author: Mr. Justice Friend

text:
    A. Marcus, Appellant, v. S. S. Kresge Company, Appellee.
    Gen. No. 38,005.
    Opinion filed February 11, 1936.

      Jesse Marcus, of Chicago, for appellant.
    Kirkland, Fleming, Green & Martin, of Chicago, for appellee; David Jacker, William H. Symmes and John M. O’Connor, Jr., all of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Plaintiff sued in assumpsit to recover $4,538 additional compensation for work done in the erection of a store building for defendant in the City of Chicago. Plaintiff’s declaration consisted of an amended first count and the common counts. By leave of court the common counts were withdrawn. To the amended first count defendant filed a general demurrer, which was sustained by the court. Plaintiff elected to abide by his declaration, and the court dismissed the suit at plaintiff’s costs. This appeal followed.

The amended first count alleged that plaintiff was engaged in business as a general building contractor, and on April 30, 1930, entered into a written contract to construct for defendant a two-story building located at 1357-61 E. 55th street, in Chicago, for a stated consideration of $48,648. Plaintiff undertook to furnish all labor and material required and to execute all the work according to plans and specifications attached to the contract.

As bearing upon the principal question in controversy, the specifications attached to the agreement contained the following provision:

“Note.

“The general figures and price for this work to be based on any and all existing soil conditions and formations, except ledge rock.

“If excavation in ledge rock formation is encountered, the excavator must mine and remove the same, using channeling and drilling machines operated by air power. Excavations in such rock formation to be done as per city ordinances or laws governing such cases. Contractors must state in their bids the extra amount per cubic yard to be paid for excavations in ledge rock, — this price to include ‘line drilling.’

“Any and all loose rock or other loose matter encountered must be removed without extra charge.”

The amended first count further averred that plaintiff commenced excavating for the building in question April 30, 1930; that the foundation for the building described in the contract was generally known as a “spread footing,” which in buildings of this kind generally does not exceed the depth of 20 feet below the surface of the ground, and that the foundation for this particular structure did not exceed the depth of 20 feet; that in excavating for spread footing foundations quicksands are not generally encountered in the ground between the depth of 20 to 30 feet, and persons contracting for the erection of buildings such as the one called for in the agreement have knowledge that quicksands are not encountered, and that the contract prices for the erection of such buildings are fixed upon the assumption that no quicksand will be encountered; that when the parties entered into the agreement herein they did not contemplate that any quicksand would be encountered, in arriving at the contract price of $48,648; that the words, “all existing soil conditions and formations,” contained in the specifications, when applied to buildings such as the one described in this agreement, did not and do not, by general custom and usage, include quicksand.

It is further alleged that the specifications contained, among others, the following provisions:

“Wherever the words ‘Supervisor of Construction Division’ are used it refers to the delegated representative of the Owner who will supervise, and have full control of the award of contracts and of the construction work in the field.

“Wherever the words ‘Division Superintendent’ are used it refers to the delegated representative of the Supervisor of the Construction Division who will be in charge of field construction in a certain geographical subdivision of the territory in which building operations are to be conducted. The Division Superintendent shall have power to decide all matters coming up in connection with the field construction in his territory, subject, however, to the approval of the Supervisor of the Construction Division.

“Wherever the words ‘Job Superintendent’ are used it refers to the representative of the Supervisor of the Construction Division who is in direct charge .of the work at the site. He shall have power to decide all matters coming up, subject, however, to the approval of the Division Superintendent.”

It is averred that when plaintiff commenced the work for the erection of the building in question, defendant had on the job a representative designated as “Job Superintendent”; that for several years preceding the execution of the agreement, the parties herein had entered into numerous contracts for the erection of buildings; that during the course of the execution of the work under these prior contracts disputes arose from time to time as to whether certain work was or was not covered by the contracts, and when such disputes arose the job superintendent authorized plaintiff to proceed with the additional or disputed work under a promise to pay therefor, and plaintiff, relying upon such order and promise of the job superintendent, proceeded with the work and was paid therefor by defendant pursuant to a. practice and course of dealing adopted by the parties herein.

It is further alleged that about May 17, 1930, plaintiff commenced excavating for a spread footing foundation for the building in question, and while so engaged encountered quicksand, which hindered and delayed him in and about his work, necessitating the expenditure of an additional $4,538, over and above the sum contemplated by the parties in their contract; that plaintiff then called to the attention of the job superintendent the fact that plaintiff was not obligated under his contract to pay any additional money necessitated by the encountering of the quicksand; that the job superintendent, acting under his powers and with the approval of the division superintendent, thereupon ordered and directed plaintiff to proceed with the work and promised to pay plaintiff the sum of $4,538 in addition to the contract price; that plaintiff, relying upon practice theretofore established between the parties, and upon the order of the job superintendent and his promise to pay, proceeded with the work and completed the building; that defendant accepted the building from plaintiff as completed, with full knowledge of the order and promise made by the job superintendent and knowing* that plaintiff was relying upon the order and promise of the job superintendent to supply the additional work under the oral promise made.

In conclusion, it is averred that upon completion of the building plaintiff demanded the additional sum of $4,538, which defendant refused and still refuses to pay, wherefor plaintiff brings suit for the recovery thereof together with interest at the rate of six per cent per annum since July 26, 1930.

It is urged on behalf of plaintiff that he is entitled to recover the additional costs incurred by him and necessitated by a condition which neither party contemplated at the time the contract was made, because (1) the demurrer admits all the allegations well pleaded in the declaration; (2) defendant’s promise to pay was based on a sufficient consideration; (3) that since the parties had established a course of dealing between them, their practices in the past may be resorted to in order to determine whether plaintiff is entitled to recover; and (4) that defendant accepted plaintiff’s work and was therefore bound to pay therefor.

Plaintiff argues that by its demurrer defendant admitted that quicksand in the particular locality on which this building was to be erected is not encountered at a depth of 20 to 30 feet; that it was not necessary to dig deeper than 20 feet in excavating for the foundation of the building in this case; that the defendant had knowledge of the same and acted thereon; that the contract price was based on such knowledge and that quicksand was not within the contemplation of the parties when the contract price was fixed.

It may be conceded that a demurrer admits all facts well pleaded, but from this it does not follow that by its demurrer defendant has admitted that quicksand did not come within the provisions of the contract. The pertinent allegations contained in the declaration as to the provisions of the contract involved are as follows:

“That the foundation for the building described in said contract was generally known as a spread footing’; that a spread footing foundation for buildings of the kind called for in said contract generally does not exceed the depth of twenty (20) feet below the surface of the ground and that the depth of the foundation for the building erected by the plaintiff, described in said contract, did not exceed the depth of twenty (20) feet.

“That in excavating for spread footing foundations .for buildings as to one called for in said contract, quicksands are not generally encountered in the ground between the depth of twenty (20) to thirty (30) feet and that persons contracting for the erection of buildings as the one described in the contract, calling for spread footing foundations, have knowledge that quicksands are not encountered and that the contract price for the erection of said buildings is agreed upon without reference to encountering any quicksand in the excavation for such foundations.

“That the parties hereto, in entering into said contract, of April 30, 1930, for the erection of said building, did not take into consideration that quicksand may be encountered in the excavating for the foundation of said building and that the contract price of Forty-Eight Thousand Six Hundred Forty-Eight Dollars ($48,648) was agreed upon without reference to encountering quicksand on said premises.

“That the words, ‘all existing soil conditions and formations,’ contained in said specifications, when applied to buildings as the one described in said contract, did not, and does not, by general custom and usage, include quicksand, which general custom and usage was in existence at the time said contract was entered into and known to the parties hereto.”

By its demurrer defendant did not admit the truth of these allegations. Some of them were clearly inferences from the facts pleaded, which are not admitted (Arenz v. Weir, 89 Ill. 25), and others were conclusions of fact and law. All that defendant admitted by its demurrer was the making of the contract and specifications and that quicksand was encountered by plaintiff in laying the foundation, but the averments that “In excavating for spread footing foundations for buildings as the one called for in said contract, quicksands are not generally encountered in the ground between the depth of twenty (20) to thirty (30) feet and that persons contracting for the erection of buildings as the one described in the contract, calling for spread footing foundations, have knowledge that quicksands are not encountered, and that the contract price for the erection of said buildings is agreed upon without reference to encountering any quicksand in the excavation for such foundations,” are mere conclusions of the pleader, and are not admitted by the demurrer. (Marcovitz v. Hergenrether, 302 Ill. 162; Big Creek Coal Co. v. Tanner, 303 Ill. 297.) Moreover, the agreement and specifications are by reference made a part of the declaration, and therefore control the allegations thereof. It was so held in Keller v. Reed, 347 Ill. 645, which involved a bill praying for the specific performance of a written agreement for the sale of realty. A demurrer to the bill was overruled, and in discussing the question under consideration the Supreme Court said:

“While the demurrer here filed admitted facts well pleaded it did not admit the conclusions of defendant in error or his interpretation of or construction placed upon the alleged contract of sale. The bill was based upon the alleged contract of sale, which, as an exhibit, was made a part thereof by reference. It controls the allegations of the bill. (Armstrong v. Building Ass’n, 176 Ill. 298; Forster v. Brown Hoisting Machinery Co., 266 id. 287; Price v. Solberg, 269 id. 459; Big Creek Coal Co. v. Tanner, 303 id. 297; Mitzlaff v. Midland Lumber Co., 338 id. 575.) . . .”

