guaranty of payment appearing on the back of the mortgage notes where the obligation in the guaranty was not secured by the trust deed.

The garnishee and others interested in the fund sought to be reached by garnishment have the right to inquire into the validity of the antecedent judgment upon which the garnishment is based. However, unless such judgment is void for lack of power of the court to enter it, it may not be attacked collaterally in the garnishment proceeding.

The court had jurisdiction of the person of Bernstein in the foreclosure proceeding. But did it have jurisdiction of the subject matter so that it was empowered to enter the personal judgment against him for the deficiency shown to be due after the sale of the mortgaged premises? Plaintiff insists that the court which entered the deficiency judgment against Bernstein had power to hear and determine the subject matter in controversy between the parties to the suit and that therefore it had jurisdiction to enter said judgment. Considering the question of jurisdiction of the subject matter in Miller v. Rowan, 251 Ill. 344, the court said at p. 348:

“Jurisdiction of the subject matter is the power to adjudge concerning the general question involved, and if a bill states a case belonging to a general class over which the authority of the court extends, the jurisdiction attaches and no error committed by the court can render the judgment void. If the court has jurisdiction, it is altogether immaterial, when the judgment is collaterally called in question, how grossly irregular or manifestly erroneous its proceedings may have been. The judgment cannot be regarded as a nullity, and cannot, therefore, be collaterally impeached. Such a judgment is binding on the parties and on every other court unless reversed or annulled in a direct proceeding and is not open to collateral attack. If there is a total want of jurisdiction in a court its proceedings are an absolute nullity and confer no right and afford no protection but will be pronounced void when collaterally drawn in question. Buckmaster v. Carlin, 3 Scam. 104; Swiggart v. Harber, 4 id. 364; People v. Seelye, 146 Ill. 189; Clark v. People, 146 id. 348; O’Brien v. People, 216 id. 354; People v. Talmadge, 194 id. 67.”

The subject matter in controversy here is not the foreclosure of the mortgage but rather the entry of the deficiency judgment against Bernstein on his guaranty. There is a clear and marked distinction between the power of a court of equity to decree mortage foreclosures and its power to enter personal deficiency judgments. Jurisdiction of equity over mortgage foreclosures is general and one of its constitutional powers. (First Nat. Bank of Chicago v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409), but it exercises its power to render deficiency judgments by virtue of a statute extending its' jurisdiction (sec. 17, eh. 95, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 83.17]).

In this State, as a general rule, the holder of a mortgage cannot join a third party claimed to be liable for the debt with the mortgagor in an action of foreclosure for the purpose of obtaining a judgment for a deficiency against him.

The case of Walsh v. Van Horn, 22 Ill. App. 170, holds squarely that a judgment for a deficiency in a foreclosure proceeding against the guarantor of a mortgage note is invalid. There it appears that in 1882 Van Horn filed a bill to foreclose a mortage making William G-alligher, his wife, Bridget, and Walsh parties defendant; that he also asked for a personal decree against G-alligher and Walsh and that for any balance unpaid after the sale of the premises he have execution against both; that in Walsh’s answer he denied the right of Van Horn to have a personal decree against him for any such balance; that on March 18, 1875, Galligher had executed his promissory note for $560, due in 5 years and payable to Walsh; that Gal-ligher and his wife to secure its payment had given a mortgage upon the premises; that in April, 1875, Walsh had sold and assigned the note and mortgage to Van Horn; and that it was a matter of dispute between the parties whether in the transaction Walsh had assumed the liability of a guarantor, or only that of an indorser. On the hearing of the case a decree of foreclosure was entered. Upon the coming in of the master’s report of sale, the court found that there was a deficiency of $589.06, and entered a personal decree therefor against both Galligher and Walsh, and awarded execution against them. In reversing that decree as to Walsh, the court said at pp. 172, 173:

“It is only by virtue of an express provision of statute, or where there are facts giving equitable jurisdiction over the demand, that a third person liable for the mortgage debt can be joined as a party defendant in a foreclosure suit, and a judgment be recovered against bim for a deficiency. In the absence of such statute and of circumstances giving jurisdiction to the court of chancery, there is a misjoinder of causes of action. 2 Jones on Mortgages, sections 1710 and 1711, and authorities there cited.
“In this case there are no circumstances of equitable jurisdiction. Whether the responsibility of appellant for the payment of the note was that of an indorser or that of a guarantor, it was a purely legal liability and enforcible in a court of law. It does not change the case even if his contract was an original undertaking and one upon which he could be sued in the first instance and without reference to the maker. It would simply be a promise distinct from those embodied either in the note as originally given or in the mortgage, but one containing no element that would make it cognizable in the chancery court. . . . The cases cited by appellee, wherein the vendee of the mortgagor agreed to pay the mortgage debt, are not parallel with and have but slight resemblance to the case under consideration, for in those cases the chancery jurisdiction arose from the fact that the legal obligation of the vendee to the mortgagor inured in equity to the benefit of the mortgagee, and no circumstances exist in this litigation that call for or permit the application of that equitable principle.
“The only statutory provision that is claimed to justify the decree against appellant is Sec. 16 of Chap. 95 of the Revised Statutes. That section, as we understand it, does not in terms or by implication give the right to join in the foreclosure suit, third persons who are legally liable for the payment of the mortgage debt, for the purpose of obtaining a decree against them for the residue of the debt remaining unpaid after all the mortgaged property had been exhausted. ’ ’

We agree with the reasoning and conclusion in the Walsh case and think it decisive of the present cause. We are impelled to hold that the trial court under its general equity powers had no jurisdiction in the foreclosure proceeding to enter the deficiency judgment against Bernstein on his guaranty and that the statute conferred no jurisdiction to enter such judgment. The court having no jurisdiction of the subject matter, its personal judgment against Bernstein is void and subject to collateral attack.

