author: Mr. Justice Hebel

text:
    City of Chicago, Plaintiff below, v. John Goebel et al., Defendants below. Eugene J. Holland, Appellee, v. City of Chicago et al. Appeal of Michael Kelly et al., Appellants.
    Gen. No. 40,506.

      Opinion filed June 21, 1939.
    Rehearing denied July 3, 1939.
    Byron Tyler, Hugh W. Housum and John F. Denis-sen, all of Chicago, for appellants and pro se.

    Pollock & Latchford, of Chicago, for appellee.
   Mr. Justice Hebel

delivered the opinion of the court.

This action was instituted by Eugene J. Holland by a petition to establish and enforce a statutory attorney’s lien on the proceeds of a judgment of condemnation of certain real estate. Such proceeds, in the amount of $30,000, had been deposited previously with the county treasurer of Cook county to be paid to the owner or owners of and parties interested in the land condemned.

The order appealed from directed the county treasurer to pay to the petitioner $7,000 out of the $30,000 so deposited, and the court retained jurisdiction to enter such other or further orders as to the balance of the money remaining with the county treasurer as should appear proper and necessary to carry out the condemnation judgment. The order was entered on findings by the court.

The petition alleged that the petitioner was engaged as attorney by Thomas J. Grady to represent him and certain described real estate, then the subject of condemnation in the cause entitled City of Chicago v. John Goebel, et al.; that Grady was then the owner of said real estate; that the petitioner agreed with Grady to represent him and the property and Grady agreed to pay the petitioner $7,000 as attorney’s fees in the cause, the fee to be paid from the judgment entered for just compensation; that the petitioner entered his appearance in the cause and rendered services for Grady and the property; that by reason of the services so rendered the final judgment for the property taken was increased to $30,000 from the original award by,the commissioners of $21,382; that by reason of the contract with the petitioner and the services rendered by him, he claims an attorney’s lien on the city of Chicago according to the statute; that the city has deposited $30,000 with the county treasurer of Cook county for the use and benefit of the owner or owners of and parties interested in the compensation to be paid for the property condemned. That Thomas J. Grady, Michael Kelly, Thomas J. Boche, Burton B. Colbert, Wiley W. Mills, as trustee in bankruptcy of the estate of Thomas J. Grady, Byron Tyler, Hugh W. Housum and John F. Denissen, claim to have an interest in the money so deposited but the claims of such parties are inferior to the lien of the petitioner. The petition prays the court to find the petitioner to have a valid first lien for $7,000 on the fund in the hands of the county treasurer, and that the treasurer be directed to pay said sum to the petitioner in full satisfaction of said lien and for general relief.

Bespondents Michael Kelly and Thomas J. Boche filed their motion in writing to dismiss the petition on the ground that the county court was without jurisdiction of the subject matter thereof.

Bespondents Byron Tyler, Hugh W. Housum and John F. Denissen, likewise filed a motion to dismiss the petition on the ground .that the county court had no jurisdiction of the subject matter of said petition. Said motions were denied.

On October 3, 1928, the city of Chicago, pursuant to the provisions of the Local Improvement Act, filed its petition in the county court of Cook county to condemn, with other property, the property described in the petition.

At that time the record title to said lands was in respondent Thomas J. Boche, as trustee under and by virtue of a deed in trust from Michael J. Hackett, dated June 14,1921, and recorded in the office of the recorder of deeds of Cook county, on July 5, 1921. On June 20, 1924, there was recorded a deed, dated June 19, 1924, purporting to convey said lands from Thomas J. Boche, as an individual, and Mary Boche, his wife, to Thomas J. Grady. Thomas J. Boche, as trustee never conveyed his title as trustee in said lands, and the record title is still in him as trustee.

In the summer of 1927 Grady told the petitioner, Holland, that there was talk about condemning a piece of property which he owned and that he would like to have it taken care of and get his money promptly if he could, and that he was not satisfied with the offer of $9,000 made by the city for the property. Petitioner told Grady that they would take the matter to court and contest it and try out the issue of just compensation for the property. Grady asked, “What will your fee be?” and the petitioner said, “One-third of any amount I get over $9,000 for you.” Grady asked who would pay the expenses and the petitioner said they would come out of his fee. Grady replied,1 ‘ Go ahead. ’ ’

On October 4, 1921, an appearance was filed in the condemnation proceeding by Holland & Donovan, as attorneys for Thomas J. Grady. Neither of the respondents, Thomas J. Boche nor Michael Kelly was named in the summons issued in that proceeding, and neither filed or entered an appearance.

The commissioners valued the lands at $21,382, but the court found and adjudged the just compensation to be $30,000, and on December 19, 1930, ordered the city to pay the latter amount to the owner or owners of and parties interested in said lands.

At the time the condemnation judgment was entered Holland said to Grady, “Well, Tom you owe me $7,001,” and Grady replied “Well, get me the money and you will get yours.” There was also a conversation between them, that Holland would be paid his fee out of the fund the city was to pay Grady. Holland, however, stated that he did not believe he ever had any conversation with Boche or Kelly in this matter.

On December 9, 1930, petitioner Eugene J. Holland caused to be served on the city of Chicago a notice of claim for an attorney’s lien for the amount of his fees for services in the condemnation case, pursuant to and based upon a contract with Grady. Bespondent Michael Kelly recovered a judgment on April 22, 1931, against Grady in the municipal court of Chicago for $20,121.55, which was subsequently satisfied to the extent of $3,402, and an execution thereon was returned unsatisfied for the balance. On April 19,1933, Michael Kelly filed an amended cross-bill in a cause pending in the circuit court of Cook county, in which he alleged the foregoing title of Thomas J. Boche, as trustee; that the aforesaid purported deed from Thomas J. Boche and Mary Boche had never been executed, acknowledged or delivered by them or either of them; that a written agreement, made by Grady, Boche and Kelly at the time the title was so conveyed to Boche in trust, contained a mistake in the description of the property it was intended to describe and that Boche held the legal title to said lands for the use and benefit of himself, Grady and Kelly. The amended cross-bill prayed that the agreement be reformed and corrected and that the purported deed from Thomas J. and Mary Boche, be removed as a cloud on the tit-le of Thomas J. Boche, as trustee, and of the beneficiaries under the trust.

Kelly on November 13, 1934, filed amendments and supplements to his amended cross-bill, in which he alleged the recovery of the judgment in the municipal court of Chicago and the return of the execution thereon unsatisfied, and that after the entry of the judgment, Grady had made a pretended conveyance of said lands without consideration and to hinder, delay and defraud Kelly out of his just demands and prayed that said conveyance he set aside and that said judgment be established as a first and superior lien against the interest of Grady in said lands and, in default of satisfaction of said judgment that such equitable interest of Grady be sold to satisfy the lien thereof. This cross-bill, as amended and supplemented, alleged that certain persons and corporations therein named claimed some interest in said lands as judgment creditors of Grady, or otherwise, and that, there are other persons whose names are unknown who have, or may claim to have, some right, title or interest in or to said lands. Petitioner Holland was not named as a defendant in or to the cross-bill. Answers were filed to the cross-bill, as amended and supplemented, by Grady, Roche and certain other defendants who did not appear, including unknown owners, and the cause was referred to a master in chancery, who proceeded to take evidence thereon. Said matter was pending in the circuit court when the instant petition was filed. An order was entered in the county court of Cook county on January 21, 1937, directing the city of Chicago to deposit the compensation awarded with the county treasurer of Cook county for the use and benefit of the owner or owners of and parties interested in the lands condemned. In accordance with that order the city did deposit the compensation, in the amount of $30,000 with the county treasurer, who still holds it.

By an assignment in writing dated February 5,1935, Holland sold, assigned, transferred and set over to Burton R. Colbert all his right, title and interest in and to his attorney’s fees for representing Grady in the condemnation proceeding. Subsequently, by written instrument bearing no date but acknowledged February 27, 1935, Colbert reassigned $4,500 of said fees to Holland, and by assignment dated February 1, 1938, assigned $2,300 of said fees to the counterclaim-ant, F. Burton Bryant.

In this condition of affairs Holland, on February 28, 1938, filed the instant petition in the condemnation proceeding.

In considering the facts in this case the rights of the parties are based largely upon the contract which was entered into on the 14th day of June, 1921, between Thomas J. Grady, Thomas J. Boche and Michael Kelly, and from this contract it appears that Grady purchased the real estate involved in this litigation for the benefit of all the parties to the contract, and for the purpose of subdivision into lots and resale, and that it was agreed by and between the parties to the contract that the property was to be held in trust by Thomas J. Boche for the benefit of the parties to the contract and that the trustee was empowered to transfer the property to either of the other two parties, and among other things it was agreed that Thomas J. Grady was to sell the property at whatever price he considered fair, and it was provided that no lot was to be sold for less than $1,000 and that the profits that might result from the sale of the property was to be divided one-third to Thomas J. Boche, one-third to Michael Kelly, and one-third to Thomas J. Grady, so that by the terms of the contract between the parties Grady had a one-third interest in the amount that might be received by the disposition of the property in which these parties were interested.

Just why the property in question was conveyed to Thomas J. Grady by Thomas J. Boche and his wife does not appear from the facts in the record, although Boche was empowered to transfer said property to such party as the parties to the contract wished to have appointed.

In finding the title to be in the parties named in the contract it is clear that the petitioner Eugene J. Holland was retained by Thomas J. Grady to appear in the litigation, and that as a result of the agreement between these parties the petitioner did appear and a judgment for $30,000 was entered by the court and the amount deposited with the county treasurer of Cook county to be paid to the owner or owners and parties interested in the land condemned. The petitioner seeks to have allowed $7,000, which was agreed to by Grady as his attorney’s fee, and the petitioner seeks to establish an attorney’s lien for the amount of his fee for services rendered in the condemnation suit, and the question is raised does the county court have jurisdiction to allow the lien for attorney’s fees from the fund in its custody and control.

