text:
    Winthrop Restaurant Company for Use of Stock Yards Packing Company, Appellee, v. Anthony Kournetas and Speros Zotos, Appellants.
    Gen. No. 35,271.
    Heard in the third division of this court for the first district at the June term, 1931.
    Opinion filed March 16, 1932.

      Bither & Bither, for appellants.
    O’Connor & Connor, for appellee; Vincent H. O’Connor, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

On December 12, 1930, the Stock Yards Packing Company, a Corporation, obtained judgment for $718.70 and costs against Winthrop Restaurant Company, a corporation. Execution issued on said judgment and was returned no part satisfied. Thereafter the Stock Yards Packing Company filed its affidavit for garnishment summons against Anthony Kournetas and Speros Zotos, as garnishees. The answer filed by the garnishees was contested by plaintiff and a trial was had on the issues before the court without a jury. On April 10, 1931, the court found that Kournetas and Zotos, as garnishees, had in their possession certain personal property belonging to the defendant, Winthrop Restaurant Company, and entered judgment against them, ordering them to turn over said personal property to the bailiff of the municipal court on special execution, and directing the bailiff to sell the same and out of the proceeds of the sale to satisfy the original judgment and costs of the Stock Yards Packing Company in the aforesaid sum, the residue to be held for the use of the garnishees. From this garnishment, judgment, Kournetas and Zotos have prosecuted an appeal.

It appears from the record and the trial court found that Winthrop Restaurant Company sold its business located at 1101 Bryn Mawr avenue, Chicago, Illinois, to the garnishee, Kournetas, on July 31, 1930; that prior thereto on December 12,1930, Stock Yards Packing Company recovered a judgment against Winthrop Restaurant Company, which was in full force and effect when the latter sold its business to Kournetas; that Kournetas, the garnishee, demanded and received from Winthrop Restaurant Company an affidavit made by George Poulos, its president, in accordance with the provisions of section 1, chapter 121-A of the act relating to sales of personal property (Cahill’s Statutes, ch. 121a, HI), commonly known as the Bulk Sales Act, which affidavit is herewith set forth in full:

“Vendor’s List of Creditors.
“State of Illinois, “County of Cook
‘ ‘ George Poulos, being first duly sworn on oath says that he is the President of the Winthrop Rest. Co. the following is a full, accurate and complete list of the creditors of Winthrop Restaurant Company, a Corp. together with the addresses and the amounts owing to each of said creditors.
“Affiant further says that he makes this statement with a view to the sale of the personal property now located at 1101 Bryn Mawr avenue, Chicago, Illinois, of Winthrop Restaurant Company. And further affiant saith not.
‘ ‘ That there are no outstanding bills unpaid against the Winthrop Restaurant Company.
“ (Signed) George Poulos
“(Signed) Tom Poulos
“Subscribed and sworn to before me this 31st day of July, 1930.
Notary Seal. (Signed) William A. Either,
“Notary Public.”

Upon hearing of the garnishment suit before the court, it was stipulated by all parties that the sole issue for determination was whether or not the Poulos affidavit was a sufficient compliance with the statute. No question is raised as to the liability of Zotos. The court held the affidavit, insufficient in law and therefore fraudulent and void as to Stock Yards Packing Company, and thereupon entered judgment against Kournetas and Zotos.

The first paragraph of the affidavit states that “the following is a full, accurate and complete list of the creditors of Winthrop Restaurant Company, a Corp.” etc., but no creditors are actually listed. The last paragraph states that “there are no outstanding bills against the Winthrop Restaurant Company,” and the principal controversy arises over the language of this paragraph.

The Bulk Sales Act provides that where there are creditors, a full, accurate and complete list of such creditors, together with the addresses and amounts owing to each, should be furnished, and “if there be no creditors a written statement under oath to that effect” shall be demanded of the vendor and received by the vendee. The gravamen of appellants’ contention is that “outstanding bills” covers all kinds of indebtedness, and that the purchaser had a right to assume that no indebtedness existed. No authority is cited to support this contention, however. Appellees cite a number of cases where language was employed to show that no claims or liens existed against the particular merchandise sold, and in each instance the courts of this and other States held affidavits so limited to be insufficient to satisfy the requirements of the statute.

We are of the opinion that the municipal court properly held the affidavit herein to be insufficient for the following reasons: Our Bulk Sales Law and similar statutes enacted in other States were designed primarily for the protection of creditors, and to prevent the sale in bulk of a business so as to defraud and défeat the claims of those to whom the vendor might be indebted. Joplin Supply Co. v. Smith, 182 Mo. App. 212. The statute, without prescribing any particular form of affidavit, expressly stipulates that if there be no creditors an affidavit to that effect should be required and received by the purchaser. The word “creditor” used in the statute has a broad meaning, and was evidently intended to include not only general creditors, but judgment creditors and others having claims against the seller. Consequently, the affidavit required and to be received by the purchaser should be sufficiently broad to include creditors of every class, without limitation. The language “outstanding bills unpaid” employed in the instant case may not include creditors in the sense contemplated by the statute. This being a statutory proceeding, the fundamental rule that the statute should be strictly complied with seems to us to be applicable. To hold otherwise would open the door to fraud and tend to defeat the very purpose of the statute, which is to protect the creditors of the vendor. Holding this affidavit valid would afford protection to the purchaser and deprive the judgment creditor of the benefits contemplated by the statute, and while both the purchaser and the judgment creditor may be innocent, a more just result will follow from placing the responsibility of an insufficient affidavit upon the shoulders of the purchaser, who had it within his power to require an affidavit in compliance with the requirements of the statute, rather than upon the creditor who did not in any wise participate in the transaction. It would have been a simple matter for Kournetas to have required an affidavit sufficiently broad to cover the statutory requirements. While we do not hold that the affidavit must necessarily employ the word “creditors,” we do hold that it must be sufficiently broad and comprehensive to include every class of indebtedness, and we do not believe that the words “outstanding bills unpaid” are sufficiently comprehensive to satisfy the requirements of the statute.

For the reason stated, the judgment of the municipal court will be affirmed.

Affirmed.

Hebel, P. J., and Wilson, J., concur.


source: Caselaw Access Project

author: Mr. Justice Friend

license: Public Domain

text:
    Josephine Purcell, Administratrix of the Estate of Joseph F. Purcell, Deceased, Appellee, v. Herman N. Bundesen, Coroner of Cook County, Appellant.
    Gen. No. 35,324.
    Heard in the third division of this court for the first district at the October term, 1931.
    Opinion filed March 16, 1932.
    John A. Swanson, State’s Attorney, for appellant; Edgar B. Elder, Assistant State’s Attorney, of counsel.
    Arnd, Gavin, Griffin & Hanley, for appellee; Frederick Arnd and Richard I. Gavin, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Joseph F. Purcell, as a taxpayer, filed a bill of complaint in the superior court of Cook county alleging in substance that Herman N. Bundesen, the regularly elected coroner of Cook county, through his medical staff, was performing unnecessary and illegal autopsies for experimentation and clinical purposes in connection with medical and surgical classroom work of various medical schools in violation of the statutes of this State, and that said autopsies were unnecessary and placed a heavy additional expense on the taxpayers of Cook county.

Defendant filed an answer denying the essential allegations of the bill, and upon issue joined the cause was referred to a master in chancery for hearing. The complainant testified before the master, but died before the hearing was concluded, and his administratrix, Josephine Purcell, was substituted as complainant.

The master found the equities in favor of complainant, and the chancellor, after hearing the exceptions to the master’s report, entered a decree approving the master’s findings and enjoined the defendant, his agents, physicians and deputies “from holding an autopsy on any dead body found or lying in Cook county, except in a case when the deceased can reasonably be supposed to have come to his or her death by violence of a criminal character, and except also in a case where the cause of death is not known, and concerning which the circumstances evidence violence of a criminal character, or evidence death from criminal means, or where the cause of death is not ascertainable otherwise than by an autopsy,” and assessed the cost of the proceeding, including the master’s charges, against the defendant. •

The court will take judicial notice that Herman N. Bundesen is no longer coroner of Cook county. Thielmann v. Burg, 73 Ill. 293; Fisk v. Hopping, 169 Ill. 105. The said injunctive order affected his personal conduct only, and whether the facts justified the issuance of said order or not, the question is now moot. No public interest is involved, and the cause will not be reviewed merely to establish a precedent or determine who shall pay the costs. Wick v. Chicago Tel. Co., 277 Ill. 338; Meyer v. Farmers’ State Bank, 180 Ind. 483; Keller v. Rewers, 189 Ind. 339.

For the reasons stated, this appeal will be dismissed.

Appeal dismissed.

Hebel, P. J., and Wilsoh, J., concur.


author: Mr. Justice Wilson

text:
    Chicago Coliseum Club, Appellant, v. William Harrison Dempsey, Also Known as Jack Dempsey, Appellee.
    Gen. No. 35,276.

      Heard in the third division of this court for the first district at the October term, 1931.
    Opinion filed March 16, 1932.
    John F. Rosen, Ralph Rosen, G. A. Farabaugh and Walter R. Arnold, for appellant.
    Dunne & Corboy and Arthur F. Driscoll, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

Chicago Coliseum Club, a corporation, as plaintiff, brought its action against William Harrison Dempsey, known as Jack Dempsey,- to recover damages for breach of a written contract executed March 13, 1926, but bearing date of March 6 of that year.

Plaintiff was incorporated as an Illinois corporation for the promotion of general pleasure and athletic purposes and to conduct boxing, sparring and wrestling matches and exhibitions for prizes or purses. The defendant William Harrison Dempsey was well known in the pugilistic world and, at the time of the making and execution of the contract in question, held the title of world’s Champion Heavy Weight Boxer.

