text:
    Abbott L. Adams et al. v. The Cross Wood Printing Company et al.

      Creditor’s Bill — Corporations—Insolvency—Claims of Directors — Application of Assets — Power to Confess Judgment — Authority of Officers to Execute — Parties.
    1. Upon a creditor’s bill a court of equity has ample power to reach assets in the hands of any person who is holding them without legal right, and to apply them in satisfaction of the claims of judgment creditors.
    2. A director of an insolvent corporation can not apply its assets to the payment of a claim due himself to the exclusion of other creditors.
    3. The president and treasurer of a corporation have no implied power to execute a power of attorney to confess a judgment against such corporation. They can only exercise such power when it has been given to them in express terms by the board of directors.
    4. In the case presented, in the absence of the corporate seal, there was not even prima facie authority to enter the judgments in question, and such judgments and the executions issued thereon are void and may be assailed by any person interested.
    [Opinion filed September 19, 1888.]
    In error to the Superior Court of Cook County; the Hon. Egbert Jamieson, Judge, presiding.
    Messrs. Frank J. Smith & Helmer, for plaintiffs in error.
    The officers of a corporation have no authority to confess a judgment for the corporation without the express authority of the board of directors. Stokes v. New Jersey Pottery Co., 46 H. J. L. 237; Thew v. Porcelain Mfg. Co., 5 S. C. N. S. 415.
    The directors of a corporation have no implied authority to act singly; they can act only as a board. Mor. Priv. Corp. (2d Ed.) 531-2; Koehler v. Hubby, 67 U. S. 715; Angell & Ames on Corp. 232.
    A judgment void for collusion or fraud may be abated by any creditor who is injuriously affected thereby, collaterally or otherwise. Martin v. Judd, 60 Ill. 78; Re Dougherty’s Estate, 9 W. & S. 196; Van Winkle v. Smith, 26 Miss. 491; Thompson’s Appeal, 57 Pa. St. 178.
    The directors of an insolvent corporation can not pay themselves out of the assets of the company to the exclusion of other creditors. Mor. Priv. Corp. (2d Ed.) 787; Richards v. Ins. Co., 43 N. H. 263; San Francisco R. R. Co. v. Bee, 48 Cal. 398; Hopkins’ Appeal, 90 Pa. St. 69; Stout v. Milling Co., 13 Fed. Rep. 802; Koehler v. Hubby, 67 U. S. 715; Bradley v. Farwell, 1 Holmes, 433; Drury v. M. & S. R. R. Co., 7 Wall. 299; Jackson v. Ludeling, 21 Wall. 616; Twin Lick Oil Co. v. Marbury, 91 U. S. 590; Corpet v. Woodward, 5 Sawyer, 416; Coons v. Tome, 90 Fed. Rep. 533; Beach v. Miller — Ill. —.
    Iba W. Buell, for Alfred J. Cross and Edward Richards, defendants in error.
   Moran, P. J.

Plaintiffs in error, who constituted three separate firms, filed their bill setting up the recover)’ by each firm of a judgment against the Cross Wood Printing Company, the issue of executions on said judgment and the return of executions on each judgment, no part satisfied. The bill contains all the usual allegations of a creditor’s bill and avers that said Cross Wood Printing Company was, about .December 17, 1883, engaged in business in the city of Chicago; that it hold and owned divers securities and also goods, wares and merchandise and equitable interests which ought to be applied to the payment of complainant’s judgments; that it has dis~ posed of its property with intent to hinder and delay complainants; that the debts on which complainants’ judgments are founded were created prior to the 10th day of December, 1883; that on said 10th day of December the Cross Wood Printing Company was, to the knowledge of all its officers and directors, insolvent. That the board of directors of said Cross Wood Printing Company never at any time prior to December 17, 1883, authorized the president and treasurer or any other officer of said company to make or execute any power of attorney to confess any judgment or judgments against said company. That, nevertheless, John E. Cross, pretending to be president of said company, and A. J. Pratt, as treasurer of said company, on or about the loth day of December 1883, executed and delivered to said A. J. Cross a so-called judgment note in form as follows:

$1,350.20. Ohio ago, Dec. 15 th, 1883.
“ On-demand after date for value received, we promise to pay to the order of Alfred J. Cross, thirteen hundred and fifty 20-100 dollars, at our office, Chicago, Ill., with interest at 7 per cent, per annum after date until paid.
And to secure the payment of said amount, we hereby authorize irrevocably any attorney, at any court of record, to appear for us in such court in term time or vacation, at any time hereafter, and confess a judgment without process in favor of the holder of this note for such amount as may appear to be unpaid thereon, together with costs and fifty dollars attorney’s fees, and to waive and release all errors which may intervene in any such proceedings, and consent to immediate execution upon such judgment, hereby ratifying and confirming all that our said attorney may do by virtue hereof.
Cross Wood Ptg. Co. by Johií E. Cross, Pres.
A. J. Pratt, Treas.