While we have' considered the other points urged, in the view we take of this case we deem it unnecessary to discuss them.

For the reasons stated herein the order of the circuit court holding the deficiency judgment against' Bernstein void, dismissing the garnishment proceeding and discharging the garnishee is affirmed.

Order affirmed.

Friend, P. J., and Scanlan, J., concur.


text:
    Morris Brownstein, Appellee, v. Hertz Drivurself Stations, Inc., Appellant.
    Gen. No. 40,748..
    Opinion filed March 11, 1941.
    Donald M. Roche and Abraham Lepine, both of Chicago, for appellant.
    Klein & Harrow, of Chicago, for appellee; Arthur W. Klein and John O. Wilkinson, of Chicago, of counsel.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

This is an appeal by the defendant, Hertz Drivurself Stations, Inc., from an order entered February 7,1939, by the municipal court of Chicago, which adjudged the defendant corporation guilty of contempt of court for its failure and refusal to answer an interrogatory filed by plaintiff and fined it $10.

The contempt proceedings grew out of a tort action brought by plaintiff September 9,1938, for damages as a result of the alleged negligence of the defendant in the operation of its automobile on October 30,1937. In its original statement of defense filed September 27, 1938, defendant not only admitted ownership but also possession, control, management and operation of its automobile at the time and place alleged in plaintiff’s statement of claim. In its amended statement of defense filed December 8, 1938, the defendant corporation again admitted ownership of the automobile involved but denied possession, control, management or operation thereof. On December 9, 1938, upon plaintiff’s motion he was given leave to file the following-written interrogatory, which defendant was required to answer under oath:

“What is the full name and address of the lessee and of the driver of a Chevrolet Coach automobile rented from the defendant’s branch office at 2667 Milwaukee Avenue, which was involved in a collision with the plaintiff’s automobile on October 30, 1937, at about noon at Western Avenue and Fullerton Street, in Chicago, Illinois. ’ ’

In its amended answer to the interrogatory the defendant by its president, Walter L. Jacobs, stated that it should not be required to disclose the name and address of the lessee and of the driver of its automobile at the time and place alleged in plaintiff’s statement of claim for the reason that the disclosure sought by said interrogatory is in violation of sections 2, 4 and 6 of Buie 133 of the Bevised Civil Practice Buies of the municipal court of Chicago. Buie 133 of said rules, including sections 2, 4 and 6 thereof, is as follows:

“The object of interrogating is two-fold; first, to obtain admissions to facilitate the proof of the proponent’s own case; second, to ascertain, so far as practicable, the facts constituting the adversary’s case, and interrogatories will be allowed whenever the answers to them will serve either to maintain the case of the proponent or to destroy the case of the adversary. The following rules are applicable in determining what interrogatories may be administered and what not:
“2. They must be bona fide for the purpose of the pending action and not merely with a view to future litigation.
“4. They must not be put for the purpose of establishing facts which, if proved, would not tend to support a cause of action or defense.
“6. They may be such as to compel the adversary to disclose the facts on which he intends to rely, but not the evidence by which he proposes to prove those facts, or the names of the witnesses the adversary intends to produce.”

Defendant having failed to comply with the rule to answer the interrogatory, the court entered a rule upon it to show cause why it should not be punished for contempt of court. Upon the hearing on the rule to show cause the court found the defendant corporation guilty of contempt of court for not answering the interrogatory and as heretofore stated fined it $10.

Defendant contends “that the court erred in entering its order of contempt against it for its failure to answer this interrogatory for the reason that the interrogatory propounded to it was improper and in violation of certain sections of Buie 133 of the Bevised Civil Practice Buies of the Municipal court.”

As has been shown defendant in his original statement of defense admitted both the ownership and op-oration of its automobile but in its amended statement of defense, while still admitting ownership, defendant denied control and operation of its automobile involved in the alleged collision. This constituted a material change in its defense. .While defendant’s amended statement of defense did not allege who operated its automobile, plaintiff had the right to assume, because of the character of defendant’s business, that if it did not operate its automobile itself on the occasion in question, it intended to show that the automobile was operated by a lessee. The situation presented was simply this. Defendant first stated it owned and operated the automobile. It then stated that it owned the automobile but that in effect it was operated by its lessee when the alleged collision occurred. Thereupon plaintiff, we think properly, propounded the interrogatory asking who the lessee was and where he lived and who the driver of the car was and where he lived.

It is idle to urge that because plaintiff’s interrogatory requested information concerning “the lessee,” he abondoned the original theory of his suit as set forth in his statement of claim wherein he alleged that the automobile which collided with his was being driven and operated by defendant or that he adopted the theory set forth in the amended statement of defense or admitted that defendant’s automobile was being operated by its lessee. The question as to whether defendant’s automobile was in fact leased and was being operated by its lessee when the collision occurred is highly important and material. The true answer to that question might well serve to maintain plaintiff’s case or to destroy defendant’s defense. Merely because defendant changed its defense and said that it did not operate its automobile but that its lessee did, does not conclude the matter. The change of defense in itself by which defendant seeks to be relieved of liability by asserting that its automobile was being driven by its .lessee emphasizes plaintiff’s right to ascertain whether or not there was in fact a lessee. If there was a lessee the only way he can be properly identified is by his name and address.

