author: Mr. Presiding Justice O’Connor

text:
    Sarah Puck, Appellee, v. City of Chicago, Appellant.
    Gen. No. 38,107.

      Opinion filed June 17, 1935.
    William H. Sexton, Corporation Counsel, and Alexander M. Smietanka, City Attorney, for appellant; Lionel J. Berg and Patrick T. Harrington, Assistant City Attorneys, of counsel.
    Jacob Baskin, of Chicago, for appellee.
   Mr. Presiding Justice O’Connor

Plaintiff brought an action against the defendant to recover damages claimed to have been sustained by her for. injuries received on account of defendant permitting a sidewalk to remain out of repair. There was a jury trial and a verdict and judgment in plaintiff’s favor for $1,000, and defendant appeals.

The record discloses that between four and five o’clock on the afternoon of December 27,1932, plaintiff and her 20-year old daughter were walking north on the sidewalk on the west side of State street, a short distance south of Monroe street, in Chicago. There was a cement sidewalk of probably more than 25 feet in width at the place in question. A number of people were on the sidewalk at the time. Plaintiff was walking about the middle of the sidewalk when she stumbled and fell and was injured.

The "evidence tends to show that there was a step in the sidewalk about two inches in height which extended from the curb on the east to about the middle of the walk. As plaintiff was stepping down at this point she tripped and fell.

At the close of plaintiff’s evidence the city moved for a directed verdict, which was overruled; it stood on its motion and offered no evidence, and contends that the court should have directed a verdict in its favor.

The evidence, as to the condition of the sidewalk and as to how the accident occurred, is brief. Plaintiff’s daughter testified that she and her mother were walking north on the west sidewalk of State street; that it was a pleasant afternoon; that quite a few people were walking in front and back of her; that her mother stumbled and fell; that she was walking just to the left of her mother; that after her mother fell, “I saw, at the center of the sidewalk an irregularity extending to the street. It is a step about two inches high, extending about half way across the sidewalk”; that before the accident she had “noticed this step present in the sidewalk for a period of several years. I stumbled over it several times myself,” and that it was in the same condition then as when her mother fell; that there was no hole in the sidewalk, “simply an.irregularity on a straight angle about two inches high. Mother was walking north and had to step down over this irregularity”; that she never called her mother’s attention to the condition of the sidewalk. ‘ ‘ This sidewalk sort of slopes”; that her mother fell on her face toward the north; that she stepped to go down, lost her balance and fell on her face. “I didn’t step over the irregularity, I stepped over the other side of where the irregularity began and was only a foot to the left of mother. ’ ’

Pearl Goldstein testified there was a step on the sidewalk; “If you were walking south you could see it. If you were walking north you couldn’t. It was half way in the middle of the sidewalk about two and o'ne-half to three inches high. I passed it every day I went to work. . . . It is not there any more. It was changed about after Christmas, 1932.’ ’; there was no hole in the sidewalk. Her cross-examination continues: “Mr. Harrington: Simply an elevation? A. Tes. Q. Not quite 180 degrees; it was just about 170 you would say? A. Tes.”

Plaintiff testified that at the time in question she and her daughter were walking north about the middle of the sidewalk; that a lot of people were walking there at the time; that there was no hole in the sidewalk, ‘ The sidewalk was higher on one side of the sidewalk; the south, but was higher than the north about two and one-half inches and I had to step down. The lowest side was on the north side.” This is substantially all the evidence as to how the accident occurred and as to the condition of the sidewalk. There was further evidence as to the nature of plaintiff’s injuries but it is unnecessary for us to refer to them here.

The defendant contends the evidence shows that at the place in question, the sidewalk “sloped downward toward the north. ... an irregularity or step in the sidewalk. ... an inclined step or ramp running down from the higher grade of the sidewalk to the south of the ramp to the grade of the sidewalk to the north of the ramp which was from two to three inches lower. The ramp being about four feet in length north and south and extending from the curb to the center of the sidewalk, east and west.” We think this statement by counsel for defendant is not warranted by the evidence. There is no evidence in the record from which it could be said that there was a ramp running from the step toward the north.

Counsel for plaintiff in his brief says, “The evidence tends to prove that there was a difference in level of approximately two inches between the flags of the sidewalk for a portion of its width. In other words, that there had either been a sinking or a raising of one of the flags for a portion of the width of the walk. ” It is not at all clear that the evidence warrants the statement of counsel just quoted as to the condition of the sidewalk at the time in question, nothing to show “a sinking or a raising.” In fact, we think all the evidence fails to disclose the condition of the walk, and the best that one can do is to surmise and conjecture as to its condition. Whether the walk was allowed to become out of repair, or whether it was constructed with a two inch step up, cannot be determined from the evidence in the record.

While there are cases in this State holding that a difference in the level of two sections of a sidewalk of from 2% to 3 inches or higher would not render the city liable for one tripping and falling at such place, yet the question is not free from difficulty; especially when we consider the crowded conditions of the sidewalks in the Loop of Chicago. Cases which tend to hold that there was no liability because of a difference in the level of parts of a sidewalk are City of Chicago v. Bixby, 84 Ill. 83; City of Chicago v. Norton, 116 Ill. App. 570; Powers v. City of East St. Louis, 161 Ill. App. 163; Owens v. City of Chicago, 162 Ill. App. 196.

There is also some doubt in the cases reported in this State as to whether a city is liable for injuries occasioned by one falling upon a sidewalk where the city has constructed the sidewalk according to a plan adopted, unless it can be said, as a matter of law, that such a plan of construction was so palpably dangerous that the city did not exercise reasonable discretion in adopting the plan upon which the sidewalk was built. Some cases are to the contrary and hold that the question of whether the city was negligent in constructing a given sidewalk is generally a question of fact for the jury. Pfeifer v. Town of Lake, 37 Ill. App. 367; the dissenting opinion by Judge Adams in Healy v. City of Chicago, 131 Ill. App. 183; Hogan v. City of Chicago, 188 Ill. 551, and cases there cited.

"We do not pass on these questions here for the reason that, as above stated, the evidence leaves the condition of the sidewalk so uncertain, at the time in question, — as to whether this condition was the result of a plan or resulted from allowing the sidewalk to become in a state of disrepair — that we think there should be a retrial of the case. And since it was stipulated on the trial that plaintiff had received $175 for which she executed a covenant not to sue, to Warner Brothers Theater, one of the other defendants, this amount should be credited on any verdict that might be obtained. City of Chicago v. Babcock, 143 Ill. 358; Garvey v. Chicago Rys. Co., 339 Ill. 276.

There was no error in the court’s action in refusing to allow the stipulation of the parties in this respect to be heard by the jury because it was agreed that plaintiff had executed a covenant not to sue, in which case the City would not be released from its liability, if any, except to the extent of $175.

We think there was no merit in defendant’s contention that plaintiff did not prove she was in the exercise of ordinary care for her own safety, nor that the condition of the sidewalk was not the proximate cause of her injuries. These were questions for the jury. Long ago our Supreme Court held that a pedestrian upon a sidewalk may ordinarily assume that it is in a reasonably safe condition for travel, and is not absolutely bound to keep his eyes constantly fixed on the sidewalk in search of possible holes or other defects. City of Chicago v. Babcock, 143 Ill. 358; Graham v. City of Chicago, 260 Ill. App. 590. In the Graham case we said (p. 594): “A pedestrian is not obliged to keep his eyes glued to a sidewalk, but may assume that it. is in a reasonably safe condition. City of Chicago v, Babcock, 143 Ill. 358.”

We regret to say that before disposing of this case we deem it our duty to call counsels’ attention to Rule 7 of this court, which provides that the “Argument shall be confined to discussion of the points made ... in the brief and no others, and in the order in which the points are made.” Counsel for defendant, in their briefs, under “Points and Authorities,” make five points but only three points are argued, while counsel for plaintiff makes two points but argues three. Obviously this is not in accordance with Rule 7. This rule was prepared with a great deal of care, is plain, simple and logical, and it will be of great assistance to this court if it is followed.

For the reasons stated the judgment of the circuit court of Cook county is reversed and the cause remanded.

Judgment reversed and cause remanded.

HoSurely and Hatchett, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Hebel

license: Public Domain

text:
    Fanny I. Weinstein, Executrix of the Estate of P. D. Weinstein, Deceased, Appellant, v. Wilma B. Morris, Appellee.
    Gen. No. 37,587.

      Opinion filed June 26, 1935.
    Rehearing denied July 10, 1935.
    Philip A. Weinstein, of Chicago, for appellant.
    Blech & Herson and Victer Ohrenstein, all of Chicago, for appellee.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

Judgment for the defendant was entered by the court upon a hearing without a jury, and from this judgment the plaintiff appeals.