We think it follows that since the specifications provided that the general figures and price for the work were to be based on “any and all existing soil conditions and formations, except ledge' rock,” and that “any and all loose rock or other loose matter encountered must be removed without extra charge,” that quicksand, as well as any other or all existing soil conditions were within the contemplation of the parties when the contract was made. The one exception to the general language employed relates to ledge rock formations, and special provisions are included in the contract to cover that contingency. Under the circumstances we think the demurrer did not admit that quicksand Was not within the contemplation of the parties, but on the contrary that it was covered under the general provisions of the specifications hereinbefore set forth.

The sufficiency of the allegation that the job superintendent, with the approval of the division superintendent, ordered and directed plaintiff to proceed with the work and promised to pay plaintiff the additional sum of $4,538 therefor, when tested by demurrer, admitted that the job superintendent gave the order and made the promise to pay, with the approval of the division superintendent, but under the second paragraph of the specifications hereinbefore set forth it is provided that:

“The Division Superintendent shall have power to decide all matters coming up in connection with the field construction in his territory, subject, however, to the approval of the Supervisor of the Construction Division.”

Therefore, it seems that under the express agreement of the parties the division superintendent could not render such an order or make a promise to pay, as alleged, without the approval of the supervisor of the construction division, and it is nowhere alleged in the amended first count that the supervisor of the construction division gave his consent or approval to pay the additional sum claimed. Defendant would not be bound by the action of the job superintendent even though it had the approval of the division superintendent.

The principal controversy between the parties arises out of the question whether the alleged promise to pay the additional $4,538 is supported by a good and sufficient consideration, and the major portion of both briefs is devoted to a discussion of that question. Plaintiff relies principally upon several citations from other States and three Illinois decisions, viz., Bishop v. Busse, 69 Ill. 403; Cooke v. Murphy, 70 Ill. 96, and the recent case of Great Lakes Dredge & Dock Co. v. City of Chicago, 353 Ill. 614. In Bishop v. Busse, plaintiff was employed under a special verbal agreement to furnish materials and erect a building. Finding himself unable to perform his contract without considerable loss, owing to a rise in prices, he informed defendant that he would not comply with the contract, whereupon defendant directed him to complete the work and promised to pay him ‘ what was right” for it. The court held that the mutual promises of the parties were sufficient to support the new agreement and constituted a sufficient consideration therefor. In Cooke v. Murphy, plaintiff, who was engaged to furnish materials and perform work in the erection of a building, claimed that he had made a mistake of $500 in the contract price and refused to complete the contract, whereupon defendants agreed to pay the $500 in addition to the original contract price. The court held that the new and supplemental agreement to pay the additional sum was not without consideration, but was valid and binding.

These two cases are frequently quoted in later Illinois decisions. One of these is Moran v. Peace, 72 Ill. App. 135, which involved a building contract covering the prices of masonry. Plaintiff, a contractor, presented his bill which defendant paid after making a deduction because of a claimed violation of the terms of the contract.' Plaintiff brought suit and upon hearing was permitted to show that after the contract was made and the work thereunder had progressed for some time, there was a verbal agreement between the parties that there should be no deduction from the contract price. In reversing the judgment the court said that the verbal agreement was void for lack of consideration, since Peace was bound by his contract to furnish the stone independent of any agreement on the part of Moran that his estimates should be paid without deduction, and citing numerous cases to support the conclusion that “It is no consideration that one promises to do what he is already under a legal obligation to do.”

In commenting on Bishop v. Busse, supra, the court said (p. 139):

“What was said by the Supreme Court in the case of Bishop v. Busse, 69 Ill. 403, to the effect that an agreement between an owner and a contractor changing the amount to be paid for building a house under a written contract previously made, was based on a good consideration, where the contractor having stopped work and declined to complete his contract previously made, agreed, if owner would pay an increased price that he Avould then proceed with his work, must be considered as in conflict with the later, as ivell as previous decisions of the same court, and therefore overruled by the later cases above cited.” (Italics ours.)

In Postell v. Joseph Bros. Lumber Co., 240 Ill. App. 384, the court, in discussing the question under consideration, said (pp. 391, 392):

“So far as the law in Illinois is concerned this question has arisen in a number of other cases in which the element of some unforeseen difficulty, arising to make performance of the contract more burdensome, has not been involved, and the rule laid down in these cases has been the opposite of that announced in Bishop v. Busse and Cooke v. Murphy, supra; Loach v. Farnum, 90 Ill. 368; Phoenix Ins. Co. v. Rink, 110 Ill. 538; Havana Press Drill Co. v. Ashurst, 148 Ill. 115, 136; Davidson v. Burke, 143 Ill. 139; Goldsborough v. Gable, 140 Ill. 269; Nelson v. Pickwick Associated Co., 30 Ill. App. 333; Moran v. Peace, 72 Ill. App. 135; Reeves Pulley Co. v. Jewell Belting Co., 102 Ill. App. 375; Strange v. Carrington, Patton & Co., 116 Ill. App. 410.

“The foregoing cases all follow the rule that it is no consideration for one to promise to do what he is already under legal obligation to do.” To support this conclusion the court then quoted the foregoing excerpt from Moran v. Peace, supra.

In Board of Education v. Barracks, 235 Ill. App. 35, Schwartz, a contractor, had submitted a bid for the erection of a school building, which was accepted. After commencing work, he found that due to war conditions prices had arisen, and he decided to abandon the completion of the structure unless the board would pay the additional cost. The board so agreed, and issued warrants for the extra amount. One of the warrants was paid and suit was brought by taxpayers to restrain further payments. An injunction was issued, and the decree was affirmed on appeal. After quoting from Bishop v. Busse and Cook v. Murphy, supra, the court said (p. 44):

“These cases do not support the doctrine that a party to a contract may in any and every case terminate the contract and enter into a new and modified agreement for an added consideration hut that they may do so only in those cases where some benefit or advantage is to accrue to the other party, by reason of such modification of the agreement. The benefit or advantage to the other party is not to be presumed in every case. The true rule is that, ‘the consideration required to support a new agreement by the parties to an old one, by which they modify, in one or more particulars, their former contract or replace it with a substitute, must be reciprocal. Each party must gain something by the change. If the benefit is unilateral, a consideration is lacking, for it is widely recognized and a well-established legal principle that doing or undertaking to do only that which one is already under a legal obligation to do by his contract is no consideration for another’s agreement.’ Russell v. Lambert, 14 Idaho 284, L. R. A. 1915 B 37; McKinley v. Watkins, 13 Ill. 140; Barnett v. Barnes, 73 Ill. 216; Loach v. Farnum, 90 Ill. 368; Goldsborough v. Gable, 140 Ill. 269.”

In Strange v. Carrington, Patton & Co., 116 Ill. App. 410, plaintiff brought an action to recover damages for the breach of a contract to sell and deliver corn and oats. After the contract had been made defendant sought from plaintiff’s agent a discount of $2,000 before delivery, claiming that he had been promised the money. In discussing the promise the court reaffirmed the well established principle that an agreement to perform an obligation already binding, cannot form a consideration for an undertaking .by the other party to perform another act, and cited numerous cases, including some of those relied upon by defendant herein. In referring to the Bishop v. Busse and Cooke v. Murphy cases, the court said (pp. 412, 413):

“If the cases cited cannot be said to have been overruled by,- or to be in conflict with, the other cases above mentioned, the facts in the cases upon which the holdings were predicated, were different from the facts in the case at bar, and the cases are readily distinguishable. In one of those cases there was an abandonment of the work by the party bound to perform, and in the other, an absolute refusal to perform, whereby the original contracts were held to have been terminated and the new agreements substituted, and in both cases the conditions had changed, whereby additional work was required to be performed.”