Under the terms of the written agreement, the plaintiff was to promote a public boxing exhibition in Chicago, or some suitable place to be selected by the promoter, and had engaged the services of one Harry Wills, another well known boxer and pugilist, to engage in a boxing match with the defendant Dempsey for the championship of the world. By the terms of the agreement Dempsey was to receive $10, receipt of which was acknowledged, and the plaintiff further agreed to pay to Dempsey the sum of $300,000 on the 5th day of August 1926, — $500,000 in cash at least 10 days before the date fixed for the contest, and a sum equal to 50 per cent of the net profits over and above the sum of $2,000,000 in the event the gate receipts should exceed that amount. In addition the defendant was to receive 50 per cent of the net revenue derived from moving picture concessions or royalties received by the plaintiff, and defendant agreed to have his life and- health insured in favor of the plaintiff in a manner and at a place to be designated by the plaintiff. Defendant further agreed not to engage in any boxing match after the date of the agreement and prior to the date on which the contest was to be held. Certain agreements previously entered into by the defendant with one Floyd Fitzsimmons for a Dempsey-Wills boxing match were declared to be void and of no force and effect. Certain other mutual agreements were contained in the written contract which are not necessary in a consideration of this case.

March 6, 1926, the plaintiff entered into an agreement with Harry Wills, in which Wills agreed to engage in a boxing match with the Jack Dempsey named in the agreement hereinbefore referred to. Under this agreement the plaintiff, Chicago Coliseum Club was to deposit $50,000 in escrow in the National City Bank of New York City, New York, tq be paid over to Wills on the 10th day prior to the date fixed for the holding of the boxing contest. Further conditions were provided in said contract with Wills, which, however, are not necessary to set out in detail. There is no evidence in the record showing that the $50,000 was deposited nor that it has ever l^een paid, nor is there any evidence in the record showing the financial standing of the Chicago Coliseum Club, a corporation, plaintiff in this suit. This contract between the plaintiff and Wills appears to have been entered into several days before the contract with Dempsey.

March 8, 1926, the plaintiff entered into a contract with one Andrew C. Weisberg, under which it appears that it was necessary for the plaintiff to have the services of an experienced person skilled in promoting boxing exhibitions and that the said Weisberg was possessed of such qualifications and that it was necessary for the plaintiff to procure his help in the promoting of the exhibition. It appears further from the agreement that it was necessary to incur expenditures in the way of traveling expenses, legal services and other costs in and about the promotion of the boxing match, and Weisberg agreed to investigate, canvass and organize the various hotel associations and other business organizations for the purpose of securing accommodations for spectators and to procure subscriptions and’ contributions from such hotels and associations and others for the erection of an arena and other necessary expense in order to carry out the enterprise and to promote the boxing match in question. Under these agreements Weisberg was to furnish the funds for such purposes and was to be reimbursed out of the receipts from the sale of tickets for the expenses incurred by him, together with a certain amount for his services.

Both the Wills contract and the Weisberg contract are referred to at some length, inasmuch as claims for damages by plaintiff are predicated upon these two agreements. Under the terms of the contract between the plaintiff and Dempsey and the plaintiff and Wills, the contest was to be held during the month of September, 1926.

July 10, 1926, plaintiff wired Dempsey at Colorado Springs, Colorado, stating that representatives of life and accident insurance companies would call on him for the purpose of examining him for insurance in favor of the Chicago Coliseum Club, in accordance with the terms of his contract, and also requesting the defendant to begin training for the contest not' later than August 1,1926. In answer to this communication plaintiff received a telegram from Dempsey, as follows:

“BM Colorado Springs Colo July 10th 1926
B. E. Clements
President Chicago Coliseum Club Chgo Entirely too busy training for my coming Tunney match to waste time on insurance representatives stop as you have no contract suggest you stop kidding yourself and me also • Jack Dempsey.”

We are unable to conceive upon what theory the defendant could contend that there was no contract, as it appears to be admitted in the proceeding here and bears his signature and the amounts involved are sufficiently large to have created a rather lasting impression on the mind of anyone signing such an agreement. It amounts, however, to a repudiation of the agreement and from that time on Dempsey refused to take any steps to carry out his undertaking. It appears that Dempsey at this time was engaged in preparing himself for a contest with Tunney to be held at Philadelphia, Pennsylvania, sometime in September, and on August 3, 1926, plaintiff, as complainant, filed a bill in the superior court of Marion county, Indiana, asking to have Dempsey restrained and enjoined from engaging in the contest with Tunney, which complainant was informed and believed was to be held on the 16th day of September, and which contest would be in violation of the terms of the agreement entered into between the plaintiff and defendant at Los Angeles, March 13, 1926.

Personal service was had upon the defendant Dempsey in the proceeding in the Indiana court and on August 27, 1926, he entered his general appearance, by-his attorneys, and filed his answer in said cause. September 13, 1926, a decree was entered in the superior court of Marion county, finding that the contract was a valid and subsisting contract between the parties, and that the complainant had expended large sums of money in carrying out the terms of the agreement, and entering a decree that Dempsey be perpetually restrained and enjoined from in any way, wise, or manner, training or preparing for or participating in any contracts or engagements in furtherance of any boxing match, prize fight or any exhibition of like nature, and particularly from engaging or entering into any boxing match with one Gene Tunney, or with any person other than the one designated by plaintiff.

It is insisted among other things that the costs incurred by the plaintiff in procuring the injunctional order in Marion county, Indiana, were properly chargeable against Dempsey for his breach of contract and recoverable in this proceeding. Under the evidence in the record fin this proceeding there appears to have been a valid subsisting agreement between the plaintiff and Dempsey, in which Dempsey was to perform according to the terms of the agreement and which he refused to do, and the plaintiff, as a matter of law, was entitled at least to nominal damages. For this reason, if for no other, judgment should have been for the plaintiff.

During the proceeding in the circuit court of this county it was sought to introduce evidence for the purpose of showing damages, other than nominal damages, and in view of the fact that the case has to be retried, this court is asked to consider the various items of expense claimed to have been incurred and various offers of proof made to establish damages for breach of the agreement. Under the proof offered, the question of damages naturally divides itself into the four following propositions:

1st. Loss of profits which would have been derived by the plaintiff in the event of the holding of the contest in question;

2nd. Expenses incurred by the plaintiff prior to the signing of the agreement between the plaintiff and Dempsey;

3rd. Expenses incurred in attempting to restrain the defendant from engaging'in other contests and to force him into a compliance with the terms of his agreement with the plaintiff; and

4th. Expenses incurred after the signing of the agreement and before the breach of July 10,1926.

Proposition 1. Plaintiff offered to .prove by one Mullins that a boxing exhibition between Dempsey and Wills held in the City of Chicago on September 22, 1926, would bring a gross receipt of $3,000,000, and that the expense incurred would be $1,400,000, leaving a net profit to the promoter of $1,600,000. The court properly sustained an objection to this testimony. The character of the undertaking was such that it would be impossible to produce evidence of a probative character sufficient to establish any amount which could be reasonably ascertainable by reason of the character of the undertaking. The profits from a boxing contest of this character, open to the public, is dependent upon so many different circumstances that they are not susceptible of definite legal determination. The success or failure of such an undertaking depends largely upon the ability of the promoters, the reputation of the contestants and the conditions of the weather at and prior to the holding of the contest, the accessibility of the place, the extent of the publicity, the possibility of other and counter attractions and many other questions which would enter into consideration. Such an entertainment lacks utterly the element of stability which exists in regular organized business. This fact was practically admitted by the plaintiff by the allegation of its bill filed in the Marion county court of Indiana asking for an injunction against Dempsey. Plaintiff in its bill in that proceeding charged, as follows:

“That by virtue of the premises aforesaid, the plaintiff will, unless it secures the injunctive relief herein prayed for, suffer great and irreparable injury and damages, not compensable by any action at law in damages, the damages being incapable of commensuration, and plaintiff, therefore, has no adequate remedy at law. ”

Compensation for damages for a breach of contract must be established by evidence from which a court or jury are able to ascertain the extent of such damages by the usual rules of evidence and to a reasonable degree of certainty. We are of the opinion that the performance in question is not susceptible of proof sufficient to satisfy the requirements and that the damages, if any, are purely speculative. Favar v. River-view Park, 144 Ill. App. 86; Broadway Photoplay Co. v. World Film Corp., 225 N. Y. 104; Wooldridge v. Shea, 175 N. Y. S. 130; Bernstein v. Meech, 130 N. Y. 354.

Proposition 2: Expenses incurred by the plaintiff prior to the signing of the agreement between the plaintiff and Dempsey.

The general rule is that in an action for a breach of contract a party can recover only on damages which naturally flow from and are the result of the act complained of. O’Conner v. Nolan, 64 Ill. App. 357. The Wills contract was entered into prior to the contract with the defendant and was not made contingent upon the plaintiff’s obtaining a similar agreement with the defendant Dempsey. Under the circumstances the plaintiff speculated as to the result of his efforts to procure the Dempsey contract. It may be argued that there had been negotiations pending between plaintiff and Dempsey which clearly indicated an agreement between them, but the agreement in fact was never consummated until sometime later. The action is based upon the written agreement which was entered into in Los Angeles. Any obligations assumed by the plaintiff prior to that time are not chargeable to the defendant. Moreover, an examination of the record discloses that the $50,000 named in the contract with Wills, which was to be payable upon a signing of the agreement, was not and never has been paid. There is no evidence in the record showing that the plaintiff is responsible financially, and, even though there were, we consider that it is not an element of damage which can be recovered for breach of the contract in question.

Proposition 3: Expenses incurred in attempting to restrain the defendant from engaging in other contests and to force him into a compliance with the terms of his agreement with the plaintiff.