From what has been said it is readily apparent that neither plaintiff’s interrogatory nor the disclosure it sought violated any of the provisions of Buie 133, heretofore set forth. It is perfectly obvious that the interrogatory was not filed merely for the purpose of obtaining the names and addresses of defendant’s witnesses. Note 6 to Municipal Court Bule 133b, covering the question as to when a party may compel the discovery before trial of the names of witnesses and when he may not, is as follows:

“It is admissible to,interrogate to facts which will inform the party as to evidence to be obtained and the names of persons who may give evidence for him. But it is not permissible to ask the names of the persons merely as being witnesses whom the other .party is going to call when their names do not form any substantial part of the material facts in the case; but where the name is a material fact it must be disclosed and it is no answer that in giving the information the party may disclose the names of his witnesses.”

It is next contended that the order adjudging the defendant corporation guilty of contempt is void and a nullity. Plaintiff argues that since this point was not raised in the trial court it cannot be presented in this court for the first time on appeal. The rule is that a void order may be questioned at any time. We think, however, that defendant’s contention that the order appealed from was void is without merit and that Armour Grain Co. v. Pittsburgh, C., C. & St. L. R. Co., 320 Ill. 156, cited by defendant in support of this contention is not applicable to the situation presented here. In our opinion the interrogatory propounded by plaintiff, which defendant failed and refused to answer, was proper and fully complied with the Bevised Civil Practice Buies of the municipal court.

The only question presented in the Armour case, which was decided in 1926, was whether section 32 of the Municipal Court Act conferred jurisdiction upon that court to require a corporation, as such, to answer interrogatories. There the court said at pp. 158, 159, 160:

“Section 32 of the Municipal Court act, with reference to interrogatories in civil actions, is as follows: ‘That the municipal court in any civil suit pending therein, at any time before the trial or final hearing thereof, may permit the filing therein of interrogatories to be answered by any party to such suit or any person for whose immediate benefit such suit is prosecuted or defended, or by the directors, officers, superintendent or managing agents of any corporation which is a party to the record in such suit, at the instance of the adverse party or parties or any of them, and to require an answer under oath to all such interrogatories as the party to be interrogated might be required to answer, if called as a witness upon the trial or hearing of such suit, but the party filing such interrogatories shall not be concluded by the answers thereto, if he shall elect to introduce the same or any or either of them upon the trial or final hearing.” (Smith’s Stat. 1925, p. 844.)
“The railroad company also contends that under the proper construction of this statute the court did not have jurisdiction or power to require a corporation, as such, to answer interrogatories of any kind. This section of the statute has never been before a court of review in this State upon the question here involved. . . . At common law the court had no power to require a party to the suit to answer interrogatories. The interrogatories which by this statute the court is authorized to require to be answered are such as the party to be interrogated might be required to answer if called as a witness upon the trial or hearing of such suit. The railroad company is a corporate entity, which could not come into court as a witness upon the trial or hearing of the suit and be examined orally. Construed literally, this section of the statute in question does not require the answering of interrogatories by corporations. The legislature, when it enacted this section of the statute, knew that a corporation could not be called as a witness upon the trial or hearing of a suit, and by the statute provided the manner in which the difference between individuals and corporations, as parties to suits, in the matter of discovery; might be obviated, by providing for the filing of interrogatories to be answered by the directors, officers, superintendent or managing agents of any corporation which is a party to the record in the suit. The municipal court of Chicago was not authorized by law to compel the railroad company to answer the interrogatories, and therefore the railroad company was not in contempt in failing and refusing to answer the same. It is well settled that a party charged with contempt for violation of a judgment, order, or decree may acquit himself by showing that such judgment, order or decree is a nullity.”

Section 20 of the Municipal Court Act as amended in 1931 (par. 375, ch. 37, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 108.045]) provides:

‘ ‘ That the judges of said municipal court shall have power to adopt, in addition to or in lieu of the provisions herein contained prescribing the practice in said municipal court, or of any portion or portions of said provisions, such rules regulating the practice in said court as they may deem necessary or expedient for the proper administration of justice in said court. . . . Amendments and changes of said rules may be made from time to time by like Orders.” • * -

Prior to the amendment of 1931, section 20 carried the proviso that no such rule should be inconsistent with those expressly provided for by the act, and that the Supreme Court might, in its discretion, substitute other rules and make any order respecting the rules as it deemed proper.

' Since the decision was rendered by the Supreme Court in the Armour case, the municipal court in 1935 adopted rule 132 and note to rule 132, the pertinent portions of same being as follows:

“Interrogatories to a Body Corporate.
“If any party to an action be a body corporate or any other body of persons empowered by law to sue or be sued whether in its own name, or in the name of any officer or other person, the court may require the interrogatories to be answered by any officer or member of such corporation or body.
“Note to Buie 132.
“1. The officer or member is the representative or alter ego of the body for the purpose of answering the interrogatories. It is not his answer but the answer of the body. ...
“2. The body is served ivith notice of the motion. ....
“3. . . .
“4. ...
“5. The body may be required to answer by the secretary or clerk or other proper officer.
“6. An officer, if selected to answer, must, if he have no personal knowledge of the facts, apply to those servants of the company who may have such personal knowledge.
“7. ...
“8. The answer may be read against the body.”
The Armour case did not find that a corporation could not be found guilty of and punished for contempt of court. All that it held, as heretofore shown, was that section 32 of the Municipal Court Act did not empower a judge of that court to require a corporation, as such, to answer interrogatories of any kind, and since the court had no jurisdiction its order finding the corporation guilty of contempt for failing to answer interrogatories was void. An entirely different situation is presented here. It was undoubtedly because of the rule enunciated in the Armour case which precluded the municipal court from compelling relevant disclosures by corporations by answer to proper interrogatories that that court adopted rule 132 and the notes thereto, which have the same force as rules, pursuant to the power and authority granted it under section 20 of the Municipal Court Act to make rules “prescribing the practice in said Municipal court.” It will be noted that section 20 of the Municipal Court Act authorizes the judges of said court to adopt rules “in addition to or in lieu of the provisions of the Municipal Court act prescribing the practice in that court.”