The petitioner points to sec. 28, Local Improvement Act, sec. 727, Cities and Villages Act, ch. 24, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 76.033], which provides that the county court in condemnation cases may decide between adverse claimants as to the disposition of the proceeds of the judgment, and cites the case of Standidge v. Chicago Rys. Co., 254 Ill. 524, as sustaining his contention that this attorney’s lien is enforceable in the county court, that court being a court of law, and we are satisfied from an examination of the law as applied to this case that the county court has jurisdiction to allow a lien in an appropriate case.

Upon the question of this allowance of more than $2,000 in the county court, the question raised is whether or not the county court is limited in its jurisdiction to the sum of $2,000. Of course the question of jurisdiction in this case arises under the Local Improvement Act, and it follows that the court has general jurisdiction to pass upon the questions involved in the condemnation proceeding without regard to the amount involved. This jurisdiction is conferred by sec. 37, par. 738, Cities and Villages Act, ch. 24, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 76.044], and the court having such jurisdiction as to amount, it necessarily follows that it has jurisdiction to enter such further orders providing for the disposition of the proceeds of the condemnation judgment entered in the cause without limit as to amount.

It seems to ns that in order to carry ont the provision of this Local Improvement Act, the court necessarily must have jurisdiction to carry to completion the disposition of the proceeds of a condemnation judgment, and that of course would apply to the amount that may be allowed an attorney for his services where he has served notice and followed the statute with reference to the application of the Attorney’s Lien Act, par. 14, sec. 1, ch. 13, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 9.13], to the amount that may be recovered in the condemnation proceeding*, and we are of the opinion that the court has jurisdiction as we have here outlined.

As to the question of the statute of limitations, it does not appear from this record that the city of Chicago, nor Grady, raises this question. So, as long as the judgment is collectible the petitioner’s lien thereon is collectible. There is no limit on the time of service of a lien notice. Mid-City Trust & Sav. Bank v. City of Chicago, 292 Ill. App. 471. We are satisfied from the record that the order appealed from was warranted and supported by competent evidence. Therefore the court was justified in allowing the entry of the order.

The further thought is conveyed by the respondents that an attorney’s possessory lien is not assignable, and they point to the assignment from Holland to Colbert, and urge that because that assignment was void Colbert’s assignment to Bryant was void also. Subsequently the assignment to Colbert and Bryant having been disposed of adversely to them, neither party is here on appeal, although Bryant filed an interpleader claiming part of the fee, which he later withdrew, so this question is not serious.

Upon the question of liens our Supreme Court in Baker v. Baker, 258 Ill. 418, said: “While the act is remedial in its nature it creates new rights aside from the remedy. The rights of the defendant or debtor are neither increased nor diminished by the act, but this is not true of the plaintiff or claimant. Under the laws existing prior to the passage of this act a client was under obligation to pay his attorney the fees agreed upon, or, in the absence of an agreement, a reasonable fee. Under the act in question the obligation on the part of the client to pay is the same, but the attorney is given a means for enforcing payment which is of material concern to his client. While the act is entitled as one creating an attorney’s hen and for enforcement of the same, and while it in terms gives the attorney a lien for his fees, the lien created partakes but little of the elements and nature of the ordinary lien. It attaches to any verdict, judgment, decree, or the proceeds of any settlement. In other words, it is a lien upon the proceeds, only, of the litigation or settlement of the claim. Should the defendant or debtor ignore the notice claiming a lien and settle in full directly with his adversary, there is no specific property left in his hands which could be applied to the payment of the attorney’s fees upon foreclosure or other proceedings to enforce the lien. The only recourse that an attorney has under those circumstances is to bring suit, recover a judgment and collect it in the ordinary way. By serving the notice claiming a lien the attorney in effect becomes a joint claimant with his client in any judgment or decree that may be rendered or in the proceeds of any settlement that may be made by the client, and to the extent of the amount of his fee has the same interest in such proceeds, judgment or decree as his client and is entitled to his pro rata share thereof. In short, when the notice claiming a lien is served on the defendant or debtor under this statute it has the effect of an assignment of an interest in any judgment or decree that may be rendered or in the proceeds of any settlement that may be made by the client, and is such an assignment that the defendant or debtor is bound to respect.”

As we have indicated in our opinion, Michael Kelly and Thomas J. Roche filed their amended answer to the petition of the petitioner, and in a rejoinder which was also filed by these respondents, they admit that on June 20, 1924, what purports to be a warranty deed from Roche and his wife, was filed of record, and the question here is whether the pending litigation in the circuit court of Cook county in the case entitled Thomas J. Grady v. Michael Kelly, et al., is a bar to the order that was entered by the county court, from which the respondents appeal. In any event it seems that Grady has a one-third interest in the judgment sought to be recovered, in the instant litigation, which was fixed in the condemnation proceeding at $30,000, and having a one-third interest the petitioner seeks a lien for $7,000 for services rendered, which the court considered and allowed. The amount is subject to a lien, and applying the conclusion of the Supreme Court in Baker v. Baker, 258 Ill. 418, it is apparent that the petitioner has a joint claim with his client in any judgment or decree that may be rendered or in the proceeds of any settlement that may be made by the client to the extent of the amount of his fee in such proceeds. In allowing the amount as a lien upon the condemnation judgment the court is sustained by the reasoning of the Supreme Court in the case just cited, and from the facts there is no doubt that the petitioner is entitled to an attorney’s lien. He served proper notice and the court entered a proper order in the case so far as his interest was concerned.

We are of the opinion that the order entered by the county court was proper. Therefore it is affirmed.

Order affirmed.

Debts E. Sullivab", P. J., and Burke, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Elizabeth Shilvock, Appellant, v. The Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago, Appellee.
    Gen. No. 40,538.
    Opinion filed June 21, 1939.
    Rehearing denied July 3, 1939.
    Daniel S. Wentworth, of Chicago, for appellant; George P. Novaic and D. K. Lindhout, both of Chicago, of counsel.
    Barnet Hodes, Corporation Counsel, and George F. Mulligan, Assistant Corporation Counsel, for appellee.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal from an order of the circuit court quashing a writ of certiorari issued upon a petition to secure a review of the record of the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago, which denied petitioner’s application for a widow’s pension. No point is raised in regard to the pleadings except that the petitioner contends the return to the writ of certiorari made by the respondent is insufficient in law to sustain the legality and validity of the record and proceedings shown thereby.

Charles E. Shilvoek, the husband of Elizabeth Shilvock, petitioner, was appointed patrolman on the Chicago police force on October 6,1906. On May 20,1911, while on regular duty directing traffic at the intersection of Wells and Madison streets he was struck and injured by a Daily News delivery wagon. It is not disputed that the accident occurred and that officer Shilvoek was injured thereby. The record shows that after he was injured he left his post to report the accident at the Central Police Station and did not return to duty. What purports to be a copy of an accident report made out at the time of officer Shilvoek’s injury appears in the record. The record shows that upon arriving home on the day of the accident, officer Shilvoclt was found to have sustained injuries and had bruises on the right side of his body, including his right hip, right leg and right arm; that a physician was called and officer Shilvoek was treated and was under the care of this physician and two other doctors up to the day he died, October 27,1914, approximately three and one-half years after the accident.

Statements and affidavits of these physicians relative to the nature and extent of officer Shilvoek’s injuries and subsequent illness appear in the record. The evidence also shows that after being injured officer Shilvock was confined to bed for three or four days and was unable to report for duty until about 10 days later, at which time he was asked to take an inside job as watchman in the old municipal court building because of a shortage of men in the department on that day; that thereafter he was assigned to “crossing duty,” but was unable to do the work because of lameness, and was transferred to the Shakespeare avenue station as patrolman, where he remained assigned until his death.

The record contains several affidavits and a photostatic copy of a death certificate, certified to by Dr. Hendricks, who attended officer Shilvoek during his last illness. This certificate was a part of the evidence, and states the cause of officer Shilvoek’s death as chronic interstitial hepatitis. Another death certificate appears in the record which states the cause of death as chronic interstitial nephritis. There is evidence by medical experts that either of the sicknesses might have been caused by the injuries sustained by officer Shilvock.

The petitioner, who has never remarried, filed her application for a pension on December 24, 1914. The record of the Board shows that on January 13, 1915, “upon motion duly made, seconded and unanimously carried,” the claim was summarily denied.

On April 3, 1924, the petitioner filed a mandamus proceeding against the Board, seeking a statutory hearing on her claim. A demurrer was filed, and upon a hearing thereon, the court refused to dismiss the action on the ground that the widow should be given an opportunity to have her rights adjudicated. This fact was brought to the attention of the Board, and on November 24, 1931, it directed Mrs. Shilvoek to appear with her witnesses before the committee on claims.

The return of the Board shows that on March 10, 1932, by direction of the Board, several witnesses appeared and testified before the “Committee on Claims” on behalf of the petitioner, and other evidence was introduced in support of her claim. A memorandum appearing in the record entitled “Report of Committee on Claims — March 10, 1932,” states as follows: “Finding: Tour Committee recommends that the testimony and records in the Shilvock case be submitted to Dr. Way, Physician for the Board; that Dr. Way be requested tó write an opinion in this matter as to whether or not the injury described could have been the cause of the complaint from which Officer Shilvock died and that further action be deferred until a future meeting of the Claims Committee.” On April 1, 1932, Dr. Henry J. Way, physician for the Board, submitted his opinion. Omitting the formal heading of the report it is as follows:

Gentlemen:

“After reviewing all the papers in connection with the Shilvock matter, it is my opinion that the cause of Charles E. Shilvock’s death is in no way connected with the alleged injury.

Tours truly,

(signed) Henry J. Way, M. D.”

