text:
    Milwaukee Commercial Bank, Plaintiff in Error, v. David A. Bennett and L. J. MacKinnon, Defendants in Error.
    Gen. No. 32,405.
    Opinion filed June 20, 1928.
    Rehearing denied July 7, 1928.
    Hoag & Ullmann, for plaintiff in error.
    Zimmerman & Clark, for defendants in error; Edward A. Zimmerman and Egbert L. McDougal, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

From the facts in this case it appears that the plaintiff, Milwaukee Commercial Bank, a Wisconsin banking corporation, was the owner and holder of a certain note dated at Milwaukee, Wisconsin, October 11, 1920, and signed by the Great Lakes Chemical Works, by D. A. Bennett, president, and L. J. MacKinnon, vice president. The note was for $25,000 and was payable ninety days after date. This note was indorsed by D. A. Bennett and L. J. MacKinnon, defendants, and was given to secure a loan from the hank to the Great Lakes Chemical Works.

The action appears to be based upon an amended declaration, consisting of three counts. The first count charges that the defendants made false representations in and about the securing of the loan; the second count, based upon the same facts as are contained in the first count, seeks to recover in trover, and the third count is one for deceit.

From the facts it appears that one Alfred Kay, was a lawyer and a hanker and, in October of 1920, was president of the Milwaukee Commercial Bank, and, as such, had charge and supervision of the loans made by that institution; that he met Bennett at the bank and a loan to the Aromatic Products Company was discussed. That later, during the month of October, he met MacKinnon and Bennett, at which time Bennett expressed the desire that the bank make a loan of $25,000 to the Great Lakes Chemical Works, of which Bennett was president. In this conversation it appears that Bennett made certain statements in regard to the future of that institution; that among other things he stated he had a man who was desirous of putting some money into the plant, hut was in need of immediate additional capital to the extent of $25,000 for the purpose of buying material for the plant; that Kay stated it would be necessary that a note should be put up as collateral, properly indorsed by others and, thereupon, MacKinnon and Bennett agreed to indorse the note.

That in addition to the collateral note, plaintiff in error received 775 shares of Aromatic Chemical Works and certain warehouse receipts. It appears further from the testimony of Kay that at this time he was told by the defendants in error that this stock, put up as collateral security, was worth about $20,000; that the Great Lakes Chemical Works was to take over the Aromatic Products Company. Kay further testified that Bennett told him that the plant of the Great Lakes Chemical Works was paid for and fully equipped and that they were ready to manufacture. He testified further that he received a statement of the Bennett & Davis Company, the Bennett in said company being one of the defendants in error herein, and received a report from one Fredrick F. Lewis in regard to the Bennett & Davis Company and took the matter up with Mr. Gates of the First National Bank of Wauwatosa, and received reports from Dun & Bradstreet and that these documents were submitted to the board of directors of his company, the Milwaukee Commercial Bank, together with the facts which he had learned from Bennett, and, thereupon, the board of directors acted favorably upon the loan.

Kay testified further that, on the evening of the 9th of December, 1920, he had another talk with Bennett at the bank and stated to Bennett that he had been down to the Great Lakes Chemical Works and had ascertained that the representations made by him and MacKinnon concerning that plant were not true. That they did not have a plant in operation; that they did not have the machinery with which to operate; that they did not own the plant and the bank had not received the money from the warehouse receipts. That, thereupon, Bennett stated that he wanted an additional $25,000, and stated that he, Bennett, had an interest in the Bennett & Davis Company and that it consisted of a one-half interest in the Delphi Products Company; that his one-half interest was worth $25,000.

Thereupon a new note was executed by Mr. Bennett, in the sum of $25,000 and Bennett agreed to deposit his stock of the Bennett & Davis Company as collateral and as additional security. It appears from the facts that this stock was, at the time, in the custody of the alien property custodian and was not delivered. Subsequently, in January of 1921, Bennett & Davis, a corporation, went into bankruptcy, and scheduled the debt of the Milwaukee Commercial Bank.

Upon the trial of this cause before- a jury, a verdict was returned finding the issues for the defendant and judgment was entered upon this verdict and this judgment we are asked to reverse on appeal.

To the declaration, pleas of the general issue were filed and also a plea of the statute of limitations. The amended declaration filed in said cause appears from the record to have been filed October 31, 1925, more than five years after the alleged transaction upon which the action is based. The record contains no copy of the original declaration filed in said suit, so that it is impossible of ascertainment as to whether or not the facts set up in the amended declaration were consistent with those set forth in the original declaration. The trial court had the advantage of seeing and considering both. In other words, this court is unable to ascertain from the original declaration as to whether or not a new cause of action is set forth in the amended declaration. When an amended declaration is filed, after the statute has run, the court reverts to the original declaration to see whether or not it is the same cause of action differently stated. Reell v. Petritz, 224 Ill. App. 65.

The facts in this case disclose that the alleged fraud was perpetrated October 11, 1920. The amended declaration was filed October 31, 1925, more than five years after the alleged fraud. There was no replication filed to the plea of the statute of limitations, setting up the fact that the fraud was concealed, so that there was presented no excuse of tolling the statute of limitations. The Supreme Court of this State in the case of Keithley v. Mutual Life Ins. Co., 271 Ill. 584, in its opinion says:

“The language of the statute is positive in its requirement that all civil actions not otherwise provided for (among which this is included) shall be commenced within five years after the cause of action accrued. ’ ’
There is no exception of causes of action originating in fraud. The Supreme Court again in its opinion says:
“The doctrine announced in these decisions is, that the fraudulent concealment of a cause of action which will prevent the running of the Statute of Limitations must be some affirmative act or representation intended to prevent the discovery of the cause of action, which does actually prevent such discovery; that a replication setting up such fraudulent concealment must set out the facts constituting the concealment; * * * that the rule that the statute begins to run only from the discovery of the fraud does not apply when the party affected by the fraud might with ordinary diligence have discovered it.”

That the plaintiff might have, with ordinary diligence, discovered the fraud concerning the plant and its equipment and its condition, is evidenced by the fact that it was discovered within a short time thereafter and before thé making of the second agreement. What was done at that time by the plaintiff might easily have been done before the loan was made.

There being no means of comparison, this court must grant the trial court every indulgence to sustain its judgment.

This court will not go to the record except to sustain, but an examination, for that purpose, of the certificate of the trial court approving the bill of exceptions, fails utterly to show that the bill of exceptions contains all the evidence heard upon the trial. Where there is no such statement in the certification, this court can only presume that there was sufficient evidence to warrant and sustain the findings of the trial court. Bedinger v. May, 323 Ill. 187. An examination of the common-law record shows no motion of the trial court or order directing a verdict, nor exception thereto, but an effort has been made to preserve the fact that the court directed a verdict in the bill of exception. The judgment order contained in the common-law record does not show a directed verdict but, on the other hand, a reading of that order indicates that the cause had been submitted upon the evidence to the consideration of the jury. We are not passing upon that question in this case and refer to it only for the purpose of calling attention to the fact that the record is irregular in a number of respects.

It is a well settled principle of law that one who finds that he has been defrauded must, after the discovery of the fraud and at the earliest opportunity, ask to have the transaction rescinded and the parties placed in statu quo. Resser v. Corwin, 72 Ill. App. 625; Cox v. Montgomery, 36 Ill. 396.

Aside from the question of the statute of limitations, it is apparent from the record that the original fraud, if there was any fraud, took place at the transaction in October, 1920. Suit was not started until July 30, 1925, and, as it has already been stated, the amended declaration, on which this suit is predicated, was filed October 31, 1925.

From an examination of the testimony and, in view of the fact that, with full knowledge of the facts concerning the original transaction, plaintiff again, in December, 1920, entered into negotiations with the defendant as a result of which additional collateral security was put up by the defendants, we can take no other view of the situation than that it was, in fact, a waiver of their rights under the original transaction, if any rights there were. Not only did the plaintiff fail to rescind the original transaction after the discovery of the alleged fraud, but it proceeded with the transaction with full knowledge of all that had transpired and with full knowledge of all the facts and circumstances surrounding the original transaction. Donian v. Fox, 170 Ill. App. 41.

Moreover, it appears from the testimony that the plaintiff did not entirely rely upon the representations, as made, but secured reports from Dun & Bradstreet, and other sources of information, prior to the making of the loan, and it would be hard to say whether the reliance was placed upon these reports or upon the words and statements of the defendants. This fact alone might not, necessarily, preclude a recovery, but would carry weight upon a consideration of the question as to whether or not plaintiff was induced to make said loan by reason of the representations or by reason of the disinterested statements.