Whether it was the intention of the judges of the municipal court to adopt rule 132 in lieu of section 32 of the Municipal Court Act or as an addition of supplement thereto is immaterial since rule 132, with its accompanying notes, clearly empowers the court to require corporations, as such, to answer interrogatories. The rule is entitled “Interrogatories to a Body Corporate.” It provides that where interrogatories are propounded to a corporate defendant “the court may require the interrogatories to be answered by any officer or member of the corporation”; that, while “the officer or member is the representative or alter ego” of the corporation “for the purpose of answering interrogatories,” “it is not his answer but the answer of the corporation”; that the corporation “is served with notice of the motion”; and that “the answer may be read against” the corporation.

In our opinion Buie 132 of the Bevised Civil Practice Buies of the municipal court, including the notes thereto, superseded section 32 of the Municipal Court Act in so far as said section pertains to disclosures by the directors, officers, superintendent or managing agents of corporations, and under such rule the court was clearly empowered to require defendant to answer the interrogatory propounded by plaintiff and to punish it for its failure and refusal to answer same. The order appealed from was a valid order.

For the reasons stated herein the order or judgment of the municipal court is affirmed.

Order or judgment affirmed.

Friend, P. J., and S candan, J., concur.


text:
    Lawrence Fodge and A. W. Baumgartner, Trading as Aball Wrecking Company, v. Board of Education of the Village of Oak Park, District 97 et al. Ceco Steel Products Corporation, Appellant, v. Fidelity and Deposit Company of Maryland, Appellee.
    Gen. No. 40,800.

      Opinion filed March 11, 1941.
    Rehearing denied March 27, 1941.
    Poppenhusen, Johnston, Thompson & Raymond, of Chicago, for appellant; Anan Raymond and Robert Z. Hickman and Thomas E. Kiddoo, both of Chicago, of counsel.
    Frank W. Swett and Wilfred M. Doherty, both of Chicago, for coappellant.
    Dent, Weichelt & Hampton, of Chicago, for ap-pellee.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

This case was consolidated for hearing in this court with Gen. No. 40,870, Fodge v. Board of Education of Village of Oak Park, Dist. No. 97, 309 Ill. App. 137 (Abst.), and Gen. No. 40,962, Fodge v. Board of Education of Village of Oak Park, Dist. No. 97, 309 Ill. App. 137 (Abst.).

Ceco Steel Products Corporation, cross complainant and appellant, is a subcontractor which was joined as a defendant in a complaint to enforce a mechanic’s lien claim against funds due from the defendant, Board of Education of the Village of Oak Park, Illinois (hereinafter for convenience referred to as the Board of Education), to F. & H. Construction Company, the principal contractor. Ceco Steel Products Corporation filed an answer by which it put the original lien claimant upon proof of his claim. At the same time it filed its cross complaint against the Board of Education, the principal contractor and others and by leave of court joined as a new party defendant to its cross complaint the Fidelity and Deposit Company of Maryland, surety on the bond taken by the Board of Education from the principal contractor.

The cross complaint alleged in substance that F. & H. Construction Company had entered into a contract with the Board of Education to erect an addition to a school building in the Village of Oak Park, Illinois; that said contractor and Fidelity and Deposit Company of Maryland as principal and surety, respectively, entered into a bond conditioned upon the payment by the principal of all persons furnishing material or performing labor for the completion of the building; that cross complainant had fully performed a subcontract, which it had entered into with the principal contractor, and that the surety was liable for an unpaid balance .due under the subcontract because said principal .contractor had not paid such balance and that, having been adjudicated bankrupt before completing the building, it was unable to pay any part thereof. Certain exhibits, including the bond and subcontract, were attached to and made part of the cross complaint.

The defendant Fidelity and Deposit Company .of Maryland, the surety on the bond, filed a motion to dismiss the cross complaint as to it upon the ground principally that the bond furnished by it was merely a performance bond naming the Board of Education as obligee, which could not be sued upon by persons performing labor for or furnishing material to the principal in the bond, F. & H. Construction Company.

After the motion to dismiss had been allowed an amendment to the cross complaint was filed to show that the action was brought on said cross complaint in the name of the Board of Education “for the use of” the cross complainant. The amendment also added an allegation that the cross complainant (by its former name) had been named in the principal contract as having been approved for employment as a subcontractor. The surety’s motion to dismiss was allowed to stand to the amended cross complaint and a final order was entered on the pleadings dismissing the cross complaint as to the surety and entering judgment for costs against the cross complainant. It is from that order that this appeal is taken by the said subcontractor, Ceco Steel Products Corporation. The Board of Education has joined in this appeal as a coparty.

The theory of cross complainant as stated in its brief is that “it is an obligee of the bond executed for the benefit of persons furnishing material or performing labor to the principal. This bond was executed pursuant to the requirements of ‘An Act in relation to bonds of contractors entering into contracts for Public Construction,’ approved June 20, 1931 (Chap. 29, Sec. [par.] 15, Illinois Revised Statutes 1937 . . . ). The cross complaint alleges the compliance with the statutory procedural steps contained in Section [par.] 16 of the same chapter, which gives to every person ‘furnishing material or performing labor, either as an individual or as a subcontractor for any contractor’ . . . the right to sue on such bond in the name of the board or political subdivision named as obligee. By amendment to the cross complaint, the Board of Education was added as the ‘use’ plaintiff. The contract, which is made a part of the bond, contains the direct promise of the principal ‘to pay subcontractors,’ and the' cross complainant is listed in the contract as one of the subcontractors to be employed. Accordingly, cross complainant contends that it has a cause of action and right to sue in the name of the board under the statute; but that if the bond proper, and the contract which is a part of the bond, do not constitute a compliance with Chapter 29, Section [par.] 15, then that it may recover on the bond and contract as a common law obligation.”