The facts are substantially that on April 7, 1930, defendant’s husband, as lessee, entered into a written lease with plaintiff’s testate, as lessor, for an apartment for the term commencing May 1,1930, and ending April 30, 1933, at a monthly rental of $120. The defendant and her husband entered into and took possession on May 1, 1930, and paid the rental for the apartment to and including November, 1931. From December, 1931, to and including March, 1932, $75 was paid on account, during each of said months, leaving unpaid $45 for each of said months. The rent, which subsequently, accrued, was not paid for the months of April, May and June, 1932, and on June 15, 1932, the defendant, her husband and family, vacated the premises. The action of the plaintiff for use and occupancy of the apartment by the defendant, her husband and members of her family, was brought on the theory that such indebtedness was a family expense, the liability of which is provided for by ch. 68, If 15, Cahill’s Ill. Rev. St. 1933, which is as follows:

“The expenses of the family . . . shall be chargeable upon the property of both husband and wife, or of either of them, in favor of creditors therefor, and in relation thereto they may be sued jointly or separately. ’ ’

The defendant filed an affidavit of merits in this action denying liability under the act in question, but did not deny that the apartment was occupied by the defendant. This court reserved to the hearing defendant’s motion to strike the amended and supplemental record filed by the plaintiff on November 22, 1934, and to affirm the judgment of the municipal court of Chicago for the defendant.

The plaintiff has called this court’s attention to sec. ,113, Rule 36 c of the Supreme Court, which provides:

‘ ‘ The report of the proceedings at the trial consisting of 'the testimony and the rulings of the trial judge and all matters upon.which such rulings were made, and other proceedings which the appellant desires to incorporate in the record on appeal, shall be procured by the appellant and submitted to the trial judge or his successor in office for his certificate of correctness, or where this is impossible because of the absence from the district, sickness or other disability of such judge, then to any other judge of said court, and filed in the trial court within sixty days after the appeal has been perfected.”

This provision changes the practice in regard to the presentation of the report of the proceedings to the trial judge for a certificate of correctness. When for any reason the trial judge is absent a judge of the same court may sign the report of the trial proceedings. The litigant desiring a report of the trial proceedings may present this record to a judge of the same court for a notation that the same was presented on the date set forth. The presentation of the record is not limited or controlled by sec. 81 of the Practice Act of 1907, but the procedure provided for is as stated above.

There is but one question, Did the trial judge have jurisdiction to correct his certificate, which was signed and filed?

The contention of the plaintiff is that the official and quasi-official records of the municipal court of Chicago, consisting of the time sheets, time books and judge’s assignment book of said court, were considered when the amended order was entered by the court. The Supreme Court has held in the case of Chicago, Milwaukee & St. Paul Ry. Co. v. Walsh, 150 Ill. 607, that upon the filing of a bill of exceptions it becomes a part of the record in the cause, and if for any reason it fails to show correctly what actually happened at the trial, even after term time, amendment may be made by bringing the parties in interest again into court, by notice, and then amendment can be made only from a memorandum or note of the judge, or from the record filed in the court. In the instant case the record was filed.

The trial judge was absent during the time the record of the proceedings was made and presented to another judge of the same court, and within the time provided for the presentation of such record.

By par. 220, sec. 92, ch. 110 of the Civil Practice Act, this court may, under subsec. (c), order or permit the record to be amended by correcting errors, or by adding matters which should have been included. It appears from fhe record as we have it before us, that the amended record was corrected by adding matters which should have been included, and by showing that the trial judge was absent at the time the statement of the proceedings was presented to a judge of the same court.

The defendant upon the trial of this cause having offered no evidence, the action must depend upon the evidence presented to the trial court by the plaintiff.

The question of occupancy of the apartment by the defendant is not seriously disputed. There is a question, however, as to the competency of the witness Eleanor Weinstein Newman, upon the ground that she was the daughter of P. D. Weinstein, deceased, and was disqualified by Cahill’s St. ch. 51, If 2 (section 2, ch. 51, Smith-Hurd’s Ill. Rev. Stat. 1931).

It is clear from the record that no objections were offered by the defendant upon this question, but she contends that the pending suit was a fourth class suit filed in the municipal court of Chicago, and that it was unnecessary for the defendant to object to the admissibility of evidence, but she offers no authority to support this theory. It would be a novel way to try a case such as we have here on appeal if one of the parties could stand by and make no objections, and then on appeal raise the question of admissibility of the evidence for the first time. Such is not the rule, and the trial court should have heard the attorney for the plaintiff on the question as to whether the plaintiff was entitled to- a judgment.

There is evidence not alone as to the occupancy of the apartment by the defendant, but also as to the rental value of the premises for the time the apartment was occupied by the defendant. The trial court should have entered judgment for the plaintiff and against the defendant in the sum of $480, and accordingly judgment for the defendant will be reversed in this court and judgment entered here for the plaintiff and against the defendant in the sum of $480, costs to be taxed against the defendant by the clerk of this court.

Judgment for the defendant reversed mid judgment here for the plaintiff.

Wilson and Hall, JJ., concur.


text:
    American National Bank and Trust Company, Appellee, v. Illinois Improvement and Building Corporation et al., Appellees. Appeal of Robin P. Allen, Appellant.
    Gen. No. 37,660.

      Opinion filed June 26, 1935.
    Rehearing denied July 10, 1935.
    Shulman, Shulman & Abrams, of Chicago, for appellant ; Meyer Abrams, of counsel.
    Gottlieb & Schwartz, of Chicago, for appellee American Nat. Bank & Trust Co. of Chicago; Harry

      N. Gottlieb, Ulysses S. Schwartz and Claude A. Both, of Chicago, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This cause is in this court by the petitioner, Bobin P. Allen, upon two appeals, one from an order denying his motion based upon his petition to intervene in Case No. 37,660 in this court, and the other from the final decree of foreclosure and sale, being Case No. 37,865. These appeals were consolidated in this court on the motion of the petitioner.

The proceeding is one of foreclosure filed by the American National Bank and Trust Company, as trustee, and from the bill it appears that it was filed upon default by the mortgagor, and that the trustee seeks to foreclose the trust deed dated December 1, 1928, on a leasehold of the ground located at Number One North La Salle street, Chicago. The trust deed secured $5,250,000 of six per cent first mortgage sinking fund bonds, and also $250,000 of six per cent general mortgage leasehold serial bonds of like date. The mortgagor under the trust deed is the Illinois Improvement and Building Corporation, the owner of the leasehold estate up to April 29,1933, when this corporation sold and assigned its title thereto to a corporation known as One LaSalle Street Building Corporation. The fee to the ground is owned by the University of Chicago. The mortgagor improved this land by the erection of a 47-story office building.

The petition filed by Bobin Allen, the intervener, alleges that the petitioner was the owner of bonds amounting to $10,000 of the issue described; the filing of the bill by the complainant on June 30, 1932, without making any bond owners parties, the only defendant being the mortgagor; that from the date of the filing of the bill to the date of the hearing no pleadings were filed other than the hill of complaint and the answer of the defendant mortgagor.

It is charged in the petition that a pretended notice for the appointment of a receiver was served by the attorneys for the complainant, and by their agreement thé mortgagor was allowed to remain in possession and manage the property, and to receive as compensation for its services two and one-half per cent of the gross income, besides a commission on new leases and renewals.

It is further charged that when the mortgagor was unable to furnish the $100,000 bond agreed upon, the attorneys agreed to take a $25,000 bond. The mortgagor conveyed its equity to a corporation with a capital investment of $1,000, and this new corporation was permitted to operate the premises and to receive the same compensation by the consent of the complainant to the order permitting the new corporation to take possession.

The petition further alleges that the underwriter, the seller and the trustee were dominated and controlled by the officers and directors of the Straus National Bank & Trust Company; that in the sale of such securities the representation was made that they were 100 per cent safe, and by the system of monthly deposits the interest of the bondholders would be safeguarded. It is further charged the petitioner purchased his bonds as the result of these representations, and presented his coupons, which were cashed by the Straus National Bank & Trust Company, without informing him of the defaults which then existed. Petitioner discovered that there were existing defaults from the allegations of the bill.

The petition further charges that the bond issue was not a safe investment, and that while it was represented that the real estate was appraised 50 per cent in value above the bond issue, such appraisal was false, and thereby the petitioner was deceived.

It is also charged in the petition that the new corporation, which now holds title, was formed to aid the bondholders’ committee in a plan to coerce the bondholders to deposit the bonds with complainant as depositary by means of threats to the nondepositors that the committee would acquire the property at the foreclosure sale at its nominal bid, and the new corporation, which did not assume the debt, would redeem from the sale in the interest of the depositors, and the nondepositors would receive the proceeds of the nominal bid.

The petition prays that the trustee be removed, and a new trustee be appointed, and that the interest of the petitioner, as well as that of the other bondholders, be protected, and that the order allowing the payment of two and one-half per cent of the gross income and commission to the new corporation be vacated, and that a receiver be appointed to operate the premises.