After the repudiation of the agreement by the defendant, plaintiff was advised of defendant’s match with Tunney which, from the evidence, it appears, was to take place in Philadelphia in the month of September and was in direct conflict with the terms of the agreement entered into between plaintiff and defendant. Plaintiff’s bill, filed in the superior court of Marion county, Indiana, was an effort on the part of the plaintiff to compel defendant to live up to the terms of his agreement. The chancellor in the Indiana court entered his decree, which apparently is in full force and effect, and the defendant in violating the terms of that decree, after personal service, is answerable to that court for a violation of the in junctional order entered in said proceeding. The expenses incurred, however, by the plaintiff in procuring that decree are not collectible in an action for damages in this proceeding; neither are such similar expenses as were incurred in the trips to Colorado and Philadelphia, nor the attorney’s fees and other expenses thereby incurred. Cuyler Realty Co.,v. Teneo Co Inc., 188 N. Y. S. 340. The plaintiff having been informed that the defendant intended to proceed no further under his agreement, took such steps at its own financial risk. There was nothing in the agreement regarding attorney’s fees and there was nothing in the contract in regard to the services of the defendant from which it would appear that the action for specific performance would lie. After the clear breach of contract by the defendant, the plaintiff proceeded with this character of litigation at its own risk. We are of the opinion that the trial court properly held that this was an element of damages which was not recoverable.

Proposition 4: Expenses incurred after the signing of the agreement and before the breach of July 10, 1926.

After the signing of the agreement plaintiff attempted to show expenses incurred by one Weisberg in and about the furtherance of the project. Weisberg testified that he had taken an active part in promoting sports for a number of years and was in the employ of the Chicago Coliseum Club under a written contract during all of the time that his services were rendered in furtherance of this proposition. This contract was introduced in evidence and bore the date of March 8, 1926. Under its terms Weisberg was to be reimbursed out of the gate receipts and profits derived from the performance. His compensation depended entirely upon the success of the exhibition. Under his agreement with the plaintiff there was nothing to charge the plaintiff unconditionally with the costs and expenses of Weisberg’s services!' ' The court properly ruled against the admissibility of the evidence.

We find in the record, however, certain evidence which should have been submitted to the jury on the question of damages sustained by the plaintiff. The contract on which the breach of the action is predicated shows a payment of $10 by the plaintiff to the defendant and the receipt acknowledged. It appears that the stadium located in the South Park District, known as Soldier’s Field, was considered as a site for the holding of the contest and plaintiff testified that it paid $300 to an architect for plans in the event the stadium was to be used for the performance. This item of damage might have been made more specific and may not have been the best evidence in the case but, standing alone, it was sufficient to go to the jury. There were certain elements in regard to wages paid assistant secretaries whi,ch may be substantiated by evidence showing that they were necessary in furtherance of the undertaking. If these expenses were incurred they are recoverable if in furtherance of the general scheme. The defendant should not be required to answer in damages for salaries paid regular officials of the corporation who were presumed to be receiving such salaries by reason of their position, but special expenses incurred are recoverable. The expenses of Hoffman in going to Colorado for the purpose of having Dempsey take his physical examination for insurance, if before the breach and reasonable, are recoverable. The railroad fares for those who went to Los Angeles for the purpose of procuring the signing of the agreement are not recoverable as they were incurred in a furtherance of the procuring of the contract and not after the agreement was entered into. The services of Shank in looking after railroad facilities and making arrangements with the railroad for publicity and special trains and accommodations were items which should be considered and if it develops that they wore incurred in a furtherance of the general plan and properly proven, are items for which the plaintiff should be reimbursed.

The items recoverable are such items of expense as were incurred between the date of the signing of the agreement and the breach of July 10, 1926, by the defendant and such as were incurred as a necessary expense in furtherance of the performance. Proof of such items should be made subject to the usual rules of evidence.

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

Judgment reversed and cause remanded.

Hebel, P. J., and Friend, J., concur.


text:
    Paul Strey and Irma Strey, Appellants, v. Conrad Buehl and Martha Buehl, Appellees.
    Gen. No. 35,389.

      Heard in the third division of this court for the first district at the October term, 1931.
    Opinion filed March 16, 1932.
    John E. Van Natta, for appellants.
    Huss & Rehm, for appellees.
   Mr. Justice Wilson

delivered the opinion of the court.

Complainants filed their bill in chancery praying that the defendants be enjoined from declaring a forfeiture upon a real estate contract and from prosecuting a suit in forcible detainer in the municipal court of Chicago. A motion for a temporary restraining order was granted. Subsequently, on motion of the defendants, "the restraining order was set aside and from that order this appeal was prayed and allowed.

No point is raised as to whether or not the order setting aside the temporary injunction was an appeal-able order. From the bill of complaint, however, it appears that the main purpose of the bill is for a permanent injunction and that complainants’ right might be lost if a temporary injunction was not allowed to issue and remain in full force and effect until final hearing. Under the Practice Act, Cahill’s St. ch. 110, H 91, appeals in chancery will lie only from final orders. Owing to peculiar circumstances and hardships, the courts have refused to dismiss appeals from some judgments or decrees which did not completely dispose of the case in which they were entered. Bucklen v. City of Chicago, 166 Ill. 451. In the event this cause should be dismissed because of the fact that the order dissolving the injunction was not a final decree, it would result in complainant being- forced to again appear in the trial court and ask to have the cause finally determined. This would result in a delay and hardship to the complainant. The same question would be before us on an appeal from the final order as is before us on this appeal. Under the circumstances, we consider the cause as coming within the exception to the rule and the parties having treated the order as an appealable one, it will be so considered by this court.

The bill charges that the parties entered into a contract for the purchase of a piece of real estate, March 26, 1925; that the contract price was $8,250, payable $1,625 in cash and $50 or more on or before the first of each month starting May 1, 1925, until the principal sum of $3,625 was paid in full with interest at 6 per cent. Upon the payment of $5,250, complainants were to receive a deed and assume a mortgage of $3,000, dated February 27, 1930; charges that the contract contained the usual clauses as to taxes, time of payment, etc., and that payments were made and accepted without objection on various dates from 1925 to 1930; that all of the payments, with one exception, were made on dates subsequent to the first of the month and in some instances were not even made during the month at which they were due; charges that in September, 1930, payments were made and accepted without objection; charges that the defendants have never given notice that further payments should be made on the dates provided in said contract and that the purchase price has been nearly paid and only approximately $848.94 remains; charges that on April 24,1931, the defendants began a forcible detainer suit in the municipal court of Chicago for the purpose of recovering possession of the premises in ■ question; charges that irreparable injury will be done the complainants if said suit is allowed to proceed and offers to pay all and any moneys due under the contract; asks for an injunction and offers to do equity as the court may find proper. The bill also charges that the complainants have invested approximately $5,400 in cash in the premises which will be lost in the event of a forfeiture.

It is insisted that complainants have an adequate remedy at law by showing the facts set out in the bill of complaint and that these facts, if true, would constitute a defense. It is further insisted that the tender in the bill of complaint is not sufficient, but that the money should be actually tendered in open court. From the facts charged in the bill it appears that the payments have been going over a number of years and that the condition of the agreement, namely, that time is of the essence of the contract, has, at frequent intervals, been waived by the parties. Forfeiture is a harsh remedy at best, and is by no means a favorite with a court of chancery under any circumstances, and readily yields in that forum to the principle of compensation, if fair dealing and good conscience seem so to demand. Watson v. White, 152 Ill. 364.

The bill charges that valuable improvements have been made on the property, and these facts are often incapable of proof in a law proceeding. No declaration of forfeiture appears to have been served on the complainants and from the record we gather that the first intimation complainants had of the purpose of the defendants was the beginning of the suit for forcible detainer in the municipal court. If the parties themselves had waived'the condition that time of payments is of the essence of the contract, then it became necessary for the defendants to have notified complainants that in the event of future noncompliance of payment in accordance with the terms of the agreement, they would declare a forfeiture. The waiver of this condition was shown by the conduct of the parties. The Supreme Court in the case of Watson v. White, 152 Ill. 364, in its opinion says:

“By the terms of the agreement here in question time was made of the essence of the contract. It was not only provided therein that if the purchaser should fail to perform the contract promptly on his part, at the time and in the manner therein specified, then that ‘the earnest money paid as above’ — i. e., the $500 first paid by White, — should, at the option of the vendor, be forfeited as liquidated damages and the contract become null and void, but it was also expressly stipulated, ‘time is of the essence of this contract and of all the conditions thereof. ’ But an agreement that time shall be of the essence of a contract may be waived or set aside, and more especially so in the contemplation of a court of chancery, either by the mutual consent or conduct of the parties, or by the consent or conduct of the party in whose favor and for whose benefit such stipulation is made. (Allen v. Woodruff, 96 Ill. 11; Palmer v. Ford, 70 id. 369; Peck v. Brighton Co., 69 id. 200; Morgan v. Herrick, 21 id. 481; Bishop v. Newton, 20 id. 175.) In the case at bar, both parties, by tacit but mutual consent, seem to have waived and ignored, from the very start, the provision that time should be of the essence of the contract and of all the conditions, stipulations or specified terms thereof.”

The tender in the bill was sufficient. It was not necessary to bring the money into court. The technical rules which govern pleadings of tender in actions at law do not apply to proceedings in chancery. The Supreme Court in Watson v. White, supra, in its opinion says: “Equity will not demand of him that which is wholly useless for any purpose. The technical rules that govern pleas of tender in actions at law are manifestly inapplicable to the circumstances of this suit in chancery. The general rule is, that to entitle a purchaser to demand a deed and maintain a bill for specific performance, it is sufficient that he is ready and offers to pay any sum that may be found to be due and still-unpaid, and to comply with the contract on his part. Mix v. Beach, 46 Ill. 311; Maughlin v. Perry & Warren, 35 Md. 352; Jenkins v. Harrison, 66 Ala. 346.” To the same effect see Hinton v. Tyler, 163 Ill. App. 454; First Nat. Bank of Hayward, Wis. v. Gerry, 195 Ill. App. 513.