Upon the pleadings and the facts as we find them in the record, the cause of action was barred by the statute of limitations. From the certificate of the trial court, certifying the bill of exceptions, we are unable to say that all of the evidence heard upon the trial is before us for consideration and, for that reason, it becomes our duty to indulge every presumption in favor of the finding of that court and, therefore, the judgment should be affirmed.

For the further reason the judgment should be affirmed because we find from the testimony that, after a full knowledge of the alleged fraud, plaintiff concluded another and different arrangement by the acceptance of other and different collateral and cannot, therefore, be heard to insist upon the original fraud. It had a right of action, but did not exercise it, but instead continued to deal with the defendants under further and different arrangements ewith full knowledge of the facts.

For the reasons stated in this opinion the judgment of the superior court is affirmed.

Judgment affirmed.

Holdom, P. J., and Taylor, J., concur.


source: Caselaw Access Project

author: Mr. Justice Wilson

license: Public Domain

text:
    Edward C. Spencer, Appellee, v. Chicago and North Western Railway Company, Appellant.
    Gen. No. 32,431.

      Opinion filed June 20, 1928.
    Nelson J. Wilcox and I. C. Belden, for appellant.
    Finn & Miller, for appellee; Frank Johnston, Jr., of counsel.
   Mr. Justice Wilson

delivered the opinion of the court:

This is an action for personal injuries sustained by the plaintiff, Edward O. Spencer, while in the employ of the defendant, Chicago and North Western Railway Company, by reason of an accident at or near defendant’s California avenue yard on the 14th of October, 1926. A trial resulted in a verdict of the jury for the sum of $30,000, which was reduced by the trial court to the sum of $22,500 the plaintiff having remitted $7,500 and judgment entered thereupon. Motions for a new trial and in arrest of judgment were overruled and from the judgment this appeal is perfected.

The facts show that the plaintiff, at the time of the accident was 42 years of age and had been employed by the defendant for 16 years and continuously for four years prior to the injury. He was what was known as a brakeman-collector and, on the morning in question, arrived at the California yards at 6:10 A. M. The train upon which plaintiff was employed was known as No. 29 and consisted of seven passenger coaches and a combination car commonly known as a baggage and smoking car. After having been made up, this train proceeded from the California yards, at or near Kedzie avenue, which was a point about three and one-half miles from the Chicago terminal, to Maywood, Illinois, which was approximately 10% miles from the Chicago terminal. The train, from the California yards west to Maywood, ran as an empty and, at Maywood, it returned to the Chicago terminal and was known as train No. 36 and carried passengers. Upon reaching the Chicago terminal, five of the cars were cut off, leaving the engine, combination smoker and baggage car and two coaches, which constituted a train, which proceeded from the Chicago terminal to Elmhurst. On this last named trip, the baggage compartment of the combination car was used for the conveyance of express matter which came from points outside the State and was forwarded on this train to Elmhurst and intermediate points for delivery. The train in question was due back at the Chicago terminal after the trip out to Maywood in order to make the return trip carrying the aforesaid express matter at 8:24 a. m. and was known as train No. 39. Plaintiff’s duties compelled him to accompany this combination car on all its trips. The making up of the train at the California yard prior to its starting from Maywood was in charge of a man named Dastous. From the facts it appears that the train was in the act of backing out of the yard and was proceeding at the rate of about 15 miles an hour along track No. 6. Plaintiff, at the time, was in the baggage car changing his uniform when Dastous called his attention by shouting to him to “Come here” and, upon going upon the platform he observed that a switch, leading from the track upon which the train was proceeding, to what was known as track No. 5, was open; that there was another train on that track and that there was imminent danger of a collision by reason of this misplaced switch. At this time, Dastons and the plaintiff were standing on the platform of the baggage car and, observing the danger, plaintiff jumped and, as a result, his foot caught in a frog and he fell and sustained the injuries in question. The baggage car collided with the cars on the switch track and, as a result, the steps of the combination car were torn off and the corner demolished.

Dr. Arthur E. Metz testified that he was a surgeon and had been attending the plaintiff and testified that there had been a fracture of the proximal end of the tibia or large bone below the knee which extended from the joint down the bone for a distance of four or five inches and that the bone had been spread open a half inch or so; that a metal bolt had been put through the upper end of the bone so as to bring this together, which was held in place by small ivory pegs or nails; that the X-ray pictures showed a certain amount of atrophy in the bone.

It also appears from the testimony of the plaintiff that, after the accident, he was taken to the Washington Boulevard Hospital where he was under the care of physicians from October until the following July; that he was able to get about at this time only with crutches; that, after being discharged from the hospital in July, he was compelled to use a cane continuously ; that he cannot move the leg below the knee and cannot carry anything heavy; that he has suffered .many falls because of the paralysis of the leg.

Dr. William Hessert, witness for plaintiff, testified that he was a physician and had made an examination of the plaintiff and that the left leg, both above and below the knee was much thinner than the right and that the thigh was an inch and a half less in circumference. The region of the left knee showed considerable deformity in that there was an outward bowing or angulation below the knee and a thinning of the outerside of the knee, and that there was a muscular paralysis of the muscles of the leg, extending downward; that the joint does and will produce pain and weakness and that the muscular paralysis prevents lifting the leg sufficiently to get over obstructions. In his opinion the condition was permanent.

The action is based upon section 1 of the Federal Employers’ Liability Act, Cahill’s St. ch. 114, ft 321, which provides, among other things, as follows:

“Every common carrier by railroad while engaging in commerce between any of the several States * * *, shall be liable in damages to any person suffering injury while he is employed by such carrier in such commerce, * * * for such injury or death resulting' in whole or in part from the negligence of any of the officers, agents, or employes of such carrier, or by reason of any defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, track, roadbed, works, boats, wharves or other equipment.”

It is urged on behalf of the defendant, as a ground for reversal, that the plaintiff, at the time of the accident, was not engaged in interstate commerce, but that the primary purpose of attaching the combination baggage and smoker car in question to the train was for the purpose of conveying passengers on the trip from Maywood to the Chicago terminal and that this trip was a separate and distinct trip for the purpose of intrastate commerce only, namely, the carrying of passengers, and the fact that this car was to be used later, on the return trip to Elmhurst, for the purpose of carrying interstate commerce, was too remote to bring the accident in question within the meaning of the statute.

On the other hand it is urged on behalf of the plaintiff, that the plaintiff was employed in and about this particular car and that it was attached to the train on the trip to Maywood in order to be ready for the purpose intended, namely, that, upon its return to the Chicago terminal, it was to be used for the carrying of interstate commerce and the duties of the plaintiff were such that he was compelled to' be with this car throughout its entire progress and consequently, at the time of the injury, he was employed in interstate commerce, or in work so closely related to it as to be primarily a part of it. It is urged that the combination car in question was to be used for interstate commerce and that the hauling of said car on this train to Maywood was an initial move for the purpose of its use later in the conveying of interstate commerce from the Chicago terminal to Elmhurst and intermediate points.

It may be stated as a general principle of law, as laid down by the various decisions, that, in order that the plaintiff might avail himself of the benefit of the Federal Employers’ Liability Act, Cahill’s St. ch. 114, If 321 et seq., it was not necessary that the train upon which he was employed was, at the time, in the actual conveyance of interstate shipments. The rule has been extended, by interpretation, so as to include those primary movements of cars which are necessary for the purpose of making up or forming a train which has for its purpose the transportation of interstate shipments. The testimony seems to be clear that the baggage car when placed in position, or located at the Chicago terminal, was to be used for the purpose of transporting goods received from outside of the State to, their final destination within the State and this would be a forwarding of interstate shipments and would bring the train from that time on under the category of “engaged in interstate commerce.”

As to the proposition that the preparation of a train for use in. interstate commerce comes within the act, see Baltimore & O. R. Co. v. Darling, 3 F. (2d) 987, where the court in its opinion says:

“But this possibility did not alter the fact that, as plaintiff testified, he ‘was building a train on that track’,- in other words, the fact that he was controlling the movement of a car for the very purpose of making it a part of an interstate train soon to move on in interstate commerce. This work was, in our judgment, so closely related to interstate commerce as to be practically a part of it. Reap v. Hines, 273 F. 88 (C. C. A. 2); Shanks v. Railroad Co., 239 U. S. 556, 36 S. Ct. 188, 60 L. Ed. 436, L. R. A. 1916C, 797; Erie R. R. Co. v. Szary, 253 U. S. 86, 40 S. Ct. 454, 64 L. Ed. 794.”