From these later decisions it clearly appears that the reviewing courts of this State have not followed the doctrine laid down in Bishop v. Busse, and Cooke v. Murphy, supra, and have either distinguished them from the facts in later cases or held them to be in conflict with the more recent decisions. Various authorities in other jurisdictions are also relied upon by plaintiff. From a careful examination of these decisions we find that in almost every instance there was either a complete rescission and abandonment of the contract by plaintiff or a threatened abandonment which induced the new promise. In both Bishop v. Busse and Cooke v. Murphy, plaintiff notified defendant that he would not comply with the original undertaking which preceded the new promise. Even under circumstances where there has been an actual or threatened abandonment the decisions are divergent. Some States hold the new promise to pay the demand binding, though there be no rescission, bub the current weight of authority in Illinois, as shown by the decisions hereinbefore cited and discussed, is otherwise. Of course, where there is a complete rescission, and the relationship of the parties is terminated, leaving them entirely free from the earlier contract, a subsequent agreement would be good. But no such circumstances are disclosed by plaintiff’s declaration herein; not even a threatened abandonment is alleged; there is merely the allegation of a promise to pay the additional amount required to meet an unexpected condition, and none of the cases cited by plaintiff go so far as to hold that such a promise is anything more than a mere nudum pactum. The conclusion here reached is supported by Schwartzreich v. Bauman-Basch, Inc., 231 N. Y. 196, wherein the court, in commenting on the case of Abbott v. Doane, 163 Mass. 433, says:

“The almost universal rule is that without any express rescission of the old contract, the promise is made simply for additional compensation, making the new promise a mere nudum pactum.”

The only other case cited by plaintiff, upon which considerable reliance is placed, is Great Lakes Dredge & Dock Co. v. City of Chicago, 353 Ill. 614. The City of Chicago had there adopted an ordinance for straightening of the lower branch of the Chicago river, and the commissioner of public works was empowered to enter into contracts for the work and to supervise same. He entered into an agreement with plaintiff which provided in effect that if it should become proper or necessary to make any alterations which would increase the expenses, the commissioner should report to the city council the nature of such alterations and his estimate of the amount by which the expenses would be thereby increased, and that no payments should be made to the contractor for any additional sum unless such changes, requiring additional outlay, should first have been especially authorized by the city council and ordered in writing by the commissioner of public works. Nevertheless the Supreme Court approved the recovery of $150,000 for additional work, but evidently not upon the theory for which plaintiff contends. Due to the fact that the high water was about four feet above the flow line, the contractor found it impossible to continue the work, and after something-over $20,000 had been expended in an effort to cope with the high water conditions, the contractor called the commissioner’s attention to the situation and requested an extension of time within which to complete the contract, hoping in the meantime that the water would recede. The commissioner thereupon directed plaintiff to incur the additional expense necessary to perform the contract within the time limit, but no authorization therefor was obtained by the city council. It was admitted that the circumstances which necessitated the extra expense had not been contemplated by the contract, and the court held that the payments for additional material and labor were specifically authorized under the agreement. The court also justified the additional expense upon the theory of estoppel, saying- that after it had accepted the benefits of the work the city could not deny that its agent, the commissioner, was without power to make the contract. There is nothing in that decision, however, which lends support to the legal theory of consideration advanced by plaintiff, nor do we find any cases which would justify us in holding that there was a sufficient consideration for the new promise under the allegations of the declaration herein. We therefore hold that the alleged promise to pay the additional sum of $4,538 was without consideration and unenforceable.

The other contentions advanced by plaintiff are without merit. One is that under the established course of dealing between the parties, practices in the past may be resorted to in order to determine whether plaintiff was entitled to recover. Since there is no showing that the prior contracts relied upon contained the same provisions as does the one under consideration, this contention is untenable. Whatever other dealings may have been pursued in the past as regards other structures would not necessarily have any connection with this transaction. The' contract between the parties was specific, and under seal, and it would be contrary to the established rule of law in this State to permit the terms of such an agreement to be affected by parol evidence of other transactions, allegations concerning which are at best vague and uncertain. The last point, namely, that acceptance of the work by defendant creates a liability on its part to pay the additional compensation, is not supported by Great Lakes Dredge & Dock Co. v. City of Chicago, supra, as plaintiff contends, because, there, unlike the circumstances of this case, claim for the additional amount had not been contemplated by the original undertaking between plaintiff and the City of Chicago, and mere acceptance of the work by defendant would not create an obligation to pay the additional sum unless there was a sufficient consideration for the new promise.

For the reasons stated herein, we are of the opinion that the demurrer to the amended count one of plaintiff’s declaration was properly sustained, and the judgment of the circuit court is therefore affirmed.

Affirmed.

& AULAS", P. J., and Sullivan, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    The First National Bank of Chicago, Appellant, v. Aladdin Industries, Inc., Appellee.
    Gen. No. 38,175.
    Opinion filed February 11, 1936.
    Burry, Johnstone, Peters & Dixon, of Chicago, for appellant; John W. Kearns and Frank B. Gilmer, both of Chicago, of counsel.
    Benjamin Levering and Elmer H. Heitmann, both of Chicago, for appellee.
   Mr. Justice Friend

delivered the opinion of the court.

Plaintiff sued to recover $1,500 attorneys’ fees alleged to be due under the terms of a trust indenture. Trial was had by jury, resulting in a verdict and judgment for defendant, from which this appeal is prosecuted. The principal question involved is whether the evidence offered by defendant was sufficient, when questioned by a motion for judgment notwithstanding the verdict, to establish a plea of accord and satisfaction interposed by defendant to avoid liability for the attorneys’ fees claimed.

The essential facts disclose that in July, 1929, defendant, being in need of funds to carry on its business, arranged to borrow $200,000 by the issuance of that amount of debentures under a trust indenture designating plaintiff as trustee and distributed by the First Trust & Savings Bank for a commission of $5,500. The debentures matured in five different series, all of which were paid at maturity except, the last, for $50,000, which became due July 1, 1932. When they matured, defendant paid the interest due thereon but did not pay the principal.

In the latter part of June, 1932, Victor S. Johnson, president of defendant corporation, called on Mr. . G-rinnell of the First National Bank of Chicago with a check for the interest then due on the $50,000 debentures, and told him that defendant was not in position to pay the principal at that time but would do -so as early ^s possible, probably not later than the ensuing fall. Grinnell accepted the check, and said: “Well, that is a lot better than most of them are doing. I don’t think we are g’oing to have any trouble.” Several days later Mr. Porter of the plaintiff bank asked Johnson when defendant would be able to do something on the principal, and stated that the debenture holders would probably come in to see him (Porter), and requested Johnson to write a letter to show any debenture holder who might make inquiry. Johnson acquiesced, and defendant’s treasurer wrote a letter to the First Union Trust & Savings Bank, dated July 5, 1932, stating in substance that defendant had ample funds with which it could liquidate the balance of the principal due but that on account of economic conditions, a large amount of its money was tied up in foreign subsidiaries which could not be released on account of the prohibitive rates of exchange, which would penalize defendant to the extent of upward of 35 per cent. The letter stated that in Australia alone defendant had upward of $60,000 due from its subsidiary in funds that were invested in government bonds and cash in the bank; that these funds would be released as soon as the exchange became more favorable; that since the issuance of the debentures defendant had constructed an additional building at Alexandria and made improvements to its plant, costing in excess of $100,000, which was taken out of working capital and for which no financing was provided.

In September of 1932 plaintiff’s treasurer, Mr. Grlantz, Messrs. Johnson and Porter met by arrangement. Porter told Johnson that he was being pestered by debenture holders and that something would have to be done, to which Johnson replied that if plaintiff would “go along” with defendant, it would be able to meet its obligation by October 15th or perhaps at least the forepart of November, and Johnson then urged Porter to give him the names of the people who were causing trouble. Porter suggested that Johnson see G-rinnell of plaintiff bank. In compliance with the suggestion, Johnson and Glantz, together with Millar, defendant’s secretary, went to see G-rinnell September 13th and requested the names of the people who were bothering plaintiff. They volunteered to see these people and take up the twelve or fifteen thousand dollars worth of debentures held by those particular persons. Grinnell said he did not believe that could be done, but would consider the matter and let Millar know the following day and would do nothing before Friday, which would be September 16,1932. The names of the debenture holders requested were never given to defendant, but plaintiff filed suit on Tuesday, September 13, 1932, the same day that it had promised defendant to do nothing until Friday.