Defendant surety’s theory is “that the bond upon which cross complainant seeks to recover is simply an ordinary ‘performance bond’ and is solely for the benefit of and indemnifies only the Board of Education, the obligee named therein, against loss; that there is no allegation in the cross complaint that the Board of Education has sustained a loss or that there has been a breach of the bond; that the cross complainant, Ceco Steel Products Corporation, is neither a named nor a beneficial obligee in the bond and has no right of action thereon; that the bond is not a statutory bond within the provisions of Sections [pars.] 15 and 16, Chapter 29, Illinois Revised Statutes, 1937; that the Statute will not be read into the bond and affords cross complainant no right of action thereon.”

The contract entered into between the principal contractor and the Board of Education contained the following, among other provisions:

“Article IX. Unless otherwise stipulated, the contractor shall provide and pay for all materials, labor, water, tools, equipment, light, power, transportation and other facilities necessary for the execution and completion of the work. ( £
“Article XXXVII. Relations of Contractor and Subcontractor — The Contractor agrees to bind every subcontractor and every subcontractor agrees to be bound by the terms of the Agreement, the General Conditions, the Drawings and Specifications as far as applicable to his work, including the following provisions of this Article unless specifically noted to the contrary in a subcontract approved in writing as adequate by the Owner or Architect.
< (
“The Contractor agrees . . .
“(d) To be bound to the subcontractor by all the obligations that the Owner assumes to the Contractor under the Agreement, General Conditions, Drawings and Specifications, and by all the provisions thereof affording remedies and redress to the Contractor from the Owner.
“(e) To pay the Subcontractor, upon the payment of certificates, if issued under the schedule of values described in Article XXIV of the General Conditions, ■the amount allowed to the Contractor on account of the -Subcontractor’s work to the extent of the Subcontractor’s interest therein.
“(f) To pay the Subcontractor, upon the payment ,of certificates, if issued otherwise than as in (e), so that at all. times his total payments shall be as large in proportion to the value of the work done by him as the total amount certified to the contractor is to the value .of the work done, by him.
' “(g) To'pay the Subcontractor to such extent as may be provided by the Contract Documents or the subcontract, if either of these provides for earlier or larger payments than the above.
“(h) To pay the Subcontractor on demand for his work or materials as far as executed and fixed in place, less the retained percentage, at the time the certificate should issue even though the Architect fails to issue it for any cause not the fault of the Subcontractor.
“ (i) Pay subcontractor just share of fire insurance.”

• The bond names only the “Board of Education, School District No. 97, Oak Park, Illinois, hereinafter called Owner, ’ ’ as obligee, and is conditioned as follows :

“Now, therefore, the condition of this obligation is such that if the Contractor shall faithfully perform said contract on his part, and fully indemnify and save harmless the Owner from all cost and damage which he may suffer by reason of any default, and shall fully reimburse and repay all outlay and expense which the Owner may incur in making good any such default, including reasonable costs and attorney’s fees, then this obligation shall be null and void; otherwise it shall remain in full force and effect.’’

The bond contained a recital that a copy of the contract “is hereto annexed,” and a copy of the contract was attached to the bond. Therefore the contract and bond in the instant case constitute a single instrument and must be considered as a single obligation.

We will first consider cross complainant’s contention that it has a right of action on the bond as a common-law obligation in that it was a third party beneficiary under the principal contract, which was attached to and made a part of the bond. This contention is fully answered in Searles v. City of Flora, 225 Ill. 167, a leading case on the question of the right of a materialman or a subcontractor to recover on a principal contractor’s public construction bond. In that case materialmen, as alleged beneficial plaintiffs, brought action on the bond in the name of the City of Flora against the principal contractor and his surety for unpaid material bills. The contract provided that the contractor was “. . . to pay for all materials . . . and labor for said improvement.” The bond was conditioned that the principal contractor should “. . . do and perform each and every, all and singular, the matters and things in said contract set forth and specified to be by said principal kept, done and performed ...” The bond further provided that the contract was “. . . made a part hereof as fully and to the same extent as if copied at length herein ...” The contention was made there, as here, that the bond and contract constituted one instrument and that the promise “. . . to pay for all materials ...” contained in the contract, created an obligation to and enforceable by ma-terialmen under the bond, although the bond itself contained no such condition. In that case, in holding that even though the contract and bond constituted a single obligation and should be considered as a single instrument, still no rights accrued to the materialmen as against the surety on the contractor’s bond, the court said at pp. 170, 171 and 172:

“Undoubtedly, in the consideration of this issue the bond and contract must be considered as one instrument, and if the persons or corporations furnishing material for the improvement of said electric light plant are protected or secured under the condition of the bond and contract, then they are entitled to recover. Neither can it be seriously disputed that if a contract is made between two persons upon a valuable consideration, whereby a third person is to be paid money or receive some benefit, such third person may enforce the contract though not named therein. (Bristow v. Lane, 21 Ill. 194; Eddy v. Roberts, 17 id. 505; Snell v. Ives, 85 id. 279.) But to entitle such third person to recover it is necessary that the bond or contract should have been entered into for his benefit, and if it appears from the terms used that the contract or bond was solely for the benefit of the parties thereto, third persons cannot recover under its provisions. The question here must therefore be whether, under the terms used in the bond and contract, considered as a single obligation, the plaintiff below was authorized to bring this suit for the use of other parties who furnished material.
“. . . It will be observed that the bond, as well as the contract, runs directly to the city of Flora. There is nothing in any of the terms used in either to indicate that it was intended to apply to or protect third persons. If the bond or contract by its terms had provided that it was given for the benefit of subcontractors or material-men as well as the city of Flora there would be force in the contention of appellee. It is evident, however, that the purpose of its execution was to insure the completion of the work within the contracted period, free from liens of every kind. If the city had been required to pay any claims arising for materials furnished by reason of a lien on the funds in its hands or for any other cause, then the surety company would be required to reimburse and save it harmless. . . .
“We think the evidence in this case clearly shows that the bond and contract were not entered into with the intention of securing third parties as to labor and "'material furnished in the completion of said contract, but they were entered into for the purpose of securing the city of Flora, and it alone, in this respect.”

In People for use of National Cast Iron Pipe Co. v. Merkle, 269 Ill. App. 449 (certiorari denied by the Supreme Court), where the action was brought upon a public construction bond similar to that in the case at bar, the bond was conditioned that the principal should “perform each and every of the covenants, conditions and agreements ...” contained in the contract. The contract required the contractor to furnish a bond for the full amount of the contract, to “provide and pay for all materials, labor . . . ,” and to furnish a “bond covering the faithful performance of the contract and the payment of all obligations arising thereunder. ...” The contract further required the contractor to submit schedules of value “. .. so as to facilitate payment to subcontractors. . . .” It gave the owner the right to withhold payments upon “failure of the contractor to make payments properly to subcontractors or for material or labor ...” and the right to terminate the contract if the contractor “ . . . should fail to make prompt payment to subcontractors or for material or labor. . . .” It will be noted that there, as in the instant case, that while the bond contained no obligation for the payment of subcontractors, the specifications contained provisions relating to payment by the contractor to subcontractors. In that case, in holding that materialmen obtained no rights under the bond, the court said at p. 458:

“Counsel for appellant have not cited nor has this cotirt been able to find any case where the language of the bond is similar to the one in question, in which the courts have held that a materialman not mentioned in the .bond would be able to maintain a suit on a bond for the amount of material he furnished to the contractor who was under bond faithfully to perform his contract.
. “We are of the opinion that the language' of this bond is such that the appellant could not maintain a suit against the surety company on this bond and the pourt properly sustained the demurrer to the declaration and the judgment of the circuit court ... is affirmed.”

In City of Herrin for use of Bradbury v. Stein, 206 Ill. App. 339, an action was brought by materialmen upon a contractor’s bond. The contract contained-a provision that the contractors should ‘' duly and promptly pay and discharge all indebtedness that may be incurred by them in carrying out said contract and completing the sanie, free of all mechanic liens and any indebtedness whatever.” There, as here, it was contended that the bond and contract should be construed together and that so construed the-materialmen might recov.er on the bond. In that case, in holding that materialmen, could not recover upon the bond, the court said at p. 344:

“Both the bond and contract run directly to the city, and nothing, appears by the terms of either to indicate that they were intended for the benefit of third parties. There is no allegation in the declaration that there was any breach of the bond so far as the city was concerned, and under the well-established principles of •law in the consideration of demurrers to pleadings, it must be taken that there was therefore no breach of ■the bond as against "the city. Contracts and. bonds very similar to those here under consideration have been construed by the Supreme Court of this State, .and the rule of construction so established must be our guide here. In Searl es v. City of Flora, supra, the contract provides that the contractor shall ‘pay for all materials, ’ etc., and the condition of the bond was that •the contractor should ‘well and truly keep, do and perform each and every, all and singular, the matters and -things in said contract set forth and specified to be by said principal kept, done and performed, at the time and in the manner in said contract specified, and shall pay over, make good and.reimburse to the above named obligee all loss and damage which said obligee may sustain by reason of failure or default on the part of said principal.’ In City of Sterling v. Wolf, 163 Ill. 467, the contractor agreed ‘to furnish all labor, materials and tools necessary to execute the entire work,.’ and executed a bond for the faithful performance of his contract. In Spaulding Lumber Co. v. Brown, 171 Ill. 487, the bond requires that the contractor ‘ shall duly perform said contract and all the covenants and agreements therein contained, and shall pay and discharge from said premises all liens for material, labor or otherwise, which may accrue on account of said building contract. ’ In each of these cases the court held that subcontractors could not recover on the bond, there being no breach thereof as against the obligee named therein. A careful reading of the contract and bond in this case does not disclose any terms or conditions therein evidencing any more intention on the ■part of the parties thereto that the same were intended for the benefit or protection of any persons not parties ■thereto, than do the terms and conditions of the contracts and bonds in the above cases. Under these au-thoriti.es and in the absence of any allegation in the declaration that the city had been required to pay any claims for materials furnished by the beneficial plaintiffs or for any other cause, the declaration as finally amended did not state a cause of action and the demurrer thereto should have been sustained.”

The bond and contract here ran directly to the Board of Education and nothing appears in or about the terms of either to indicate that they were intended for the direct benefit of third parties. Neither the fact that cross complainant (by its former name) was named in the principal contract as an approved subcontractor nor the further fact that the principal contract contained the promise of the contractor to the Board of Education that it would “pay the subcontractor” serve to distinguish this case from the foregoing decisions. They were all resolved, as this case must be, in so far as the instant contention is concerned, on the proposition that, regardless of the language used in the respective contracts pertaining to the payment by the contractor for material or labor or to materialmen or subcontractors, such contracts were not made primarily for the direct benefit of the materialmen or subcontractors, but ran to and were intended only for the benefit of the public bodies involved.