That on the same day a similar note payable to the order of Edward Eichards with like power of attorney and signed in the same manner, for the sum of $1,653, was delivered to Eichards, and that on December 17,1883, said A. J. Cross and said Eichards caused judgments to be entered upon their said respective notes against the said Cross Wood Printing Company and executions to he issued thereon and levied upon the property of said company of the value of more than $4,000, and caused the same to be afterward sold by the sheriff, and had i the proceeds applied on the said executions; that both said A. J. Cross and said Richards were at the time of the entry of said judgments directors of said company, and knew that said company was at 'said time insolvent and unable to pay its just debts. Charges that said A. J. Cross and said Richards were and are liable to said Cross Wood Printing Company and to complainants as creditors thereof to account for the fair value of the said property so levied upon under said executions and converted by said parties to their use.

The separate answers of A. J. Cross and Richards to said bill deny that they knew of the insolvency of the corporation, admit the execution of the judgment notes, but deny that they were executed or the said judgment thereon .entered without authority, but state no authority for entering the same; say the notes were given for a valuable consideration, to wit, for an actual indebtedness from said company to said Cross and Richards respectively; admit the sale under the executions, that property levied on only sold for $1,400, which sum was applied on said executions; deny all fraud and say that they were actual bona fide creditors of the company, and say that the said judgments were just and are not void. Cross denies that he ever was a director of the company, and Richards admits that he was such director at the time the judgments were entered.

The bill was taken pro confesso against the corporation, and the case was tried as to the other defendants, and upon the hearing it was clearly shown that the corporation was insolvent at the time the judgment notes were given and the judgment entered, to the knowledge of Cross and Richards, and Pratt, who was the treasurer of the company, and that all the property of the corporation was taken under the execution; but in our opinion the evidence failed to establish that A. J. Cross was a director or officer of the corporation.

Complainants offered to prove that there was no resolution of the directors of the company, or any other action ever liad with reference to the execution of said judgment notes of Richards and Cross, but the court excluded the evidence, and there was no evidence whatever in the case tending to show that the officers of the corporation were ever authorized by the board of directors to execute a power of attorney to confess a judgment against the said corporation.

The court, after hearing all the evidence, dismissed the bill for want of equity, and appellants have appealed and assigned the entering of such decree for error.

The decree could not stand so far as the appellee Richards is concerned if there were no other ground of error than that he, while a director of the corporation which was insolvent, undertook to apply the property of the company to the payment of a debt due from the said company to himself, to the exclusion of other creditors of the corporation. That this will not be permitted has been well settled by numerous authorities. The Supreme Court of this State in the recent case of Beach v. Miller, 20 Legal News, 239, said: “When the corporation is insolvent, that is, when its assets are not sufficient, or not more than sufficient, to pay its debts, the shareholders have no claim upon its property, but all its property belongs to the creditors; in such ease the directors having control of the assets hold them in trust for all the creditors and can not use them up in the payment of their own claim. Morawetz on Priv. Cor., Sec. 787, and cases cited.

There is another ground of error, which, in our opinion, requires the reversal of the decree as to both Cross and Richards. The president and treasurer of a corporation have no implied power to execute a power of attorney to confess a judgment against the corporation. They can not lawfully exercise such a power unless it has been given to them in express terms by the board of directors. If the seal of the corporation is attached to the power of attorney it is perhaps prima, facie sufficient to authorize the entry of the judgment, as it is evidence of the assent of the corporation when taken in connection with the signature of the proper officer or officers. In this case no seal of the corporation is attached to the power of attorney, nor is there any seal at all upon it; and taking the note and the so-called power together, we are inclined to the opinion that there is not even <prima facie authority for entering a judgment against the corporation upon it. However that may be, we need not finally determine; for the bill clearly alleges that no authority was ever conferred on the president and treasurer to execute the powers of attorney or to confess the judgments attacked, and this allegation of the bill is not denied by the answer; and the evidence offered by appellants to sustain this allegation should .have been admitted by the court, and must, for the purposes of this review, be treated as in the case and as proving the allegations. The only authority, then, which the president and treasurer had to execute the power of attorney in question, was that which inhered in them as officers by virtue of their official position. The question here presented was decided in The Joliet Electric Light & Power Company v. Ingalls, in the Appellate Court of the Second District, in an opinion by Mr. Justice Baker. It was then said : “ We think it plain, both on principle and from the authorities, that the president of a corporation has not, as a matter of law and simply by virtue of his office as president, authority to either confess a judgment against such corporation or execute a warrant of attorney empowering another so to do. Such matters form no part of the ordinary business of the company which the president, as its executive officer, is authorized to transact virtute officii. The power in question is not inherent in or incident to the office from either usage or necessity.” The cases cited by the learned judge fully support the doctrine stated.