Subsequently, the chancellor found in a decree that defaults occurred in deposits since January 1, 1932, resulting in the mortgagor not being able to pay the interest due on July 1, 1932, in the sum of $157,000; that defaults were made in the payment of 1928, 1929 and 1930 taxes, and that such defaults were in excess of $105,000; that the complainant, as trustee, was entitled to $10,000 for his fees and $22,000 for its counsel fees, making a total sum of $32,000; that there was due on the first mortgage bonds $6,155,086.87; that there is due on the general mortgage bonds $293,099.37 and that the decree provides for the sale of the premises.

It further appears from the decree that the mortgagor corporation was properly allowed to remain in possession under the former order, and that the new corporation was to remain in possession under the same order until the expiration of the period of redemption, or until the further order of the court. According to the decree, the court retained jurisdiction to pass upon the trustee’s account and rights from time to time and to administer the trust property.

The appellant contends that the only question for consideration by this court is the legal sufficiency of the petition; that the petition alleged a state of facts by which the petitioner would be aggrieved by the result of the decree and that petitioner was entitled to his day in court. Unless the trial court, after an examination of the petition, acted in plain violation of its discretionary power, this court will not interfere. The motion by the petitioner for leave to file his petition is not granted, as a matter of course.

In the consideration of the sufficiency of the facts alleged in the petition, this court will apply the law to actions of this character. In a proper case the petitioner may be allowed to intervene, provided it appears from his petition that his interest is of such a character that the petitioner will either gain or lose by the legal operation of the decree, and for that reason the petitioner’s rights will be protected and adjudicated. Wightman v. Evanston Yaryan Co., 217 Ill. 371.

The trust deed provides for foreclosure upon a default by the mortgagor, and in the event of such action, the trustee is to represent the bondholders and to act for them in a representative capacity, and continue as such until the litigation is terminated by the terms of the decree, whereby the rights of all parties are adjudicated.

The right of a trustee to act in a foreclosure proceeding for the benefit of the bondholders is supported by what is said by the author, in “Fletcher Cyclopedia Corporations,” ch. 39, sec.. 3179, entitled “Mortgages and Deeds of Trust”:

“The trustee is the representative and agent of the bondholders in many matters, including all litigation connected with the trust, not only in the courts below, but also on appeal, and a judgment in an action affecting the subject matter of the trust, to which the trustee is a party and by which he is bound, binds the bondholders, though they may not be parties nor participate in the proceedings. If the bondholders bring the suit where the trustee is given power to protect them, their petition is demurrable on the ground that they have no legal capacity to sue. The general rule is that the bondholders are bound by the acts of the trustee, in the absence of fraud.” The author cites numerous cases in support of this rule.

The petition does not question the foreclosure proceeding by the trustee as being a proper one, nor allege that it was not provided for by the terms of the trust deed and the conditions contained in the bond.

The theory of the petitioner as alleged in his petition, in part, is that the trustee in the approval of certain orders entered in the foreclosure suit was without authority, and by such conduct was disqualified and should be removed.

The Supreme Court in the case of Wightman v. Evanston Yaryan Co., 217 Ill. 371, above referred to, said what we regard as pertinent to the issues involved herein, as follows:

“In Dennis v. Spencer, 51 Minn. 259, the question before the court being whether the appellant had the right to intervene and participate in the trial of an action, it was held: ‘The interest which entitles a party to intervene in an action between other parties must be in the matter in litigation in a suit as originally brought, and of such a direct and immediate character that the intervenor will either gain or lose by the direct legal effect of the judgment therein. ’ See, also, McClury v. State Bindery Co., 3 S. Dak. 362; 44 Am. St. 799. The same doctrine has been held in Colorado, Iowa, Nebraska, New Mexico, Texas and other States.

“While, of course, these decisions are not directly in point, yet by analogy they sustain the rule' announced in equity proceedings, and a summary of the limitations upon the rights of persons to intervene in actions to which they have been made parties is found in the American and English Encyclopedia of Law, (vol. 17, 2d ed. p. 185), as follows:

“ ‘The intervenor must take the suit as he finds it. He is bound by the record of the case at the time of his intervention. If he claims property in controversy, he can interfere only so far as is necessary to prove his right to it. He cannot, under such circumstances, contest the plaintiff’s claim against the defendant, or raise an issue as to the formality of the pleadings or the regularity of the procedure in the principal cause, nor can he plead exceptions having for their object the dismissal of the action. He cannot change the issue between the parties, nor raise a new one. He cannot insist upon a change in the form of procedure nor delay the trial of the action, ’ — and each of these several limitations is well supported by the authorities cited in the note. The reason for thus qualifying the right to intervene rests upon the principle that parties to a suit have the right to proceed with it to final judgment or decree free from interference by others, and if parties desire to obstruct the litigation, except as qualified in the foregoing, they must do so by an original action.”

It is wholly immaterial that the bonds were represented to the petitioner as a safe investment by the agent of the house of issue, and of course is not pertinent in this foreclosure suit. The petitioner takes suit as he finds it and is bound by the record and the rule as stated by the Supreme Court in the case of Wightman v. Evanston Yaryan Co., supra. The fact is that because of failure of the mortgagor to pay the amount due, the foreclosure suit was instituted by the trustee. Again, the fact that the mortgagor conveyed title to a similar corporation of smaller capital will not militate against this cause. It is urged, however, that the court permitted the owner to remain in possession and to collect the rents, on a commission basis, and account for the same; that the court was imposed upon when it entered an order consented to by the parties in court. The facts do not warrant such an inference. When the holder of the title, that is the mortgagor, conveyed it to the grantee, the grantee thereafter was permitted to take possession, collect the rents and make distribution and was. allowed a commission subject to the approval of the court. This of itself was not, as suggested, a fraud'upon the chancellor who entered the order. The petition filed in the instant case contains no allegation of fact that by such order the petitioner was injured. The building constructed on the leasehold interest of the mortgagor consisted of a 47-story office building, and after the order was entered the building was not operated for the benefit of the holder of the legal title. The net amount appearing from an order of accounting is to be applied for the benefit of the bondholders. The court has retained jurisdiction, and the party having funds will be obliged to account, subject to the approval of the chancellor. So at all times the court is in control of the property and the party collecting income from the property.

It is also urged that the trustee is the successor of the Straus National Bank & Trust Company, and that the Bondholders’ Committee was organized and consisted of certain members of the Straus organization who were interested in a reorganization plan which was not for the benefit of the bondholders.

Assuming that the trustee in the instant case did act in conjunction with the Bondholders’ Committee, this fact of itself would not indicate that fraud had been practiced by the committee and the trustee, nor would the failure of the trustee to proceed with the" foreclosure, of itself, stamp the delay as fraud. It does not appear from the allegations of the petition that the bondholders were deprived of their security, nor that any right of the bondholders was lost by the delay. The foreclosure was a matter of record, of which the petitioner was chargeable with notice, not only from the filing of the suit, but also from the fact that he had knowledge that his bonds were in default by reason of his failure to receive the amount due under the terms of the several bonds.

Petitioner does not claim that his security in the 47-story office building was lessened in value by the delay. The trustee is not chargeable with acts which tend to destroy values, nor that he entered into a conspiracy with others to carry out a plan to deprive petitioner of his rights, together with those of all the other bondholders. A trustee in a foreclosure proceeding, because he may have acted with a bondholders committee, is not disqualified by such act alone. It is apparent that the bondholders’ committee was organized for the purpose of aiding the bondholders, as we have already stated, and this is not disputed by any concrete facts charged in the petition. At least, the petition does not charge that the members of the committee had entered into a scheme whereby they would gain at the expense of the bondholders. Conjectures are not helpful in determining the truth of the charge that the acts of the several parties were not for the benefit of the bondholders. Upon a similar question in the case of Continental & Commercial Trust & Savings Bank v. Allis-Chalmers Co., 200 Fed. 600, where this rule was approved, the court said:

“To entitle a stockholder to intervene and defend a suit against the corporation to foreclose a mortgage on its property, where there was an admitted default in interest, which, under the mortgage, authorized foreclosure, the stockholder must allege facts clearly showing the necessity of the intervention to protect rights of the corporation, and general allegations in his petition of fraud and collusion between ‘certain persons,’ including officers of the corporation, and that the corporation had funds applicable thereto sufficient to have paid the -interest on the mortgage debt and prevented the default, are insufficient, both because they do not show any fraudulent act on the part of the officers and directors of the corporation and because they state no defense to complainant’s suit.” This would seem to apply to the questions involved in the present litigation. Then again, on the question of bondholders, the court in the same case said:

“True, it is claimed that the bondholders in the combination requested the foreclosure, and there is the general allegation that complainant is ‘co-operating’ with the combination. But assuming’ that the trustee was so requested and complied therewith by instituting the proceedings, it was, after all, merely asserting a right granted and a duty imposed by the trust deed. The circumstance, admitting it to be true, that certain bondholders in association with officers permitted the default to occur — even admitting that they were actuated by an ulterior motive, or purpose, did not endow the trustee with any discretion to do otherwise than to obey the instrument under which it was empowered to act. So far as it was concerned, even admitting that it knew of the circumstances noted, the validity of the debt and the fact of default out of which its duty arose are not in the slightest degree called in question, and the motives which may have actuated the defendant’s officers in suffering the default do not disqualify the trustee, nor impair its right as sole complainant to institute and prosecute the suit to foreclose.