Another statement in the record entitled “Board Meeting held April 22,1932, ” sets forth as follows: ‘ Finding : On the basis of the medical opinion rendered by Dr. Way, Physician for the Board, your Committee recommends that the claim of Elizabeth Shilvock be denied.

“Acting upon the recommendation of the Claims Committee and upon the written opinion of Dr. Way, Physician of the Board, it was moved by Trustee Getz and seconded by Trustee McCarthy that the claim of Elizabeth Shilvock for pension as the widow of Charles E. Shilvock be denied for want of evidence showing that her husband, Charles E. Shilvock, died as the result of injuries received while in the performance of an act of duty.”

Thereafter the petitioner submitted further testimony to the Board in support of her claim. This consisted chiefly of expert medical testimony of Drs. Healv and Keesey. From a memorandum in the record of the Board Meeting held on May 19, 1933, the following appears:

“In the Shilvoek case, Mrs. Shilvoek and her attorneys McKinley & Price, and Dr. William E. Keesey, appeared before the Board and gave testimony.

“It was moved by Trustee Dwyer and seconded by Trustee Small that the entire record in the case of Elizabeth Shilvoek be referred to the attorney and physician of the Board to be summarized and their conclusions submitted to the Board as soon as possible.” And it further appears from the memorandum of the report that:

“It was moved by Trustee McCarthy and seconded by Trustee Dwyer that the report of the Attorney and the Physician for the Board in the Shilvoek case be approved and concurred in; that said report be made a part of these proceedings, and that this Board make no change in the decision entered on January 13, 1915, denying the claim of Elizabeth Shilvoek.”

Upon a hearing on this amended return, the writ of certiorari was quashed by the court and the case now comes to this court on appeal.

The petitioner contends that the Board unlawfully delegated its statutory duty to consider and pass upon the petitioner’s application for a pension, and suggests that the statute clearly makes the swearing of witnesses and passing upon evidence a quasi-judicial duty personal to the Board alone, citing Ill. Rev. Stat. 1937, ch. 24, par. 950, sec. 6 (g), p. 610 [Jones Ill. Stats. Ann. 100.130].

It appears from the record in this proceeding that on March 10, 1932, the committee dn claims of the Retirement Board recommended that the testimony and records in the case be submitted to Dr. Henry J. Way, physician for the Board, and that he be requested to write an opinion as to whether or not the injury described could have been the cause of the complaint from which officer Shilvock died, and Dr. Way filed a report and opinion which consisted of the following:

“After reviewing all the papers in connection with the Shilvock matter, it is my opinion that the cause of Charles E. Shilvock’s death is in no way connected with the alleged injury. ’ ’ And upon this report the claim of the petitioner was denied. Then after the Board had received further testimony and evidence offered by the petition in support of her claim, on January 19, 1933, and to the Board on May 19, 1933, the Board ordered that the entire record in the case be referred to the attorney and the physician for the Board to be summarized and their conclusions submitted to the Board, and this was followed by a report signed and filed by the attorney and the physician for the Board, and the Board then entered the following order:

“It was moved by Trustee McCarthy and seconded by Trustee Dwyer that the report of the Attorney and Physician for the Board in the Shilvock case be approved and concurred in; that said report be made a part of these proceedings, and that this Board make no change in the decision entered on January 13, 1915, denying the claim of Elizabeth Shilvock.”

In the consideration of the question of authority of the Board to direct that the physician as well as the attorney for the Board make a report upon the questions of fact, it is well to have in mind what our Supreme Court has stated as the rule by which the Board is controlled in the consideration of the evidence and exhibits. Upon the question of a writ of certiorari and the question as to what the record which this writ brings up must show if the proceedings are to be sustained, the Supreme Court said in Funkhouser v. Coffin, 301 Ill. 257: “There is no presumption of jurisdiction in favor of a body exercising a limited or statutory jurisdiction. Nothing is taken by intendment in favor of such jurisdiction but the facts upon which the jurisdiction is founded must appear in the record. Appellee has a right to a judicial review of the proceedings, ‘and the record must show that the board acted upon evidence and contain the testimony upon which the decision was based, in order that the court may determine whether there was any evidence fairly tending to sustain the order. ’ . . . The finding of the commission in removing the appellee from his position stated no evidence or any facts justifying his removal, simply saying on this point: ‘Whereupon the commission heard the evidence offered, and having considered all the evidence adduced herein, we find therefrom that the said M. L. C. Funkhouser is guilty as charged in the within and foregoing charges.’ It is manifest that the finding that the appellee was guilty as charged is a mere conclusion of law. No fact was stated by which the court was able to see that that conclusion was true. ‘A quasi judicial tribunal of inferior jurisdiction must recite the facts, or preserve the facts themselves, upon which its jurisdiction depends.’ ”

So when we come to examine the final order of the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago, we find that the record of approval of the report of the attorney and the physician for the Board is concurred in; that said report is made a part of the proceedings, and that the Board makes no change in the decision entered on January 13, 1915, denying the claim of Elizabeth Shilvoek.

From an examination of the statutory provision which gave to this body a limited jurisdiction it appears that it was the intention of the legislature to empower it to hear witnesses and pass upon questions which are necessarily involved in a proceeding of the character here before us. However, it does not appear from anything in the statute that the Retirement Board would be justified in delegating to employees the power to consider the evidence that was before the Board. It was the duty of the Board to pass upon this question, and in entering an order it was necessary that it comply with the rule stated in Carroll v. Houston, 341 Ill. 531, that—

“The record must show facts giving the inferior tribunal jurisdiction and mere conclusions of law are not sufficient. The record must show that the board acted upon evidence, and it must contain the testimony upon which the decision was based in order that the court may determine whether there was any evidence fairly tending to sustain the order.” And it is to be noted from what our Supreme Court has stated that the evidence upon which the conclusion of the Board has been reached must be in the record, and the Board must act upon the evidence in order that this court may determine whether there was any evidence fairly tending to sustain the order. That was not done in this case.

While it is true that the physician and the attorney for the Board have filed a report of the facts they claim were before the Retirement Board, still in the final order there is no finding of fact which the Board considered sufficient to justify the entry of the order entered by the Board at the time it denied the claim of this petitioner.

Other questions have been called to our attention, but we do not consider it necessary to consider them as we are of the opinion that the Retirement Board erred when it approved the report and did not include in the report of the Retirement Board the finding of fact based upon the evidence that should have been considered by the Board.

For the reasons stated the order of the court quashing the writ of certiorari issued upon a petition to secure a review of the record of the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago, which denied petitioner’s application for a widow’s pension is reversed and the cause remanded for further proceeding consistent with the views herein expressed.

Reversed and remanded.

Denis E. Sullivan, P. J., and Burke, J., concur.


text:
    A. C. Larsen, Appellant, v. Union Bank of Chicago, as Trustee under Trust Nos. 2130 and 2131 et al., Appellees.
    Gen. No. 40,565.
    Opinion filed June 21, 1939.
    Mathias F. Perz, of Chicago, for appellant; Harold W. Hawes, of Chicago, of counsel.
    Daniel Riley McMaster, of Chicago, for appellee John F. Crowley.
   Mr. Justice Hebel

delivered the opinion of the court.

The action here on appeal by the plaintiff was one for an accounting and to impress an equitable lien upon the corpus of a trust estate. The decree confirmed the report of a special commissioner and dismissed the amended bill of complaint for want of equity.

From the facts in the record it appears that on April 9, 1928, Lucy A. Crowley, Kate T. Blankenheim, Florence E. Baker and Austin J. Rooney owned a 15-acre tract of land at the southeast corner of Lawrence avenue and Thatcher road in Cook county, Illinois. With these owners, one John H. Celhardt and the Union Bank of Chicago, defendant herein entered into a written agreement dated April 9, 1928, herein referred to as the ‘ ‘ Sales Agreement. ” In it the owners agreed to convey the real estate to the bank as trustee under the terms of a trust agreement executed simultaneously with the sales agreement. Celhardt therein agreed to subdivide the property, and at his expense erect cement lamp posts, lay cement sidewalks, grade the streets and put in shade trees. He was to have the exclusive sale and management of the subdivision and was to sell the lots at agreed prices. It was further agreed in this contract that — “the purchaser is to make a down payment of twenty-five per cent (25%) and pay one per cent (1%) or more per month of the contract price for a period of thirty-nine (39) months, at which time the unpaid balance shall become due and payable.” And it was further provided in the sales agreement that—

“The third party (the bank) is to pay over the down payment of twenty-five per cent (25%) to the second party (Celhardt) and divide all other collections seventy-five per cent (75%) to the first parties (the owners) and twenty-five per cent (25%) to the second party (Celhardt). ...”

The trust agreement referred to in the sales agreement was dated the same day and was between the owners of the real estate (referred to therein as beneficiaries) and the Union Bank of Chicago (therein called “Trustee”). It recited the conveyance of the land therein designated “Trust Property” to the trustee. It provided that the trust property was to be subdivided and sold pursuant to the sales agreement, a copy of which sales agreement was attached and made a part of the trust ag’reement. It further provided that the trustee was to make, execute and deliver contracts, deeds and other instruments on trust property sold by the sales agent (Gelhardt) and it was agreed as follows:

“6. The Trustee is to receive and receipt for all moneys paid on lot contracts and the money so received shall be distributed as follows:

“(a) To the Sales Agent the down payment of twenty-five per cent (25%).

“(b) To the Beneficiaries seventy-five per cent (75%) of all other collections, each Beneficiary to receive his or her proportionate share of the same; and “(c) To the Sales Agent the remaining twenty-five per cent (25%) of such collections.

“The down payment on any lot contract is to be turned over to the Sales Agent at the time of the signing of such contract, and the Trustee is to make monthly distribution of all other collections to the Beneficiaries and Sales Agent.”

By their deed in trust dated April 9,1928, the owners of the land conveyed the same to the defendant bank as trustee under the above trust agreement and the property was subdivided into lots and blocks known as Lawrence Avenue Gardens Subdivision according to plat recorded on May 28, 1928.