The judgments, then, were entered without authority of law, and were not binding on the corporation or its property. They were void and the executions issued upon them were also void, and being so void, not merely irregular or voidable, they may be assailed by any person and treated as of no force so far as they affect such person’s interest.

In Hoyt v. Thompson, 51 N. Y. 321, where the president and cashier of a bank, without authority from the board of directors, undertook, by an instrument under seal, to assign the property of the bank to the State of Michigan for a valuable consideration, and the bank being insolvent the transaction was attacked in the interest of creditors, the court said : “A deed formally executed under the corporate seal bears upon its face the presumption that it was executed by competent authority from the corporation; but this presumption may be repelled and the deed avoided by showing that the seal waaffixed without authority. The assignments in question to the State of Michigan upon the facts shown are not voidable merely, but absolutely void. They appear on the face to convey a tit’e, but on the facts stated and admitted they convey nothing; and, without reference to the insolvency of the corporation, their validity may be impeached by the corporation itself, or in connection with such insolvency by its creditors, directly or col laterally, but with the same effect as if they had been forgeries; and whether the State of Michigan was a bona julo purchaser of the debt and securities or not makes no difference. The assignments not being the acts of the corporation, the State acquired no title ; the case stands on the same footing as if the assignments had never been made.”

The reasoning of the case quoted from applies to the case now under consideration, and was applied by the Supreme Court of New Jersey, in the case of Stokes v. New Jersey Potter Company, 46 N. J. L. 237, which case is directly in point. There, as here, a judgment was confessed hv the officers of an insolvent corporation without authority from the board of directors, and there was a motion to set it aside in the interest of creditors. After showing that the judgment was void the court said: “ Nor can this judgment acquire validity from the fact that the money advanced by plaintiff was applied for the benefit of the company. Prom that fact a debt would arise, and an obligation on the part of the corporation to pay the debt in common with other debts would result; but the plaintiff can not hold his security which gives him a lien upon the company’s property, unless his security is a valid security as an incumbrance thereon, especially when the rights of other creditors are involved. The receiver as the representative of creditors, has the capacity to make the objection that the security was not made in such a manner as to be binding upon the corporation.”

The proceedings in those cases were by receivers and were in the nature of insolvent proceedings instituted by creditors, but the power of the court on creditor’s bill in this State is ample to reach all assets of the debtor’s in the hands of any .person who has obtained them without legal right to hold them, and apply the same in satisfaction of the claims of the judgment creditors.

We conclude, therefore, that the complainants were entitled to a decree against the defendants, A. J. Cross and Richards, that they account for the value of the property seized by them respectively on their void executions, and it was error for the court to dismiss complainants’ bill.

The decree will therefore be reversed, with directions to the Superior Court to enter a decree requiring said appellees to account for all property taken by them, or either of them, under their said judgments and executions, and the court will proceed, in accordance with the usual practice in chancery, to find the value of the property so seized by said appellees, and will, on the same being ascertained, decree the payment of the same to the complainants to the extent of their judgments, or to a receiver upder complainants’ bill, if one shall be appointed, and such other and further proceedings or decree may be had in said case as shall be in accord with the practice of the court and not inconsistent with this opinion.

Reversed and remanded.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Henry Swantz v. John Muller.

      Former Adjudication — Riparian Rights — Dam—Successive Actions for Damages — Nominal Recovery — Estoppel.
    1. The doctrina of res adjndicala extends to the grounds of recovery and defense which might have been but were not presented.