A case very much in point is that of La Lone v. St. Louis Merchants’ Bridge Terminal Ry. Co., 316 Mo. 835, 293 S. W. 379, decided February 16, 1927, and not yet reported in the State report. From the facts in this case it appears that there was a custom of making up a train which was located or spotted at a certain location in the city of Tulsa and that shipments to Tulsa would come to that particular point to be loaded on this train; that when there was a sufficient amount of freight to justify, the freight would be loaded and would be moved forward on its trip. The court in its opinion, after citing a number of cases, says:

“It is not just as plain, and quite within the reasoning of the above cases, that the movement of these same cars in their empty condition from the Twenty-third Street yard to the Broadway freight house for the purpose of being immediately loaded thereat with interstate freight and immediately moved therefrom in interstate commerce, was a preparatory movement in aid of, a necessary incident to, for the purpose of furthering, a/nd so closely connected with the movement of these same cars when loaded with interstate freight as to be a part of such interstate movement? The movement of these empty cars to the Broadway freight house was a part of the round trip duty resting upon respondent, and on the prompt, faithful, and complete performance of which the movement of loaded cars destined for interstate points depended.”

To the same effect is Patterson v. Pennsylvania R. Co., 284 Pa. 577.

This court had occasion to consider this question in the case of White v. Jackson, 221 Ill. App. 129. The court in its opinion, says:

“From these illustrative cases it may be said that a railroad employee injured while engaged in the movement of a car incidental to its intended employment for interstate transportation is under the federal act. In some of the cases cited by defendant the next use of the instrumentality, whether intrastate or interstate transportation, was undetermined at the time of the injury. Such a case is Minneapolis & St. L. R. Co. v. Winters, 242 U. S. 353 (13 N. C. C. A. 1127).”

It is urged on behalf of counsel for the defendant that, at the time of the accident, plaintiff was not engaged in interstate commerce and our attention is particularly called to the case of Illinois Cent. R. Co. v. Peery, 242 U. S. 292. We have examined the facts in that case and find that at the time of the accident involved the plaintiff was riding upon a caboose attached to an engine, and was on a return trip after having completed his services in and about the transportation of interstate commerce, and that there was no intention to engage further in that act. We cannot say that this case is applicable, and we are of the opinion that, if the facts had been reversed and the plaintiff in that case was riding in the same manner to a point where he was to begin services in- interstate commerce, the ruling of the court would have been different because he would then have been engaged in a natural movement for the purpose of engaging in interstate commerce.

We have examined carefully the case of Shanks v. Delaware, L. & W. R. Co., 239 U. S. 556, also relied upon by the defendant, and find from the facts as stated in the opinion that the plaintiff in that case was employed in a machine shop repairing locomotives used in transportation, that on the day in question he was not engaged in that service, but was engaged solely in taking down and putting into a new location in the machine shop an overhead countershaft which was to be used in connection with some machinery in the shop. The court in its opinion expressly points out this distinction.

From the facts in the case at bar, as disclosed by the record, we are of the opinion that the question as to whether or not the plaintiff was engaged in a service for the defendant company which had for its purpose the use of a combination car for forwarding interstate shipments was a question for the jury. The fact, also, as to whether or not the placing of the combination car on the train running to Maywood was for the primary purpose of conveying it to the Chicago terminal on the same train in order that it should be used in interstate commerce was a question for the jury. It was urged at the trial by counsel for the defendant that it was used for the conveyance of passengers from Maywood to Chicago and was so originally intended. It is insisted on the other hand by counsel for the plaintiff that, at this time in the morning, there was a great number of incoming suburban trains and it would not be possible to make the connection on the return trip from Maywood; that the connecting of the combination car with the train prior to its trip to Maywood was a practical proposition of railroading which avoided the necessity of blocking traffic on the return trip. These were all questions of fact for the jury to consider.

The Supreme Court of this State in the case of Bolle v. Chicago & N. W. Ry. Co., 324 Ill. 479, in its opinion on page 482, says:

“Whether or not at the time of the accident plaintiff was employed by defendant in interstate commerce was a controverted question of fact upon which plaintiff had a constitutional right to a trial by jury. This question of fact was the main issue in the case. Whenever an issue is made in a case and evidence must be introduced to maintain the issue, controverted questions of fact are involved which include not only evidentiary facts, but ultimate facts, even though there be. no conflict in the testimony. (Chicago, Title and Trust Co. v. Ward, 319 Ill. 201; Frank v. Hoskins Co., 323 id. 46.) The evidence in the case was not such that all reasonable minds must necessarily agree that at the time of the accident plaintiff’s employment was not such as to bring him within the provisions of the Federal Employers’ Liability act.”

The Supreme Court of the United States in the case of Erie R. Co. v. Welsh, 242 U. S. 303, in sustaining a decision of the Ohio Supreme Court, affirming a case where the jury had decided that the plaintiff was not engaged in interstate commerce, lays down the following rule:

“The question remains whether he was performing an act so directly and immediately connected with his previous act of placing the interstate car in the ‘F: D. yard’ as to be part of it or a necessary incident thereto.' New York C. & H. R. R. Co. v. Carr, 238 U. S. 260, 264; 59 L. ed. 1298, 1300, 35 Sup. Ct. Rep. 780, 9 N. C. C. A. 1; Shanks v. Delaware, L. & W. R. Co., 239 U. S. 556, 559, 60 L. ed. 436, 438, L. R. A. 1916C, 797, 36 Sup. Ct. Rep. 188. And this depends upon whether:the series of.acts that he had last performed was properly to be regarded as a succession of separate tasks or as a single and. indivisible task. It turns upon no interpretation of the act of Congress, but involves simply an appreciation of the testimony and admissible inferences therefrom in order to determine whether there was a question to be submitted to the jury as to the fact of employment in interstate commerce. The state courts held there was no such question, and we cannot say that in so concluding they committed manifest error. It results that, in the proper exercise of the jurisdiction of this court in cases of this character, the decision ought not to be disturbed. Great Northern Ry. Co. v. Knapp, 240 U. S. 464, 466.”

We are of the opinion that the question was one of fact which was properly submitted to a jury and, in view of the fact that we cannot say the verdict was manifestly against the weight of the evidence, we find no reason for disturbing the judgment on the facts.

Counsel for defendant raises several objections to certain instructions given on behalf of the plaintiff. While these objections were argued at length in the brief, they are not set out in full but referred to by number. This court should not be required to search for such matters but they should be contained in the argument. General Platers Supply Co. v. L’Hommedieu & Sons Co., 228 Ill. App. 201. It is attempted to cure this, however, by restating the instructions in full, together with the arguments thereon in the reply brief filed herein, but this does not cure the objection. We have examined the instructions, however, and do not find that there is error sufficient to cause a reversal of the case.

It is also urged that the verdict is excessive. From the medical testimony it appears that there is a permanent condition of injury, resulting in a practical loss of the use of the leg, and the trial court saw fit to accept the remittance of $7,500, and enter judgment for the sum stated in the judgment. The trial court had a full opportunity of seeing and observing the condition of the plaintiff, as well as hearing the testimony and observing the witnesses, and we see no reason to disturb the judgment on the ground that it is excessive. Every presumption and intendment should be indulged in favor of the judgment.

For the reasons stated in this opinion the judgment of the circuit court is affirmed.

Judgment affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    Anthony Joseph Linowiecki, Appellant, v. Franciszek Wisniewski and Aniela Wisniewski, Appellees.
    Gen. No. 32,522.
    Opinion filed June 20, 1928.
    Jones & Koerner and Joseph A. Jaros, for appellants; James S. Wight and Charles M. Geringer, of counsel.
    John S. Bybioki and Joseph D. O’Donnell, for appellees.
   Mr. Justice Wilson

delivered the opinion of the court. •

On November 8, 1926, plaintiff, Anthony Joseph Linowiecki, obtained a judgment by confession against the defendants, Franciszek Wisniewski and Ardela Wisniewski, for $703.23. May 17, 1927, a petition was filed to vacate said judgment and on May 26 of that year the judgment was vacated and leave given defendants to enter their appearance and defend the suit, the petition to stand as an affidavit of merits.

The case was heard by the court without a jury and resulted in a finding of the issues for the defendants. Accordingly, the judgment by confession was set aside and judgment entered for the defendants. From that judgment this appeal has been perfected.