The plaintiff, Larsen, pursuant to orders and instructions from Gelhardt, installed sidewalks and lamp posts in the subdivision and did a small amount of other work. He commenced the work in the early summer of 1928 and finished in October, 1928. The aggregate price of the work was $5,958.75. The sum of $700 was paid on account thereof up to October, 1928. No further payments were made until December, 1928, when the trustee bank commenced making payments out of the receipts of the trust fund from the sale of lots. Prior to the beginning of these payments by the trustee bank the sales agent Gelhardt, under date of Novemher 26, 1928, had by letter addressed to the bank authorized the bank in the following terms:

“Be: Lawrence Avenue Gardens

Trust # 2131.

“Desire that the Twenty-five (25%) Per cent we are entitled to in the above Trust, be paid monthly to A. C. Larsen, 6285 Norwood Park Avenue, covering Sidewalk work completed on this Property. Bill is enclosed herewith covering same.”

Under date of December 4, 1928, Gelhardt wrote the plaintiff Larsen as follows:

“Am informed that it is agreeable with the Bank to set aside Twenty-five (25%) Per cent of the monthly collections in Lawrence Avenue Gardens, Trust # 2131, to take care of your bill for sidewalks amounting to Five Thousand Two Hundred Twenty-eight ($5,228) Dollars.

“There will be a dividend of this money early in December, and monthly thereafter. Of course these collections will grow by the month, it will take two months or so before it becomes very substantial.”

The bank consented to this arrangement and paid to the plaintiff out of the trust under the letter of assignment the total sum of $1,300.50 over the period beginning December 7, 1928, and ending December 27, 1929, including one payment in April, 1932. No other moneys were paid out of the trust to the plaintiff. The moneys paid into the bank on lot sales contracts out of which the payments to Larsen were made, did not include any down'payments on the contracts. Accordingly Larsen received no portion of any of the down payments. John M. Treveiler, an assistant trust officer of the bank, witness for the defense, testified that the moneys so paid to Larsen represented the share Gelhardt would have received had he not instructed the bank in accordance with his letter of November 26, 1928 (letter of assignment). These payments to Larsen were made by voucher checks on the bank, each of which showed Larsen’s receipt in settlement of account either in exactly or in effect the following words: “For installing sidewalks account J. H. Gelhardt’s assignment. ’ ’

Gelhardt had proceeded to sell quite a number of lots to contract purchasers but he breached the contract (sales agreement). It developed that Gelhardt had accepted and retained down payments in excess of 25 per cent of the lot sales contract price. As Austin J. Rooney, one of the beneficiaries under the trust, testified ‘1 under the agreement the bank was to get the down payment,” and as the attorney for the defendant Crowley (successor trustee) stated at the hearings before the master the down payment — “was to be paid to the Union Bank as trustee and they were to pay him, if it was properly only the 25 per cent, they were to pay him that amount of money for his services; if it was 50 per cent they were to give him half of it. All in excess of this 25 per cent of the sales price was to be divided equally between the subdivider and the beneficiaries of the trust — not equally but 25 per cent; he was still to receive the 25 per cent of the subsequent payment.”

As a result of these breaches of the sales agreement by Gelhardt, on or about October 31, 1929, the same was canceled and later a new sales contract under date of December 9,1929, was entered into between the same parties. It should be noted that plaintiff makes no claim under this latter new sales agreement — his claim is under the original sales agreement to the time of cancellation and under the trust agreement.

There were 19 instances of down payments on lot sales contracts in excess of 25 per cent of the contract price during the period commencing January 23, 1929, and ending August 21, 1929, which down payments were kept by Gelhardt. This was within the period during which both the original sales agreement, the letter of assignment and the trust agreement were in full force. The total amount of that part of these down payments in excess of 25 per cent of the respective contract sales prices received and withheld by Gelhardt is the sum of $11,012, one-fourth of which, or the sum of $2,753, is the amount plaintiff claims never was but should have been distributed to him under the assignment to apply on his unpaid bill for the sidewalk work.

On June 24, 1932, the trustee bank was closed by order of the auditor of public accounts, and on June 28, 1932, the defendant James S. B-odie became the duly qualified and acting receiver of the bank. John F. Crowley was appointed on July 22, 1933, as successor to the bank under the trust agreement and acquired title to the subdivision as such successor trustee by virtue of a deed from the bank dated July 22, 1933. The Union Bank of Chicago was insolvent at the time of the hearings.

The question in this case is largely a question of the construction of the sales agreement and the trust agreement, and from an examination of both of these documents it is apparent that the agent Gelhardt is entitled to a down payment of 25 per cent upon the sale of the lots in question, and a further 25 per cent of the balance of the amount that is to be paid in the purchase of the property. This amount is to pay for the laying of sidewalks, and the installing of lamp posts for which work Gelhardt arranged with the contractor and prepared a written assignment whereby the trustee agreed to pay to the plaintiff the amount due under the second item referred to herein, meaning 25 per cent of the balance of the collection in the sale of the lots. From the record it appears that in the sale of the lots a larger down payment was made to Gelhardt, and that there were 19 instances of down payments on lot sales contracts in excess of 25 per cent of the contract price during the period commencing January 23, 1929, and ending August 21, 1929, which down payments were kept by Gelhardt in violation of the terms of the agreement that is in the record, and it was within the period during which both the original sales contract, the letter of assignment and the trust agreement were in full force that these collections were made by Gelhardt. The total amount received and withheld by Gelhardt was $11,012, one-fourth or 25 per cent of which would be $2,753, the amount plaintiff claims was due under the assignment to apply on his unpaid bill for the sidewalk work.

It was contemplated from the trust agreement, together with the sales contract, that a down payment of 25 per cent of the purchase price was to be paid at the time the trustee signed the purchase contract. The trust agreement provides that the down payment on any lot contract is to be turned over to the sales agent at the time of the signing of such contract, so it appears when Gelhardt in his letter of assignment dated November 26, 1928 stated: “Desire that the twenty-five (25%) Per cent we are entitled to in the above Trust be paid monthly to A. C. Larsen — ” the conclusion is without doubt that the 25 per cent intended was the 25 per cent of the balance of 75 per cent of the purchase price. The plaintiff does not claim any part of the 25 per cent down payment, but his contention is that he is entitled to 25 per cent of the 75 per cent of the balance due in the purchase of the lots. However, there seems to be a question as to the duty of the trustee at the time it signed the real estate contract, in so far as the receipt of the money was to be applied in accordance with the terms of the contract. This contract of sale of lots was presented to the bank for signature, and on the face of the contracts they showed the purchase price and a down payment, the balance to be paid in monthly installments, and it is claimed by the plaintiff that the trustee knew that it was not receiving the down payments, and if it did not receive them the sales agent must have received them, and as we have said, these contracts showed on their face that the down payment in 19 instances exceeded 25 per cent of the purchase price, and this after the trustee had received notice of Gelliardt’s assignment to the plaintiff and knew that the plaintiff was entitled to a share in these excessive down payments. The duty of the trustee, as provided for by the documents in the record, was to collect the down payments, and in the distribution thereof the trustee had a duty to perform and should have protected not alone the interest of the beneficiaries in this agreement, but also the parties to the contracts and the assignment providing for certain payments to be made to the plaintiff, and, having signed the contracts, when the amounts provided for in the contract were not received by it so as to make this distribution, it violated the terms of the contract providing for collection and distribution of the down payments by the trustee.

It has been well said that the signature of the trustee to the real estate contract for purchase changed the legal-character of what were at the time of signature mere deposits for purchase, and the trustee bank had within its power to withhold its signature, and by failure to withhold its signature it failed to fulfill its agreement to collect and distribute the down payments and accordingly is liable to the plaintiff for breach of contract.

The Union Bank of Chicago, the trustee in the matter here considered, was closed by the auditor of public accounts. It has ceased to do business. It is in receivership and is insolvent. Under such circumstances the plaintiff is entitled to reach the trust estate directly in this proceeding, and is entitled to an equitable lien to the extent of his claim on the amount that the trustee had collected.

For the reasons stated the order dismissing the plaintiff’s amended bill of complaint is reversed and the cause is remanded with directions to the court to enter a decree in accordance with the views expressed herein.

Reversed and remanded with directions.

Denis E. Sullivan, P. J., and Burke, J., concur.


text:
    Soft-Lite Lens Company, Inc., Appellee, v. Ante Ritholz et al., Appellants.
    Gen. No. 40,591.
    Opinion filed June 21, 1939.
    Rehearing denied July 3, 1939.

      Clarence T. Morse, of Chicago, for appellants.
    Mayer, Altheimer & Kabaker, of Chicago, for appellee ; Herman A. Kabaker and Richard H. Deutsch, of Chicago, of counsel.
   Mr. Justice Hebel

delivered the opinion of the court.

This is a suit in chancery by the plaintiff, Soft-Lite Lens Company, Inc., a New York corporation, against the defendants, Ante Ritholz, Benjamin D. Ritholz, Morris I. Ritholz, Samuel J. Ritholz, Fannie Ritholz, Sylvia Ritholz and Sophia Ritholz, co-partners. The action is for alleged unfair competition. In its complaint the plaintiff alleges that the defendants unlawfully and unfairly compete with plaintiff’s business by selling and offering for sale and fraudulently substituting and palming off a product in imitation of plaintiff’s product with the intent of deceiving purchasers; that the plaintiff has suffered loss thereby and if said acts are permitted to continue they will result in unfair competition and irreparable loss to the plaintiff. The prayer of the plaintiff is for a permanent injunction and for damages in the sum of $25,000.

The pleadings consist of plaintiff’s complaint and the defendants ’ amended answer thereto. No point is made as to the sufficiency of the pleadings by the parties. The case was referred to a master in chancery, who rendered his report recommending that a decree be entered as prayed for in the complaint, and the court entered such decree, from which this appeal is taken.