To sustain its contention that it has a right of action upon the bond as a common-law obligation cross complainant cites Board of Education of City of Chicago for use of Chandler Lumber Co. v. Aetna Indemnity Co., 159 Ill. App. 319; Board of Education for use of Weil v. Chicago Bonding & Surety Co., 218 Ill. App. 20; Cherry v. Charles Benson, Inc., 264 Ill. App. 199; Phillips Co. v. Constitution Indemnity Co. of Philadelphia, 68 F. (2d) 304; Federal Surety Co. v. City of Staunton, Ill., for use of McWane Cast Iron Pipe Co., 29 F. (2d) 9. These five cases are either Illinois cases or Federal cases decided under Illinois law. In Board of Education of City of Chicago for use of Chandler Lumber Co., v. Aetna Indemnity Co., supra, the bond itself contained an express provision for the protection of laborers and materialmen, the bond providing that the contractor “shall promptly make payment to all persons supplying it labor or materials.” In that case the court said at p. 321:

“To hold the bonds in question valid and binding is only to compel the obligors to do the thing they bound themselves to- do. The distinction between these cases and Spalding Lumber Co. v. Brown, 171 Ill. 487, and Searles v. City of Flora, 225 id. .167, is, that in those cases the bonds contained no condition that the obligors should pay for labor or materials furnished to the contractors, and in these cases the bonds contain such conditions.”

In the other four, cases cited the bonds upon which the respective actions were brought also provided that the principal contractor was liable for the payment of labor and materials. In Federal Surety Co. v. City of Staunton, Ill., for use of McWane Cast Iron Pipe Co., supra, which was decided under Illinois law by the United States Circuit Court of Appeals for the Fifth District, the court, quoting from Board of Education of the City of Chicago for use of Chandler Lumber Co., v. Aetna Indemnity Co., said at p. 11:

“The distinction between these cases and Spalding Lumber Co. v. Brown, 171 Ill. 487 (49 N. E. 725), and Searles v. City of Flora, 225 Ill. 167, (80 N. E. 98), is, that in those cases the bonds contained no condition that the obligors should pay for labor or materials furnished to the contractors, and in these cases the bonds contain such conditions.”

It is conceded that the bond proper in the instant case is not conditioned for the benefit of the subcontractor, but it is insisted that, since the contract contains an express agreement “to pay the subcontractor” and since the contract and the bond constitute and must be considered together as one instrument and obligation, therefore the bond must be construed as containing a direct obligation on the part of the surety to pay the subcontractor. The contract in this case does contain a provision that the principal contractor agrees “to pay the subcontractor” but it must be remembered that there is nothing in the contract that indicates that there was any intention on the part of either the contractor or the Board of Education to execute same primarily for the benefit of the cross complainant. The doctrine that a third party may maintain an action on a promisé 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. Kenfield Publishing Co. v. Baumgartner, 189 Ill. App. 413. In our opinion cross complainant does not come within the rule applicable to third party beneficiaries in this State and it has no conunon-law right as a third party beneficiary to recover on the principal contractor’s bond executed by the surety in this case.

It is next contended that since “the bond sued upon was executed pursuant to a statute requiring public bodies to take a- bond conditioned for the protection of subcontractors in the situation of the cross complainant, and entirely aside from the question of its character as a common law bond, the surety is liable at the suit of cross-complainant as the person for whose benefit the statute required a bond.,”

It was unquestionably because there is no right to a mechanic’s lien against a public work (Gunther v. O’Brien Bros. Const. Co., 369 Ill. 362) and because it has been repeatedly held by the courts of review of this State that provisions such as are contained in the principal contract in this case, which are relied upon as constituting cross complainant a third party beneficiary, were not effective for that purpose and did not afford a common-law right of action- against a surety upon a public construction performance bond, that the statute was enacted requiring public bodies and officials in making contracts for public work to see that bonds were furnished by the contractors which would protect materialmen and subcontractors.

In 1931 the legislature enacted “ah act in relation to bonds of contractors entering into contracts for public construction” (pars. 15 and 16, secs. 1 and 2, ch. 29, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 136.320, 136.321]), which provides:

“Sec. 1. All officials, boards, commissions or agents of this State, or of any political subdivision thereof in making contracts for public work of any kind to be performed for the State, or a political subdivision thereof shall require every contractor for such work to execute a bond to the State, or to the political subdivision thereof entering into such contract, as the case may be, with good and sufficient sureties, and in an amount to be fixed by said officials, boards, commissions, commissioners or agents, and such bond, among other conditions, shall be conditioned for the payment of material, used in such work and for all labor performed in such work, whether by subcontractor or otherwise.
“Sec. 2. Every person furnishing material or performing labor, either as an individual or as a subcontractor for any contractor, with the State, or a political subdivision thereof where bond shall be executed as provided in this Act, shall have the right to sue on such bond in the name of the State, or the political subdivision thereof entering into such contract, as the case may be, for his use and benefit. . . .”.

This statute was in force when the contract and bond involved herein were executed.