The bill charges facts which, if true, would entitle the complainant to relief, and the action of the trial court in dissolving the temporary injunction was error. It would be a harsh rule which would permit the defendant to receive belated payments extending over a number of years and then suddenly invoke the aid of a law court to enforce a forfeiture, and equity should prevent such a thing, if possible, so long as equity is done to all parties.

For the reasons stated in this opinion the order of the superior court is reversed and the cause remanded with directions to expunge the order dissolving the temporary injunction, to allow the temporary injunction to stand, and to proceed in accordance with the views expressed in this opinion.

Order reversed and cause remanded with directions.

Hebel, P. 3\, and Friend, J., concur.


text:
    Clyde D. Pence, Appellee, v. The West Side Hospital of Chicago, Appellant.
    Gen. No. 35,484.
    Heard in the third division of this court for the first district at the October term, 1931.
    Opinion filed March 16, 1932.

      William H. Noble, for appellant.
    Henry W. Olschner, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

Plaintiff, a director and vice president of defendant company, brought his action in the municipal court to recover for services rendered at the special instance and request of the defendant while acting as manager for the defendant company during the year 1928. The cause was tried before the court without a jury, resulting in a finding in favor of plaintiff, assessment of plaintiff’s damages at the sum of $600, and judgment on the finding.

Plaintiff testified that he was a practicing physician in the City of Chicago and that he had a talk with one Davis, president of the defendant company, in which he told Davis that he could not afford to put in so much time at the hospital without being paid for his services, and asked to be given $1,000 a year for such services; that it was finally agreed between himself and the president that he was to receive $600 and that he was paid $600 annually for the years 1923, 1924, 1925, 1926 and 1927. Plaintiff further testified that he rendered the same services during the year 1928 and that this was done with the knowledge of the defendant company under the previous arrangement, but defendant refused to pay for the services. He testified as to what he did during the year, and from his testimony it appears that the services performed. were different from those ordinarily required of a director or vice president of a corporation. The evidence clearly demonstrates the fact that the plaintiff performed services which required his daily attendance qt the hospital and were such as are usually required of a general manager.

Defendant offered in evidence the by-laws of the corporation, from which it appears that in the president’s absence the duties shall be performed by the vice president and that no officer or director of the corporation should receive any salary as such officer or director. Defendant insists that a contract with a director of a corporation for compensation for his official duties in the absence of a by-law or resolution of the board of directors is illegal; that there was no such resolution; that the president of the corporation had no authority to bind it for such services as were rendered by the plaintiff, and that the duties rendered were such as should have been rendered by the plaintiff as vice president and a director.

The general rule as announced by counsel for defendant is correct, namely, that in order to entitle an officer of a private corporation to receive compensation for the performance of the duties of his office it is necessary that such compensation be authorized by the board of directors or by the by-laws of the company. Where, however, services are rendered by an officer of a corporation, which are outside and apart from those imposed upon him by virtue of his office, he may recover compensation for such services if they were rendered at the request or acquiescence of the corporation. The Supreme Court of this State in the case of Chicago Macaroni Mfg. Co. v. Boggiano, 202 Ill. 312, in its opinion says:

“While the principle is well established that in order to entitle an officer of a private corporation to receive compensation for the performance of the duties of his office it is necessary such compensation should have been authorized by the board of directors or by the bylaws of the company, it is also the rule that for the performance of duties or services outside of and apart from those imposed upon him by virtue of his office, such officer may, if such extraordinary services were rendered at the request or with the acquiescence of the corporation, recover upon a quantum meruit. (Rockford, Rock Island and St. Louis Railroad Co. v. Sage, 65 Ill. 328; Cheeney v. Lafayette, Bloomington and Mississippi Railway Co., 68 id. 570; Gridley v. Lafayette, Bloomington and Mississippi Railway Co., 71 id. 200; 21 Am. & Eng. Ency. of Law, — 2d ed. — 909.) ”

The Supreme Court in the case of Stevens v. Industrial Commission, 346 Ill. 495, in its opinion again laid down the rule:

“It is well established that the directors of a corporation cannot receive compensation for the performance of their duty as directors or as officers of the corporation unless compensation is provided for by a by-law or resolution of the board of directors before the services are rendered. This rule applies to a director who' is the president, vice president, secretary or .treasurer of a corporation, but it does not apply to a director or officer who has performedi necessary services entirely outside the scope of his duties as a director or officer, at the instance of the officers of the corporation having general authority over the affairs of the corporation, under an express promise of payment for such services or under such circumstances as raise an implied promise to pay for them. Rockford, Rock Island and St. Louis Railroad Co. v. Sage, 65 Ill. 328; Cheeney v. Lafayette, Bloomington and Mississippi Railway Co., 68 id. 570; Holder v. Lafayette, Bloomington and Mississippi Railway Co., 71 id. 106; Chicago Macaroni Co. v. Boggiano, 202 id. 312; Pew v. First Nat. Bank, 130 Mass. 391; Fitzgerald & Mallory Construction Co. v. Fitzgerald, 137 U. S. 98.”

From the evidence it is clear that the defendant corporation acquiesced in and consented to the performance of the services by the plaintiff and from the evidence in the record it is clear that these services were outside of and apart from the usual and ordinary services rendered by a director or vice president. There is ample evidence to sustain the judgment of the trial court.

For the reasons stated the judgment of the municipal court is affirmed.

Judgment affirmed.

Hebel, P. J., and Friend, J., concur.


text:
    Chicago Title & Trust Company, Appellee, v. James A. Lauletta et al. James A. Lauletta and Germaine Lauletta, Appellants.
    Gen. No. 35,846.

      Heard in the third division of this court for the first district at the February term, 1932.
    Opinion filed March 16, 1932.
    Otto G. Ryden, for appellants.
    Urion, Drucker, Bishop & Boutell, for appellee; William B. Gemmill and Ross S. Welch, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

This matter comes before this court on an interlocutory appeal from an order appointing a receiver on a bill for foreclosure. The bill is in the usual form and is brought for the purpose of foreclosing a trust deed on certain property described therein and which appears from the trust deed and notes to be located at the southwest corner of Rockwell street and Rosemont avenue in the City of Chicago. The trust deed in question contains the usual allegations describing the parties and the property, default in the payment of interest and taxes, and praying for the appointment of a receiver to collect the rents and profits derived from the property.

The bill was filed December 15, 1931. December 14, the day before the filing of the bill, the following notice was mailed to the defendants James Lauletta and Germaine Laul'etta:

“To:
James Lauletta and Germaine Lauletta,
5120 North Winchester Avenue,
Chicago, Illinois.
“Please Take Notice That on Thursday, December 17, 1931, at the opening of court in the forenoon, or as soon thereafter as counsel can be heard, we shall appear before whatever Judge the Chief Justice shall assign the case * to, in the Court room usually occupied by him in the County Building, Chicago, or in his absence before any other judge sitting in his stead, and shall then and there ask, for the appointment of a Receiver for the above premises; at which time and place you may appear if you so see .fit to do.
Urion, Drucker, Bishop and Boutell.
* Judge can be ascertained by telephoning counsel.”

This notice was sent by registered mail and received by the defendants December 15. December 17, 1931, an order was entered in said cause by the chancellor of the superior court from which it appears that notice of the motion for a receiver had been duly served on the defendants and upon the hearing of evidence the court ordered the appointment of a receiver upon the giving of a bond by both the complainant and the receiver within five days.

December 29, 1931, an order was entered granting the receiver leave to employ counsel', but without notice to Ifche defendants.

January 9, 1932, an order was entered approving the bond of the complainant and this bond was filed in the office of the clerk of the superior court on January 9, 1932. An examination of this bond shows that it runs to the People pf the State of Illinois instead of to the defendants.

January 14, 1932, the defendants perfected their interlocutory appeal by filing their bond in the office of the clerk of the superior court of Cook county.

An additional abstract of record was filed herein by the appellees showing that on February 23, 1932, a certain certificate of evidence was presented and signed by the chancellor which appears to be a recital of what took place at the time the order appointing the receiver was entered. This purported certificate of evidence having been filed after this appeal was perfected does not concern this court in its consideration of the matter before it. A perusal of the certificate, however, shows that it appears to be a narrative signed by the chancellor showing what took place before him two months earlier. It states that' evidence was heard, but no evidence appears in the certificate. This purported certificate of evidence states that the present counsel for the defendants was in court at the time and took part in the discussion regarding the appointment of a receiver. It does not appear, however, that the present counsel was the then attorney for the defendants, nor was there any appearance entered by the defendants or anybody on their behalf. No order was entered at the time the receiver was appointed granting leave to anybody to file a certificate of evidence, nor was there any time fixed in which a certificate of evidence was to be filed.

Defendants urge as a ground for reversal that the notice was insufficient in that it failed to designate the judge before whom the motion was to be heard, the time when it was to be heard, or a description of the premises which were to be foreclosed.

It is further insisted that the notice required by law was a personal notice and'that the mailing of a .registered letter is not sufficient to satisfy the requirements.

The objections are, in our opinion, well taken. The notice wholly fails to state any place in any court where the motion is to be heard and in the body of the notice it is provided that they shall ask for the appointment of a receiver for “the above premises.” The above premises appear to be 5120 North Winchester avenue, Chicago, Illinois, which is the address of the defendants and totally different from the premises described in the trust deed and notes. The property being foreclosed is described as being at the corner of Rockwell street and Rosemont avenue. There is nothing in the record to show that the defendants owned or had any interest in the property at 5120 North Winchester avenue, to which address the notice was mailed.