The plaintiff and its predecessor have for many years been in the business of selling and distributing tinted eyeglass lenses made exclusively for the plaintiff by Bausch & Lonib Optical Company pursuant to a secret formula owned by the plaintiff. These lenses are sold under the name of “Soft-Lite” and the plaintiff is the owner of registered trade-marks embodying said name. The defendants, as copartners, operate a chain of retail optical stores in Chicago and in other places. It is claimed that the defendants on numerous occasions palmed off lenses other than.the plaintiff’s product when the plaintiff’s product was called for and as evidence thereof the plaintiff offered testimony covering four instances wherein persons, each with an oculist’s prescription for a pair of glasses, took their prescriptions to stores of the defendants and requested that said prescriptions be filled. Each of the prescriptions designated that it should be filled by using Soft-Lite lenses. By reason of plaintiff’.s advertising and the long usage of the name by the plaintiff and all those engaged in the optical business, “Soft-Lite” had become known and recognized as being the eyeglass lens manufactured by Bausch & Lomb Optical Company for the plaintiff and sold and distributed by it. The four prescriptions were filled and glasses therefor were delivered, but none of the lenses in the four pair of glasses were Soft-Lite lenses, the product of the plaintiff. In each instance the defendants had palmed off lenses in imitation of the plaintiff’s product without the knowledge or consent of the customer or the doctor whose prescription was filled, and thus perpetrated a fraud upon the purchaser of the glasses, the doctors who had issued the prescription and upon the plaintiff.

It is claimed that by reason of the fact that the ultimate consumer is unable to differentiate between the plaintiff’s product and other lenses of a similar appearance, the plaintiff, for the protection of the ultimate consumer, hás created a method of distributing its lenses through licensees. Any oculist, optometrist or optician doing his own dispensing is required to have a license in order to obtain lenses from the plaintiff. Those individuals who do not do their own dispensing need not have a license but their prescriptions must be filled by a dispenser having a license in order to assure the delivery of genuine Soft-Lite lenses. In addition to the above-described licensing system the plaintiff furnishes a printed protection certificate to dispensers who deliver the certificates with each pair of glasses as their assurance to the consumer that the lenses are genuine Soft-Lite lenses.

The master heard all of the testimony and observed each of the witnesses on the stand and, from his report, concluded that in all four instances lenses other than Soft-Lite had been provided without the knowledge or consent of the purchasers or of the doctors who had issued the prescriptions, and that in each of the four instances the defendants were guilty of palming off a product other than the plaintiff’s when the plaintiff’s product was called for. The chancellor sustained the master’s report in all respects, and a decree was entered, as we have already indicated.

The defendants contend that in an unfair competition case the burden is on the plaintiff to prove by a clear preponderance of the evidence: (1) That the defendants are in competition with plaintiff, and that defendants so conducted their business as to intentionally palm off on the public goods of the defendants as the goods of the plaintiff; (2) that such palming off has resulted in financial loss to the plaintiff unless an injunction is issued; (3) that in the conduct of its own business, plaintiff’s representations and business conduct is free from false representations and dishonest methods so as to justify relief from a court of equity; that it is free from the taint of ‘‘unclean hands” in bringing the suit; and (4) that the allegations of plaintiff’s bill are true.

In the discussion by the court of the merits of this appeal it is apparent that certain of the allegations made by the plaintiff in regard to trade marks were not urged in its litigation. This applies with equal force to the allegation in the complaint regarding the secret formula, which is not pressed by the plaintiff in its argument before this court. In a further allegation the plaintiff claimed $25,000 damages, but upon the trial stipulated that no monetary damages would be asked, so by the suggestions offered upon the facts, the issue has been reduced to the question of whether proof of the plaintiff has established that the defendants have palmed off a product other than the plaintiff’s when the plaintiff’s product has been called for. In discussing this question we have considered the case of Stevens-Davis Co. v. Mather & Co., 230 Ill. App. 45, cited by both parties to the litigation, and in order to apply the conclusion reached by the court in that case it is necessary that we have in mind what the court said upon the question that is pertinent in this appeal. In this case, which was one in which the plaintiff sought injunctive relief against alleged unfair competition, the court upon the question as to what was unfair competition, said:

“The question which now confronts us is, whether the ‘palming off’ doctrine has been erroneously considered to be a rule of decision, when in fact it was merely a term descriptive of a typical class of cases; and if it has been correctly regarded as a rule of decision, is it the rule that has been adopted by the Supreme Court of this State? The ‘palming off’ doctrine has been accepted by the courts in England and America, including the Supreme Court of the United States, with few exceptions, as the rule of law itself, and not as a descriptive term or classification of the most typical cases illustrative of the rule. It may be that it would have been better if the rule originally had been framed in more general terms, but the fact is that it was not. ‘ The legal doctrine of unfair competition is a development of the fundamental idea that it is against public policy that the goods of one person should be offered for sale or sold as those of another. Very few cases dealing with the question were decided in England or America prior to 1850.’ Nims on Unfair Competition and Trade-Marks (2nd ed.), p. 4. With the decision of the Supreme Court of the United States in the case of Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537, which announced the ‘palming off’ rule, ‘The doctrine of unfair competition may be regarded as being finally established in the United States; and as based not only on fraud on the public, but on the plaintiff. ’ Hopkins on Trade-Marks and Unfair Competition (3rd ed.), p. 42. . . .

“The courts in this State do not treat the ‘palming off ’ doctrine as merely the designation of a typical class of cases of unfair competition, but they announce it as the rule of law itself — the test by which it is determined whether a given state of facts constitutes unfair competition as a matter of law. As the Supreme Court of this State said in the case of DeLong Hook & Eye Co. v. Hump Hairpin Mfg. Co., supra, quoting from the Supreme Court of the United States in the case of Howe Scale Co. v. Wyckoff, Seamans & Benedict, supra: ‘If defendant so conducts its business as not to palm off its goods as those of complainant, the action fails.’ We are of the opinion from our examination of the authorities, that the ‘palming off’ doctrine has been followed by both the state and federal courts in an almost unbroken line of decisions, as a rule of law, and that the courts of this state also deem it to be a rule of law.”

And then when we come to consider the degree of proof necessary in a case of the character before us, we find that in this same case the court said:

‘ ‘ The next question to be determined is, what is the degree of proof imposed on one seeking relief on the ground of unfair competition? Counsel for appellants maintain that appellee must prove its case beyond a reasonable doubt and in support of their contention cite the case of Candee, Swan & Co. v. Deere & Co., 54 Ill. 439. Counsel for appellee assert that they have established the right of appellee to relief by a ‘preponderance of the evidence.’ They refer to no authority. In our opinion neither contention is correct. It is true that in the case of Candee, Swan & Co. v. Deere & Co., supra, the court said (p. 467): ‘We believe the rule to be, in such cases, the proof must be clear, leaving the question beyond a reasonable doubt’; but although that case has not been expressly overruled it has not been followed in subsequent cases. The question involved in that case related to a violation of a trade-mark, but the ‘ essential element is the same in trade-mark cases as in cases of unfair competition. . . .

“In our opinion appellee is required to prove its case clearly by the evidence, and a slight preponderance of the evidence is not sufficient; there must be a clear preponderance.”

To pass upon the question as to whether the plaintiff has established its case by a clear preponderance of the evidence it will be necessary to discuss the facts that are important upon this question. In this connection the defendants have called to our attention that the plaintiff failed to prove competition with the- defendants, particularly within the territorial limits of the city of Chicago; that the plaintiff does not sell to the public, but to wholesalers; that the defendants, on the other hand, sell directly to the public through their 62 retail optical stores. It was therefore suggested that the plaintiff was not in competition with the defendants, who were retailers and dealt directly with the public. The defendants call our-attention to the case of Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173, wherein that court said: ‘ ‘ The difficulty with the plaintiff’s case is that it has not been able to show that its business is interfered with by any competition on the part of the defendant. . . . It is inconceivable that it may maintain an action for the alleged protection of some of its customers, who are not complaining, and . . . as a matter of fact, these customers are found not to have been interfered with by any competition of the defendant,” and suggest that there is no proof of any sales to the public in the Chicago territory, and that the plaintiff is clearly not entitled to any protection in that market, citing a number of cases. However, the proof we have before us is the evidence that the defendants palmed off their goods as those of the plaintiff when the plaintiff’s goods were called for, and this was established by the evidence of F. C. Decker and E. T. Summers, who testified they appeared at the defendants’ place of business for the purpose of having-lenses furnished by the defendants as called for by the prescription, and it appears from the facts as disclosed, that Decker and Summers were persuaded by the defendants’ employees to accept something other than Soft-Lite lenses, even though the prescriptions for the glasses designated said lenses, while in this regard the testimony is conflicting and the evidence of Gladys Monroe and F. J. Fleischer is to the effect that they had their eyes examined, took the doctors’ prescriptions to stores of the defendants and requested the defendants to fill them. At a subsequent time, they returned to the respective stores and paid for and received their respective glasses from the defendants. In each of these instances, the prescription provided that it was to be filled with Soft-Lite lenses. The glasses when received were identified by each witness by pasting labels containing the witness ’ name or initials, date and the source of the glasses on each lens. The defendants maintain that the lenses used in said glasses were Soft-Lite lenses. The plaintiff, however, maintains that it has proved beyond question that Soft-Lite lenses were not used. The report of the master was based largely upon the evidence here detailed for the purpose of a report with his suggestions and conclusions as to the relief that should be granted by the court. The master heard all the testimony and observed each of the witnesses on the stand and concluded that in all four instances lenses other than Soft-Lite had been provided without the knowledge or consent of the purchasers or of the doctors who had issued the prescriptions and that in each of the four instances the defendants were guilty of palming off a product other than the plaintiff’s when the plaintiff’s product was called for.