The facts show that the defendants executed a series of notes, twenty in number, secured by a trust deed in which the defendants were grantors and a certain Max Weber was named as trustee. The notes were identical, except as to the amounts therein stated and the dates payable, and each of said notes was made payable at the offices of Weber & Weber, 2132 North Western avenue, Chicago, Illinois, and from the testimony it appears that Max Weber, the trustee, Was a member of that firm. Ten of these notes were paid as they fell due, at the office of Weber & Weber, and on January 15, 1924, Max Weber sold notes numbered 10 to 20, inclusive, to the plaintiff and they were delivered to the plaintiff who retained them in his possession. The notes were made payable to the order of the defendants and by them indorsed so that they passed by delivery.

It appears from the testimony that the defendants continued to pay the last ten notes as they fell due at the office of Weber & Weber. As each of these notes was presented at the office of Weber & Weber, they would accept the money and then take it to the plaintiff who, thereupon, delivered the note to them which, in turn, they forwarded to the defendants. In some instances they would issue a receipt for the money and in some instances the receipt was waived.

On-January 31, 1925, the defendants paid the last note which was known as No. 20 at the office of Weber & Weber, the total amount paid on said note being the sum of $583.39. Weber thereupon released the trust deed, but, not having possession of the note, made an indorsement of payment on a letter dated January 22, 1925, which he had sent to the defendants notifying them that this note was due, and which they had with them at the time they made the payment on this last note.

It is undisputed that Weber received the money, but the plaintiff alleges and charges that Weber & Weber were not agents authorized to receive payment of money, and that it was the duty of the defendants to see to it that the money was paid to him as holder of the note.

Plaintiff further contends that the defendants having paid the note without its production at the time, did so at their peril.

The original loan, for which the trust deed was given as security, was made at the office of Weber & Weber, which was a firm engaged in the real estate and loan business, and the. notes were made payable at the office of that firm. These facts, standing alone, might not he sufficient to authorize Weber & Weber to make collections on these notes, hut the fact is to be considered together with all the other facts and circumstances of the case. An agent authorized to make a transaction is not necessarily authorized to collect by reason thereof and a person paying a note, except to the owner, ordinarily does so at his peril. The holder and owner of a note, however, may by his conduct impliedly create an agency and it is not necessary that the agency be constituted by a direct authorization. James v. Conklin & Hill, 158 Ill. App. 640, where the court in its opinion says:

“Payments made to an agent are good and obligatory upon the principal, in all cases where the agent is authorized to receive payment, either by express authority, or by that resulting from the usage of trade, or from the particular dealings between the parties. Noble v. Nugent, 89 Ill. 522, citing Story on Agency. The principal is equally bound by the authority which he actually gives, and by that which by his own acts he appears to give. The principal is responsible for the appearance of authority. Smith v. Peoria County, 59 Ill. 412; Phoenix Ins. Co. v. Stocks, 149 Ill. 319.”

From the facts in this case it is apparent that not only were the notes made payable on their face at the office of Weber & Weber, but that plaintiff had allowed and permitted the nine notes previously due to be paid at that office and accepted by Weber & Weber, arid, himself, turned over said notes to Weber & Weber for delivery to the defendants. There was nothing different in the course of conduct in regard to these nine previous notes than there was to note No. 20, except that Weber & Weber failed to remit to the holder of the note the money collected by him for its payment. The notes were to bearer and, while it might have been possible for the makers of said notes to have discovered by inquiry who the owner was, the makers also had the right to rely upon the course of' conduct of the owner of the notes in permitting them to pay at the place named in the notes, without objection. On the other hand, if the payee did not desire the collection to be made by Weber & Weber, he had ample opportunity to have notified the makers of said riotés that they should be paid to him directly arid not through an intermediate person or agency. Moreover the plaintiff, by his course of conduct, had agreed to the payment of the notes, without their production, at the office of Weber & Weber by the defendants, as it appears from his own testimony that he would not deliver the notes until he had first received the money and, for that reason apparently, would not deposit them with that firm.

This court had occasion to pass upon this question in a very similar case, entitled Voelkner v. Ott, 197 Ill. App. 520. From the facts in that case it appears that certain coupons were made payable at the office of John P. Foerster & Company. The original loan in that case was made by that company and no notice was ever served upon the defendant to pay any one save Foerster & Company. The notes were not in the possession of Foerster & Company, but were to be delivered after payment. Several previous interest coupons had been paid in this manner and no objections had been made because of the payments to that company, until the payment of the last interest coupon which was not turned over by Foerster & Company to the plaintiff in that case. The court in its opinion says:

“Clearly, under this state of facts, the court properly found that the payment before maturity to John P. Foerster & Company was a payment of this interest coupon to the duly authorized representative of the plaintiff. The fact that said note was not in their possession at the time is not controlling.”

We have examined the cases cited by counsel for defendants, and find that they are distinguishable from .the case at bar. Nearly all of these cases involved a single transaction and, in nearly all instances, while the note was made payable at a certain place, the name of the payee was set out in the note. These cases do not conflict in any way with the principle that where a person has permitted a person or firm to make collections, he has, impliedly, created an agency for that purpose, upon which another may have a right to rely.

We find from the record that there was sufficient evidence to sustain the finding of the trial court and its judgment entered thereon and, for the reasons stated in this opinion, the judgment of the trial court is affirmed.

Judgment affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    Harold Jacobson, by A. W. Jacobson, Appellee, v. Max Ashkinaze, Appellant.
    Gen. No. 32,534.

      Opinion filed June 20, 1928.
    Aaron E. Eppstein, for appellant.
    Jacobson, Merrick & Latter, for appellee; Cameron Latter, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

This cause comes on to be heard on appeal from an order of the superior court denying a written motion to vacate a judgment entered in said court on March 19, 1921, in favor of Harold Jacobson, a minor, by A. W. Jacobson, his next friend, plaintiff, against Max Ashkinaze, defendant. The written motion to vacate said judgment was filed June 9, 1923, over two years after the entry of said judgment, and as the reason for vacating and setting aside said judgment, charges:

That' the plaintiff on August 14, 1919, filed a ■ praecipe in said cause; that thereupon summons was issued which was duly served upon the defendant on August 18th of the same year. Charges that on October 24, 1919, a declaration was filed in said cause, consisting of one count, which alleged that the plaintiff, while in the exercise of due care for his own safety, was injured by a certain automobile driven in a careless and negligent manner by the defendant. Charges further that the defendant procured the services of Pierre Gr. Beach, an attorney at law; that said attorney on October 31, 1919, entered the appearance of the defendant in said cause and filed a plea of the general issue to said declaration; that on October 11, 1920, by order of court, said cause was stricken from the docket; that on December 30, 1920, a paper was filed with the clerk of the superior court which stated that Beach withdrew as attorney for defendant and that J. Kentner Elliott was being substituted as attorney in his place. Charges that notice was filed in the office of said clerk, filed by plaintiff’s attorney, addressed to J. Kentner Elliott as attorney for the defendant, stating that said attorney for the plaintiff would appear in court and move to vacate the order striking said cause from the docket and have same placed upon the trial call; that an order of court was entered vacating the order striking the cause from the docket and reinstated said cause and placed same upon the trial call for February 16,1921. That on March 17, 1921, a jury was impaneled in said cause and on March 18, 1921, an ex parte verdict for $25,000 was returned against defendant and in favor of plaintiff and judgment entered on said verdict, and that on the said 18th day of March, 1921, an additional count was filed by plaintiff to his declaration, charging wilful and malicious conduct in injuring the plaintiff; that said cause was submitted to the jury, which answered special interrogatories presented to it, finding that the defendant was guilty of wilful and wanton misconduct. Charges that an execution on said verdict issued out of the superior court on the 10th day of May, 1923, directing the sheriff to bring in the body of the defendant by reason of the tort judgment. Charges that the defendant engaged the said Beach as his attorney at law and was told by the said Beach that the said cause would not come on for trial for several years and that he, the defendant, believed it and relied upon the skill, diligence and integrity of the said Beach, and that he had no knowledge of the proceedings until May, 1923, when he casually heard that there was a large judgment against him and that he then called upon the present counsel representing him on the hearing of this motion. Charges that he, the defendant, had no acquaintance with said Elliott, attorney at law, nor did he ever speak to him, and that he never knew or acquiesced in any substitution of attorneys and knew nothing of the proceedings at the trial. Charges further that the said Elliott had no authority to accept service of notice in said cause on the motion to reinstate said cause for trial nor do anything in and about said cause on behalf of the defendant. Charges further that the additional count filed in said cause, charging wilful and malicious injury by the defendant, was filed without leave of court being first had and obtained and, therefore, should be disregarded and stricken from the files. Charges further that the body summons was issued May 10'th, and that the defendant had no knowledge of same until about the middle of May. Charges further that the plaintiff, Jacobson, at the present time appears to be well nourished and that the judgment for $25,000 is excessive and that the defendant has a valid defense to the action set forth in plaintiff’s declaration and sets out in said written motion the facts in support of his contention that he, himself, at the time of the accident was not guilty of negligence.