Thereafter a declaration was filed by plaintiff, on September 23, 1932, including a claim for the bonds, $1,500 attorneys’ fees and $600 trustee’s fee, to which defendant demurred. Plaintiff amended its declaration, and defendant again demurred to the amended pleading. That suit was never brought to trial, it having been dismissed by stipulation of the parties pursuant to settlement, which is the subject matter of this controversy.

October 31, 1932, Glantz and Millar of defendant company, with its counsel, Benjamin Levering, called on Grinnell at the bank and tendered $19.50 in cash, court costs, and $51,000 in payment of its obligations, except an item of $62.50 which defendant, as a part of the settlement, agreed to pay and did pay. The tender was made in consideration of the cancellation of the debentures. A conversation ensued between the parties, in which one of defendant’s representatives said: “We do not owe any attorneys’ fees, and we are not going to pay any attorneys’ fees”; defendant also stated that plaintiff’s suit was without force and effect, and abortive, and one of its representatives said to Grinnell, “Don’t forget. You can take that or leave it. That is all you will ever get. If you take it you will take it in full settlement of everything that - may be due. ’ ’ There is, of course, a dispute as to the conversation had at the time plaintiff accepted the tender, conditionally made, of $19.50 in cash and defendant’s check for $51,000. The bill for cancellation, amounting to $62.50, was paid, and the suit then pending, claiming the amount due on the bonds, attorneys’ fees and trustee’s fees, was dismissed by stipulation of the parties.

Following this settlement, plaintiff instituted this proceeding, seeking to recover from defendant attorneys’ fees claimed to be due under the terms of the trust indenture, which provided in substance that plaintiff should be entitled to advice of counsel and authorized reasonable compensation for that purpose. Defendant filed six pleas to the declaration, one being the general issue and five special pleas, the third of which was a plea of accord and satisfaction, The gravamen of the controversy between the parties arises out of that plea. Plaintiff takes the position that this defense cannot succeed unless at the time defendant made the lesser payment, consisting of all items except attorneys’ and trustee’s fees, “a good faith dispute existed”; that no such dispute could exist in the present case, even as to attorneys’ fees, which defendant had agreed to pay under the express terms of the trust indenture, unless the fees were unreasonable; and that since defendant had stipulated as to the reasonableness of the fees claimed the only possible basis for its alleged accord and satisfaction was eliminated from the case. In other words, they say that since-the trust indenture provided for'the payment of fees and no question was raised by defendant as to the reasonableness of the fees, the good faith dispute required by the authorities was absent and the plea of accord and satisfaction could not prevail.

Upon this question the court charged the jury as . follows:

“The court instructs the jury that if you find from the evidence in this case that there was a dispute in good faith between the First Union Trust and Savings Bank, the plaintiff, and Aladdin Industries, Incorporated, the defendant, as to, the amount justly due from the Aladdin Industries, Incorporated, to the First Union Trust and Savings Bank under their agreement and the defendant, the Aladdin Industries, Incorporated, throug'h its agent, tendered to the First Union Trust and Savings Bank, a certain amount of money which money was offered with notice to First Union Trust and Saving's Bank that the said money could only be accepted as a full and complete satisfaction of all of plaintiff’s claim against the defendant under their contract which is in evidence in this case, and if you further find that the First Union Trust and Savings Bank fully understood that said amount was so offered and conditioned on defendant’s part and was accepted, with or without protest, and retained, you will find an accord and satisfaction occurred and the issues for the defendant. You should bring to the consideration of the evidence before you, your every day common sense, and judgment as reasonable men, and those just and reasonable inferences and deductions which you, as men, would ordinarily draw from the facts and circumstances proved in this case, you should draw and act upon as jurors under the law as given to you in this charge. The court instructs the jury that a stipulation between the parties to a lawsuit that said suit be dismissed without costs means that the parties to said lawsuit agree that said suit may be dismissed without payment by either of said parties to the other of any statutory costs, such as court costs theretofore paid by either of said parties to the clerk of the court in which the suit was brought, and the word, ‘costs’ when so used does not mean attorney’s fees. The defense, which has been referred to as an accord and satisfaction, and the elements of which are elsewhere defined in these instructions, is an affirmative defense and must be proven by the defendant by the preponderance or greater weight of the evidence. The reasonableness of the amount of attorney’s fees has been admitted by the defendant and is not an issue in this case so if you find from the evidence and the instructions that your verdict should be for the plaintiff vou shall assess the plaintiff’s damages at the sum of $1,500.”

Plaintiff contends that there .was no issue of fact to submit to the jury because there was no valid dispute, but from an examination of the record we are impelled to differ with this conclusion. It must be conceded, of course, that section 1 of article 4 of the trust indenture provided that plaintiff should be entitled to advice of counsel in all matters concerning the trust and was authorized in all cases to pay such reasonable compensation as it might deem proper to its attorneys. Nevertheless, plaintiff could forego the benefits of this provision if it chose to do so, and it was therefore a question of fact whether they did forego benefits thus stipulated in the written agreement when they accepted defendant’s tender (October 31, .1932). When the tender was made on the latter date defendant took the position that it did not owe attorneys’ fees, and its representative stated that they did not intend to pay such fees, and that plaintiff could “take that or leave it. That is all you will ever get. If you take it you take it in full settlement of everything* that may be due.” Whether or not this conversation took place was a question of fact for the jury, and if the jury believed that plaintiff accepted $51,000, plus the other items tendered, in the light of these statements, it was proper for them, under the instructions of the court, to conclude that plaintiff was then willing to forego any right to attorneys’ fees authorized by the trust indenture.

Defendant takes the position that plaintiff violated its promise to delay bringing suit; and that if a delay until Friday, September 16, 1932, had been allowed, as promised, some satisfactory arrangement for payment might have been made in the interim which would have obviated the necessity for suit and the consequent charge for attorneys’ fees, and they say these circumstances gave rise to the subsequent dispute as to whether or not plaintiff was entitled to fees. It is also urged that plaintiff, from the time of the maturity of the $50,000 debentures, on July 1, 1932, until the very day the suit was commenced, September 13, 1932, led the defendant to believe and to act as though no suit with its attendant costs would be commenced without notice, and that the commencement of the suit was a manifestation of bad faith under the circumstances, and unnecessary, since the parties had not concluded their negotiations. In the suit which was dismissed by stipulation, pursuant to the settlement of the parties, plaintiff claimed not only the principal of the debentures and interest, but also the following items: $500 — ■ expenses for its officers; $1,500 — attorneys’ fees; $600 — compensation of plaintiff for services as trustee. All of these items were disputed at the time of the settlement, and demurrers to plaintiff’s amended declaration were then pending, and undisposed of. By stipulating to dismiss the suit, defendant waived any defense that it might have to plaintiff’s claim, not only for the principal and interest of the debentures but also for the various other items claimed.

Defendant’s counsel does not take issue with the propositions of law advanced by plaintiff, namely, that in order to prevail under a plea of accord and satis-' faction a good faith dispute must exist, but they say that there was a good faith dispute which was properly submitted to the jury under instructions that are not questioned. After careful consideration of the evidence, we think that the evidence offered by defendant was sufficient, when questioned by plaintiff’s motion for judgment notwithstanding the verdict, to require the determination of a jury. In Teague v. John E. Burns Lumber Co., 187 Ill. App. 225, one of the cases cited by plaintiff, suit was brought on an alleged indebtedness arising out of a sale of lumber by plaintiff’s assignor to defendant. Plea of accord and satisfaction was ’ interposed. The case was submitted to the jury, resulting in a verdict and judgment for plaintiff. Defendant, who appealed, asserted that the court should have given the jury a peremptory instruction. The Appellate Court affirmed the doctrine that where there is a bona fide dispute between a debtor and creditor as to a portion of the claim made by the creditor, and the debtor sends to the creditor payment of the sum he admits to be due, with the express or implied condition that it is to be accepted as payment in full or returned, there is an accord and satisfaction if the creditor retains it, and that the creditor cannot thereafter recover the balance claimed to be due. In discussing the question, the court said (p. 228):

“The questions here, however, are narrower, ahd are only, in effect, first, the general one whether a jury may, as a part of their duty, properly decide whether in any particular case there is a bona fide dispute, under instructions of the court leaving that matter to them. ... To the first of these questions our answer is affirmative. Although we do not find in the decisions in our own State any directly in point, we think, in reason, that the existence of bona fides in the dispute on the part of the debtor in such cases is a question of fact, and as such belongs to the jury to decide.”

For the reasons stated herein, the judgment of the' superior court should be affirmed, and it is so ordered.

Affirmed.