The defendants in the discussion of the evidence considered by the master and approved by the court severely criticized plaintiff’s witnesses Decker, Summers, Gladys Monroe and Fleischer, and refer to them as “snoopers,” or “spies,” and that they were paid investigators to do the things to which they testified. The question that has been called to the attention of the court might be food for consideration by the master, as well as by the court, in determining the weight of the evidence and the credibility of the several witnesses, but we have not been able to find anything in the evidence which would justify our consideration of defendants ’ criticism. The purpose of the plaintiff in this action was to discover whether the defendants were actually palming off goods as the plaintiff’s, when in fact the product was not the plaintiff’s, and in doing so, we find nothing which would justify the conclusion that these witnesses were not competent to testify. The plaintiff has called our attention to the case of Coca-Cola v. Happiness Candy Stores, Inc., 19 Del. Ch. 292, 167 Atl. 900, where the court made the pertinent statement: “The fact that the customers who made these calls for Coca-Cola were investigators in the employ of the complainant is of no material significance. . . . While no one relishes the thought of sending out persons to ‘ snoop ’ upon another, yet the very necessity of the case in such matters as this almost impels reputable men to resort to that sort of thing as a protection against the unfair tactics of a suspeetedly dishonest competitor. ’ ’

In a further discussion of this subject it might be well to have in mind the quotation from Nims on Unfair Competition and Trade Marks (3d Ed.), sec. 337, p. 867, called to our attention by the plaintiff. The author states:

“Evidence of defendant’s willingness to pass off, and of his practice of doing so when chance offers, is difficult to obtain.

“Often investigators must be used to obtain it through test purchases of defendant’s goods in the open market. Such investigators are not deceived in making purchases, but that does not make their evidence inadmissible or detract from its weight. It is important as showing the course of action pursued by the defendant. . . . Such evidence is a valuable aid to the court in deciding as to the effect of his acts on the sale of plaintiff’s goods and upon the minds of buyers. Where there is no proof of sales to persons other than agents in the employ of plaintiffs, defendant often urges that no injunction should issue, inasmuch as no such course of conduct has been proved as will show by a clear preponderance of the evidence that there was intentional fraud, and also inasmuch as plaintiff has no cause of complaint against a defendant for damages resulting from an act done by defendant at the instance and solicitation of plaintiff’s agents. If the defendant’s employees did not know at the time that the purchasers were in plaintiff’s employ, evidence of this sort discloses defendant’s intent and purpose exactly the same as if the sales were made to purchasers not buying in order to obtain evidence against the seller.” We are satisfied that the purpose of these witnesses who testified regarding the purchases made from the defendants was to determine the question as to whether the defendants were guilty of palming off on these witnesses lenses which were not called for by the prescriptions presented to the defendants. The question that follows is whether the plaintiff in failing to offer evidence as to the damages suffered did not establish a case which would justify the court in entering the decree in the instant case.

The plaintiff points to the contention of the defendants appearing in their brief to the effect that the plaintiff did not offer any specific proof of the damages sustained by it by virtue of the defendants’ palming off. The plaintiff stipulated in the case that no monetary damages were being asked by it, and the plaintiff further sets forth that this does not mean that none have been sustained by the plaintiff, and if the plaintiff saw fit to waive its rights to damages during the trial of the case, the defendants should not be heard to complain.

The important question in a case of the character now before the court on appeal is whether the acts charged against the defendants if continued would result in damages injurious to the plaintiff’s business. Of course if such acts were injurious the plaintiff could appeal to a court of equity and pray for an injunction in a proper case, restraining the defendants from carrying on such course. Our attention has been called to the case of Akron-Overland Tire Co. v. Willys-Overland Co., 273 Fed. 674, where the court held that the defendant had taken no business away from the plaintiff and that the plaintiff’s loss was problematical and speculative, but it nevertheless rendered an injunction against the defendant. In a like case, entitled Rice & Hutchins, Inc. v. Vera Shoe Co., Inc., 290 Fed. 124, the court in granting an injunction stated that it must assume that if unrestrained the defendant would pursue its business to the injury of the plaintiff and the danger of injuries was sufficient ground for the restraining arm of the court of equity. The same rule was followed in the case of Vogue Co. v. Thompson-Hudson Co., 300 Fed. 509. The court there sustained an injunction and held that the reasonable probability of injuries to the plaintiff by acts of the defendant was clear even if it had not occurred. In the case of Wall v. Rolls-Royce of America, Inc., 4 F. (2d) 333, the court held that the continued practice of the defendant was so fraught with such possibilities of irreparable injury that the only way to' remedy it was to stop it at the start.

The rule that we have just stated would apply with equal force to the facts as they appear in this record and the possibility of injury to the plaintiff’s business resulting from palming off.

Many cases are cited in the briefs filed by the parties, all of which we have examined, and only a few of which we have cited in support of the position taken by us.

The defendants urge that the plaintiff must come into court with clean hands; that the plaintiff comes into equity as a .law violator and an admitted wrongdoer in the conduct of its business and therefore is barred from relief in equity, and suggest in support of their position the evidence received by the master of the proceedings against the plaintiff by the Federal Trade Commission, in which the plaintiff admitted it was guilty of such unfair practices, in that it was attempting to build up a monopoly, and that the cease and desist order entered in the Federal Trade Commission proceedings is based upon plaintiff’s licensing system, to which attention has been called, and plaintiff’s admission that it was a violator of sec. 3 of the Clayton Anti-Trust Act (15 U. S. C. A.); that the applicable gist of said act is that it is unlawful for a dealer to enter into an agreement that the purchaser will not use or deal in the goods of others. Upon a hearing, the plaintiff objected to the introduction of these documents, but they were received by the master and considered by him in making his report.

The 13 items which were part of plaintiff’s advertisement and objected to by the defendants, were commented upon by the master in his report, and he pointed out evidence supporting these items to some extent, and also commented as to certain items that were a part of the record, and finally made his recommendations to the court, which were sustained by the decree of the court entered in this proceeding. As to the objection that evidence was received by the master in regard to the proceedings against the plaintiff before the Federal Trade Commission, the question arises: What connection did that proceeding have with reference to the questions involved in the case before this court? The general rule followed by the courts that the plaintiff must come into a court of equity with clean hands would apply only in regard to the subject matter in which the plaintiff was concerned and in regard to which it was before the court, and from an examination of the facts as we have them before us it has not been established that the acts of the plaintiff of which complaint is made, had any direct bearing upon the defendants’ business or upon the controversy between the parties. The plaintiff has called to our attention the case of Tinkoff v. Wyland, 272 Ill. App. 280, wherein the defense of unclean hands was raised. The court in that case held that the rule of equity which forbids relief to him who is guilty of inequitable conduct applies only where the improper conduct concerns the very transaction of which complaint is made, and this rule was followed in the case of MacMurray v. Flynn, 291 Ill. App. 294. The plaintiff suggests that in the case of Stevens-Davis Co. v. Mather & Co., 230 Ill. App. 45, cited and relied upon by the defendants, the court held that the maxim that he who comes into a court of equity must come with clean hands is limited in its application where the substance of the thing is inequitable; that the inequity must apply to the particular subject matter and must be connected with the matter in litigation.

In the case of Mossler v. Jacobs, 66 Ill. App. 571, where the question was whether the advertising of the plaintiff was untrue and hence the plaintiff came into court with unclean hands, the court in passing upon this defense held that the advertisements mentioned had no connection with the defendants or their business, or the controversy with the plaintiff. So, we are inclined to the view that this rule is not applicable to the instant case, because the defense of unclean hands is not the subject of controversy between the parties.

It is also claimed by the defendants that by the plaintiff’s method of selling through licensees it was guilty of creating a monopoly in restraint of trade, and in support of this contention the defendants rely largely upon a matter before the Federal Trade Commission— which has been called to our attention — in which the plaintiff was involved. While the plaintiff contends the matter is not properly before this court, still it does not rely upon that fact as a defense to the defendants’ claim, even though it does not concede its right to raise such a defense.

The plaintiff admits that a complaint was filed against it by the Federal Trade Commission based upon the question of method of distribution by the plaintiff. The plaintiff in that case entered into a stipulation with the Federal Trade Commission for the purpose of avoiding costly litigation and it was based upon that stipulation that an order‘was entered, and from what has been called to our attention it appears from the very terms of the order that while the plaintiff consented to broaden its manner of distribution, the Federal Trade Commission, aware of the danger to the plaintiff of other people palming off its products as those of the plaintiff, acknowledged in said order that the plaintiff’s manner of distribution had been evolved for the purpose of preventing that wrong and endeavored to continue to protect the plaintiff in that regard.

While the subject matter of the proceeding before the Federal Trade Commission is of no material benefit to the court in deciding the questions involved in the instant case, yet the subject matter has been called to our attention, and we think we ought to consider the question as to what, if any, effect the action of the Federal Trade Commission proceeding would have upon -the plaintiff’s being charged with conduct such as would make it guilty of coming into equity with unclean hands and thus barred from the relief prayed for in its complaint. It seems that the question in that matter was the licensing of distributors in the distribution of the plaintiff’s product.

Upon this question the plaintiff cites the case of Federal Trade Commission v. Raymond Brothers-Clark Co., 263 U. S. 565, wherein the defendant threatened to cease doing business with one party if he did business with a certain other party, the court held that no elements of monopoly or oppression existed and that it was the right, long-recognized, of a trader engaged in an entirely private business to freely exercise his own independent expression as to the parties with whom he will deal.