A demurrer was interposed by plaintiff to vacate the judgment and, after a hearing upon said demurrer, the demurrer was sustained and the motion to vacate said judgment was denied, to which ruling of the court denying said motion, defendant excepted and prayed this appeal.

It is a well-recognized principle of law that every presumption will be indulged in the regularity of the proceedings of the trial court, unless it shall plainly be made to appear to the contrary. Elliott v. Greene, 172 Ill. App. 213.

After the term of the trial court at which a judgment is entered, the court has no authority to set aside the judgment for any alleged error of law and can only amend it- in manner of form after notice to the opposite party. The court, however, may correct errors of fact. Section 89 of the Practice Act, Cahill’s St. ch. 110, If 89, provides that errors in fact, which by the common law could be corrected by a writ of error coram nobis, may be corrected upon motion within five years after the rendition of the judgment. Cramer v. Illinois Commercial Men’s Ass’n, 260 Ill. 516.

The essentials of the proceeding upon the motion, provided for by section 89 of the Practice Act, Cahill’s St. ch. 110, If 89, is governed by the same rules and the same practice as was applicable to a hearing upon a writ of error coram nobis. The most general class of cases in which such a writ would lie were those where it is made to appear by said writ that there was some disability of the parties, either to sue or defend, such as infancy, coverture, death of one or more of the parties, or of a joint party, or insanity, and it is generally such facts, which, if in the opinion of the court, would prevent the entry of a judgment, afford ground for the use and application of such a writ. It appears, however, that the rule has been extended somewhat but, in most instances, by statute. It will not lie to correct error or mistake of the judge in point of law, but, under such circumstances, a writ of error may be sued out in order to bring about a correction. Marabia v. Mary Thompson Hospital of Chicago for Women and Children, 309 Ill. 147,153.

The Supreme Court in this State in the case of People v. Noonan, 276 Ill. 430, says:

“ ‘The office of the writ of coram nobis is to bring the attention of the court to and obtain relief from errors of fact, such as the death of either party pending the suit and before judgment therein; or infancy, where the party was not properly represented by guardian; or coverture, where the common law disability still exists; or insanity, it seems at the time of the trialor a valid defense existing in the facts of the case, but which, without negligence on the part of the defendant, was not made, either through duress or fraud or excusable mistake, these facts not appearing on the face of the record, and being such as, if known in season, would have prevented the rendition and entry of the judgment questioned. ’ (5 Ency. of Pl. & Pr. 27.) This text is amply supported by authority. It will thus be seen that it is only such errors of fact as do not appear upon the face of the record which could be cured by the writ of error coram nobis or may now be corrected under section 89 of our Practice act.”

It has been too well established by decisions of this State that the court will not relieve a litigant where he, himself, is guilty of negligence, or has failed to protect his own interests. Gburek v. Kuss, 225 Ill. App. 346; Cramer v. Illinois Commercial Men’s Association, 260 Ill. 516.

It has been said that diligence on the part of the party complaining is as essential to the writ of relief, as that a good defense to the action on its merits shall exist. A consideration of the facts as charged in the written motion to vacate the judgment shows that the defendant was personally served with summons, so that he had personal knowledge of the pendency of the suit. It appears further that he employed counsel who entered his appearance in said cause. It further appears that Elliott, another attorney at law, entered his appearance by and with the consent of Beach, the attorney employed by the defendant, so that it is natural to assume that the knowledge of the agent Was the knowledge of the principal. Moreover, the judgment was entered March 18, 1921, and the defendant appears to have made no inquiries nor to have taken any steps to ascertain the status of the litigation until May 10, 1923, more than two years after the entry of said judgment and over three years after the starting of said suit.

This court cannot help being impressed with the fact that from the lack of interest of the defendant in said cause it would appear that he was not concerned with a money judgment, but when a body execution was issued on said judgment, it caused the development of a lively interest on his part in the forgotten litigation.

The filing of the additional count charging wilful and wanton negligence on the part of the defendant was not irregular and was apparently done by and with the consent of the court because it appears from the record that the court gave the jury certain special interrogatories based upon said additional counts. Moreover, there is nothing to show that said cause was not reached in its regular order on the trial call and, at that time, parties litigant have the right to amend declarations or file additional counts where it is done without objection or with the consent of the court. Every presumption must be indulged in favor of the regularity of the proceedings. We cannot say that there is anything in the written motion to vacate the judgment which would entitle the defendant to have said judgment set aside.

For the reasons stated in this' opinion the order of the trial court, sustaining a demurrer to the motion to vacate the judgment and denying the motion, is affirmed.

Order affirmed.

Holdom, P, J., and Taylor, J., concur,


text:
    Sol Rubin, Appellant, v. Chicago Title & Trust Company, Appellee.
    Gen. No. 32,550.
    Opinion filed June 20, 1928.
    Clark & Clark .and Edward M. Keating, for appellant; Russell S. Clark, of counsel.
    Sherman C. Spitzer and Charles F. Grimes, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

The complainant, Sol Rubin, filed his bill in the superior court of Cook county in chancery, charging that a certain original proceeding had been started in the circuit court of Cook county by the Douglas Lumher Company, to foreclose a mechanic’s lien and that several persons were made parties defendant to that bill and that certain cross-bills were filed therein; that a decree was entered finding that there was due certain lienholders the sum of $18,853.87; charges that said property was sold under said proceedings to satisfy certain trust deeds and liens and that after said sale the said property was redeemed by the Chicago Title .& Trust Company, defendant herein, and that there was paid, as a result of said redemption, approximately the sum of $85,000 which was not sufficient to satisfy the claims; charges that the Chicago Title & Trust Company was the assignee of the owners of the equity and, therefore, entitled to make the redemption, but that after said sum of $85,000 had been applied by the chancellor in the circuit court, there remained $19,000 due to certain lienholders; charges that the said complainant is the assignee of the claims remaining unsatisfied and asking that the Chicago Title & Trust Company, as the assignee of the owner of the equity of redemption, be required to pay the sum of $18,853.87, the amount of the liens unpaid under the circuit court proceedings and that in the event of the failure of the said defendant so to do, that the premises be sold to satisfy said claims in this proceeding in the superior court.

A demurrer was sustained to this bill by the chancellor of the superior court and an amended bill of complaint was filed, setting forth the facts practically as already contained in the original bill with an additional averment, however, that the Chicago Title & Trust Company, as assignee of the equity of redemption, redeemed said property for and on behalf of the original owners thereof, and charging that the assignee became by law liable to pay the unpaid liens found to be due in the suit pending in the superior court.

Attached to the amended bill of complaint and marked as exhibits, are a copy of the bill filed in the circuit court, a copy of the mechanic’s lien filed on behalf of the Douglas Lumber Company, a copy of a notice and claim for lien filed by the Douglas Lumber Company, an affidavit to the effect that certain unknown owners cannot be found, an affidavit to the effect that the places of residence of certain persons are unknown and asking that they be made parties defendant as unknown owners. All other documents in said circuit court proceeding, including the decree therein entered, are by reference made a part of the amended bill, but are not set up in haec verba, nor is there contained in said amended bill any extended description of said documents. A general and special demurrer to this amended bill was filed in the superior court and sustained and the bill dismissed for want of equity.