      2. Where the owner of lands has brought suit to recover damages for prospective as well as present damages, alleged to have resulted thereto from the erection of a dam and changes in the flow of water, he can not. subsequently maintain an action to recover damages for the depreciation in the value of his land.
    3. The recovery of merely nominal damages in the first, action does not warrant the presumption that the question of permanent injury was not considered by the jury.
    [Opinion filed September 19, 1888.]
    Appeal from the Superior Court of Cook County; the Hon. Elliott Anthony, Judge, presiding.
    This is an action by appellant against appellee to recover damages for continuing and maintaining a certain dam by appellee on his land, by reason of which, it is alleged, the surface waters and watercourses flowed therefrom out of their natural courses upon land of appellant, injuring his orchard, land and barn, and interfering with his business of farming.
    The declaration, as amended, contained the usual averments, reciting that he was the owner and possessor of certain lands, together with a certain orchard, orchard grounds and cattle barn thereon; that certain surface waters or watercourses had run and flowed in the natural watercourses or channels from land of defendant in and upon land of plaintiff, south and clear of said orchard, orchard grounds and cattle barn; that plaintiff was a farmer, and used such grounds for raising of vegetables, etc., and that such surface waters irrigated and drained his land; that defendant, on March 15, 1885, wrongfully erected and constructed a certain dam above land of plaintiff, whereby such surface waters were directed from their natural courses and flowed in, upon and through such orchard, orchard grounds and cattle barn; that on the 13th day of June, 1885, the plaintiff commenced certain proceedings in the Superior Court, of Cook County for the wrongful erection and construction of said dam against the defendant, and that on the 13th day of March, 1886, lie recovered a judgment of one cent damages and costs of suit, and which judgment has never been reversed, and is now the final, adjudication of the rights of the plaintiff and defendant concerning the matters at issue in such proceedings; that defendant, from theday of recovery of said judgment until the commencement of the present suit, wrongfully suffered and permitted the said dam to remain, and be maintained, although requested to remove the same; by reason of said grievances the plaintiff could not use his said land, orchard grounds and cattle barn, and follow his said business in so extensive and beneficial a manner as he otherwise would have done, and was thereby deprived of the use and enjoyment of the same, and of the profits and gains which he otherwise would have'made, and thereby the land of the plaintiff became, was and is, depreciated in value.
    The declaration of the case now under consideration set ou t im¡ haee vería the declaration in the original suit. The latter declaration consists of three counts, the third of which contained the allegation that the land oí plaintiff became depreciated in value; the other two counts made no allusion to such depreciation, but all the elements of damage charged in the declaration in this ease were set up and relied on in the declaration filed in the suit first brought.
    A demurrer to the declaration was sustained by the court below,_ and judgment for costs entered against appellant, from which he appeals to this court.
    Mr. B. M. Shaffiter, for appellant.
    No technical objection was taken or made to the declaration, but the court below sustained the demurrer on the ground that the recovery of one cent damages in the former suit, for the erection and construction of the dam and. obstruction, was a bar to a further recovery for the continuing of the same.
    The demurrer admits the continuing of the dam or obstruction, and every continuation thereof is a fresh trespass. Holmes v. Wilson et al., 10 Ad. & El. 503.
    Hpon the recovery of the judgment, although nominal damages only, it was presumable that appellee would thereupon abate the wrong and nuisance, but instead, he continued and maintained it.

      In McConnell v. Kibbe, 33 Ill. 178, the Supreme Court say: “The right infringed is property, and for its invasion nominal damages may be recovered; but such recovery is no bar to • a suit for actual damages subsequently sustained, where they did not take place before the commencement of the former suit.” ,
    The principle of the common law, in cases of this kind, is that successive actions can be brought as long as the obstruction exists. 1 Sedg. on Damages, 280.
    And the law does not presume that the wrong will continue, and therefore damages for overflowing lands are limited to those which occurred before the bringing of the action. Savannah & Ogeechee Canal Co. v. Bourquin, 51 Ga. 378.
    Mr. Arnold Tripp, for appellee.
   Per Curiam.

The substance of appellant’s complaint is the depreciation in value of his land. For that injury he once before sought redress in a similar action. By the showing made in his declaration now before the court, he claimed damages for this identical cause of action in the former suit, and the jury awarded him the sum of one cent. The declaration does not even aver that the question of depreciation was not submitted to the jury in the first case. The allegation, if it were material, can not be supplied by presumption. The failure of the jury to award substantial damages in the first trial, does not warrant us in holding that they did not consider the alleged permanent injury to the land. They may have thought nominal damages full compensation for all the injury, present or prospective. A former judgment is conclusive as to all .questions within the issue whether formally litigated or not. The doctrine of res judicata “extends not only to the questions of fact and of law which were decided in the former suit but also to the grounds of recovery or defense, which might have been but were not presented.” Beloit v. Morgan, 7 Wall. 619; Harmon et al. v. Auditor, etc., 123 Ill. 133; Bennitt et al. v. Star Mining Co. et al., 119 Ill. 14.