Soanlan, P. J., and Sullivan, J., concur.


author: Mr. Justice John J. Sullivan

text:
    Paramount Pictures Distributing Corporation, Appellant, v. Jean T. Gehring and George Gehring, Appellees.
    Gen. No. 38,117.

      Opinion filed February 11, 1936.
    Spitz & Adcock, of Chicago, for appellant; Eli E. Fink, of Chicago, of counsel.
    M. A. Reinstein, of Chicago, for appellee; Son. R. Malkin, of Chicago, of counsel.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

February 8,1934, plaintiff, Paramount Pictures Distributing Corporation, which is engaged in the business of leasing motion picture films to exhibitors or operators of motion picture theatres, brought an action against Jean T. Gehring and George Gehring, alleged owners and operators of the Rosewood Theatre fin Chicag’o, for damages resulting from defendants’ alleged breach of three motion picture film contracts. Upon the jury’s verdict, finding the issues ag’ainst plaintiff, the trial court entered judgment. Plaintiff charged in the second count of its statement of claim and it sought to prove that the defendants were partners in the business of operating the Rosewood Theatre, but now states that, inasmuch as the evidence on the issue of their partnership was conflicting, it has concluded not to question the judgment of the trial court in favor of the defendant George Gehring and prosecutes this appeal solely from the judgment rendered in favor of Jean T. Gehring (hereinafter referred to as the defendant) on the cause of action against her alone as set forth in the first count of its statement of claim.

The undisputed evidence shows that on December 6,: 1933, Jean T. Gehring signed three applications, which j constituted offers to enter into three different and = separate motion picture contracts with plaintiff for I the 1934 season. Each application contained the fol- s lowing provision:

Acceptance of Application — Seventeenth: This instrument shall be deemed an application for a license , under copyright only and shall not become binding I until accepted in writing without alteration or change / by an officer of or any person duly authorized by the Distributor and notice of acceptance sent to the Exhibitor as herein provided. . . . Unless notice of acceptance of this application by the Distributor is sent to the Exhibitor by mail or telegraph within fifteen (15) days after the date thereof, . . . said application shall be deemed to have been withdrawn. ’ ’

One application was for 53 feature length pictures at a total rental of $2,405, the second called for 96 short length pictures at a total rental of $408 and the third was for 52 news reel pictures at a total rental of $260, amounting in the aggregate to a rental of $3,073.

. December 20, 1933, at JU38 p. m., plaintiff delivered to the Western Union Telegraph' Company the following telegram accepting defendant’s three applica- ,■ tions:

“December 20, 1933.

“Mrs. J..Gehring,

'Rosewood Theatre,

1823 Montrose Avenue,

Chicago, Illinois.

“Contracts dated December sixth nineteen thirty three covering Paramount Feature News and Shorts for the year nineteen thirty three thirty four but excepting Marx Brothers production which must be passed upon separately by their representative are hereby approved.

,r “E. J. Barnard,

' Paramount Picture Distributing Corp.”

On the same day, George Gehring, husband of the defendant, Jean T. Gehring, entered an office of the Western Union Telegraph Company about 2:30 p. m., and sometime between then and 2:48 p. m. delivered to said Western Union Telegraph Company the following telegram seeking to revoke defendant’s three applications :

“Paramount Pictures Corporation',

1306 South Michigan Avenue,

Chicago, Illinois.

“The time of the day is now 2:45 P. M. 12/20/33. As we have not received our approval on our application for contract dated December 6, 1933, herewith please accept our cancellation for contract of same.

“J. T. Gehring, Rosewood Theatre.”

Although the record is silent as to the exact tW the addressees received the respective telegrams, appears that they were both received later the sar. afternoon and that plaintiff received defendant’s telegram of revocation sometime after its telegram of acceptance of the offers contained in defendant’s three applications was delivered to the telegraph company. Within five days thereafter plaintiff tendered performanee, insisting that valid contracts had been entered into and demanding performance by the defendant, . who declared that no contracts had been made and ¡ definitely disclaimed and repudiated all responsibility, ] claiming that she had revoked her offers for the rental [ of plaintiff’s films before they were accepted.

The only disputed question of fact in the case was as to the time defendant’s telegram of revocation was delivered to the telegraph company. George Gehring testified that he entered the office of the telegraph company at exactly 2:30 p. m. on December 20, 1933, with the body of the telegram written on a piece of paper, but unsigned and without the name and address of any addressee. It appears that some conversation ensued' between him and the young lady employee of the Western Union Company and that before she filed the message for sending she pasted the paper containing the message on a company message form, the message was signed, the addressee’s name and address were inserted by her, the figures “2:30” p. m., in the original draft of the message presented to her by Gehring were changed to “2:45” p. m., either at Gehring’s direction or with his consent, and that the message was finally filed for sending at 2:48 p. m. Miss Russell, the telegraph company’s employee, made the following written report of the occurrence to the superintendent of her employer on January 5,1934:

“Mr. Gehring brought message in shortly after 2:30 as he had it written on piece of paper with no name to address or signature. He gave me the message and then said ‘Let me see that again’ and stood and talked with me awhile. He then paid me for the message and looked at the clock and then said, ‘You’d better make that time on there 2:45 instead of 2:30 P. ’ This I did. I immediately timed the message (it was 2:48 then) and sent it at 2:50 P.”

/ Defendant argues that the evidence showed that her telegram of revocation was delivered to the telegraph company before plaintiff’s telegram of acceptance. While it is immaterial, as will hereafter be shown, which telegram was delivered to the telegraph company first, we have set forth the above evidence to show that even on this question the evidence is conclusive that plaintiff’s telegram of acceptance was delivered to the telegraph company before defendants ~~feiegram of revocation.

Plaintiff contends that legal and binding contracts were entered into between it and defendant when its wire of acceptance was delivered to the telegraph companjr at 2:38 p. m., December 20, 1933, and that, regardless of the time that defendant’s telegram of revocation was delivered to the telegraph company, it is clearly the law that an offerer’s wire of-revocation is not effective until received by the offeree.

Defendant’s theory is that no contracts were entered into by the parties inasmuch as the offers contained in her application were revoked before accepted by plaintiff; that plaintiff’s acceptance was qualified and therefore required further approval by defendant ; that the stipulation in the applications as to the damages for the breach of the contracts provided for a penalty and not liquidated damages; and that the burden was upon plaintiff to show that it suffered actual damages, which it failed to do.

E'here is no more well established rule in the law of tracts than that an acceptance sent by an author-l mode of communication takes effect and the contract is made when the message of acceptance is deposited by the offeree for delivery to the offerer.

The contract is complete on delivery of the message of acceptance to the telegraph company. (Clark on j Contracts, p. 34.) A contract by telegram may be com- * pleted by delivering a telegraphic despatch of acceptance for transmission at the receiving office of the telegraph company. (Williston on Contracts, p. 144, sec. 82.) The contract is concluded when an acceptance of a proposition is deposited in the telegraph office for transmission. (Note in 47 A. L. It. 159.) Where a person makes an offer and requires or. authorizes the offeree, either expressly or impliedly, to send an answer by post or telegram and the answer is duly posted or telegraphed, the acceptance is communicated and the contract is complete from the moment the letter is mailed or the telegram sent. (13 C. J. 300.) A con- l tract becomes complete at the time the acceptance is delivered to the telegraph company without regard to the time the telegram is actually received. (Elliott on Contracts, p. 55; Fox v. Turner, 1 Ill. App. 153; Cobb v. Foree, 38 Ill. App. 255; Bay State Milling Co. v. Barth, 135 Ill. App. 539; Ziehme v. McInerney, 167 Ill. App. 577; Sinaiko v. Illinois Smelting & Refining Co., 215 Ill. App. 108; Chytraus v. Smith, 141 Ill. 231; Wagner v. McClay, 306 Ill. 560.)

In discussing this question and the reason for the rule in Hallock v. Commercial Ins. Co., 26 N. J. L. 268, the court said, at p. 282: "

“There is in fact no difference between the acceptance of a proposition by word of mouth and a letter stating an acceptance. In the one case it is articulate sounds carried in the air, in the other, written signs carried by the mail or by telegraph. The vital question is, was the intention manifested by an overt act, not by what kind of messenger it was sent. The . bargain, if ever struck at all, must be eo instanti with such overt act. Mailing a letter containing’ an acceptance, or the instrument itself intended for the other party, is certainly such an act.”

In Cottingham v. National Mut. Church Ins. Co., 290 Ill. 26, our Supreme Court said, at p. 32:

“A contract is complete when an unqualified assent to the offer of one of the parties is dropped- in the post-office properly directed and stamped by the other party, unless the offer is so qualified as to require the actual receipt of the letter of acceptance before the agreement is complete.”