Writings or documents made a part of written agreement, by reference, may become incorporated and made a part of such agreement. Written documents and writings made part of a bill of complaint, however, are subject to the rules of pleading and the reference to such documents or writings has no effect other than to call their attention to counsel and the court for the purpose of making them admissible as evidence in the case upon the trial of the proceeding after proper proof of their authenticity. The allegation that they are made part of the bill, by reference, carries no weight upon demurrer as the court is not compelled to examine records for the purpose of consideration upon the hearing upon the demurrer. The Supreme Court of this State in the case of Jocelyn v. White, 201 Ill. 16, in its opinion says:

“From the above quotations we understand the rule to be, that if the complainant in the bill relies upon a written instrument, and has so described the instrument as to identify it, and then by apt words specifically refers to the instrument, he may, if demurrer be not interposed, upon the trial of the cause have the benefit of the instrument and all its provisions, but that if the bill, on its face and in apt terms, does not contain all the allegations necessary to show him to be entitled to the relief prayed, the bill will be obnoxious to demurrer, but if the bill be not demurred to, but be answered or default made, and the instrument so referred to, when offered in evidence, shows the right of the plaintiff to his relief, then in such case the bill will be sufficient to support the decree.”

Counsel has sought to supply this failure to set out the instrument in haec verba, or attach same as an exhibit, by setting out in full the decree and various other necessary documents in their brief,' but this court finds no such documents in the record and has no means of knowing the truth or correctness of said instruments and has no legal justification to consider them as properly in the cause. The only allegation in the amended bill, bearing on the question as to whether or not the Chicago Title & Trust Company redeemed said property on behalf of the original owners, is a mere conclusion of the pleader. The bill contains not a single circumstance upon which the court could predicate an opinion that such was the fact. The original bill contains no such allegation, but, on the other hand, directly charged that the Chicago Title & Trust Company became the legal holder and owner of the master’s certificate of sale and obtained the legal title to said property. Courts do not look with favor upon amendments to bills that are clearly in conflict with the allegation set out in proceeding pleadings. If the property was in fact the property of the original owner of the equity and not of the Chicago Title & Trust Company, the proper remedy would have been a creditor’s bill to disclose that fact and subject the property to a satisfaction of claimants’ liens.

The ground for reversal in this case, as set forth in the amended bill, seems to be based upon the fact that where, as a matter of law, the assignee of the equity of redemption redeems property sold under a foreclosure sale, such assignee is liable for any unpaid balances not satisfied by the sale and, in the event of the assignee’s failure to pay said claims, the property may be subjected to a further sale. We do not understand this to be the law. Only such persons who redeem who were primarily liable for the indebtedness, become liable for the balance due, if any, on a foreclosure and then only in the event that a deficiency decree is found against such person primarily liable. The general rule seems to be that the foreclosure clears the property of all claims and the individual primarily liable is so only because of his common-law liability. The creditors may reach any asset belonging to him, subject to execution, and this would necessarily include the property after his redemption of same from the sale.

The Supreme Court of this State in the case of Ogle v. Koerner, 140 Ill. 170, in its opinion says:

“A mortgage, or as in this case, a deed of trust in the nature of a mortgage, vests in the party secured a lien upon the mortgaged premises. By virtue of that lien the mortgagee is entitled to have ,the mortgaged property sold under a decree of foreclosure and the proceeds of the sale applied to the payment of the debt secured. This is the mode provided by law for the enforcement of the lien, and when the lien has been once enforced by the .sale of the property, it has, as to such property, expended its force and accomplished its purpose, and the property is no longer subject to it.

“When the redemption is made by a party primarily liable on the mortgage debt, it may be that the same property may be resorted to again for the purpose of subjecting it to the payment of an unpaid balance due on the mortgage, but that is not because of any right to enforce the mortgage lien against the same property a second time, but because of the rule of law which subjects all the property of a debtor to the payment of his debts until they are satisfied in full. But where the redemption is made by a party not liable upon the mortgage debt, the mortgage lien having been exhausted, the property cannot be subjected a second time to the satisfaction of the same lien. The party redeeming does so for his own benefit, and the holders of the senior mortgage having, by the sale, become entire strangers to the property, are in no position to derive any advantage from the redemption. The sale having been made at public auction, and in the manner prescribed by the statute, the presumption, as between the senior and junior incumbrancers, is a conclusive one, that the property has produced its entire value, and that value having been once applied to the senior mortgage, the lien has accomplished its full purpose and is thereafter functus officio.”

To the same effect is Easter v. Holcomb, 221 Ill. App. 485, where the court in its opinion says:

“Section 21 of said chapter (J. & A. Par. 6767) provides the method of making successive redemptions by judgment creditors, and section 22 (J. & A. Par. 6768) provides for the preference and seniority in making such redemptions. It will therefore be observed from the reading of the statute that after the first sale on an execution the only person entitled to redeem within one year is the judgment debtor, or his assignees or grantees or someone claiming by, through or under them. In other words, there is no provision of the statute allowing a levy and sale of the debtor’s equity of redemption prior to the expiration of one year from the date of sale. From this we draw the conclusion that at any time prior to one year from the date of sale under an execution, the judgment debtor can convey his equity of redemption free and clear of any judgment liens. If the grantee or assignee of the equity of redemption sees fit within one year to redeem from the sale he has the right to do so, and, having done so, could sell the premises free and clear of any balance that might remain unpaid on the judgment on which execution was issued. ’ ’

To the same effect is Lightcap v. Bradley, 186 Ill. 510; Strause v. Dutch, 250 Ill. 326.

There does not appear to have been any personal service on the defendant Yonderheide, and the record is somewhat confused as to whether or not he, or certain others, were liable under a charge in the bill that the decree was ordered entered against certain of the defendants in the circuit court in favor of the cross-complainants. A personal decree should not be entered unless there is such service as the law recognizes as legal service for the purpose of a personal judgment. Counsel for the defendant insists that such service as there was in the circuit court proceeding, being by publication, did not authorize a personal judgment, and cites the case of Northern Trust Co. v. Sanford, 308 Ill. 381. Counsel for complainant in turn cite the case of Malleable Iron Co. v. Brennan, 174 Ill, App. 38. This latter case is referred to in the case of Boothman v. Wulfing, 194 Ill. App. 289, but while they hold in the latter case that service of such á character was sufficient, the court recognizes the fact that there cannot be a personal judgment against the defendant by serving by publication and mailing of a notice. The court in the Boothman case, supra, however, distinguished Malleable Iron Co. v. Brennan, supra, and recognized a personal judgment on the ground that the affidavit contained language from which there might arise a presumption that the defendant was not a nonresident, but living somewhere, residence unknown, within the city of Chicago, and, furthermore, that the defendants had entered their appearance in the writ of error proceeding in said cause and were not urging any objection to the jurisdiction of the municipal court where the orginial judgment was entered.

We are impressed with the holding in the case of Northern Trust Co. v. Sanford, 308 Ill. 381, to the effect that the complainant in the foreclosure suit cannot legally have a personal judgment entered against a defendant for any sum, where the defendant has not been personally served with process.

For the reasons stated in this opinion, the judgment of the superior court is affirmed.

Affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    L. D. Read and C. P. Reynolds, Appellants, v. William S. Kerr, Appellee.
    Gen. No. 32,559.

      Opinion filed June 20, 1928.
    Louis P. Miller, for appellants.
    Henry E. Jacobs, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

The record in this case discloses that the plaintiffs, L. D. Bead and C. P. Beynolds, recovered a judgment by confession on a certain promissory note against William S. Kerr, defendant, on the 24th of January, 1927, for the sum of $6,068.33. On February 16, 1927, the judgment was opened and defendant given leave to appear and defend, and the affidavit of William S. Kerr, filed in support of the motion to open said judgment, was allowed to stand as an affidavit of merits on behalf of the defendant.

The note upon which the judgment was based follows:

1 ‘ Collateral Note

$5,000.00 September 2nd, 1924

“Twelve Months after date, for Value Beceived, I Promise to Pay to the Order of J. W. Kingsbury and J. L. Boach the sum of Five Thousand Dollars, at Phillip State Bank and Trust Co. with interest at the rate of six per cent, per annum after date, payable semi-annually, having deposited.

“Seventy Five Hundred Dollars in Stock of the Grlen-Lunt Manor Corporation, Located 1327 to 1339 Lunt Ave., Chicago, Ill. which I hereby give the said J. W. Kingsbury and J. L. Koach agent or assignee, authority to sell, or any part thereof, on the maturity of this Note, or at any time thereafter, or before in the event of said securities depreciating in value, in the opinion of said J. W. Kingsbury and J. L. Roach at public or private sale, at the discretion of said J. W. Kingsbury and J. L. Roach or their assignee, without advertising the same, or demanding payment, or giving me any notice, and to apply so much of the proceeds thereof to the payment of this Note as may be necessary to pay the same, with all interest due thereon, and also to the payment of all expenses attending the sale of the said Stock including Attorney’s fees; and, in case the proceeds of the sale of the said Stock shall not cover the principal, interest, and expenses, I promise to pay the deficiency forthwith, after such sale. And at any sale of said collaterals, or any part thereof, made by virtue hereof, it shall be optional with the legal owner or holder of this Note to bid for and purchase said collaterals or any part thereof.