From that well settled rule we have no desire to deviate. Applying it to this case, it can not be denied that appellant might have presented for adjudication in the first case all the matters complained of in this, and if he failed to do so, there is now no relief for him.

Whether an erection of a permanent character by an individual for his own convenience, profit or pleasure, having no connection with a public use, but which causes a depreciation in the value of adjoining land, gives a right of action which is entire and can only be sued on by the party owning the land at the time of the injury, we need not here determine. See C. & E. I. R. R. Co. v. Loeb, 118 Ill. 211, 212.

This case is of that class where the plaintiff has elected to treat the injury as embracing prospective as well as present damages, and has recovered a judgment therefor. The decision of the Superior Court was not in conflict with C., B. & Q. R. R. Co. v. Shaffer, 124 Ill. 112, or O. & M. Ry. Co. v. Wachter, 123 Ill. 440.

A distinction upon which this judgment may safely, rest, is stated in the opinion in the latter case to be the treatment of the injury by the plaintiff, as embracing prospective as well as present damages. The court then says, that the decisions in such cases rest upon the principle of estoppel, and áre consequently sound.

The judgment of the Superior Court is affirmed.

Judgment affirmed.


author: Harnett, J.

text:
    The Security Insurance Company v. August Mette et al.

      Fire Insurance — Conditions—Fall of Part of Building■ — Forfeiture— Strict Construction — Agency—Condition as Jo Title — Leasehold—Instruc- ' tions.

    1. A condition in a policy of insurance providing for a forfeiture in case of the fall of the building insured, will not be construed as working a forfeiture upon the fall of a part of the building.

      2. Where the building insured is on leased land, a failure to disclose such fact will work a forfeiture under a condition requiring it to be written in the policy.
    3. In the case presented, the broker who procured the insurance in question acted as the agent of the assured. The mere delivery of the policy and payment to him of a commission did not constitute him the agent of the defendant.

      4. The employment of an adjuster by the defendant before it knew the plaintiff's title was not a waiver of' the condition as to title.
    5. It is improper to submit an instruction touching a point upon which no evidence was introduced.
    [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Biohabd W. Clifford, J udge, presiding.
    In connection with this ease see the following case of the Illinois Insurance Company v. Mette.
    Messrs. Miller, Lewis & J rosón, for appellant.
    Mr. George F. Westover, for appellees.
    If an agent be informed by the assured of the true condition of his title, the company is bound thereby, even though the agent be not a general agent of the company. Atlantic Ins. Co. v. Wright, 22 Ill. 462; Commercial Ins. Co. v. Spanknable, 52 Ill. 53; Keith v. Globe Ins. Co., 52 Ill. 518.
    Any of the conditions in a policy of insurance may, in this State, be waived by an agent. Aurora Fire Ins. Co. v. Eddy, 55 Ill. 213; Illinois Fire Ins. Co. v. Stanton, 57 Ill. 354; Home Mutual Ins. Co. v. Garfield, 60 Ill. 124; Reaper City Ins. Co. v. Jones, 62 Ill. 458; Lycoming Ins. Co. v. Barringer, 73 Ill. 230.
    And this rule is held, even though the policy of insurance contain the clause, as do the policies in this case, that “ any person,” other than the assured, who may procure the insurance, <l shall be deemed the agent of the assured and not of this company, under any circumstances whatever, or in any transaction relating to this insurance.” Commercial Ins. Co. v. Ives, 56 Ill. 402.

      If the agent of the company knows the facts, even in the absence of any disclosure by the assured, the company can not complain that the title is not stated in the policy. Phoenix Ins. Co. v. Tucker, 92 Ill. 64; N. E. Fire & Mar. Ins. Co. v. Wetmore, 32 Ill. 24.
    Having knowledge, it is the company’s duty to write the policy correctly. Union Ins. Co. v. Chipp, 93 Ill. 96.
    And if the building be on leased ground, with the knowledge of the agent, the company can not avoid the policy because the fact is not stated therein. Lycoming Ins. Co. v. Jackson, 83 Ill. 302.
    And in dealing with an agent the assured is not bound to know the extent of the agent’s authority. Hartford Fire Ins. Co. v. Farrish, 73 Ill. 166.
    Thomas Hnderwood acted as the agent of the insurance companies, and not as the agent of the appellees, August Mette & Co.
    This is a question for the jury, and the jury has so decided. Sun Mutual Ins. Co. v. Saginaw Barrel Co., 114 Ill. 99.
   Harnett, J.