“. . . Then, because certain bondholders have combined as a reorganization committee, and, as the plan discloses, probably expect to purchase at foreclosure sale, and transfer the property to a new corporation, and the petitioners are unwilling to join this combination, they .urge that there is a controversy among bondholders which of itself gives them the right to intervene in this suit. This situation is fully covered by the rule of convenience above referred to. So long as the trustee is not disqualified by reason of a hostile or prejudicial act, or because of conflicting interests vested in, or duties charged upon it, it has and can have no interest in any collateral controversy between bondholders. Until its participation in such controversy is shown, or unless and until it is sought to bring it into the foreclosure proceedings and thereby to influence a different course than would ordinarily be pursued, such controversy is of no concern either of the trustee or of the court entertaining the foreclosure.”

The right of a petitioner to intervene in a foreclosure action was considered in the case of Bowling Green Trust Co. v. Virginia Passenger Power Co., 132 Fed. 921, which has a peculiar application to this proceeding and wherein the court used this language:

“The general rule in judicial proceedings, that all persons interested in a controversy should be made parties thereto in order that their rights may be determined and concluded, is conceded. That there are exceptions, however, to this proposition, is equally clear, and particularly is this true in proceedings in the federal courts in foreclosure suits, and suits for the administration of trust estates. There it is the well-settled doctrine — too well established to need elaboration — that the trustee in the mortgage or trust deed, or other instrument creating a trust estate, speaks and acts for the cestuis que trust, and that the latter are neither necessary nor proper parties, where the fitness of the particular trustee, or his conduct as such in failing to efficiently, honestly, or impartially discharge his duties, is not brought in question. This is a rule largely the result of convenience, and in order to facilitate the proper conduct of litigation. To admit each individual bondholder or stockholder of a corporation to appear of his own motion, and proceed to assert his rights as he may be advised, when the same can be as well asserted through the trustee, will not be tolerated. Indeed, it has become the settled practice, in mortgages of the character under consideration here, to provide in terms that the trustee shall, and the individual stockholder and bondholder shall not, assert this right; and this is one of the provisions of the mortgage in this case. The circumstances under which individual stockholders or bondholders can themselves appear and act in their own behalf has frequently been the subject of review in the courts of last resort, state and federal, in this country, and there is perhaps no branch of the law more definitely determined.” See also Clyde v. Richmond & D. R. Co., 55 Fed. 445; Trust Co. of America v. Norfolk & S. Ry. Co., 174 Fed. 269; Mercantile Trust Co. v. United States Shipbuilding Co., 130 Fed. 725.

It is to be noted from the petition that collateral matters are alleged which would not be of any particular aid to the court in determining the issues. For this reason, together with the other reasons stated in this opinion, it was within the discretion of the chancellor to refuse permission to a bondholder to intervene and to have collateral issues tried. We reached this conclusion from what was said in Lisman v. Knickerbocker Trust Co., 211 Fed. 413, that is:

“We think also that the court was not bound to permit appellants, as a matter of right, to intervene generally for the purpose of trying out the question of liability of Hollins & Co. to account for railroad stocks acquired in connection with the reorganization, or the liability of that firm or others for profits on the Ann Arbor purchase, or for damages on account of defaults suffered under the mortgage and collateral trust agreement.”

This statement by the court applies to that part of the petition wherein the petitioner speaks of representations made to the petitioner that the bonds in question were a safe investment, and the court again stated, which applies in the instant case:

“These issues were collateral to the foreclosure suits, and were not concluded by the decrees made. The court was vested with a certain amount of discretion in determining whether to permit intervention for the purposes stated; this discretion does not appear to have been improvidently exercised, and no appeal lies from the action complained of. (Quoting cases.) So far as concerns the effect of the alleged collusive defaults upon the right to decree of foreclosure and sale, it is apparent that when the decree was made the time had actually come, rightly or wrongly, when the sale should be no longer delayed.”

This statement is pertinent and conclusive upon the right of the petitioner to intervene, and for the reasons stated, the order of the court denying leave to file said intervening petition is affirmed. The questions raised as to the decree of sale are disposed of largely by what is said as to the right of the petitioner to intervene, and from an examination of the record this court finds that the decree is free from error and is therefore affirmed.

Order and decree affirmed.

Wilson and Hall, JJ., concur.


text:
    Mary Berner, Appellee, v. Prairie State Bank, Appellant.
    Gen. No. 37,683.

      Wilson, J., dissenting.
    Opinion filed June 26, 1935.
    Rehearing denied July 10, 1935.
    Campbell, Clithero & Fischer, of Chicago, for appellant.
    Downes, Downes & Downes and Joseph W. Cox, all of Chicago, for appellee.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the defendant from a judgment in favor of the plaintiff for $12,500, entered upon the verdict of the jury in a suit for malicious prosecution. The four counts of the declaration upon which the verdict was based are substantially as follows:

In the first count it is alleged that the defendant maliciously and for want of probable cause procured the plaintiff’s arrest, detention, indictment and imprisonment on a charge of having forged a hank check with intent to cheat and defraud the defendant; that thereafter, when the case came up for a hearing, the trial court, over her protests, entered an order pleading her guilty, and admitting her to probation, from which she was discharged a year later. Some months after her discharge from probation, another judge presiding in the criminal court of Cook county vacated the judgment, granted a new trial, and the indictment was then nolle grossed and the plaintiff adjudged not guilty.

The other three counts in the declaration charged, in more general terms, the preferring of charges in the municipal court, a holdover of the plaintiff to the grand jury on false testimony, arrest and confinement in custody on a charge of forgery from October 22, 1929, to January 13, 1930, all without reasonable or probable cause, and by adjudication entered on September 4, 1931, the plaintiff was found not guilty.

The defendant filed pleas of not guilty and the plea that the suit was barred by the two-year statute of limitations.

From the evidence offered upon the trial of the cause, it appears that from September 1928 to October 1929, 50 or 60 bogus checks were reported to the Illinois Bankers Association. Among that number was included a check of the Prairie State Bank that was cashed by the Continental Illinois Bank. A number of blank checks had been stolen from the office of a former employer of the plaintiff, and after the bogus checks were issued, investigators for the Cicero State Bank, which had cashed bogus checks, in locating the place of employment of the plaintiff, traced her to Butler Bros., and she was arrested there on October 17, 1929. After she had been arrested, she was taken to the offices of the Bankers Association, where a number of persons identified her as the woman who presented and passed bogus checks. Plaintiff was taken from the Bankers Association to the police station, where informations were filed and she was turned over to the police.

On the following day, Walter A. Volkman, who at the time was employed by the defendant as a teller, was called to the police station by telephone. At the time, neither the president nor the cashier was at the bank, but a Mr. Wegner, an assistant cashier, accompanied Volkman to the police station. At the station they met and talked with a police officer, and Volkman was again asked as to whether the plaintiff was the woman who cashed a check at the bank, to which he replied that in his opinion she was. He was asked at the police station to sign a complaint. Volkman then turned to Wegner and asked whether he should sign the paper, and he was advised to sign it. This document, which was an information, appears to have been an unverified complaint, dated October 19,1929, charging the plaintiff with having passed a forged check drawn on the Prairie State Bank. Thereafter, on October 21, 1929, a preliminary hearing was had before one of the judges of the municipal court of Chicago. Plaintiff was taken to the county jail and a capias was issued and served on October 22, 1929.

Subsequently, indictments were returned against the plaintiff in the Cicero State Bank case and on five other charges, including* the case based on the check cashed by the Prairie. State Bank. Plaintiff was incarcerated and remained in jail until January 10,1930, when she was tried before Judge G-emmill in the Cicero State Bank case, and the jury, upon a hearing, returned- a verdict of guilty.

From the evidence it appears that the following.orders were entered in the indictment proceeding then pending in the criminal court of Cook county against Mary Berner, charged with passing a forged check drawn on the Prairie State Bank, namely:

On January 13, 1930:

“Plea of not guilty withdrawn. Plea of guilty received. Defendant warned. Plea of guilty received and entered of record. Testimony heard. Finding guilty to the indictment. Application for probation entered. Probation allowed for one year. Defendant released on probation $500 own recognizance bond. Permission given to leave state with father.”

On January 16, 1931, defendant discharged from further supervision.

From an order dated September 4, 1931; the following appears:

“This day come the said People by John A. Swanson, State’s Attorney and the said defendant as well in her own proper person as by her Counsel also comes.