William S. Kerr.”

Following this note and made part of it was the ordinary, usual clause authorizing a confession of judgment and waiving notice and providing for costs and attorneys’ fees. This note bore the indorsement, “J. W. Kingsbury” “J. L. Roach.”

The affidavit filed on behalf of the defendant Kerr, in support of his motion to open the aforesaid judgment, charged that he received notice of the writ of execution served to enforce said judgment and that it was the first knowledge he had of the confession of judgment against him; charged that the note was procured by false representations made by J. W. Kingsbury and J. L. Roach, who were promoters of a certain co-operative building located in the city of Chicago, and sets forth certain statements that were made to him by said parties at the time that he purchased one of the apartments and gave the aforesaid note.

It is not necessary to go into detail as to the charges of fraud in the affidavit of merits on the part of Kings-bury and Roach because of the fact that these are not denied by plaintiffs.

The cause was tried before a jury and a verdict returned finding the issues against the plaintiffs and in favor of the defendant. Appeal was prayed and allowed to this court on the filing of bond and bill of exceptions. It is charged, however, in the aforesaid affidavit filed on behalf of the defendant, which was allowed to stand as an affidavit of merits, that the aforesaid note was received by the plaintiffs with full knowledge of the false and fraudulent representations charged in the affidavit of merits, and that it was not received before maturity nor for a valuable consideration and that the said plaintiffs were not the actual owners of said note. '

We have searched the record and find that there was no testimony on behalf of the defendant to the effect that the plaintiffs had any knowledge of the false and fraudulent representations alleged; nor is there any evidence that it was not received by the plaintiffs for a valuable consideration; nor is there any evidence that it was received after maturity; nor is there any evidence that they were not the real and actual owners of the said note. On the other hand the testimony of the plaintiffs is clear and unimpeached that they paid the sum of $4,750 for said note on March 12, 1925, and-the check given in payment for said note was introduced in evidence as Exhibit No. 2. The testimony of Read and Reynolds, plaintiffs herein, is unimpeached, in that they had no knowledge of any of the alleged false and fraudulent representations made to the defendant and had no knowledge that the premises for which the note was given were defective or different in any respect from the alleged statements made to the plaintiffs. It is uncontradicted that the note was purchased before maturity and that a demand was made upon the defendant for the interest, which was refused.

No effort was made by the defendant Kerr, so far as the record shows, to rescind the agreement between himself and Kingsbury and Roach, but, on the other hand, the note was allowed to remain in the hands of plaintiffs, from the date of its purchase in March, 1925, until suit was started upon said note in January of 1927. The defendant did refuse, however, to pay the interest upon the same. The note in question was indorsed in blank and passed by delivery to the plaintiffs. Palmer v. Nassau Bank, 78 Ill. 380, where the court in its opinion says :

“Possession of a note indorsed in blank is evidence of title * * *. The filling up the blank indorsement was a mere matter of form.”

Y. M. C. A. Gymnasium Co. v. Rockford Nat. Bank, 179 Ill. 599, where the court in its opinion says:

“In the case at bar the six notes in suit were placed in the hands of Pármele, bearing the endorsement of the payee, without any. evidence whatever endorsed thereon or attached thereto that they were to be held by him otherwise than as absolute owner. He was thus clothed with every indicia of the legal title and absolute ownership by the party to whom they were made payable. It is well settled that such instruments endorsed in blank pass by delivery, the endorsement being treated as made to each subsequent transferee; also, that the negotiability of commercial paper does not cease with its maturity but may still be negotiated by endorsement.”

In the ease at har, when the plaintiffs received the note indorsed in blank by Kingsbury and Roach, they received it in due course, and became the owners by delivery. The fact that said note- was subsequently sold to another innocent purchaser and afterwards received back upon the return of the Consideration, placed the note again in the hands of the plaintiffs and as such they held as bona 'fide owners and had all the rights that they would have had if they had not parted "with the note but continued to retain possession of it after its first receipt from Kingsbury and Roach.

Bradley v. Progressive Metal & Refining Co., 205 Ill. App. 552, where the court in its opinion says:

“It is the well-settled law of this State that a remote indorsee may avail of the title of any prior indorser, and if, as in the instant case, the first indorsement was valid and vested the title to the note in such indorsee, that title may be availed of in an action by any subsequent indorsee and holder of such note. ’ ’

There is nothing in the Negotiable Instrument Act which changes or alters this rule. Drumm Construction Co. v. Forbes, 305 Ill. 303.

It is urged by counsel for the defendant that, by reason of the fact that the note on its face showed that it was secured by collateral security that it therefore is non-negotiable, but with this contention we are unable to agree. The Supreme Court of this State in the case of Mumford v. Tolman, 157 Ill. 258, in the statement of facts shows that in that case the note was upon a judgment which was given for certain shares of the Chicago Trust & Savings Bank and was payable on demand for $8,500 and, attached to the note, was the statement that the maker had deposited with the holder as collateral security, a certain certificate for shares of the Chicago Trust & Savings Bank stock, etc. and also a power of attorney to confess judgment. The court in its opinion says that the instrument sued on is negotiable, and this too clearly to be made the subject of serious controversy.

To the same effect see Victor v. Warner, 248 Ill. App. 35, in which this court in its opinion said:

“In support of this proposition defendants contend that because the note is secured by a chattel mortgage it is not payable unconditionally. This contention finds no support in any of the terms of the note. It is payable for a sum certain and without condition. The chattel mortgage is collateral security only. If we were to concede the correctness of this contention, then every note secured by collateral would be non-negotiable, and bankers who hold such notes could not pass title by indorsement and delivery.”

Not only is there no evidence in the record that the plaintiffs took said note with any knowledge of the alleged fraudulent statements made to procure its issuance, but, in this State the rule is much stronger and they would be entitled to be considered as bona fide holders for value even though there may have been a suspicion in their minds at the time of the purchase of said note that it was issued as a result of false and fraudulent statements.

The Supreme Court of this State in the case of Matson v. Alley, 141 Ill. 284, in its opinion says:

“The party who takes it (commercial paper) before due, for a valuable consideration without knowledge of any defects of title, and in good faith, holds it by a title valid against the world. Suspicion of defect of title, or the knowledge of circumstances which would excite such suspicion in the mind of a prudent man, or gross negligence on the part of the taker, at the time of the transfer, will not defeat his title, — that result can only be produced by bad faith on his part. The burden of proof lies on the person who assails the right claimed by the party in possession.”

It is urged on behalf of the defendant that, under the pleadings in this case, the burden was upon the plaintiffs to show that they received the note without knowledge of any fraud. The testimony bears out the fact that they did not have any such knowledge and, moreover, it is not the rule that the burden was upon them to disprove the' fact as charged in the affidavit of merits. The court appears to have instructed the jury otherwise.

It is clear that under circumstances such as this, where a party places in circulation a note which is procured by fraud and where it does not affirmatively appear that the purchaser of the note took it with full knowledge, that it is better in the eyes of the law that he who started a note in circulation, although injured thereby, should suffer rather than some person who took it later on, relying upon its validity.

The rule is laid down in the case of Drumm Construction Co. v. Forbes, supra, wherein the court says:

“Moreover, we think a recovery cannot be had because of the well known rule that where there are two innocent parties in the case, the one who puts it in the power of a third party to commit the act causing it must bear the loss.”

We are unable to perceive any force in the argument of counsel to the effect that, under the pleadings, the plaintiffs should not be entitled to recover. From the record in this case it appears that there was first a judgment obtained on the note by reason of the power of attorney to confess judgment therein contained. Later, upon motion of defendant to open said judgment for the purpose of allowing them to come in and defend, said judgment was opened and the affidavit in support of said motion was allowed to stand as an affidavit of merits. It was under this state of the pleadings that the parties proceeded to trial, with the judgment opened but not vacated. The plaintiffs under the proof were the owners and holders of the note and produced said note on the hearing and introduced it in evidence, and the issues were made and tried upon the record so constituted. The defendants in their affidavit of merits did not deny execution nor delivery. We find no exception in the record on behalf of the defendant to the pleadings and will not, therefore, consider them upon review.