The foregoing statute declared the public policy of this State in the matter of the protection of those furnishing material or labor in the construction of public work under bonds thereafter given for the perform-anee of such work. The statute contains the mandatory provision that public bodies or officials in making contracts for public work “shall require every contractor for such work to execute a bond” affording protection to all those who furnished “material used in such contract” or “labor performed in such work.” Not only was the Board of Education chargeable with knowledge of the provisions of this statute but so were the principal contractor and the surety and as a subcontractor cross complainant had the right to assume that the requirements of the statute would be complied with when the bond was executed by the surety herein. We think it necessarily follows that the bond must be construed in the light of the statute. In view of the fact that the bond contained the recital that a copy of the contract “is hereto annexed” and a copy of the contract was actually attached to the bond, we have heretofore held that the contract and bond constituted a single instrument and therefore must be considered as a single obligation. That being so the conditions of the contract are conditions of the bond to the same extent as if they had been incorporated in terms in the bond proper.

It has been shown that the principal contract contained repeated promises and agreements on the part of the contractor to pay the subcontractor. While in considering the previous contention we were compelled to hold under the rule established by decisions of the Supreme and Appellate Courts of this State that the promise of the contractor to pay the subcontractor was primarily for the benefit of the Board of Education and that therefore no common-law right of action against the surety on the bond inured to cross complainant as a third party beneficiary, in the light of the statute, which was intended for the benefit and protection of subcontractors situated as is the cross complainant, and in view of the fact that the contract, which is a part of the bond, contains a definite promise to pay the subcontractors, we are impelled to hold that the payment of the claims of subcontractors is within the guaranty of the bond.

It is fair to assume that the defendant surety was familiar with the purpose and provisions of the statute which had been in existence for 6 years when the bond in this case was executed. The contract gave the owner the right to require a bond covering “the payment of all obligations arising thereunder.” The contract was conditioned and therefore the bond, of which the contract was an integral part, was conditioned for the payment of the subcontractors. Under these circumstances we think that it cannot be said that the surety did not undertake by its bond to guaranty the obligation of the contractor to pay the subcontractors.

The defendant surety insists that the bond in this case contains no such provision as the statute prescribes for the protection of subcontractors furnishing labor and material to contractors for public works; that, while the contemporaneous contract contains a provision for the payment of subcontractors, it cannot be imported from the contract into the bond; and that whether the omission from the bond of the provision for the payment of subcontractors was the result of accident or design or misunderstanding of the law, the limit of the liability of a surety is that to which it has actually obligated itself and it cannot be held beyond the strict letter of its bond.

In passing upon a somewhat similar contention in Peake v. United States, 16 App. D. C. 415, where a contract and bond for construction of a public work were presented for interpretation in the light of a Federal statute (title 40, sec. 270, U. S. Code of Laws) practically identical in its provisions with the statute of this State heretofore set forth, the court said at pp. 419, 421,422:

“. . . But the plain answer to this argument is that the provision required by the statute for the protection of laborers and materialmen subordinate to contractors for public works is contained in the bond in controversy, and is fully and completely contained therein, and it is unnecessary to go outside of the letter of the bond to find it.
“The bond embraces the contract; the latter is in express terms made an integral part of the bond. The sole obligation of the paper called the bond, as distinguished from the contract, is that the contractors shall perform 'all and singular the covenants, conditions and agreements of the contract, ’ and there is no other obligation of any kind in it. In fact, it is meaningless except as incorporating the contract into it, which it sufficiently does by its reference to it. Plainly, therefore, the contract is as much a part of the bond as though it had been copied verbatim into it; and when the bond sufficiently indicates the covenants which it intends to secure, we. know of no dictate of reason or rule of law that would require their repetition in the bond.
“. . . The obligation, which the appellants, both principal and sureties, distinctly assumed by their bond was to perform all and singular the covenants, conditions and agreements of the contract. They were bound to take notice of every covenant, condition and agreement of the contract, ordinary and extraordinary. The fundamental principles of law and fair dealing require that they should not be permitted to execute solemn obligations like this, and then say that they did not know what the obligation contained. It was their duty to know. It was their duty to read the contract, of all and every covenant of which they guaran-' teed the faithful performance; and we must assume in the present case that they did read it; for the record shows nothing to the contrary.
“We do not deem it necessary to review the numerous authorities cited by the appellants. We do not regard any of them as applicable to the case before us. For this case is not one in which we are called upon to determine whether a strict or liberal construction is to be applied in the interpretation of a bond. The simple question is, whether the bond in controversy contains certain words, the sufficiency of which is not contested if they are found in the bond. Wé hold that they are found in the bond because they are found in the contract which accompanies the bond, and which is made an integral part of it. The utmost that can reasonably be said, if that much, is that they are written in the wrong place. But that they are written in the instrument clearly and distinctly, and without possibility of being mistaken or misunderstood, we have no doubt.”

The language used in the foregoing decision is particularly appropriate and applicable to the situation presented in the case at bar. So here we havé a case where not only by fair intendment were the rights and interests of the subcontractors being provided for as required by statute and as shown by the terms of the contractor’s agreement, but also one whére the terms of this agreement were expressly made a part of the bond itself. (Maryland Casualty Co. v. Fowler, 31 F. (2d) 881.)

In the view we take of this case we feel that it would serve no useful purpose to discuss the numerous authorities cited by the parties.

The cross complainant admittedly complied with the procedural steps required by section 2 of the act under consideration.

In our opinion the cross complaint stated a good cause of action under the statute against the defendant surety on its bond and the trial court erred in striking same.

The motion of the Board of Education heretofore made and reserved to hearing, to dismiss its joint appeal without costs, is at this time allowed.

For the reasons stated herein the judgment of the circuit court is reversed as is the order striking the cross complaint, as amended, of Ceco Steel Products Corporation on motion of the defendant surety, and the canse is remanded with directions that the defendant surety be required to answer said cross complaint, as amended, and that such further proceedings be had as are not inconsistent with the views herein expressed.

Judgment reversed and cause remanded with directions.

Friend, P. J., and Scanlan, J., concur.