The Practice Act, section 16, Cahill’s St. ch. 110, H 16, provides that notice of motions on a person who has been sued but who has not entered his appearance shall be served personally upon him, or, if not found, by leaving a copy at his residence or place of business. The rule of the superior court contains a similar provision. Service of notice of any proceeding in court is supposed to' be personal service unless otherwise designated by law. Grabowski v. MacLaskey, 257 Ill. App. 484; Haj v. American Bottle Co., 261 Ill. 362.

The complainant failed to file its bond as provided by the order which required this to be done within five days and no notice was served on the defendants of any new order requiring the giving of such bond. It is insisted that the trust deed contains a clause to the effect that notice of the application for the appointment of a receiver is waived. Complainants, however, failed to proceed according to this provision in the trust deed but attempted to serve notice. The court, moreover, in its order appointing the receiver, stated that it was done upon notice served. It is possible that if no notice had been received no receiver would have been appointed. This court has held repeatedly that the appointment of a receiver is not a matter to be considered lightly. The appointment of a receiver is an extraordinary remedy and the interests of all parties concerned should be safeguarded. The owner of the property, in. a foreclosure proceeding as well as the one seeking to subject the property to an indebtedness, is entitled to consideration and should be advised of the proceedings incidental to the appointment of a receiver. He should be heard upon the question, if tie cares to be present, as to whether or not a receiver should be appointed and also as to the fitness of the appointee. In the opinion of this court the notice was not such as answered the requirements of the law and the order entered December 17, 1931, appointing a receiver was, therefore, ineffective.

For the reasons stated in this opinion the order of December 17, 1931, appointing a receiver is reversed.

Order of December 17, 1931 appointing a receiver reversed.

Hebel, P. J., and Friend, J., concur.


author: Mr. Justice Matchett

text:
    Alexander W. Pflueger, Appellee, v. Broadway Trust & Savings Bank, Appellant.
    Gen. No. 34,732.

      Heard in the first division of this court for the first district at the October term, 1930.
    Opinion filed October 19, 1931.
    Dent, Dobyns & Freeman, for appellant.
    Fisher, Boyden, Bell, Boyd & Marshall, for appellee; Thomas L. Marshall and David A. Watts, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

In an action of replevin for the recovery of three $1,000 debenture bonds issued by the Container Corporation of America on June 15, 1926, and due June 15, 1936, there was a finding for plaintiff and judgment for possession and costs in his favor, which defendant seeks to reverse by this appeal.

The declaration was in the usual form. There were pleas by defendant of not guilty, and a special plea alleging that the bonds were bearer bonds and negoliable; that they were negotiated before maturity, and that defendant took the same without knowledge of any defect of title and became the holder thereof in due course.

There is no dispute as to any material fact. Defendant is engaged in the business of banking in Chicago. December 26, 1928, it accepted these debentures as collateral security for a seven-day loan of $2,500 made to a customer, Herbert Hoffmeyer, who gave his note for the amount of the loan which is unpaid. Defendant knew that Hoffmeyer was employed by a hotel near its place of business, and before accepting the debentures ascertained either by published reports or by inquiry that the debentures were selling at a price of par or better. The court found that in accepting the debentures defendant acted in good faith and was not negligent. The evidence further shows that plaintiff, who was the owner of the debentures, placed them in a safe at 111 West Washington street, from which they were stolen about April 9,1928, by some unknown person or persons. Eleven days before the debentures were pledged to defendant they had been called for payment pursuant to the terms of a certain trust indenture executed by the corporation at the time the debentures were first issued. The first sentence of the writing on the face of each of the debentures is as follows:

“For value received, the Container Corporation of America (hereinafter referred to as the Company), a corporation organized and existing under the laws of the State of Delaware, promises to pay to bearer, or, if this debenture be registered, to the registered owner hereof, on June 15, 1936, the principal sum of One Thousand Dollars and to pay interest thereon from the date hereof at the rate of six per cent per annum, semiannually, on December 15 and June 15 in each year.”

Other provisions appear upon the face of the debentures to the effect that interest due before maturity will be paid only on surrender of the interest coupons; that both principal and interest are payable at the office of the trustee in the Borough of Manhattan, city and State of New York, in gold coin, etc., “without deduction for any Federal Income Tax thereon or with respect thereto, not in excess of two per cent of such interest in any year, which the company or the trustee may be required or permitted to pay thereon or retain or deduct therefrom under any present or future law of the United States of America”; that the debenture is one of an authorized issue of $1,000,000, all issued under a certain trust agreement dated as of June 15, 1926, “to which trust agreement reference is hereby made for a statement of the terms under which the said debentures are issued, and the rights and obligations of the company, of the trustee, and of the respective holders of the said debentures under the said trust agreement ’ ’; that to the extent provided in the trust agreement all rights of action upon the debenture are vested in the trustee.

There is a further provision to the effect that recourse for payment of either principal or interest or for claim under the trust agreement may not be had or made against any incorporator, stockholder, officer or director of the company or of any successor corporation, either directly or indirectly by virtue of any constitution, statute, provision or rule of law, “all such liability being, by the acceptance of this debenture and as a part of the consideration for the issue hereof, expressly released, as provided in the said trust agreement. ’?

Section 29 of the trust agreement states that except as therein provided, no holder shall have the right to institute any suit, action or proceeding at law or in equity upon or with respect to the agreement, or for the execution of any trust or power thereof, or for any other remedy under or upon the agreement or with respect to any of the bonds or interest coupons secured thereby, without first giving to the trustee written notice of an existing default or tendering to the trustee security and indemnity satisfactory to it; nor also unless the holders of 25 per cent in the aggregate amount of the outstanding bonds shall have requested the trustee in writing to take action with respect to such default, and the trustee shall have declined to take such action or shall, have failed to do so within 30 days thereafter, “it being understood and intended that no holder of any bond or interest coupon or claim for interest shall have any right in any manner to enforce any right or remedy hereunder, or under or with respect to any of the bonds, except in the manner herein provided, and that all proceedings hereunder shall be instituted, had and maintained in the manner herein provided, and for the equal, benefit of all holders of outstanding bonds. ’ ’

Each of the debentures provides that it may be redeemed at the option of the company upon any semiannual interest date prior to maturity upon at least 30 days’ prior notice published in a daily newspaper of general circulation, printed in the English language, published in the Borough of Manhattan, city and State of New York, at the price and upon the terms stated.

Section 14 of the trust agreement provides that notice having been given and cash for redemption deposited, “the said bonds shall, on the redemption date designated in such notice, become due and payable at the said head office of the trustee. ’ ’ There is a further provision that after the date fixed for redemption the bonds shall cease to bear interest.

Two controlling questions arise upon the record: (1) Are the debentures, which are the subject matter of this suit, negotiable? (2) Assuming negotiability, were the same overdue when received by defendant in the transaction in Chicago % If the same were not negotiable or overdue at that time, then defendant would take the same subject to infirmities, not being a holder in due course; but if they were negotiable and not due, even a thief could give good title to one taking for value and in good faith. Sherman State Bank v. Smith, 244 Ill. App. 171.

Preliminary questions arise. Defendant contends that since the debentures were issued in New York and by their terms payable there, the laws of New York are to control our decision. Plaintiff, on the other hand, says that since the transaction in which defendant took the bonds occurred in Illinois, the laws of this State are controlling. In a suit in the State of Michigan involving debentures of this same issue and where identical questions were involved (Paepcke v. Paine, 253 Mich. 636, 235 N. W. 871), the Supreme Court of that State said it was conceded by the parties that the laws of the State of New York should be applied. The point is not conceded by these parties.

The question is of some importance since it is suggested that under the statutory law of the State of New York the debentures are negotiable (ch. 41 of the Consolidated Laws of New York, "Article 8). The opinion in the Michigan case holding the law of New York applicable relies on Fidelity & Deposit Co. of Maryland v. Andrews, 244 Mich. 159, 221 N. W. 114, which so holds without the citation of authority. It further cites City Bank & Trust Co. v. Atwood, 197 Mich. 116, 163 N. W. 941, a case distinguishable upon the facts,’ since the action there was upon the written instrument.

While there is some conflict in-the authorities, we are of the opinion that where, as here, the controversy is between the original holder and a third party claiming title to the debentures, the law of the jurisdiction wherein the transaction occurred through which the defendant claims title should be applied.

In Picker v. London & County Banking Co., 18 Queen’s Bench Div. 515, it appeared that the plaintiff brought an action to recover possession of certain Prussian bonds which were issued by the Prussian government and which had been stolen from the plaintiff. Evidence was offered tending to show that by the law of Prussia these bonds were payable to bearer and transferable by delivery, and that a bona fide holder for value without notice would be entitled to payment of them. The plaintiff gave evidence tending to show that in the English markets these bonds were by custom not negotiable. The trial judge held that the instruments were not negotiable and gave judgment for the plaintiff, which was affirmed upon appeal. Lord Esher, M. B., said: “But I will assume that they were negotiable instruments in Prussia in the fullest sense of the term. The question is, what under those circumstances is the English law with respect to them. The common law of England does not allow a party to a contract to transfer his right under the contract to another person except in certain cases. ... If all that can be proved is that by the law or custom in Prussia the instrument is negotiable, then, as it seems to me, the answer is that an English Court and English merchants are not bound by a law or custom of trade in Prussia. To prove that an instrument is negotiable in the sense required, there must be something to make it so by English law.” Fry, L. J., said: “I am of the same opinion. The question is whether these bonds are negotiable instruments according to the law of England. ’ ’

In Williams v. Colonial Bank, 38 Chancery Div. Law Beports 388, where the question of the title to certain stock in an American corporation was' at issue, Bindley, L. J., said that the evidence given by the American lawyers was to the effect that if the transaction had taken place in America the banks would have had a good title to the shares, subject possibly to a question of attestation, and the banks would have succeeded. He added:

“Now, can it be said that these banks have acquired by English law a title to these certificates ? If so, how have they got it"? Assume for the moment that in America certificates indorsed like these are treated as negotiable instruments, that would not make them negotiable instruments in this country. That was decided by Picker v. London and County Banking Company, but authority is hardly wanted for so very obvious a proposition. A Prussian thaler is current in Prussia, but it is not current in London; nor, because a negotiable instrument is current in one country and part of the cash of that country, is it therefore a negotiable instrument or part of the cash of England.” Bowen, L. J., said: “Whether or no they are negotiable instruments according to American law is unimportant if they are not negotiable instruments according to our own.”