From the record and testimony in the case we find no evidence whatsoever to the effect that the plaintiffs purchased said note with knowledge of any fraudulent representations, but, on the other hand, are of the opinion that the verdict of the jury is manifestly against the clear weight of the evidence.

For the reasons expressed in this opinion the judgment of the trial court is reversed and the cause re-, manded for a new trial.

Reversed, and remanded.

Holdom, P. J., and Taylor, J., concur.


text:
    Joseph Maly, Appellee, v. Dominic Iandola, Appellant.
    Gen. No. 32,575.

      Opinion filed June 20, 1928.
    Rehearing denied July 5, 1928.
    ■ Murphy O. Tate, for appellant.
    J. W. Koucky and Charles C. Spencer, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

The plaintiff, Joseph Maly, brought his suit in the superior court of Cook county, against James Iandola and Dominic Iandola, defendants, charging that they were the owners and possessed of a certain automobile which was then and there under the control and management of the defendants, and was then and there driven at a high rate of speed over and along certain streets of the city of Chicago, Cook county, Illinois; charging that the defendants so carelessly and improperly drove said car that it ran into the plaintiff, as a result of which plaintiff was injured; charges further that plaintiff, at the time of the accident in question, was, himself, in the exercise of ordinary care for his own safety.

To this declaration the defendant James Iandola filed a plea of the general issue and Dominic Iandola filed a plea of the general issue and a special plea to the effect that he did not own, operate or control the vehicle alleged to have caused the accident to the plaintiff.

The suit was dismissed as to the defendant James Iandola at the conclusion of all the evidence and a verdict returned by the jury against Dominic Iandola and assessing plaintiff’s damages at the sum of $1,750 and judgment was entered on the verdict. From this judgment the defendant, Dominic Iandola, appeals.

The facts clearly show that at the time of the accident in question the car was being driven by James Iandola, a son of Dominic Iandola, and that the son, at the time of the accident, was about 22 years of age, but it is insisted by the defendant here, that the son was not, at the time of the accident, engaged in and about the father’s business, nor was he driving the car at the time of the accident with his father’s knowledge and consent.

At the end of the plaintiff’s testimony the defendant made a motion for a directed verdict in favor of the defendants which was denied and an exception taken. At the end of all the evidence this motion was renewed and overruled by the court and an exception taken. After verdict, a motion for a new trial was overruled and exception taken and after judgment, a motion in arrest of judgment was made by the defendant here which was overruled and an exception taken.

It is insisted by counsel for the defendant that the declaration charges facts showing a relation of joint tort-feasors on the part of the two defendants and that the proof is entirely at variance with this allegation and that the liability of Dominic Iandola, if any, should be based upon the doctrine of respondeat superior and that, therefore, the facts do not sustain the allegations of the declaration. .

No count in the declaration charges Dominic Iandola, the father, with liability by reason of the act of his servant or agent, nor does it predicate liability upon the fact that the son was driving the car with the knowledge and consent of the father. The declaration charges solely joint ownership and operation and this was denied by the plea of the general issue, as well as the special plea filed on behalf of the father, Dominic Iandola. This question was properly preserved for the consideration of this court by reason of the motion at the close of the plaintiff’s evidence and renewed at the end of all the evidence to direct a verdict for the defendant here.

This court in the case of Van Meter v. Gurney, 240 Ill. App. 165, says:

“Counsel for the plaintiff contends that the objection of counsel for the defendants involves a question of variance between the proof and the declaration, and that as the variance was not pointed out specifically on the trial, the question of variance was not saved for review.

“If the question was one only of variance, the contention of counsel for the plaintiff would be correct. Linguist v. Hodges, 248 Ill. 491, 497; Carney v. Marquette Third Vein Coal Min. Co., 260 Ill. 220, 225; Libby, McNeill & Libby v. Scherman, 146 Ill. 540, 549; Harris v. Shebek, 151 Ill. 287, 292, 293. But although the objection involves the question of variance, it also includes the question whether the cause of action alleged in the declaration is supported by the proof. As the defendants made a motion at the close of the plaintiff’s evidence to direct a verdict in favor of the defendants, and renewed the motion at the close of all the evidence, the question whether the proof sustains the cause of action alleged in the declaration was saved for review. Chicago Union Traction Co. v. Brethauer, 223 Ill. 521, 525.”

The allegations in the declaration in the case just cited, as in the case at bar, charges that the defendants were the owners of, and were in possession of and operating a certain automobile and that it was their duty to manage and operate said automobile in a careful manner, but, on the contrary, managed and operated it in a negligent manner. The court in its opinion says in regard to this declaration:

“In our opinion these allegations are not sufficient to establish the relationship of master and servant between the defendants, even when all intendments and presumptions are indulged in favor of the allegations. Ill our view the allegations state a cause of action against the defendants only as joint tort feasors. We do not think, however, that counsel for the defendants are correct in their contention that the proof fails to sustain a cause of action on the theory of joint tort feasors, and that on the evidence the defendants could be held liable only on the doctrine of master and servant. If the right of the plaintiff to recover should be considered from the aspect of the evidence alone, we are of the opinion that the defendants could be held liable jointly both on the theory of tort feasorship, and on the doctrine of master and servant, or the equivalent relationship of principal and agent. But when the declaration, which charges only tort feasorship, is considered in connection with the evidence, the plaintiff’s right of recovery must be restricted to tort feasorship.”

It is clear from the evidence in the case at bar that there was no concerted action between the defendants and, consequently, no liability by reason of the defendants being joint tort-feasors. To the same effect see 39 Corpus Juris, 1352; 13 Ency. Pl. & Pr. 922; Shein v. John B. Thompson Co., 225 Ill. App. 490.

This court in the case of Leber v. Lindenberg, 244 Ill. App. 104, which was an action against husband and wife, based on the theory that they were jointly liable by reason of the fact that they were jointly in possession and in control of the car at the time of the accident, in its opinion says:

“The only evidence relied on to sustain the judgment as to him was to the effect that he was the actual owner of the car; that he bought it for the family use and convenience and that it was being used for that purpose with his knowledge and consent. On these facts counsel for plaintiff urges that the case comes within the doctrine of respondeat superior and the rulings in Graham v. Page, 300 Ill. 40, and Gates v. Mader, 316 Ill. 313. The contention is based upon a misconception of the issues. The facts so relied on and the cases referred to involve only the doctrine of imputed negligence, and not the principle of liability in a case of joint tort-feasorship. The declaration here contains no allegations of any relationship to which the former doctrine is applicable. As it states a cause of action on the theory of joint tortfeasorship only, and not one on the doctrine of respondeat superior, neither the facts nor the authorities so relied on by defendant in error are pertinent to the issues raised by the pleadings.”

Counsel for the plaintiff cite Braum v. Conrad Seipp Brewing Co., 72 Ill. App. 232; Klugman v. Sanitary Laundry Co., 141 Ill. App. 422; Margolis v. United Dairy Co., 214 Ill. App. 613, in support of their contention that, under a direct charge that the defendant ran, managed and operated the vehicle in question, it becomes competent to show that it was done by a servant or agent, under such a charge in the declaration, but the cases cited are cases against a corporation and in those cases the court has extended the doctrine apparently upon the ground that the defendant, being a corporation, it could act only by servant or agent and that, therefore, the allegation that it acted by its servants and agents was sufficient. The reasoning in those cases could not apply to an individual defendant. Moreover, we find nothing in those cases in conflict with the rule announced in the cases already cited in this opinion.

The fact that the defendant, James Iandola, who was actually engaged in the management and control of the car at the time of the accident was dismissed out of the suit, does not deprive the remaining defendant of the right to have the court consider the question as to whether or not the evidentiary facts conform to the declaration. The declaration by expressly charging the defendants with being joint tort-feasors, excluded the theory of respondeat superior and the dismissal of one defendant could not alter the charge of negligence on the ground made out in the declaration.

In the case at bar, the defendant here is charged with running, operating and owning a certain vehicle which caused the accident in question and the evidence discloses that, at the time, he was not operating or managing said car and that his liability, if any, is predicated upon the rule of respondeat superior. By his special plea he gave notice to plaintiff of this fact, but plaintiff did not see fit to amend to conform to the fact.

We are unable to hold otherwise than that the facts did not conform to the allegations of the declaration and that this question was saved by the proper motion made in the trial court.

For the reasons stated in this opinion the judgment of the trial court is reversed and the cause remanded for a new trial.

Reversed and remanded.

Holdom, P. J., and Taylor, J., concur.