“And the Court hearing Counsel in support of the motion for a new trial in this cause heretofore entered herein as well as in opposition thereto, and being fully advised in the premises doth sustain said motion and orders that the said defendant do have a New Trial in this cause.

“It is further ordered by the Court that the Judgment and sentence in this cause heretofore entered herein be and the same are hereby vacated and the said defendant granted a New Trial in this cause.

“And the State’s Attorney now says that he will not further prosecute this indictment against the said Defendant, Mary Berner. Thereupon it is ordered by the Court that the indictment in this cause be and the same is hereby dismissed out of this Court as to the said Defendant, Mary Berner, and the said Defendant, Mary Berner, go hereof without day.”

The records also show that on the same date the following order was entered in the six cases against Mary Berner, the plaintiff, which included the indictment in the Prairie State Bank case, as follows:

‘ ‘ On motion of Mary Berner to vacate the judgments hereunder, and by virtue of Section 89 of Chapter 110 of Cahill’s Illinois Revised Statutes, 1929, the court having heard evidence in support of the petition and the State’s Attorney of Cook County consenting thereto, and it appearing to the Court that the allegations of said petition have been proved, that the conviction in these cases occurred through an excusable mistake of fact as to the identity of the defendant Mary Berner, and through an excusable mistake of fact as to the defendant at the time of trial, in her not being informed as to the existence of legal defenses to the charges herein, It is Therefore Ordered that the judgment and sentences heretofore entered in the above entitled cause be and the same are hereby vacated and the defendant granted new trials, and all of said causes, on motions of the State’s Attorney be nolle pros sed.”

It appears from the record that the plaintiff testified that on January 13 (after her conviction by a jury) she was again brought before Judge Gem mill on the five other cases pending against her. In chambers, the judge told her that if she would plead guilty he would grant her probation. She replied that she would rot in jail first. Afterwards there was a hearing in open court in which th,e judge entered a plea of guilty, the defendant and her attorney standing mute, and she was granted probation to her father, who took her to her home in Iowa. There is a conflict in the evidence as to whether or not the plaintiff at that time made a statement to the court that she was not guilty.

Plaintiff testified that she knew she could not ge.t probation without a plea of guilty; that she understood a plea of guilty was entered and that was why she received probation.

Volkman, the teller who signed the complaint, was subpoenaed as a witness and appeared at the hearings before Judge Borrelli, the grand jury, and Judge Gem-mill. He talked to one of the officers of the bank before going to court. They told him he was under subpoena and had to go, and when he returned he reported to one of the officers what had occurred in the court room.

Volkman testified that in his opinion the plaintiff was the woman who cashed the check; that he believed it at the time he signed the complaint, and still believed it and when he testified in the criminal court; that in the year 1933, he first heard she was not the woman.

A. P. Sherwood, an investigator who had charge of the Mary Berner investigation for the Illinois Bankers Association, testified that about December 14, 1929, he first saw three other checks in the same handwriting as those under which plaintiff was indicted. He showed them to the representatives of the Cicero Bank. He attended plaintiff’s trial, and before the trial, talked to the Assistant State’s Attorney, showed him the other checks and told him that a mistake was being made in the prosecution of Mary Berner. Sherwood also testified that he showed these checks to all the witnesses, including Volkman, and told them it could not have been Mary Berner who had been passing the checks because she was in jail at the time when the last three checks were passed. He also talked with the'then president of the Prairie State Bank and told him that in regard to these three checks a mistake had been made in the prosecution of Mary Berner.

Sherwood also testified that when in the judge’s chambers he attempted to tell Judge Gemmill his story, but the judge would not listen to him.

On the question of damages sustained' by the plaintiff, she testified that she was subjected to the usual prison routine and compelled to undergo examinations, measurements, etc., when arrested and during her stay in the county jail. She said that she got up out of a sick bed for her trial in the Cicero State Bank case on January 10, 1930, and was sick in bed with pleurisy until Easter Sunday; that it was about three months before she was entirely well. After her release from the jail she was unable to get employment until September 4,1931; that she expended in the defense of the criminal cases between $700 and $800. At the time she was arrested she was earning $130 a month. After September 4, 1931, she received. $65 a month for temporary employment.

Upon the evidence, the jury found the defendant guilty and in answer to special interrogatories submitted by the court of its own motion, the jury found that Volkman had acted as agent for the defendant and acted wilfully and maliciously in testifying against the plaintiff.

A party instituting a criminal prosecution for a criminal offense assumes a certain legal responsibility to the party so prosecuted. In making a charge, the person so charging must have probable cause against the party charged with violation of the law. Probable cause is a belief held in good faith by the prosecutor in the guilt of the person charged with the offense, based upon circumstances sufficiently strong to induce a belief in the mind of a reasonably cautious person that the person prosecuted is guilty of the particular offense charged. Such is the rule in the case of Glenn v. Lawrence, 280 Ill. 581.

This rule is qualified to the extent that if the person charged is found not guilt;7' when put upon trial, such fact does not indicate want of probable cause, for the reason that the person making the charge is not bound to prove the guilt of the defendant at the peril of being personally liable in an action for damages, provided the prosecutor acts upon probable cause, and he is then excused whatever the result of the prosecution may be. Calef v. Thomas, 81 Ill. 478.

A mistake or error not amounting to gross negligence will not affect the question of probable cause, when there is an honest belief on the part of the party swearing out a warrant for the arrest of another that such person is probably guilty. McGuire v. Goodman, 31 Ill. App. 420.

It has also been held that the fact that the party started the criminal proceedings, and in doing so acted maliciously, does not tend to prove, nor raise an inference of, want of probable cause. It has been held in this State that where a judgment of conviction by a competent tribunal has been reversed because of a mistaken view of the law by the trial court this does not of itself establish that there was no probable cause for the prosecution. McElroy v. Catholic Press Co., 254 Ill. 290; Frankfurter v. Bryan, 12 Ill. App. 549. Even though probable cause for the prosecution may be present, it is immaterial that the accused was found not guilty, but was actually innocent. Tumalty v. Parker, 100 Ill. App. 382; Anderson v. Friend, 85 Ill. 135.

It has also been held by the Supreme Court of Rhode Island, 25 R. I. 255, in Fox v. Smith, that knowledge acquired after the institution of the criminal proceeding tending to show the innocence of the accused is irrelevant, as probable cause depends not upon the guilt or innocence of the accused, but upon the prosecutor’s belief in his guilt, upon reasonable grounds, at the time of the prosecution. Such being the law controlling in an action of malicious prosecution, it of necessity applies in the instant case.

In analyzing plaintiff’s action, it is clear that it was based upon the theory that there was want of probable cause in the prosecution of the plaintiff for the offense charged, and in order to establish want of probable cause for prosecution there was introduced in evidence, over the objection of the defendant, certain court orders, not alone for the purpose of showing the disposition of the charges, which of course was proper if limited for that purpose, but also for the purpose of showing certain proceedings heard before Judge Gem-mill, in which the court erred in the entry of certain of the orders. This of itself could not be properly charged against the defendant in the instant case.

The same rule would apply to the order entered by Judge McGoorty in the criminal court. The effect of this order would be to influence the jurors in believing that there was a disposition of certain indictments, wherein the plaintiff in this case was the defendant and in which the defendant in the instant case was not interested. The court’s order was clearly prejudicial, when it appears from the order entered on plaintiff’s motion of September 4, 1931, “that the conviction of these cases occurred through an excusable mistake of fact as to identity, ’ ’ and that through an excusable mistake of fact she was not informed as to the existence of her legal defenses. The finding by the court would indicate to the jury not only that the court adjudicated that the plaintiff was not properly advised as to her legal rights, but also that she was not properly identified in the prosecution of those cases. There could be no course for the jury but to follow what was found by the court in those orders, and no doubt they believed that the defendant in the instant case did not act with probable cause in the prosecution of this plaintiff.

The law is well settled that error of the trial court does not go to the question of probable cause, nor is the finding of not guilty of plaintiff as defendant in a criminal proceeding material upon the question: Did the defendant as complainant in a criminal prosecution act in good faith in the prosecution of the charge? Otherwise, it would be possible, if acting in good faith, for the prosecutor to be held liable for the error of the trial court, and in addition he would be compelled to establish the guilt of the person charged with crime. Such is not the law, as indicated by the established rules of courts of appeal referred to in this opinion.

For the reasons stated, and without further comment on the evidence, the judgment will be reversed and the cause remanded.

Reversed and remanded.

Hall, J., concurs.

Wilson, J.? dissents,


author: Mr. Justice Hall

text:
    The People of the State of Illinois ex rel. Effie D. Sigler, Appellee, v. James P. Allman et al., Appellants.
    Gen. No. 36,902.
    Opinion filed June 26, 1935.
    William H. Sexton, Corporation Counsel, and Francis J. Vurpillat, Assistant Corporation Counsel, for appellants.
    R. E. Blackwood, of Chicago, for appellee.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal by James P. Allman, commissioner of police of the City of Chicago, the city comptroller, the city treasurer and the members of the civil service commission of such city, from an order entered in the circuit court of Cook county in a mandamus proceeding brought by Effie D. Sigler, directing them to reinstate her in the position of censor of moving pictures in the classified service of the City of Chicago. The canse was heard on the general demurrer to the petition of the relator filed by the above named officials. The demurrer was overruled and the order entered, from-which this appeal is prosecuted.