And then again in the case of Moore v. New York Cotton Exchange, 270 U. S. 593, it appears that by virtue of a contract the Western Union Company paid the defendant a certain sum for the year for the privilege of receiving and distributing quotations in the United States to such persons as the defendant might approve. It was required that applicants must sign an application agreeing not to use quotations for bucket shop purposes or give them to other persons. The plaintiff in that case made application and it was refused. The court, at page 606, held that restrictions to preserve the plaintiff’s business and terms were proper to that end and that neither in purpose nor in effect did the defendant directly or unreasonably restrain commerce or operate to create a monopoly, and further stated: “It has long been settled by this court that under such circumstances a trader or manufacturer engaged in a purely private business may freely exercise his independent discretion in respect of the persons with whom he will deal and to whom he will sell and refuse to sell.” And the court held that the method of operation was not in conflict with the AntiTrust Law. It would seem, under the circumstances, that the plaintiff in licensing dealers to handle its product did not create a monopoly and that it was done for the purpose of protecting the business of the plaintiff by designating proper persons to handle its product.

The plaintiff-appellee made a motion in this court to strike certain parts of the record and disregard certain other portions of the appellants’ brief and reply brief, and this motion was reserved to the hearing of the cause. Upon- considering the motion the plaintiff objects to certain named medical journals, as well as two optical journals, as not being proper to be considered by this court. Certain reports of the Bureau of Standards of the U. S. Government were referred to in the brief and called to the attention of the court. It might be said in reply to' this motion that the court has considered all of the questions and the authorities which it regards as conclusive, so that it will not be necessary to further consider the motion made before this court.

The defendants object to the award by the court to the master in a separate decree of $2,990.30 for his charges as being excessive, unreasonable and contrary to the statutes of Illinois. They suggest that the amount claimed was allowed by the court for the taking of 5,954 folios of testimony at 15 cents per folio. Such charge for 3,342 folios, consisting of testimony taken upon the hearing before him, the defendants admit is approximately correct. They claim, however, that the charge for the taking and reporting of 2,612 folios of documentary evidence is grossly excessive, and the charge is made that arriving at this number of folios the master counted all the pages of various magazines, trade journals not named and the like, in which out of hundreds of pages of text, advertisements, etc. only one page, namely, plaintiff’s advertisement is an exhibit. Defendants also complain that they were charged $410.25 paid by the plaintiff to its stenographer. While the question presented regarding the service charge allowed the master, and also the amount allowed the plaintiff for the expenses of his stenographer, is one for consideration by this court, yet it is not altogether clear wherein the 2,612 folios of documentary evidence is grossly excessive. It is to be noted that the suggestion is made by the defendants that there was a separate decree allowing the master’s fees. It appears from the certificate of service presented by the master that he has charged for 45 days’ services rendered in passing upon the questions which were presented to him, and for these services so rendered he lumped the amount which he asked the court to allow at $2,000. There is nothing in the record to indicate that any evidence was heard by the court for the purpose of fixing the per diem charge. This was a necessary requirement and should have been followed. In the case of Comstock v. Morgan Park Trust & Sav. Bank, 367 Ill. 276, the court said:

“By the statute, (53 S. H. A. 38; State Bar Stat. 1935, chap. 53, par. 34;) the master was entitled to fifteen cents per folio for all the evidence introduced at the hearings. (Donham v. Joyce, 257 Ill. 112.) In Herpich v. Williams, 300 Ill. 540, we held that the chancellor, in fixing master’s fees for services not required by law to be itemized, should base the amount on the actual number of days that were reasonably required in their performance. That number of days should not be so excessive as to render nugatory the restrictions as to the per diem there prescribed. The amount to be allowed as a per diem should be based on evidence heard ‘before the chancellor on principles not inconsistent with natural justice. ’ The master was allowed $775, half of the $1550 requested by him in his third certificate. The item is: ‘Fees to be fixed by the court for obtaining files, docketing cause, attending hearings, preparing report, hearing objections, etc., $1550.’ No evidence was heard as to the reasonable value of such of these items as the master was entitled to be paid for. In the absence of such proof we cannot tell whether $775 was a proper allowance.” This statement by the Supreme Court applies with equal force to the charge that is made by the master of $2,000 for his services for the number of days he has certified were necessary in considering the matters presented and in preparing the master’s report. And this is true as to the objection made that the number of folios of documentary evidence is grossly excessive. From the state of the record before us at the present time there is nothing from which we can determine that the allowance, set forth in the certificate of services claiming $2,893.10 and stating that $410.25 is an allowance due the plaintiff, would be justified.

For the reasons stated it will be necessary to reverse the allowance to the master. The cause is therefore remanded to the circuit court of Cook county with directions to hear whatever testimony may be presented by the master in chancery, after reasonable notice to him, as to the nature, extent and reasonable compensation to be paid him for the work done in preparing his report, folio allowance and stenographic expense. Otherwise, the decree of the court is affirmed.

Affirmed in part, reversed in part and remanded with directions.

Denis E. Sullivan, P. J., and Burke, J., concur.


text:
    F. K. Ketler Company, Appellant, v. County Fair Grounds Corporation et al., Appellees.
    Gen. No. 40,377.

      Original opinion filed April 26, 1939.
    Rehearing opinion filed June 26, 1939.
    Joseph E. Serhant and Owens & Owens, all of Chicago, for appellant; John E. Owens and Vincent G-. Rinn, of Chicago, of counsel.
    D’Ancona, Pelaum & Kohlsaat, of Chicago, for appellees.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a decree entered by the court dismissing the plaintiff’s bill for want of equity. The plaintiff filed its complaint to foreclose a mechanic’s lien. The complaint sought to establish a mechanic’s lien against property used as a fair grounds and an amusement park owned by the defendants, Arthur T. Galt and Ida Galt. The case was referred to a master in chancery, who filed his report finding that the plaintiff had done all things necessary to establish a lien upon the leasehold interest of the County Fair Grounds Corporation, lessee, in the amount of $9,046.09, but that the plaintiff was not entitled to a mechanic’s lien against the fee estate of the defendants, Arthur T. Galt and Ida Galt.

Objections were filed to the report by both the plaintiff and the Gaits, and were heard as exceptions by the chancellor. The chancellor overruled the exceptions of the plaintiff and sustained the exceptions of the defendants Galt, and entered a decree dismissing the complaint for want of equity.

The defendants, Arthur T. Galt and Ida Galt, owned the premises at the southeast corner of River road and North avenue, in Cook county for many years. On May 31, 1932, they entered into a written lease with the County Fair Grounds Corporation, as lessee, whereby said premises were leased for an amusement park and fair grounds for a period of 10 years and 4 months. The lease provided, in part, that the rental was to be a minimum of $3,000 each year and as further rent “that proportion of the gross receipts of lessee from any and all sources, direct and indirect, as shall amount to fifty (50%) per cent or one-half of the net receipts during each of said periods aforesaid of calendar years and fractions of years ’ ’; that the $3,000 annual rental shall be deducted from gross receipts to arrive at the amount due the lessor; that all permanent improvements shall be amortized over a period of 10 years by deducting a certain amount from gross receipts each year; that all actual bona fide running expenses incurred and paid out by lessee shall be deducted, provided that no “fancy” salaries shall be paid anybody.

The lease further provided that the lessee may at any time during the lease, when not in default, erect on any portion of the premises any building or any additional building or buildings and may tear down any building then situated thereon for the purpose of replacing the same with a new building or buildings of like or better character, upon condition provided in said lease about waivers of mechanics’ liens and statements.

The lease also contained a provision that the lessee “will cause to be inserted or included in any and all contracts made by it for the erection of any new building ... a clause or covenant by which the contractor, and every contractor . . . shall waive all his rights, if any, to a mechanics’ lien, or other lien, upon the interest of the lessor in the premises.” It is further provided that the lessee will include in such contracts a statement that the contractors are familiar with the provisions of the lease with reference to mechanics’ liens, and that all waivers and statements are to be in the hands of the lessor before any work is done or material delivered on the premises; that the lessee will, within five days after the making of any such contract, furnish to the lessor a copy thereof.

It is further provided that the lessee upon the termination of the lease by lapse of time, forfeiture or otherwise, will take down and remove all buildings and structures and materials of all kinds placed upon the premises at any time at the expense of the lessee within 15 days of the termination of the lease in any way.

The lessee, County Fair Grounds Corporation, made a contract with the plaintiff on June 24, 1933, whereby the plaintiff agreed to construct a grandstand on the premises in question for the sum of $22,000. The record shows that the plaintiff proceeded with the work under this contract. In constructing the grandstand, the plaintiff made 52 excavations, approximately three feet square and three feet deep, all of which were filled with concrete, with anchor bolts extending out of the concrete. The plaintiff commenced the erection of the grandstand, which consisted of steel, and built a retaining wall 10 feet high and 12 inches thick, the full length of the grandstand. After the steel work was completed the floor was put in, consisting of precast-concrete slabs. There were three carloads of these cement slabs. After the floor was finished the plaintiff then installed 60,000 feet of lumber for the seats and the roof was installed. Thereafter the railings were installed and the painting of the grandstand was completed. The grandstand was completed in conformity with the plans and specifications. There was an extra item of $46.09. The plaintiff was paid $13,000 on account and issued a partial waiver of lien therefor. There is a balance due and owing to the plaintiff of $9,046.09. On November 24, 1933, a claim for mechanic’s lien was filed in the office of the clerk of the circuit court, claiming a mechanic’s lien upon the leasehold estate. Shortly prior to the filing of the complaint herein the defendants served a five-day notice on the lessee, and thereafter filed forcible entry and detainer proceedings. Judgment for possession was entered in favor of the defendants, Arthur T. Galt and Ida Galt, and thereafter the defendants entered into possession of the premises, including the grandstand.

It appears from the record that Mr. Galt visited the fair grounds on July 20, 1933, and was first acquainted with the fact that the grandstand was being erected upon the premises in question; that after learning of this, Mr. Galt, on July 20, mailed a letter to the plaintiff in this action in regard to the building of the grandstand. This letter is addressed to the plaintiff, F. K. Ketler Company, and is as follows:

“I understand you are the general contractors for the grand stand to be erected on property leased from me at the Southeast corner of River Road and North Avenue by .the Fair People. My lease provides that there shall be a waiver of mechanics’ liens by every one placing anything on the ground or doing any work thereon and every one has been notified further by filing notice as provided by law.