While it is urged in the instant case that the acceptance was qualified in that it excepted “Marx Brothers production” from the scope of the offers accepted, defendant’s argument in this regard is without force since her application covering the matter specified that the “Marx Brothers” and certain other films were to be treated and considered independently. The acceptance of the offers contained in the three applications was, in our opinion, absolutely unqualified and' the reference in plaintiff’s telegram to the “Marx Brothers production” had nothing’ whatever to do with its acceptance of defendant’s applications for the films which are the subject of the contracts in question.

Defendant insists that under the law she was entitled to personal notice of the acceptance of her offers. s The law is, however, to the contrary. She, of course, / had the right, if she had so desired, to specify in her | offers that their acceptance would not be binding upon j her until the actual receipt by her of notice of same. / This she did not do. In the absence of such a condition or specification the "law" as" "hereinbefore stated j applies. But defendant not only did not attach to her I offer any condition requiring the actual receipt of the acceptance by her before it would be effective to com-i píete the contract, but in her application she expressly authorized acceptance of same “by mail or telegraph within fifteen (15) days after the date thereof.” Her offers were made December 6, 1933, and, not having been previously revoked, they were accepted by plaintiff within 15 days, on December 20, 1933.

Predicated upon her claim that the evidence showed that her telegram of revocation was delivered to the telegraph company prior to plaintiff’s telegram of acceptance, defendant urges that the revocation of her offers was effective from the moment of its delivery to the telegraph company. It is almost universally set-tied that a revocation requires communication and that, therefore, an acceptance prior to a communicated j revocation will make a binding contract. (Williston > on Contracts, p. 56.) It is admitted that plaintiff had not received the telegram of revocation until after it had delivered its telegram of acceptance to the telegraph company. The authorities are abundant to the proposition that, when an offer is made and accepted by the posting of a letter of acceptance or by the delivery of a message of acceptance to a telegraph company before notice of the withdrawal of the offer is received, the contract is not impaired by the fact that the revocation had been mailed or telegraphed before the acceptance had been mailed or telegraphed. (Patrick v. Bowman, 149 U. S. 411.)

In Wagner v. McClay, supra, the defendants gave the plaintiffs an option to purchase certain coal and within the period of the option the plaintiffs mailed their acceptance. On the following day, but before they received the letter of acceptance, defendants visited plaintiffs and attempted to revoke the option. In this case, holding that the revocation is operative only from the time it is received, the court said, at pp. 563, 564:

“On the question of the sufficiency of the acceptance of the offer the authorities cited are to the effect that when a letter of acceptance is deposited in the mail, properly addressed and stamped, it will be considered that the acceptance is binding, while the revocation of an option contract only operates from the time it is received by the one to whom it is sent and has no legal effect prior to that time. (1 Elliott on Contracts, secs. 44, 34, and note on p. 53.) According to the testimony of plaintiffs in error they wrote defendants in error that the money was in the bank ready for them on the $2400 basis, and the next day McClay and his son James came in and said they did not want to stand by the $2400 contract.

“It is argued that as plaintiffs in error resided at some distance from the defendants in error it must have been understood that the acceptance might be sent by mail. ‘Where the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usages of mankind the post might be used as a means of communicating the acceptance, ’ acceptance by mail is implied and the contract is complete from the moment the letter is mailed. (13 Corpus Juris, sec. 116, p. 300.) We are of the opinion that the letter of acceptance was mailed before McClay revoked this offer.” .

On the undisputed facts in this case it was clearly the duty of the trial court to have allowed plaintiff’s motion made at the close of all the evidence to direct a verdict in its favor since, under the law, a conupl-ete valid contract existed and defendant had refused to perform same. This brings us to the question of damages.

In so far as we have been able to learn, the question of the .damages to be allowed in this character of case has not been heretofore presented to or determined by the Supreme or Appellate Courts of this State. We see no reason why the ordinary rules as to damages for the breach of contracts generally should not be applicable to the breach of motion picture contracts. The general rule is stated in 17 C. J., pp. 847, 848, as follows:

“The measure of damages in the case of a breach of contract is the amount which will compensate the injured person for the loss which a fulfillment of the contract would have prevented or the breach of it has entailed. In other words, the person injured is, so far as it is possible to do so by a monetary award, to be placed in the position he would have been in had the contract been performed. ’ ’

It is a matter of common knowledge that the production costs of making moving pictures are enormous and that the producer’s only method of reimbursing itself for such costs and realizing a profit, if possible, is by licensing the use of or renting the duplicate films of such pictures to exhibitors and operators of moving-picture theatres. It is, of course, apparent that the cost of making each picture remains the same regardless of how many theatres rent the films for exhibition. Plaintiff introduced evidence to the effect that it makes about 300 duplicate prints of each picture and endeavors to rent them to practically every theatre in the country, actually renting them to about 85 per cent of the theatres in Chicago; that there were four other theatres in the neighborhood of defendant’s theatre, all of which had theretofore entered into contracts with plaintiff for the rental of its pictures for the entire year of 1934; that there was no limit to the number of prints it always had available; and that it did not realize any rental from the films specified in the contracts which defendant refused to take and pay for.

If defendant had performed her contracts plaintiff would have been entitled to receive $3,073 as the total rent for its films, and we cannot perceive why her wrongful refusal to perform should absolve her from paying any less. It is only by the payment of that amount that plaintiff will be placed in the position it would have been in had the contracts been performed. We think that the leasing of a motion picture film is somewhat analogous to the leasing of an apartment. In either case the leasing contract calls for a specified rental, and in the one the distributing company and in the other the landlord is put to practically the same expense whether the film, in the first case, or the apartment, in the second, is used or not. In the case of the apartment, the rule is well established that a landlord’s damages consist of the rental stipulated in the lease and that he establishes his case to recover the lease rental in the event of the tenant’s breach by merely introducing the lease into evidence. (Resser v. Corwin, 72 Ill. App. 625; Hinde v. Madansky, 161 Ill. App. 216.)

Another situation which seems to us to be analogous is that of employment contracts where it is uniformly held that an employee’s damages for the breach of such a contract amount to the wages specified in his contract and that he establishes his prima facie case for the contract salary merely by alleging the nonpayment of the salary and introducing the employment contract into evidence. (Fuller v. Little, 61 Ill. 21; School Dist. No. 4 v. Stilley, 36 Ill. App. 133.)

Still another analogous situation arises in the case of advertising contracts where it has also been held that the prima facie measure of damages is the amount called for by the contract. (Phelps v. LaSalle Hotel Co., 209 Ill. App. 430; Ware Bros. Co. v. Cortland Cart & Carriage Co., 192 N. Y. 439.)

Only one case involving the leasing of motion picture films has been called to our attention. In that case, Metro-Goldwyn-Mayer Distributing Corp. v. Cooke (Tex. Civ. App.), 56 S. W. (2d) 489, where it was held that the rental specified in the contract should be allowed as damag*es for its breach, the court said at pp. 489, 492:

“The appellant corporation, engaged in distributing copyrighted photoplays and films, sued the defendant Cooke to recover $1,507.50 and interest, alleging the breach of five different contracts entered into between the parties, which provided for the exhibition by Cooke in his theater at Wellington of motion pictures and films to be furnished him by the appellant. The contracts describe the several films included in each of them respectively by production number and title and state the rental value. . . .

“The case has been tried twice upon the same pleadings and to remand it for another trial would seem to be a useless and expensive proceeding, since it is clear that under the evidence introduced in b.oth trials appellant was clearly entitled to a judgment for the full amount sued for and that the appellee has no valid defense to the action. . . .”

In our opinion plaintiff’s damages are as certain as are the damages in the case of an apartment lease, advertising contract or employment contract and it fully established its right to recover the $3,073 specified in the contracts as the total rental value of the films by introducing the three contracts into evidence and proving’ defendant’s breach of them.

It is conceded that under the law it was plaintiff’s ,./ duty to mitigate its damages, if possible. While this is true, it is also the law that the burden was on defendant to prove that plaintiff could have mitigated the damages. No evidence was offered by defendant that plaintiff could have in any way mitigated the damages, but on the other hand plaintiff introduced evidence that showed that it could have done nothing further than it did do to mitigate the damages.

The applications of defendant all contained the following provision:

“Remedy for Breach: If the Exhibitor shall fail or refuse to perform this contract or any other exhibition contract with the Distributor, in respect of one or more of the photoplays licensed for exhibition hereunder and/or thereunder, or (2) if this agreement is terminated by the Distributor because of the Exhibitor’s breach thereof in charging less than the minimum admission prices herein specified, the Distributor may, at its option, declare such failure or refusal or breach, a breach of the entire contract entitling the Distributor to recover from the Exhibitor as damages for such breach the license fees payable in respect of all photo-plays not theretofore exhibited under this contract, and the Distributor shall be under no obligation thereafter to deliver or offer to deliver any photoplay or photoplays hereunder.”