The petition recites in substance that on August 24, 1914, petitioner took the examination for the position of ‘ ‘ censor of moving pictures, ’ ’ passed such examination, and that her name appeared first on the eligible list; that thereafter, on requisition of the police department, she was certified by the civil service commission to the police department, reported for duty and continued to perform such duties almost continuously until 1926; that in 1926 she was permitted to and did take the promotional examination for the position of “censor of moving pictures in charge,” and as a result of such examination, she was certified and appointed to such position; that as 1 ‘ censor of moving pictures in charge,” she performed the same duties as “censor of moving pictures,” and in addition, was given added responsibilities and duties; that on various occasions in the month of June, 1932, she notified the civil service commission that in view of the fact that no future appropriation was to be made for the position of “censor of moving pictures in charge,” that her name be restored to the list of ‘ ‘ censors of moving pictures, ’ ’ that her seniority be recognized, and that her salary as such be paid out of moneys appropriated for censor in charge up to July 1, 1932, that the position of ‘1 censor of moving pictures in charg*e” was abolished by reason of the fact that the City of Chicago made no appropriation for such position, and that her name was placed on the reinstatement list of ‘ ‘ censor of moving pictures in charge ’ ’ and on the list of ‘1 censor of moving pictures, ’ ’ and that on July 18, 1932, she demanded of the chief of police that she be reinstated to the position of “censor of moving pictures” at once, but that defendants had failed and neglected to so reinstate her and she prayed that defendants, mentioning all of them, be ordered to restore her to the position of “censor of moving pictures,” and that they preserve and keep her in such position. The petition recites the following rule of the civil service commission of the City of Chicago:

11 Section 1, of Rule IX, adopted by the Civil Service Commission of the City of Chicago, in accordance with the provisions of the statute above mentioned, reads as follows: 1 Section 1. Layoffs. Whenever it becomes necessary, through lack of work or funds, or for other cause, to reduce the force in any employment in any department or bureau, the person who was last certified to such employment shall be the first laid off. Persons laid off in accordance with the foregoing procedure shall be entitled to have their names placed on the reinstatement list according to the seniority of their certifications. ’ ”

While petitioner’s brief is confusing, still, as we understand it, her contention is that because the position of “censor of moving pictures in charge” was abolished, that position being a promotional one and higher in rank than the position of “censor of moving pictures,” that she has seniority over those in lower rank positions, and that upon the abolition of the office to which she was promoted, she is entitled to immediate appointment in the lower rank, even though there be no vacancy in such position. The petition does not allege that any such vacancy exists. On the contrary, the court’s order indicates that the position petitioner seeks is already filled. The only rule of the civil service commission of the City of Chicago pleaded by petitioner is section 1 of Enle IX, a part of which has heretofore been quoted, which seems to us to be very clear in its language and is decisive of the proposition that petitioner is not entitled to appointment until a vacancy exists. The portion of the rule referring to this subject is as follows:

“Any officer or employe whose position has been abolished for lack of work or funds may, upon application, have his name placed on the reinstatement list in any lower rank or grade from which he was promoted, according to his examination and seniority of certification. Any officer or employe who elects to accept certification to such position in any lower rank or grade shall remain on the reinstatement list of the position from which he was separated on account of lack of work or funds and on the reinstatement list of any intermediate rank or grade in which he has seniority rights, and he shall be eligible to reinstatement in any vacancy occurring in such position in accordance with his seniority rights therein. ’ ’

The finding and order from which this appeal is being prosecuted contains the following recitation:

‘1 The court further finds that petitioner by right of seniority of service in the said petition of Censor of Moving Pictures is entitled to be restored to said position forthwith and the court finds that the position of Censor of Moving Pictures held by the last eligible to have been certified must be vacated and that the petitioner is entitled to immediate reinstatement in said position of Censor of Moving Pictures in the Classified Civil Service of the City of Chicago.”

It may be noted that the effect of the court’s finding and order is that the occupant of the position sought by petitioner be ousted and that petitioner be given the place. Inasmuch as this person is not a party to the proceeding, any rights of such person are being adjudicated without due process of law. The court erred in entering the order. The order of the circuit court is reversed.

Reversed.

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


text:
    Erie Railroad Company, Appellee, v. Neiman Brothers Company, Appellant.
    Gen. No. 37,599.
    Opinion filed June 26, 1935.
    Rehearing denied July 10, 1935.
    T. F. Laramie, of Maywood, for appellant.
    Follansbee, Shorey & Schupp, of Chicago, for appellee ; Clyde E. Shorey, Loren P. Oakes, of Washington, D. C., and G-erhardt S. Jersild, of Chicago, of counsel.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal from a judgment for $362.70 entered against the defendant in the municipal court of Chicago. The statement of claim filed in the case on June 19, 1930, recites in substance that defendant caused to be delivered to plaintiff at Chicago, Illinois, on or about March 8, 1929, and March 15, 1929, two cars of sugar, to be delivered by plaintiff to Cleveland, Ohio, with instructions to notify the Meyers Grocery Company, care of the Liberty Cartage Company of that city; that plaintiff as a common carrier transported the sugar to Cleveland and notified the Meyers Grocery Company and the Liberty Cartage Company, and delivered the sugar to them on or about March 13,1929, and March 25,1929, and that thereby the defendant became liable to pay plaintiff for all lawful freight charges assessed against such shipment, in accordance with the schedules and tariffs of the Interstate Commerce Commission. It is further alleged that plaintiff had rendered defendant a statement of the amount of the charges amounting to $372.60, but the defendant had refused to pay.

In its affidavit of merits the defendant denied that the shipments were made on the dates alleged, but that on March 11, 1929, and March 18, 1929, the defendant shipped certain carloads of sugar to the Meyers Grocery Company, subject to sight drafts and bills of lading f. o. b. Chicago, and that at the destination of the sugar, the Meyers Grocery Company could only receive the same upon presentation of the bills of lading, which it could only get by paying the sight draft and all freight charges and other accrued charges, and that plaintiff issued its bills of lading accordingly; that the defendant, after procuring such bills of lading, transmitted them to Cleveland with sight draft attached for collection and that the drafts were paid; that a bank in Cleveland released the bills of lading to the Meyers Grocery Company, and that plaintiff, through its own negligence or oversight, delivered the two cars of sugar to the Meyers Grocery Company without requiring- the Meyers Grocery Company to pay the freight and accrued charges, which action, it is alleged, defendant never authorized. Defendant further states in its affidavit of merits that the two cars of sugar were sold f. o. b. Chicago, that all accrued freight charges should have been paid by the consignee, that plaintiff knew such to be the fact when it issued its bills-of lading, that defendant did not become liable for the freight charges because it sold the two cars of sugar to the Meyers Grocery Company f. o. b. Chicago, subject to all freight charges, and that plaintiff was aware of this fact. The defendant further states that it did not order or direct the plaintiff to deliver the cars of sugar before receiving its freight charges.

The case was tried on a stipulation of facts as follows :

“It is hereby stipulated and agreed by and between the parties hereto, by their respective attorneys, that the following stipulation of facts be submitted to the court as a complete statement of facts in this cause in lieu of any other testimony, with exception only that the parties hereto may offer in evidence the original and duplicate bills of lading, in the possession of the parties and admitted to have been signed by the parties hereto, also with the right to defendant to offer in evidence that it executed the ‘Without Recourse’ clause thereon and the right to plaintiff to offer evidence to the contrary.

“1. Plaintiff, Erie Railroad Company, a corporation, charges that there is due it from defendant the sum of $362.70 as freight charges for transporting two cars of sugar.

“2-. On March 11, 1929, defendants transshipped through Chicago, Milwaukee & St. Paul Railway and via Erie Railroad Company six hundred (600) 100 pound bags of sugar weighing 60,450 pounds at Chicago, Illinois, via Car Number 152610 consigned to its own order at Cleveland, Ohio, with directions to notify Meyers Grocery Company, Care of Liberty Cartage Company, Cleveland, Ohio, as evidenced by certain bills of lading issued by plaintiff to defendant under date of March 11,1929, as provided in the bill of lading. Likewise, on March 18, 1929, 'the defendant transshipped through Chicago, Milwaukee & St. Paul Railway and via Erie Railroad Company another car of six hundred (600) 100 pound bags of sugar weighing 60,450 pounds at Chicago, Illinois, via Car Number 716382 consigned to its own order at Cleveland, Ohio, with directions to notify Meyers Grocery Company, Care of Liberty Cartage Company, Cleveland, Ohio, as evidenced by certain bills of lading issued by plaintiff to defendant under date of March 18,1929, as set forth in the bills of lading, and which bills of lading plaintiff adopted as its own.