The same principle was expressed by Justice Holmes in Direction der Disconto Gesellschaft v. United States Steel Corp., 267 U. S. 22, a case involving the title to shares of stock where the certificates had been seized by an English custodian of enemy property. He said:

“But the question who is the owner of the paper depends upon the law of the place where the paper is. It does not depend upon the holder’s having given value, or taking without notice of outstanding claims, but upon the things done being sufficient by the law of the place to transfer the title. ’ ’

In 2 Wharton on Conflict of Laws, ed. 1905, sec. 447b, p. 966, the author says:

“It may be pointed out in this connection, however, that according to the weight of authority, although there is some conflict upon the point, the negotiability of an instrument, as affecting the respective rights of one who has been fraudulently deprived of it, and one who has obtained the same from or through a third person who had no authority to transfer it, depends upon the law of the place where the transfer to the present holder took place, and not necessarily upon the substantive law of the original contract.” ' Gorgier v. Mieville, 3 Barn. & C. 45; Lang v. Smyth,.7 Bing. 284; Goodwin v. Robarts, L. R. 1 App. Cas. 476; Picker v. London & County Bkg. Co., L. R. 18 Q. B. Div. 515; Williams v. Colonial Bank, L. R. 38 Ch. Div. 388, are cited to that effect, and Wylie v. Speyer, 62 How. Pr. (N. Y.) 107; Savings Bank of Kansas v. National Bank of Commerce, 38 Fed. 800, are cited as contrary. The authorities are also collected in a note to Spies v. National City Bank, 174 N. Y. 222, 61 L. R. A. 193, at p. 205, subdivision 8. See also Alcock v. Smith, L. R. 1 Ch. Div. 238; Embircos v. Anglo-Austrian Bank, L. R. 1 K. B. 677, and Roland M. Baker Co. v. Brown, 214 Mass. 196.

A writer on this subject in 11 Cal. L. B. pp. 115-117, says:

“What little Anglo-American authority there is upon this question seems to indicate that the original character of an instrument is generally held not to have been impressed permanently upon it, but that its negotiability as to persons dealing with the instrument within a jurisdiction other than that in which it was issued and made payable is to be determined by local law. . . .
“On the Continent, however, it is generally assumed that the law of the place of issue must fix the character of an instrument throughout its life. ’ ’ He cites Loren-zen, Conflict of Laws Belating to Bills and Notes, p. 131, and raises the question of whether Popp v. Exchange Bank, 189 Cal. 296, means that the courts of California have adopted “the continental rule.”

We think the “Anglo-American rule” should be adhered to. It does not seem reasonable that the courts of this State should be required to apply to a transaction taking place within this State the rules of law of a foreign jurisdiction. Negotiable instruments are credit instruments and designed to take the place of and pass as money. It is not to be supposed that a sovereign State would adopt and enforce a rule of law which in its practical effect would subject transactions of this kind between parties in this jurisdiction to a foreign legislature. Since the transaction in which defendant took these bonds and by reason of which it claims title to them occurred within the jurisdiction of the State of Illinois, we hold the legal effects of the transaction must be construed according to the law of Illinois.

A further question is whether the negotiability of these debentures must be determined by their conformity or lack of conformity to- the Negotiable Instruments Law. That law in substantially the same form was effective in both New York and Illinois at the time these debentures were issued. Professor Brannan thinks (see Brannan Negotiable Instruments Law Annotated, 4th ed., p. 7) that while the language of the act taken literally is broad enough to include bonds of this character, it should not be construed to include them. He points out that the legislators evidently had in mind only three types of instruments, namely, promissory notes, bills of exchange and checks. He says that bonds are not given any consideration except a reference in section 65 of the act which, he thinks, is too incidental to have the effect of invalidating instruments universally accepted as negotiable by the business world. (See Cahill’s St. ch. 98, H 85; SmithHurd’s Ill. Rev. Stats., ch. 98, fí 85, sec. 65.) He says that while in some respects similar, the functions performed by bonds in the business world are quite different from the functions of promissory notes, bills of exchange and checks; that it is unnecessary in the determination of the negotiability of bonds to refer to the formal requisites declared by the law for simpler instruments, since bonds and similar corporate securities before they are admitted for sale on the stock exchange must be passed upon by expert committees of such bodies who can apply the tests of transferability which are considered desirable. He points out that the British statute, while differing somewhat in its language from the American, is construed to be so limited, and says that onr courts should be left free like theirs to follow commercial usage and to recognize the possibility of growth of the law merchant in the future as in the past; that “new types of corporate securities should be free to develop to meet the new needs of a changing business world”; that the law of commercial paper as embodied in the Negotiable Instruments Law was not something creatéd by the judges of the courts, but represented the necessity of business worked out by business men.'

So far as we are informed there has been no decision by the courts of review of this State as to whether the statute should or should not be limited to notes, bills of exchange and checks. However, cases cited in the briefs from this and other States in which the Negotiable Instruments Law has been enacted assume that it is applicable to obligations such as bonds and debentures. In Manhattan Co. v. Morgan, 242 N. Y. 38, the precise question was presented, and it was held that an instrument to be negotiable must, conform to the statute. It was there said in substance that the section of the statute, which is section 65 of our act, precluded any other construction and that the act itself by its enumeration of qualities, which would make an instrument non-negotiable as well as its enumeration of qualities which would make it negotiable, made it impossible to hold otherwise. (24 Col. L. R. 757; 39 Harv. L. R. 875.) The New York authorities, however, seem also to hold that the statute should be given a liberal construction to the end that instruments regarded by the business community as negotiable might be held to be so, and in Manhattan Co. v. Morgan, supra, the opinion indicated that notwithstanding the statute, instruments not otherwise negotiable might become so by contract or by estoppel. In Enoch v. Brandon, 249 N. Y. 263, the same court held that while an instrument to become negotiable need not follow any precise language, it must conform to the definition specified in the statute; that in the face of a command the court must adhere to the design of the legislature; that while at times contract rights might be enforced or some theory of estoppel adopted, no intention, no agreement “may make negotiable an instrument which the statute declares to be non-negotiable. ’ The particular instruments (bonds) involved in that case were held negotiable. We are disposed to follow the construction of the statute as announced in these New York cases. Indeed, the language of the Negotiable Instruments Law is so inclusive as to preclude a different construction. The word “instrument” in section 1, Cahill’s St. ch. 98, Ü 21, must be construed as broad enough to include bonds and debentures such as those which form the subject matter of this suit.

The authorities seem to agree that the question of negotiability must be determined from the face of the writing itself. That is practically the decision of our Supreme Court in Equitable Trust Co. of New York v. Harger, 258 Ill. 615, followed by this court in National Bond & Investment Co. v. Lanners, 253 Ill. App. 262; Atlas Coal & Coke Co. v. Kentucky River Coal Min. Co., 253 Ill. App. 475; Weber v. Keith Ry. Equipment Co., 248 Ill. App. 258, and Balch v. English, 261 Ill. App. 29. It is also the rule in New York (Enoch v. Brandon, 249 N. Y. 263) as well as in Minnesota (King Cattle Co. v. Joseph, 158 Minn. 481, 488). Nickey Bros. v. Lonsdale Mfg. Co., 149 Tenn. 1, 257 S. W. 403, 31 A. L. R. 1383; Paepcke v. Paine, 253 Mich. 636, 235 N. W. 871.)

Thq qualities which the statute prescribes as indispensable to the negotiability of written instruments are stated in paragraph 21 of chapter 98 (see Cahill’s St. ch. 98, If 21; Smith-ITurd’s Ill. Rev. Stats. 1929) which is section 1, article 1, of the Negotiable Instruments Act. It provides:

“An instrument payable in money, to be negotiated, must conform to the following requirements:
“1. It must be in writing and signed by the maker or drawer.
“2. Must contain an unconditional promise or order to pay a sum certain in money.
“3. Must be payable on demand or at a fixed or determinable future time.
“4. Must be payable to the order of a specified person or to bearer; and,
5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.”

Paragraph 23 of our statute (section 3 of the act) provides:

“An unqualified order or promise to pay is unconditional within the meaning of this Act, though coupled with:
“1. An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or *
“2. A statement of the transaction which gives rise to the instrument.
“But an order or promise to pay out of a particular fund is not unconditional.” Cahill’s St. ch. 98, H 23.

Section 51 provides: “The holder of a negotiable instrument may sne thereon in his own name. . . . ” Cahill’s St. ch. 98, 71.

It is contended here that the promise in these debenture bonds is not unconditional, because of the provision recited by which the holder is referred to the trust agreement for a statement of the terms under which the debentures are issued and the rights and obligations of the company, of the trustee and of the respective holders, because all rights of action upon the debentures are vested in the trustee, and because the amount to be paid is rendered uncertain by the provision for the payment of taxes.

It has quite uniformly been held by the authorities in the different jurisdictions that if an extrinsic document is referred to on the face of the instrument in a way which modifies the unconditional promise to pay, then the negotiability of the writing is destroyed. If, on the contrary, its effect is simply to state the origin of the transaction out of which the writing* arose, or if it simply refers to some other writing which provides additional security for the performance of the unconditional promise to pay, then such reference does not in any way affect or destroy the negotiability of the writing.