“I have not received the waiver from you, no doubt because I have been out of town. Probably Mr. Thompson or Mr. Gunkel have it for me but have not delivered it to me.

“I want a waiver of mechanics’ liens by every one, the general contractor, sub-contractors and material men and anyone who might have a right to a lien otherwise.

“You are hereby notified of the terms of the lease against mechanics’ liens and requested for the sworn statement provided by the mechanics’ lien law as to those who are going to work or furnish material on the structure.” and is signed by Arthur T. Galt, one of the defendants.

Subsequent to the mailing of this letter to the plaintiff, there was delivered to this defendant a written waiver of lien, dated July 14, 1933, which is in part as follows:

‘ ‘ To All Whom It Mat Concern :

“Whereas, . . . the undersigned F. K. Ketler Co. has been employed by Cook County Fair Grounds Corporation to furnish . . . for building known as Grand Stand.

“Now, Therefore, Know Ye, That . . . the undersigned, for and in consideration of . . . Dollars, and other good and valuable considerations, the receipt whereof is hereby acknowledged, do . . . hereby waive and release any and all lien, or claim or right of lien on said above described premises under ‘An Act to Revise the Law in Relation to Mechanics’ Liens, approved May 18, 1903, and in force July 1, 1903,’ on account of labor or materials, or both furnished up to this date by the undersigned to or on account of the said Cook County Fair Ground Corporation. This waiver of lien is in favor of the ground only and not the building.” and signed by the plaintiff. So it is to be noted that the waiver of lien applies only to the ground and that the plaintiff does not waive any rights that it may have by way of a lien on the building. After receiving the letter from the defendant Arthur T. Galt, the plaintiff continued with the work in connection with the construction of the grandstand, but failed to comply with the notice that it had received regarding the waiver of liens other than the one to which we refer in this opinion. Therefore, in the further construction and completion of the work the plaintiff had notice of the lease between the defendants Galt and the Fair Grounds, and its attention had been called to the provision of this lease regarding the erection of buildings and the waiver of liens.

The plaintiff suggests that by the completion of the grandstand after receipt of the notice from Galt this work required and was of the value of the amount that is claimed as a lien upon the property in question.

The plaintiff contends, however, that the contract between the plaintiff and the lessee did not contain the provision requiring the lessee to insert a waiver of the lien in any contract made by it, and the statement by the contractor that he was familiar with the provision of the lease relative to mechanic’s liens. The record does show the mailing of this letter and the receipt of it by the plaintiff, and that it did have notice that there was a lease between the defendants Galt and the County Fair Grounds, and that the lessee knew that there were provisions calling for the waiver of liens. Therefore, it would seem to this court that this knowledge was sufficient to put the plaintiff on notice.

It is also suggested by the plaintiff that the facts in this case evidence a joint enterprise. When we examine the provision for the payment of rent, we find that the rental was to be a minimum of $3,000 a year and a proportion of the gross receipts of the lessee from any and all sources, as shall amount to 50 per cent, on one-lialf of the net receipts for each of the calendar years and fractions of years, which would not indicate that there was a joint enterprise as between the defendant Fair Grounds and the defendants Galt. On the contrary, it is clear that the provision provides only for the payment of rent and the amount that is to joe received by the defendants Galt.

From the record it appears that the plaintiff did not at any time investigate the title of the defendant, County Fair Grounds Corporation, and its right to permit the building of a structure of the kind that was erected upon the property, and the plaintiff now seeks to impose a lien on the property without having made an investigation as to ownership.

It does appear in the record that more than four months after the grandstand was completed, a claim for lien was filed with the clerk of the circuit court of Cook county. This claim for lien was sworn to by the president of the plaintiff corporation and claimed a lien only on the leasehold estate of the County Fair Grounds Corporation. It appears from this claim that no mention was made in that a claim for lien with reference to any claim being made against the fee simple estate in the premises involved, and is an indication that as far as the plaintiff corporation itself was concerned it had no intention of making any such claim as it is making at the present time; that by reason of this mechanic’s lien waiver and by reason of the filing of the mechanic’s lien claim against the leasehold estate only, it would appear that the plaintiff during the course of the construction of the grandstand and at the completion of the same, not only did not intend to make any claim against the fee simple estate of the defendants, but waived any claim that it might have against said fee simple estate.

The leasehold estate of the defendant County Fair Grounds Corporation was terminated on the 4th day of September, 1934, being prior to the filing of the complaint. The plaintiff contends that even though it may fail in having its claim for lien decreed to .be a claim as against the fee simple estate of the defendants, that it is nevertheless entitled to maintain its claim for lien upon the leasehold estate created by the indenture of lease between the defendants, as lessors, and the County Fair Grounds Corporation, as lessee.

While it is contended that the tenant had the right to remove a fixture, this right existed only during the tenancy or perhaps a reasonable length of time thereafter, and is controlled by the provision of the lease. The tenant did not exercise this right of removal within the time fixed by the lease, and under the authorities lost it altogether. Therefore, the plaintiff’s lien is not attached to this so-called right of removal so as to permit it to remove the grandstand. The Supreme Court in the case of Williams v. Vanderbilt, 145 Ill. 238, upon this subject, said:

“A mechanic’s lien, which attaches to a leasehold estate, is subject to all the conditions of the lease. (Citing cases.) Here, one of the conditions of the lease was, that, in case of default in the payment of the rent, the landlord could without notice declare the term ended, and re-enter the premises. A forfeiture will not be implied, nor is it favored by the rules of law. (2 Jones on Liens, sec. 1273.) But in the present case there seems to be no question as to the right of the appellee to forfeit the lease under its terms, nor do we see that there can be any question as to the effectiveness of the forfeiture which actually took place. ... If the lease has been forfeited, the holder of the lien must pay all arrears of rent to the lessor before he can acquire the rights of the lessee thereunder, even by purchase.”

It appears that on August 13,1934, the lessee, County Fair Grounds Corporation, being then in default in the payment of rent as provided for in the lease, a usual form five-day notice was served on behalf of the defendants Gaits as landlords. The five days having elapsed and the rent not having been paid, forcible detainer proceedings were instituted before a justice of the peace, and on September 4, 1934, a finding and judgment was entered in favor of the defendants against the County Fair Grounds Corporation. The lease having been canceled and the leasehold estate terminated, the defendants took possession of the premises.

No question has been raised by the plaintiff that the defendants were not within their rights in doing as we have above outlined, nor is the contention made that they did not take all the necessary and proper steps for the effective cancellation of the lease, the termination of the term and the complete forfeiture of the leasehold estate. And from the facts as they appear in the record it would appear that there is nothing to which the mechanic’s lien claim could possibly attach. It cannot attach to the leasehold estate because that had been ended, and it cannot attach to the so-called right of removal, because of the fact that the tenant did not exercise that so-called right within the time stipulated in the lease, and for the reason that this was also forfeited when the tenancy was terminated.

For the reasons outlined in this opinion, we believe the court in dismissing the complaint for want of equity was fully supported by the facts in the record, and the decree of tíre court is affirmed.

Decree affirmed.

Denis E. Sullivan, P. J., and Burke, J., concur.

On Rehearing.

The plaintiff filed its petition for a rehearing and upon due consideration by the court the motion for a rehearing was allowed.

The plaintiff questions whether the case of Williams v. Vanderbilt, 145 Ill. 238, is applicable in denying to the plaintiff a mechanic’s lien against the leasehold estate. This case has been called to the court’s attention and the plaintiff contends that the opinion of the court was overruled by the passage of the Mechanics’ Lien Act of 1903, when this Mechanics’ Lien Act was amended, and suggests to the court that the act did not provide that the lien shall extend to the interests of the lessee at the time of making the contract, and there was added by amendment as the last line of section one: 1 and this lien shall attach as of the date of the contract. ’ ’

Upon an examination of the authority cited by this court entitled Williams v. Vanderbilt, 145 Ill. 238, we find the Supreme Court held and used this language, which is pertinent upon the very question we have before this court:

“A tenant for life or years can not, by contract, create a lien upon the fee; he may, by contract, create a lien to the extent of his right and interest in the premises, but no further. ’ ’ And further in this opinion the court said:

“A mechanic’s lien, which attaches to a leasehold estate, is subject to all the conditions of the lease.” And the court further said: “A forfeiture will not be implied, nor is it favored by the rules of law (2 Jones on Liens, sec. 1273). But in the present case there seems to be no question as to the right of the appellee to forfeit the lease under its terms, nor do we see that there can be any question as to the effectiveness of the forfeiture which actually took place.”

We are still of the opinion that the application of this authority to the case now pending is convincing, even though counsel contends that the amendment changes and in effect overcomes this authority, for the court in that opinion said, as we have quoted above, that a lien may be asserted to the extent of the right and interest in the premises of a tenant who is in possession by virtue of the terms of the lease. However, the further suggestion is made by the plaintiff that the court in the case of Westphal v. Berthold, 273 Ill. App. 266, said: “The facts in Williams v. Vanderbilt, 145 Ill. 238 . . . discloses that since the decision of that case the Mechanics ’ Lien Law has been amended and changed, so what the court said in the Williams case is not applicable to the case we are now considering. ’ ’ Of course it may be that what the court said in the Williams case is not applicable to the facts as disclosed in the Westphal case, but it is apparent that this case which has been called to our attention does not by its terms overrule the decision in the case now under consideration, and from an examination of the questions that have been called to our attention, we believe the opinion filed by this court is sustained by the authority quoted. Therefore we will adhere to the opinion as originally filed.

Denis E. Sullivan, P. J., and Burke, J., concur.