“3. That both of said shipments were transported by plaintiff as a common carrier from Chicago, Illinois, to Cleveland, Ohio, and the plaintiff notified the Meyers Grocery Company, assignee of said two cars, and the Liberty Cartage Company of the arrival of said two shipments as was provided for in said bills of lading so issued by the Chicago, Milwaukee and St. Paul Railroad Company, the initial carrier at Chicago, and which bills of lading plaintiff has adopted in the transportation from Chicago, Illinois, to Cleveland, Ohio, of said two cars of sugar.

“4. That plaintiff had been advised and had knowledge that there was an agreement between defendant and said Meyers Grocery Company whereby the freight charges on both shipments from Chicago to Cleveland, Ohio, had to be paid by the Meyers Grocery Company to plaintiff, before plaintiff could deliver the aforesaid two cars of sugar to said Meyers Grocery Company, the assignee of the consignee at the time of the presentment of the bills of lading by the Meyers Grocery Company. That the defendant transmitted the original bills of lading duly endorsed by itself with its invoices and a sight draft attached, to a bank at Cleveland, Ohio, which collected from the Meyers Grocery Company the amount of the purchase price of the sugar, but not the freight charges, and said bills of lading, properly assigned by the defendant to the Meyers Grocery Company together with the invoices, were released by the bank at Cleveland, Ohio, to the Meyers Grocery Company, and thereafter said Meyers Grocery Company presented to plaintiff said bills of lading and obtained delivery of said two cars of sugar, without plaintiff demanding payment of said freight and transportation charges from said Meyers Grocery Company.

“5. That at that time it was the usual practice of the plaintiff and customary at plaintiff’s warehouse at Cleveland, Ohio, that freight charges had to be paid by an assignee of a consignee, before the assignee could have delivered to it the merchandise so transported. That in the case of both of the foregoing shipments, plaintiff, through the error of one of its clerks in having marked the freight charge bills as paid, released both of said shipments to the Meyers Grocery Company without demanding and collecting the freight and transportation charges on said two cars from Cleveland, Ohio.

“6. The plaintiff thereafter discovered its error, and demanded the freight charges from Meyers Grocery Company, but failed to collect the same or any part thereof from said Company, or any other source. That about fifteen months afterwards, plaintiff made demand for the freight charges on defendant and defendant refused to pay it, and on June 19, 1930, plaintiff filed this suit against defendant in this cause.

“7. It is hereby stipulated and agreed that the facts hereinabove set forth are true.

“8. It is further stipulated and agreed that no question will be made as to the Erie Railroad Company, a corporation, being the proper party plaintiff. That there is no dispute that the proper charges for transporting the shipments as aforesaid amount to $362.70. The question to be raised is as to the liability of the defendant for the aforesaid charges of $362.70 on the facts hereinabove set forth.”

In addition to the stipulation, plaintiff offered the original bills of lading in evidence, and it was admitted that they bore the signatures of plaintiff and the signatures of defendant. Each bill of lading contains the following clause, which was not signed by defendant:

“If this shipment is to be delivered to the consignee without recourse on the consignor, the consignor shall sign the following statement. The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges.

“If charges are to be prepaid, write or stamp here, to be prepaid.

The position of the plaintiff is that under the Federal Interstate Commerce Act, plaintiff was without power to enter into an agreement releasing the consignor from its liability, and that since the railroad would not be bound by an agreement made with itself, it could not be bound by mere knowledge of an agreement which the consignor made with the consignee with reference to which party should pay the charges. The case of New York Cent. R. Co. v. Lehigh Stone Co., 220 Ill. App. 563, is cited as authority for this contention. In that case, the New York Central Railroad Company, being engaged in interstate commerce, received at Lehigh, Illinois, from the defendant company a carload of stone for shipment from Lehigh to Schneider, Indiana, and thence to Danville, Illinois, over plaintiff’s tracks, where it was transferred to another railroad which transported it to Flat Rock, Illinois. A bill of lading- was issued for the freight charges, and the charges not having been paid, suit was brought by the railroad company, resulting in the judgment of the circuit court in favor of defendant. On appeal, the Appellate Court reversed the circuit court, and said:

“Under the Interstate Commerce Act of 1887, and the amendments thereto, when goods are delivered to a common carrier by a consignor to be shipped by interstate commerce to a consignee, by freight, the terms of the contract between the consignor and the carrier with reference to the freight charges differ from other contracts. The parties themselves do not fix the terms of the contract, but those terms are fixed by law. Even if the consignor and carrier should agree upon terms differing from those imposed by the Interstate Commerce Act, their contract could not prevail to change the consignor’s liability. Central of Georgia Ry. Co. v. Birmingham Sand & Brick Co., 9 Ala. App. 419; 10 Corpus Juris 445. . . .

“Delivery of the freight to the consignee is not a condition precedent to the consignor’s liability for the freight charges, but when the goods are delivered to the common carrier for interstate shipment and accepted by such carrier for such shipment, the status of the consignor and the carrier is, at that instant, fixed as debtor and creditor as to the freight charges, and the common carrier has the right to demand prepayment of such charges. Indianapolis & St. L. Ry. Co. v. Herndon, 81 Ill. 143; Lehigh Val. Transp. Co. v. Post Sugar Co., 228 Ill. 121. ...

“When defendant delivered the car of stone in question to plaintiff for interstate shipment and the car was accepted by plaintiff for such shipment, defendant became primarily liable to pay the freight charges and the status of the parties as debtor and creditor was thereby fixed, and there being no evidence to the contrary the presumption is that such status continued until the time of the trial and the court should have found in favor of plaintiff in error. ’ ’

In New York Cent. R. Co. v. Philadelphia & Reading Coal & Iron Co., 286 Ill. 267, an action was brought by the New York Central Railroad against the Philadelphia and Reading Coal & Iron Co. to recover freight charges on a carload of coal shipped by the Philadelphia and Reading Coal & Iron Co. from Pennsylvania to Chicago. The plaintiff recovered a judgment, which was appealed to the Appellate Court, which court certified the ease to the Supreme Court, and the judgment was affirmed. In that case, the facts as stated by the Supreme Court in its opinion were as follows:

“The coal was delivered in Pennsylvania to a carrier on February 14, 1912, by said coal company, consigned to itself at Chicago. At Buffalo the coal was delivered to appellee, which transported it to Chicago, where it arrived February 19, 1912. On February 20, 1912, appellant by an order in writing directed that the car of coal be forwarded to A. F. Cook & Co., who had purchased the same and agreed to pay the freight thereon, at Pullman, Illinois; via the Illinois Central railroad, the order stating, ‘Charges follow.’ The coal was delivered to Cook & Co. about March 6, 1912, and appellee at the time demanded the payment of the freight charges, but the same were not paid. It appears that several demands were made later for the same hut without avail, and on September 19, 1912, appellee brought suit against Cook & Co., in the municipal court of Chicago and recovered judgment for the amount of the freight on December 13,1912, which judgment still remains unsatisfied. On September 22,1914, appellant was first notified by appellee that the freight charges had not been paid. On the last mentioned date Cook & Co. became and have ever since been insolvent and have ceased to do business.” In its opinion, the Supreme Court said:

61 The evidence in the record tends to show that shippers and merchants throughout the country ship great quantities of coal and other commodities to various persons throughout the United States over the lines of the railroad companies, and that the almost universal practice and custom in such shipments is for the shippers not to prepay the freight charges thereon and for the railroad companies to waive their right to such prepayment and to accept payment thereof from the consignees.” In passing upon the questions there involved, the Supreme Court further said:

“The Federal act of 1887 to regulate commerce controls in this and similar transactions. Appellee had no right to release appellant from liability to pay the freight, and had it attempted to do so such action would have been unlawful. ‘The necessary effect of all these decisions construing and applying the Inter-state Commerce act, when considered together, is . . . that the carrier cannot by any act estop itself from exacting the lawful freight rate. If the carrier could so estop himself, then it would lie within the carrier’s power, by purposely putting itself in a position where it could not exact the lawful rate of a shipper it desired to favor, to render nugatory one of the main designs of the act, — the prevention of discrimination between shippers; and for the law to countenance the doctrine of estoppel in cases like this, is for the law to say, through the courts, that the carrier is estopped from doing what the statute mentioned plainly requires that it must do, — collect the lawful rate in all cases, and nothing greater and nothing less by any means or device whatsoever. ’ Central of Georgia Railway Co. v. Birmingham Co., 9 Ala. App. 419. See, also, to the same effect, Baltimore and Ohio Southwestern Railway Co. v. New Albany Box and Basket Co., 48 Ind. App. 647; Bush v. Keystone Driller Co., 199 S. W. 597.”