Defendant contends that the provision for damages in this section of her applications should be construed as a penalty.

It has already been shown that under the general principles of the law of damages, plaintiff has the right to recover the rentals specified in the three contracts. In addition to that the parties themselves, by the adoption of the above provision, agreed upon what damages plaintiff should be entitled to recover in the event of a breach of the contracts by defendant.

In discussing this subject in United States v. Bethlehem Steel Co., 205 U. S. 105, the Supreme Court of the United States said, at p. 119:

“The courts became, more tolerant of such provisions, and have now become strongly inclined to allow parties to make their own contracts, and to carry out their intentions, even when it would result in the recovery of an amount stated as liquidated damages, upon proof of the violation of the contract, and without proof of the damages actually sustained.”

Contracts by which parties who are under no legal compulsion agree beforehand upon the amount of damages which shall be allowed for the breach thereof are as lawful as any other unless they are inhibited by some rule of law. (Parker-Washington Co. v. Chicago, 267 Ill. 136.) There is no principle more elementary and better recognized than that when a price is fixed between the parties to a contract for the purchase or rental of property or the performance of labor, it must be accepted as the rule for recovery. Both court and jury must be governed by it as to the contract of the parties and neither has any power to alter it. (Springdale Cemetery Ass’n v. Smith, 24 Ill. 480.) The present tendency of the authorities is to alloy? the parties to make their own contracts and carry out their intentions in this respect. Their intention, which has been clearly manifested, cannot be disregarded by the court when the result is not shown to have been unconscionable. In such a case the law should and will enforce the agreement of the parties. (Farley v. Knight Light & Soda Fountain Co., 223 Ill. App. 317.)

It can hardly be said that the damage clause in the contracts involved here is unconscionable or inhibited by law when it provides the same measure of damages as the law would allow under the general principles of contract law as heretofore shown, and, in any event, the defendant had the burden of proving that the damage clauses in the contracts called for illegal penalties. Not a word of evidence was offered by her to show that illegal penalties were provided for. Courts will give effect to the contracts of parties with reference to liquidated damages in the absence of fraud or unconscionable oppression. (Lu-Mi-Nus Signs, Inc. v. Jefferson Shoe Stores, Inc., 257 Ill. App. 150.) In Weiss v. United States Fidelity Guaranty Co., 300 Ill. 11, the court held, at pp. 16 and 17:

“Plaintiff is entitled to rely on the contract to show that damages at the rate stipulated will result from the breach. The burden of proof in such case is on the defendant to show that the contract provided for a penalty and not for liquidated damages, where there is nothing upon the face of the contract that requires the court to make the legal finding that the provision is for a penalty. Such a contract is prima facie evidence that the parties have stipulated and agreed on the actual amount of damages that ought to be recovered for a breach, and in the absence of evidence to the contrary the damages will be held to be liquidated damages.”

Such other points as are urged by defendant were either not raised in the court below or have no material bearing on the controlling questions involved in this proceeding, and in the view we take of this case we deem it unnecessary to discuss them.

Inasmuch as the material facts are undisputed and the jury could have properly assessed plaintiff’s damages only in accordance with the stipulated license fees or rentals and the damage clauses of the contracts, and, inasmuch as the trial court, for the reasons stated herein, should have directed a verdict in plaintiff’s favor and instructed the jury to assess its damages at $3,073, it would serve no useful purpose to remand this cause. Therefore, the judgment of the municipal court is reversed and judgment will be entered here in favor of plaintiff and against defendant for $3,073. Plaintiff’s claim for interest is not allowed.

Reversed and judgment here in favor of plaintiff and against defendant, Jean T. Gehring, for $3,073.

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


text:
    In re Estate of Thomas Quinn, Deceased. Josephine Quinn, Appellant, v. John F. Lukanitsch, Administrator of the Estate of Thomas Quinn, Deceased, Appellee.
    Gen. No. 38,265.
    Opinion filed February 11, 1936.
    Patrick J. Cahill, of Chicago, for appellant.

      Cummings & Wyman, of Chicago, for appellee; Austin L. Wyman and Daniel P. Nagle, of Chicago, of counsel.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

J osephine Quinn petitioned the probate court for the appointment of appraisers to set off to her a widow’s award in the matter of the estate of her deceased husband, Thomas Quinn. The administrator objected that she was not entitled to an award and upon hearing her petition was denied by the probate court. On appeal to the circuit court her petition was again denied. This appeal followed.

The cause was heard upon the following stipulation of facts:

“(1) That this is a hearing de novo on a petition filed by Josephine Quinn, the widow of Thomas Quinn, decedent herein, in the Probate Court of Cook County, Illinois, praying for the appointment of appraisers to set off to her a widow’s award under the statute of the State of Illinois, the prayer of which petition was denied by order of said Probate Court entered on or about November 12, 1934, in the matter of said estate, from the entry of which order an appeal was duly prayed, allowed and perfected to this Court.

“ (2) That Thomas Quinn, the decedent, was bom in Ireland, and as a young man emigrated to the United States, established his residence in Chicago, Illinois, where he lived with his first wife and reared five children by said wife.

“(3) That his first wife died and thereafter he re- '■ turned to Ireland for a visit, and while there, at the age of seventy-six, married J osephine Quinn, the petitioner herein, her age being eighteen years, said parties being married on or about September 1, 1926. No children were bom of this second marriage.

“(4) That Josephine Quinn and decedent lived to-, gether in Ireland as husband and wife from and after their said marriage until the death of Thomas Quinn, which occurred on January 23,1934.

“ (5) That said Thomas Quinn departed this life intestate on or about January 23, 1934, at Enniscorthy, (Wexford County, Ireland), leaving him surviving as his only heirs at law, and next of kin, his widow, Josephine, and five children by his first wife, all adults, and that the said Thomas Quinn was residing in Cook County, Illinois, at the time of his death.

“(6) That Thomas Quinn at the time of his death was a permanent resident of Cook County, Illinois, and his sojourn in Ireland was only temporary.

“ (7) That Josephine Quinn, his widow and the petitioner herein, was never physically present in the State of Illinois or the United States of America.

“ (8) That among the assets of the said estate is certain personal property, $26,000 in Illinois and $10,000 in Ireland, and that after the death of said decedent, John L. Lukanitsch of Chicago, Illinois, was appointed administrator in the Probate Court of Cook County, Illinois, and that said John L. Lukanitsch duly qualified as such administrator and has ever since and now is the duly qualified acting administrator of said estate, and said estate is still pending and undetermined in the Probate Court of Cook County, Illinois.

“(9) That all the children of Thomas Quinn are adults and that he never adopted any child or children, and no one is entitled to a child’s award herein.”

The only question involved in this controversy is the construction of the statute relating to a widow’s award (Ill. State Bar Stats. 1935, ch. 3, fí 75, sec. 74), the pertinent portions of which are as follows:

“The widow, residing in this State, of a deceased husband whose estate is administered in this State , , , shall, in all cases , , , be allowed as her sole and exclusive property forever . . . the following, to-wit:

“First — The family pictures and the wearing apparel, jewels and ornaments of herself and her minor children.

“Second — Such sum of money as the appraisers may deem reasonable for the proper support of herself and his minor children for the period of one year after the death of the testator or intestate, in a manner suited to her condition in life, taking into account the condition of the estate of the testator or intestate.” (Italics ours.)

Petitioner contends that Thomas Quinn was domiciled in Illinois at the time of his death, and that, therefore, she was domiciled in Illinois; that because of her domicile in Illinois she was residing in this State within the meaning of the statute; and that she is entitled to a widow’s award.

The administrator’s theory is that, inasmuch as Josephine Quinn was never physically present in the State of Illinois, she was not residing in this State within the meaning of the statute.