Thus, in-Strand Amusement Co. v. Fox, 205 Ala. 183, 14 A. L. R. 1121, where upon the face of a promissory note in the usual form were written the words, “as per contract, ’ ’ it was held by a divided .court that the words did not impair the negotiability of the note. The annotation to this case says:

“It may be stated as the general rule that wherever a bill of exchange or promissory note contains a reference to some extrinsic contract in snch a way as to make it subject to the terms of that contract, as distinguished from a reference importing* merely that the extrinsic agreement was the origin of the transaction, or constitutes the consideration of the bill or note, the negotiability of the paper is destroyed. ’ ’

In Balch v. English, 261 Ill. App. 29, this court said:

‘ ‘ The references on the face of the bonds to the trust deed amount to no more than a declaration and agreement by defendants that the bonds are secured by a first mortgage on certain real estate. To hold that these references made the bonds non-negotiable instruments would be to permit gross frauds to be perpetrated upon the public.” Citing with approval Utah Lahe Irr. Co. v. Allen, 64 Utah 511.

In Enoch v. Brandon, 249 N. Y. 263, the court said:

“If in the bond or note anything appears requiring reference to another document to determine whether in fact the unconditional promise to pay a fixed sum at a future date is modified or subject to some contingency, then the promise is no longer unconditional. (Old Colony Trust Company v. Stumpel, 247 N. Y. 538.)”

In Old Colony Trust Co. v. Stumpel, 247 N. Y. 538, the Court of Appeals affirming the Appellate division, held that an indorsement on the face of the note as follows: “This note is given in accordance with the terms of a conditional sales agreement between the payee and the maker hereof, ’ ’ and the further indorsement on the back of the note, ‘ ‘ The within note is subject to the terms of a conditional sales agreement executed by the maker thereof upon this date,” did not destroy the negotiability of the instrument.

■ In Enoch v. Brandon, 249 N. Y. 263, the bonds, after stating that the obligor must create a sinking fund to provide for the payment of the same as provided in the mortgage, said:

“To which reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds with respect thereto, the manner in which notice may be given to such holders, and the terms and conditions under which said bonds are issued and secured.” It was held that these limitations referred only to the rights of the parties under the trust agreement and did not limit or modify the obligation to pay and therefore did not destroy the negotiability of the bonds.

On the contrary, in Babbitt v. Read, 236 Fed. 42; Crosthwaite v. Moline Plow Co., 298 Fed. 466, and King Cattle Co. v. Joseph, 158 Minn. 481, 488, substantially similar statements were held to destroy the negotiability of the instrument. In other words, while the cases do not differ very much in the statement of the rule of law, the application of it has led to uncertainty and confusion. For example, a corporate bond was held non-negotiable by the Supreme Court of California in Kohn v. Sacramento Elec., etc., Co., 168 Cal. 1, 141 Pac. 626, while a similar bond was held to be negotiable by the Supreme Court of the State of Washington in Bank of California v. National City Co., 138 Wash. 517, 244 Pac. 690. In the Kohn case the California court ruled that a reference to a trust agreement made a bond non-negotiable, and in Old Colony Trust Co. v. Stumpel, 247 N. Y. 538, a similar reference in case of a note was held not to make the note non-negotiable. In Hibbs v. Brown, 190 N. Y. 167, and Enoch v. Brandon, 249 N. Y. 263, it was held that such reference alone would not make a bond non-negotiable. In the Kohn case it was held that a provision exempting stockholders otherwise liable would render the bond non-negotiable, while in Hibbs v. Brown it was held that such provision would not render the bond nonnegotiable. In other words, while practically agreeing upon the statement of the rule, the divers views as to its application to particular cases has left the law in a condition fitting the description of “confusion worse confounded.” A perusal of the opinions discloses that the courts are persuaded by what is conceived to be the necessities of the situation. The tendency in the great commercial communities is to hold bonds and similar securities negotiable whenever it can consistently be done.

■ This court has passed upon a state of facts in Weber v. Keith Ry. Equipment Co., 248 Ill. App. 258, which is substantially similar to that presented by this record. In that case plaintiff sued on certain bonds described as Keith Railway Equipment Company bonds which were in the usual form. Therein the Keith Company" for value received promised to pay “to the bearer,” and stated, “This certificate shall pass by delivery,” and that it was one of a series of coupon certificates of the company. There was a clause providing for anticipatory redemption before maturity and another clause which stated that in case of default according to the terms of a contract of lease the principal amount might be declared due as provided by that contract. There was a provision on the face of the bond: “ . . .to which contract of lease reference is hereby made for a statement of the nature and extent of the security afforded thereby, the rights of the holders of said certificates in respect of such security, and the terms and conditions under which said certificates are issued.” The contract of lease provided: “No holder of any of the certificates herein provided for shall have the right to institute any suit, action, or proceeding, at law or in equity,” etc.

The plaintiff sued at law on one of these bonds. The case was tried by a jury, and at the conclusion of the evidence each party made a motion for an instructed verdict. The defendant’s motion was denied and that of plaintiff allowed. It was contended by the defendant that the provision on the face of the bond was sufficient to incorporate into the certificate itself all applicable provisions of the contract of lease, to which it referred, and that the "effect of the provision in the lease was to prohibit a suit at law upon the certificate unless such conditions had been complied with. To this contention plaintiff replied that the instruments sued upon were negotiable instruments, and that he was a holder in due course; that under the provisions of section 3 of the Negotiable Instruments Act, Cahill’s St. ch. 98, If 23, “An unqualified order or promise to pay is unconditional within the meaning of this Act, though coupled with: a statement of the transaction which gives rise to the instrument.”

The trial court held that the only question was whether the statement on the face of the bonds was sufficient under the decisions to require the plaintiff to examine and take notice of the contract of lease. The defendant offered in evidence this lease for the purpose of showing that the plaintiff was not entitled to maintain his action without complying with its provisions and stated that he, defendant, intended to offer proof of the amount of certificates outstanding at the time the suit was commenced, and of the fact that no written notice or request by the holders of the requisite amount of certificates had been made upon the trustee, and that no indemnity had been offered to the trustee as required by the lease. The court sustained an objection to this offer of proof and there was a finding for the plaintiff.

Upon appeal to this court it was held that the crucial and decisive question was whether or not the instruments sued upon were negotiable instruments, and on the authority of Victor v. Warner, 248 Ill. App. 35; International Finance Co. v. Northwestern Drug Co., 282 Fed. 920, and other cases, this court held that the bonds were negotiable instruments, saying:

“There are several decisions in this State holding that the language used in a note, or other commercial instrument will not have a tendency to destroy its negotiable character, unless by such terms payment is dependent or conditional upon some instrument to which it refers. Among these cases are Biegler v. Merchants’ Loan & Trust Co., 164 Ill. 197; Siegel v. Chicago Trust & Savings Bank, 131 Ill. 569; Hunter v. Clarke, 184 Ill. 158; and Zollman v. Jackson Trust & Savings Bank, 238 Ill. 290.”

The court also said: ‘ The bank- trustee, it is in evidence, sold to plaintiff the bonds in suit. The title by the bank’s act of delivery passed to the purchaser plaintiff, and, at least inferentially, the conduct of the bank was notice to the plaintiff in making the sale that the instruments were negotiable. If they then believed they were not negotiable instruments, they were guilty of conduct which tended to deceive the purchaser in leading him to believe that he was purchasing negotiable instruments, when as now contended they were not so. Is it to be contemplated for a moment that plaintiff would have purchased the bonds sued upon, if the bank had told plaintiff at the time that the instruments were non-negotiable? We opine not.

“The setting forth in the instrument of the collateral security which secured the payment of the bonds in no way tended to affect or destroy their negotiability. The instruments sued upon, in themselves, are negotiable by their express terms to the point where there is a recital of the fact that they are secured by collateral partially therein described.” The court said there were cases in the federal courts which held contrary but refused to follow them.

In Paepcke v. Paine, 253 Mich. 636, 235 N. W. 871, the court held negotiable debentures of the same issue as these for which plaintiff sues upon the theory that the reference in the debenture did not affect the unconditional promise to pay; that it merely gave notice to the holder that he might examine the trust agreement “to ascertain the nature and kind of the security pledged to insure payment and the procedure provided for to enforce the same, should he care to do so before making purchase thereof.” The record before us does not disclose, however, that any security for the payment of these obligations was conveyed to or deposited with the trustee. Indeed, these instruments appear to be of the class described in Dewing’s Financial Policy of Corp., p. 159, as “straight credit obligations unsecured by any direct or indirect pledge of property.” This case is distinguishable in this particular from many of the cases which have been cited, in that the obligation here is in effect simply an unsecured promissory note of the corporation.

The key to the solution of the question of the negotiability of these instruments is to be found, we think, in Hibbs v. Brown, 190 N. Y. 167. That case involved a controversy between the holder in good faith for value and without notice and the owner of certain coupons representing the interest upon bonds issued by the Adams Express Company, which was a joint stock association under the laws of New York. The bonds and coupons were of an issue of $12,000,000 secured by a trust indenture conveying and pledging for its payment a large amount of securities and property. Following the agreement in the usual form to pay to the bearer or registered holder, was a clause that provided :

“No present or future shareholder, officer, manager or trustee of the Express Company shall be personally liable as partner or otherwise in respect of this bond or the coupons pertaining thereto, but the same shall be payable solely out of the assets assigned and transferred to the said Trust Company or out of other assets of the Express Company.”