We are of the opinion that, under the facts as set forth and under the authorities, the trial court was not in error in finding for plaintiff and in entering the judgment herein. The judgment is, therefore, affirmed.

Affirmed.

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


text:
    J. Paul Zalesk, Appellee, v. Peter Wolanski et al., Defendants. Polish National Alliance of the United States of America, Appellant.
    Gen. No. 37,609.

      Opinion filed June 26, 1935.
    Rehearing denied July 10, 1935.
    Joseph X. Waynhe, of Chicago, for appellant.
    Joseph F. Elward and W. Gr. Poicorny, both of Chicago, for appellee; Joseph F. Elward, of counsel.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal by the Polish National Alliance, one of the defendants herein, from a decree of the superior court of Cook county. The bill was filed by plaintiff on September 30, 1932, for the foreclosure of a mortgage trust deed on certain described real estate, given to secure the payment of nine promissory notes held by various parties, totaling $30,000. The suit was brought on behalf of the owners of all the notes, who were all made defendants. In the decree, the court found that the plaintiff, as one of the note holders, under the terms of the trust deed, had the right to declare the whole amount of the indebtedness due and unpaid and to prosecute the suit on behalf of all the note holders. The decree orders the sale of the mortgaged property and the distribution of the proceeds. There seems to be little if any question as to the facts involved in the case.

On September 26, 1929, Peter Wolanski and Jennie Wolanski, his wife, executed a mortgage trust deed on certain real estate to secure the payment of nine promissory notes. All of the notes were dated September 26, 1929, and were numbered 1 to 9 consecutively. Number 1 was for $1,000 due one year after date, number 2 for $500 due one and a half years after date, number 3 for $500 due two years after date, number 4 for $500 due two and a half years after date, number 5 for $500 due three years after date, number 6 for $500 due three and a half years after date. Number 7 for $500 due four years after date, number 8 for $500 due four and a half years after date and number 9 for $25,500 due five years after date. The last named note number 9, is the property of the Polish National Alliance.

On September 26, 1930, the following document was executed by the makers of the notes and the trust deed:

“In Consideration of the extension of the time of payment of One Thousand and no/100 Dollars of the principal sum evidenced by the note hereto attached, executed by Peter Wolanski and Jennie Wolanski, his wife, dated September 26th, 1929, for the sum of One Thousand and No/100 Dollars payable to the order of Bearer — due one year after its date, secured by a Trust Deed to Chicago Title & Trust Company which was recorded in the recorder’s office of Chicago, County Cook in book 27417 of records at page 147 as document No. 10494338.

‘1 The Undersigned Hereby Covenants and Agrees to pay on the Twenty-sixth day of September A. D. 1931 to the holder, the said extended sum in gold coin of the United States of America, of the present or an equal standard of weight and fineness, with interest thereon, until the maturity hereof, at the rate of six per centum, per annum, payable in like gold coin semi-annually, on the Twenty-sixth day of March and of September, in each year, according to the tenor of- and as further evidenced by two extension coupons of even date herewith, and seven per centum per annum interest after maturity. Both principal and interest are payable at Sherman State Bank, Chicago — or such other place in the said city as the legal holder may from time to time in writing appoint.

“It Is Further Agreed by the undersigned that all the covenants and agreements in said principal note and said Trust Deed or Mortgage shall be and remain unchanged and in full force and effect during such extended period, except as hereby changed.

“It Is Further Agreed by the undersigned that a default in the payment of said interest coupons or either of them, or any part thereof, when due as provided therein, or a breach of any of the covenants contained in said Trust Deed or Mortgage or said principal note or interest coupons or in this agreement, the legal holder of said notes and coupons may, at the option of such holder, at any time thereafter declare said entire principal sum at once due and payable, together with interest thereon, without notice to the undersigned, and the said Trust Deed or Mortgage may then be at once foreclosed, the same as if said indebtedness had matured by express terms; or the said legal holder may, at the election of such holder, resort to proceedings at law to collect such amount, or may elect to prosecute proceedings both at law and in equity.

“In Witness Whereof the undersigned have hereunto set their hands and seals this Twenty-sixth day of September, A. D. 1930.”

This document refers to note number 1. On September 26, 1931, a like document was executed by these parties, purporting to extend the time of payment of note number 1 to September 26, 1932. At the time the bill was filed, the extended time for the payment of note number 1 had expired, and notes Nos. 3, 4 and 5 for $500 each remained unpaid, note number 3 having matured September 26,1931, number 4 on March 26,1932, and number 5 on September 26, 1932. Also at that time, the interest due on notes numbers 4, 5, 6, 7 and 8 and on note number 1 was in default. On September 26, 1932, and at the time the bill was filed, there was due and unpaid an instalment of interest on note number 9 amounting to $895. Note number 2 was paid at maturity. The trust deed given to secure these notes contains the following provision:

“And It Is Further Covenanted and Agreed, that in case of default for three days in making payment of any of said notes, or any installment due in accordance with the terms thereof, either of principal or interest, or of a breach of any of the covenants or agreements herein contained to be performed by the party of the first part, or the heirs, executors, administrators or assigns of said party, then the whole of said principal sum hereby secured shall, at once, at the option of the holder or holders of said principal notes, or any of them, become immediately due and payable, without notice to said party of the first part, or the heirs, legal representatives, or assigns of said party.

“And thereupon the legal holder or holders of said principal and interest notes, or of any of them, or the party of the second part, for the benefit of the legal holder or holders of said notes, shall have the right to immediately foreclose this Trust Deed. . . .”

Bach of the notes contains the following provision:

“It is hereby agreed that if default be made in the payment of any one of the installments of interest aforesaid, or in the payment of the principal or any installment of interest on any other principal note secured by the trust deed hereinafter referred to, . . . then the principal sum hereof together with accrued interest thereon, may at any time without notice, become at once due and payable at the place of payment aforesaid, at the election of the holder or holders hereof, or of any principal note described in and secured by said trust deed.”

The bill herein was filed by the owner of note number one, and the first contention of the defendant, Polish National Alliance, is that under the covenants and agreements in the trust deed and notes, plaintiff is without authority to accelerate the maturity of the entire mortgage indebtedness upon default in the payment of the one note held by him and to foreclose for such entire amount when the other notes secured by the same trust deed are owned by others, and the case of Seidel v. Holcomb, 249 Ill. App. 10, is cited as authority for this contention. In that case, the trust deed provided that “in the event of a breach of any of the aforesaid covenants or agreements, the whole of said indebtedness, including principal and all earned interest, shall, at the option of the legal holder thereof, without notice, become immediately due and payable, and with interest thereon from time of such breach, at seven per centum per annum, shall be recoverable by foreclosure thereof, or by suit at law, or both, the same as if all of said indebtedness had matured by express terms.” The court there said:

“This court is of the opinion that the power here granted is to the holder of the whole of the indebtedness to the exclusion of the owner of any part thereof, and since the undisputed evidence shows that Karoline Seidel is not the owner of the whole but, on the contrary, the owner of only a part of the indebtedness, the finding of the master’s report and the decree that she rightfully declared the whole amount due is not sustained by the evidence. ’ ’

In the case at bar, however, we have an entirely different situation. As noted, the trust deed provides that in case of a breach of any of the covenants of the trust deed, “then the whole of said principal sum hereby secured shall at once, at the option of the' holder or holders of the principal notes, or cmy of them, become immediately due and payable,” and that any of the note owners affected might foreclose. It is further to be noted that each note contains the provision that if default be made in the payment of the principal, or any other notes secured by the trust deed, that the principal sum shall become due and payable “at the election of the holder or holders hereof, or of cmy principal note described in and secured by said trust deed.”

The defendant further contends that the extension of the maturity date of complainant’s note, without the knowledge or consent of the other note holders, had the effect of subordinating the lien of the extended note to the lien of the remaining notes. In the trust deed in question, it is provided that the trustee shall “hold the above described premises with the appurtenances and fixtures unto the party of the second part . . . for the equal security of the principal notes hereinbefore described and the interest coupons attached, without preference or priority of any one of said principal notes over any one of the others by reason of the priority of time of maturity, or of the negotiation thereof, or otherwise.” Whether the time for the payment of note number 1 was extended or not, or whether it was paid at the time of its original maturity or not, could not possibly have affected the rights of the appealing defendant, except that its payment might possibly have bettered this defendant’s security. When the makers of note number 9 defaulted in the payment of interest on this note, the Polish National Alliance, its owner, had the right to proceed with the foreclosure of the mortgage in the same manner as plaintiff has proceeded here, if it had chosen to do so, and its rights in the premises in such situation would be the same as the rights claimed and attempted to be exercised by the plaintiff. By failing to act, it could not prevent plaintiff from protecting his rights. We are of the opinion that the plaintiff proceeded under the rights and powers given him under the provisions of both the trust deed and his note, and that the court was not in error in entering the decree. Therefore, the decree of the superior court of Cook county is affirmed.

Affirmed.

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