It will be noted that the parties stipulated that after his first wife died Thomas Quinn, the decedent, “returned to Ireland for a visit”; that petitioner and decedent lived together as husband and wife until the time of Thomas Quinn’s death January 23, 1934; that “Thomas Quinn was residing in Cook County, Illinois, at the time of his death”; and that “Thomas Quinn at the time of his death was a permanent resident of Cook County, Illinois and his sojourn in Ireland was only temporary. ’ ’

Under the stipulated facts the permanent residence or domicile of Thomas Quinn at the time of his death was in the State of Illinois, and the law is well settled that upon the marriage of petitioner and the decedent and so long as the relations between them were not adverse, his domicile was her domicile and so continued throughout their married life. (Cooper v. Beers, 143 Ill. 25; Evans v. Evans, 164 Ill. App. 614; Davis v. Davis, 30 Ill. 180.) This rule was also recognized in Ashbaugh v. Ashbaugh, 17 Ill. 476, where it was said that the residence of the wife follows that of her husband, and in Kennedy v. Kennedy, 87 Ill. 250, the court said that it was not “aware that a different rule had been announced where the common law obtains.”

But the administrator insists that the words “residing in this State” as used in the statute do not contemplate merely “legal residence” or mean “domiciled in this State,” but require actual residence as a qualification for a widow’s award; and that petitioner never having left Ireland and never having lived in this State cannot be held to come within the purview of the statute.

While no case has been cited where this statute has ■ been construed as to a widow claiming an award who • had never lived in the State of Illinois, the language ■ “residing in this State,” as used in the act has been held to mean “domiciled in this State,” and, in the ab- \ sence of adverse relations between the parties, the de- | termining factor in arriving at this conclusion has been ! not the actual residence of the wife but whether or not the deceased husband had his permanent residence and domicile here. In Hayes v. Hayes, 74 Ill. 312, where a bill was filed which sought as part of the relief prayed to set aside the “widow’s award” allowed in this State, the widow residing here, on the ground that the deceased husband was a resident of Iowa, the court in holding that the controlling element as to the propriety of the allowance of the widow’s award, as well as the succession to the decedent’s estate, was the domicile of the deceased husband, said at pp. 314 and 316:

“It is said by authoritative text-writers, that the term ‘ domicile ’ in its ordinary acceptation, means the place where a person lives or has his home. In a strict legal sense, that is properly the domicile of a person, where he has his true, fixed, permanent home and principal establishment, and to which, whenever he is absent, he has the intention of returning. Story’s Confl. of Laws, 39, sec. 41. It is further said, actual residence is not indispensable to retain a domicile after it is once acquired; but it is retained, animo solo, by the mere intention not to change it and adopt another. < Í

‘‘ To effect a change of domicile there must be an actual abandonment of the first domicile, coupled with an intention not to return to it, and there must be a new domicile acquired by actual residence within another jurisdiction, coupled with the intention of making the last acquired residence a permanent home. Nothing of this is discernible in the testimony in this record. The ease of Smith v. People, 44 Ill. 16, may be referred to in support of this doctrine, and other cases cited. Smith et al. v. Groom et al., 7 Fla. 200; Shaw v. Shaw, 98 Mass. 158. But the doctrine does not need the citation of authorities in its support. ’ ’

In Hutchings v. Hutchings, 137 Ill. App. 495, where the Hutchings had at one time lived in this State as husband and wife but had moved therefrom sometime prior to the husband’s death, she to establish a business in St. Louis, Missouri,'and he to travel to St. Louis, Missouri, California and Australia, being lost at sea on his return from Australia, the court said at pp. 495, 496, 497:

“If at the time of the death of William H. Hutchings he had owned or controlled a permanent home in Illinois, in which he resided, or to which he intended to return to live, if away from the same temporarily, then his home would have been the home or domicile of appellant (the widow), in the sense in which that term is used in said section 74 (of the Administration act heretofore set forth). . . .

“It is not claimed that deceased ever owned a home of any kind in Illinois, while upon the other hand the evidence shows him to have been a man who lived in many different cities, owning no home in any of them and who moved from place to place whenever his employment made a change desirable. . . .

“We are of the opinion, under all the evidence, that if Hutchings and his wife can be said to have had any home at the time of his death, it was in St. Louis, Missouri; and that neither one of them had any fixed or settled purpose to return to Illinois.”

In Kenton v. Hager, 150 Ill. App. 347, where the widow lived in Illinois and her husband died in Kansas, whence he had been removed from his home in this State by his son during his last illness, the court in considering her application for a widow’s award and allowing same determined that the decedent’s domicile was the controlling factor rather than her actual residence, as will appear from the following language, at p. 353:

“We are of opinion that the domicile of Peter Hager remained in Illinois where his home had been all his active life and where all the property in fact was which the record shows that he possessed. The principal administration was therefore in Illinois, and his widow was entitled to an award in this state, regardless of the question whether she could have had an award here under our statute if the administration here were only ancillary. ’ ’

In our opinion the last three cited cases, decided prior j to 1909, construed the words “residing in this State” j to mean domiciled within this State, and when the i Widow’s Award Act was amended in 1909, the phra- j seology “widow residing in this State” was retained i as the residential requirement of the widow for the [ award. A construction of a statute by the courts, supported by long acquiescence on the part of the legis¡ature, or by continued use of the same language or failure to amend the statute, is evidence that such construction is in accordance with the legislative intent. So the re-enactment of a statute, after it has been construed by the courts, amounts to a legislative adoption of such construction. (59 C. J. 1037; Spiehs v. Insull, 278 Ill. 184.) It necessarily follows that the legislature in retaining the phraseology “the widow residing in this State,” when amending the Widow’s Award Act in 1909, adopted the construction that had theretofore been placed on such language in the Hayes, Kenton and Hutchings cases, all of which held same to refer to the domicile of the decedent and his widow.

The words “residence,” “residing,” “domicile,” and similar words, while having different shades of meaning, are often used synonymously and it is almost uniformly held that when such words are used in statutes they are used synonymously and signify “legal residence, ” or “ domicile, ’ ’ unless their meaning is limited either by express definition in the statute or by the context of the act. In Herron v. Passailaigue, 92 Fla. 818, 110 So. 539, the Supreme Court of Florida stated the rule in the following language, at p. 543:

“The rule is well settled that the terms ‘residence,’ ‘residing,’ or equivalent terms, when used in statutes, or actions, or suits relating to taxation, right of suffrage, divorce, limitations of actions, and the like, are used in the sense of ‘legal residence’; that is to say, the place of domicile or permanent abode, as distinguished from temporary residence.”

In People v. Moir, 207 Ill. 180, in passing upon the word “resident” in our Revenue Act and construing it to mean “domiciled,” the court said, at p. 188:

“The terms ‘residence,’ ‘domicile,’ and kindred terms, differ somewhat in meaning, but when used in statutes similar to the one in force in this State providing for an inheritance tax, have frequently been held to be synonymous. (10 Am. & Eng. Ency. of Law,— 2d ed. — p. 9; Cooley on Taxation, — 2d ed. p. 369; Thorndike v. City of Boston, 1 Metc. 242.) ”

Our Revenue Act renders subject to taxation “all moneys, credits, bonds or stocks and other investments . . . owned or controlled by persons residing in this state,” (Ill. State Bar Stats. 1935, ch. 120, ff 1) and requires every person “being a resident of this state” to list his property for taxation. (Ill. State Bar Stats. 1935, ch. 120, ff 6, subpar. 1.) In Holt v. Hendee, 248 Ill. 288, the language of this act, “residing in this State” and “being a resident of this'State,” was construed to mean “person domiciled” in this State.

In Thoms v. Thoms, 222 Ill. App. 618, the words “resident” and “resided,” as used in the Divorce Act were held to be synonymous with “domicile.” In the case of In re Petition of Mulford, 217 Ill. 242, where the court was called upon to construe the phrase “no nonresident shall be appointed or act as executor,” etc., it held the word “nonresident” to mean “one not domiciled. ’ ’

The petitioner lived with deceased as his wife until his death and under the stipulated facts we think we may safely assume that she was willing and ready to come with him to his permanent residence in this State whenever he decided to cut short his visit to Ireland. That he failed to come home during his lifetime cannot fairly be charged to his wife to deprive her of the right to her award.

It is urged as a matter of public policy that the statute should be construed as applicable only to widows who are actual residents of this State. We can conceive of no sound reason for such a construction. After all, the award is paid from the estate of her deceased husband. Its purpose, in so far as it concerns the widow, is to afford her support during the year subsequent to her husband’s death and before she could otherwise realize anything from the administration of his estate. The relations of Josephine and Thomas Quinn were not adverse. Illinois was coneededly his permanent residence. Under the law it was also hers, and, inasmuch as his estate is being administered here, we are of the opinion that she is entitled to receive the widow’s award provided by statute.

For the reasons herein stated the order of the circuit court denying the petition of Josephine Quinn for the appointment of appraisers to set off a widow’s award to her is reversed and the cause is remanded with directions that her petition for the appointment of such appraisers be allowed.

Reversed and remanded with directions.

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