There were other clauses referring to the deed of trust for a statement of the rights of the bondholders. The trust indenture contained provisions that a certain proportion of the bondholders might waive default and postpone payment of the interest coupons. The question to be decided was whether these limitations rendered the bonds and coupons non-negotiable. It was held that the same were negotiable but upon divers grounds, five of the seven judges of the court of appeals rendered opinions. Hiscock, J., said that to hold these instruments non-negotiable would be “an unfortunate result” and “would make apparently negotiable securities in the hands of investors non-negotiable and seriously impair their value and security.” He was of the opinion that the general credit of the obligor wras pledged and that the instrument was therefore not subject to the objection that it was payable out of a particular fund. The other objections he thought “minor reasons of a somewhat technical nature,” and he would not accept the contention that the limitations of the document would prevent an action at law upon the bonds. He said: “It would be somewhat extraordinary to construe the section as meaning that the character and standing of the claim being thus fixed, the association might then debar the holder from bringing such an action against it by an agreement which it had procured him to make to waive the individual liability, which otherwise might be enforced, and to bring his action against the association.” He thought that such action at law could be maintained.

O ’Brien, J., thought the instruments negotiable notwithstanding the limitations. He said that the argument against negotiability was that the bonds were the bonds of a partnership made in the name of a firm and though containing a promise to pay the bearer or holder a specified sum of money in the future upon a day certain, yet the promise was coupled with a condition that none of the partners should ever be held liable; that if the premises were correct, it would be difficult to resist the conclusion “unless, indeed, it could he held that the conditions might he rejected as utterly inconsistent with and repugnant to the promise and, therefore, void.” He thought, however, that the bonds were not in any proper or legal sense partnership obligations but that the Express Company must be regarded as a legal entity, whose general credit was pledged by the bonds.

Werner, J., did not agree with the views of his associates with reference to the liability of a joint stock company and said that the most distinctive difference between these corporate and noncorporate creatures of the law had been consistently preserved by the legislature and recognized by the courts. He thought that if the clause exempting the individual shareholders from liability was valid, the bonds were non-negotiable. He said that the clause was the only substantial thing differentiating these bonds from ordinary corporate bonds, and that there was great force in the suggestion that as a matter of public policy the exemption clause should be treated as nugatory so that the bonds might be invested with the element of negotiability, “which may fairly be regarded as one of the principal items of their value, and one of the most important inducements to their current sale and purchase.” He added:

“I deem it unnecessary to go quite so far as that in the case at bar, since I am convinced that the exemption clause is so repugnant to the terms, tenor and purpose of the bonds that it not only may but must be taken out of the instruments in order to preserve their negotiability, and even their validity. It would be rather difficult to explain upon what theory the obligation of these bonds could be enforced in an action at law if the exemption clause is retained as part of the bonds. The maker cannot be sued in its business name, and the officers which represent it can only be sued upon obligations for which an action could be maintained against all the shareholders. (Code Civ. Proc., sec. 1919.) We are presented,- in short, with the legal paradox that a written obligation, obviously intended to be negotiable, cannot be enforced in a court of law. This is an anomalous condition so utterly at variance with the manifest purpose of the association in issuing these bonds, and so palpably destructive of the legal rights of the holders thereof, that we could hardly give the exemption clause the effect which its language imports without destroying the validity of the bonds themselves.”

Bartlett, J., concurred in the opinion of Werner but said he could not agree with the suggestion that it was unnecessary to treat the exemption clause as nugatory as a matter of public policy; that he was of the opinion to hold otherwise would be subversive of the law of joint stock associations and permit them to exercise corporate powers and privileges without legislative sanction or restraint. One result,- he said, would be to deprive creditors of their main security in many instances.

Cullen, Chief Justice, agreed with Werner that if the clause relieved the shareholders from personal liability it would render the bonds non-negotiable, and that he also agreed with him that “such exemption clause is repugnant to the general tenor of the bonds which are intended to be negotiable and which have been purchased by the public as such and, therefore, should he eliminated and disregarded.”

Some of the points urged against the negotiability of these debentures require little, if any, attention. For instance, the provision that the interest will be paid without deduction for any federal income tax not in excess of -two per cent of such interest in any year, does not render the sum to be paid uncertain,. and the case of .Smith v. Myers, 207 111. 126, relied on is easily, distinguishable as are the other cases cited. (Fidelity & Deposit Co. of Maryland v. Young, 159 Ill. App. 531; First State Sav. Bank v. Russell, 244 Mich. 298; 45 A. L. R. 1074-1108.) The provision is one that appears upon almost every bond and so far from rendering the amount to be paid to the owner uncertain, renders it certain. Nevertheless it seems plain that the holder of one of these debentures (if the whole writing is assumed to be valid) would not know his rights without recourse to the extrinsic document, namely, the trust agreement. Such seems to be the effect of the plain language on the face of the instrument — “To which trust agreement reference is hereby made for a statement of the terms under which the said debentures are issued, and the rights and obligations of the company, of the trustee, and of the respective holders of the said debentures under the said agreement.” The writing upon its face does plainly refer to another document, and it does purport to take away the quality of negotiability by vesting the right of action upon the instrument in a trustee and not in a holder of the debenture, but this provision is so clearly contrary to the essence of the writing as stated in the first sentence and so clearly opposed to what any purchaser would regard as the evident general purpose of the document that we think it must be held to be void. That in our opinion was the basis for the decision in Weber v. Keith Ry. Equipment Co., 248 Ill. App. 258, although not very clearly expressed. It is a general rule of law applicable in the interpretation of all contracts and one that is entirely necessary unless the perpetration of fraud upon purchasers and holders is to be encouraged. A provision of a contract contrary and repugnant to the essence of the contract is void. Thus, a release of one of two joint debtors retaining a right to proceed against the other, will be a discharge of both. (Rice v. Webster, 18 Ill. 331.) In Benjamin v. McConnell, 9 Ill. (4 Gilm.) 536, it was said: “A proviso in a contract totally repugnant to the contract itself is void.” A conveyance in fee with inconsistent limitation that the estate shall not be subject to the grantee’s debts conveys the estate but the limitation is void. (Hudson v. Hudson, 287 Ill. 286.) Likewise void would be a subsequent condition thát the grantee should not alienate the property during her lifetime. (Walker v. Shepard, 210 Ill. 100.) Particular clauses of a contract are subject to the general intent ascertained from the writing, and where in a chattel mortgage subsequent words appear sufficient to convey real estate, the later clause is repugnant and void. (Harney v. Wirtz, 30 N. D. 292.) An absolute gift by a testator cannot be cut down by a subsequent inconsistent or repugnant provision, and such subsequent provision is void. (In re Valentine’s Estate, 204 N. Y. S. 284.) A provision in a contract repugnant to a right therein created is void. One cannot contract against his own fraud. (Passaic Valley Sewerage Com’rs v. Holbrook, Cabot & Rollins Corp., 6 F. (2d) 721.) The same principle was applied to an insurance policy (Jones v. Pennsylvania Casualty Co., 140 N. C. 262) and to a contract for the purchase of drugs (Vickers v. Electrozone Commercial Co., 67 N. J. L. 665.) It has also been applied to the question of whether a contract constitutes a partnership (Southern Can Co. v. Sayler, 152 Md. 303) and to an agreement between parties for a settlement of claims in DuPuy v. United States, 35 F. (2d) 990.

This principle, which is of a so general application, and so necessary to the attainment of justice in the construction of all contracts, should, in our opinion, be applied to. a document of this kind, and we find nothing in the Negotiable Instruments Law which .compels a construction to the contrary. The' 'provisions of a negotiable contract giving to the holder the right to convey the title by delivery of the document and giving to the vendee the right to bring an action thereon, not subject to defenses that might have existed in favor of prior parties, are of the essence of contracts which are intended to be used as instruments of credit which may pass current as money. For a debtor to be permitted in the first part of the writing to create an instrument with these qualities and to take it back in the latter part of the instrument, would be to open the door to fraud of a vicious kind. To permit a debtor to say in one part of his written obligation that he will pay and in another part that he will not pay, is something that the law will not tolerate.

We hold that these provisions which are contrary to the express promise made in the document and contrary to its entire tenor and purpose are void as against one holding in good faith for value.

It is urged however in behalf of plaintiff that this paper had matured by reason of the fact that a notice had been published prior to the time of its transfer calling it for payment, and that plaintiff was therefore not a holder of the debentures in good faith and for value before its maturity within the meaning of the Negotiable Instruments Act. Plaintiff has failed to recognize the distinction between maturity and redeemability. Morgan v. U. S., 113 U. S. 476, is in our opinion conclusive against this contention. Defendant had no notice that these debentures had been called for redemption.

For the reasons indicated, the judgment will be reversed with a finding of facts and finding here of right of property and possession in defendant with judgment thereon. As the return of the sheriff shows that the property was taken under the replevin writ and delivered to plaintiff, the writ of retorno habendo will issue from this court for the return of said property to the owner, Broadway Trust & Savings Bank.

Reversed; with a finding of facts and judgment here with right of property and possession in defendant, with directions that the writ of retorno habendo issue.

O’Connor, P. J., and McSurely, J., concur.

Finding of facts: We find as facts that the right of property and right of possession of the property which forms the subject matter of this suit is in defendant, Broadway Trust & Savings Bank; that said bonds or notes are negotiable instruments; that said defendant before and at the beginning of this suit was the bona fide holder of the same in due course for value without notice of any equities of plaintiff and that the writ of retorno habendo should issue from this court for the restoration of said property to defendant, Broadway. Trust & Savings Bank.


author: Mr. Presiding Justice Gridley

text:
    Gage Bernard Walldren, a minor, by Delema Meyer, his aunt and next friend, defendant in error, v. Joseph G. Weber, plaintiff in error.
    First District.
    Gen. No. 35,312.
    Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.
    Ernest Kentwortz, for plaintiff in error. No appearance for defendant in error.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.


text:
    Samuel Solomon, defendant in error, v. North American Trust Company (formerly known as Iroquois Trust Company) et al., plaintiffs in error.
    Gen. No. 35,328.
    Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.
    Schofield & Wood, for plaintiffs in error; Frank Schofield and David H. Kraft, of counsel. Goldman, Allshouse & Healy, for defendant in error; Robert G. Dreffein, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.