In this case a judgment was rendered in the court below, on a policy of insurance against tire, in favor of appellees, and appellant, the defendant, appeals therefrom to this court.

The policy of insurance upon which the action is founded, contains the conditions, that “if a building shall fall, except as the result of a fire, all insurance by this company on it or its contents shall immediately cease;” “if the assured is not the sole, absolute and unconditional owner of the land on which such building or buildings stand, by a title in fee simple, and this fact is not expressed in the written portion of the policy, this policy shall be void ;” and “it is a part of this contract that any person other than the assured, who may have procured this insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy, and not of this company, unless he shall have received a commission sighed by the officers of this company, appointing him as its agent.”

The building insured was a frame ice house 180 feet square under five gable roofs, and was constructed in five compartments, each gable roof covering one of them. Shortly after the policy was issued, the south two fifths of the structure was blown down, leaving the three other compartments standing, and about three fourths filled with ice. A few weeks after-wards the remaining parts of the building were destroyed by fire, and the appellant now claims that the policy was vitiated when the destruction of the two fifths took place. Conditions in policies of insurance are not liberally construed for the purpose of producing forfeitures. “While courts will extend all reasonable protection to insurers, by allowing them to hedge themselves about by conditions intended to guard against fraud, carelessness, want of interest, and the like, they will nevertheless enforce the salutary rule of construction, that as the language of the condition is theirs, and it is therefore in their power to provide for every proper case, it is to be construed most favorably to the insured.” May on Insurance (2d Ed.) Sec. 175.

The condition in the policy of appellant makes the insurance cease on the fall of the building. Following the sound rule of construction above given, we can not say that the fall of two fifths of the ice house leaving the other three separate compartments standing intact, was a fall of the building within the terms of the condition. Otherwise there is no halting point short of the proposition, that the fall of any substantial part of the building puts the condition in operation, and terminates the risk. The rule requires that the appellant shall he taken to have provided all that was deemed necessary for its security, and that it shall have no benefit from the condition of its own making, until the building shall fall. This identical condition received the attention of the Supreme Court of California in Brenner v. Insurance Company, 51 Cal. 101, the conclusion of the court in that case being in harmony with the views lieie expressed. That the courts are in no haste to broaden this condition in favor of the companies is shown in fireman’s Fund Ins. Co. v. Congregation Rodeph Sholom, 80 Ill. 558, where it is said, “so long .as the building remained standing, there could be no exemption for liability, under this clause of the policy, no matter how much deprecation there may have been by the action of the winds or any other cause.” When the policy was executed and delivered, appellees were not, in fact, the owners in fee of the land on which, the ice house stood, but held it under a lease, and that fact was not written in the policy. Without explanation, this is a clear violation of the condition secondly above set forth. Appellee’s reply is,, that one Underwood, who negotiated the insurance, was the agent of appellee; that he was fully informed that appellees only held the property by lease, and that the lease itself was shown to him before the insurance was agreed on. If, in fact, he was the agent of the company, the fact is not changed by that clause in the policy which declares that the person procuring the insurance shall be deemed to be the agent of the insured and not the agent of the company. But we find in the record no evidence tending to prove that Underwood was the agent of appellant when the lease was shown to him. Prior to the transaction in question he had no connection or business of any kind with appellant or its agents,Charles W. Drew & Co., nor did he inform appellant or its agents^ that appellees’ interest was a leasehold. Underwood was an insurance broker, having a desk in the office of James Ayars & Co., insurance agents. One Bremer, an insurance agent at. South Chicago, who had no connection or business relations with appellant or its agents, informed Underwood of the fact that appellee had an uninsured ice house in South Chicago. Underwood, without any communication with appellant, called on appellees to induce them to allow him to place their insurance. After some negotiation, ÜVIette testifies that they finally concluded to let him place the insurance. Appellees did not name the companies, or any of them, from which the insurance was to be procured, but left that and everything else relating to the insurance, except the amount of risks and rates, to Underwood’s discretion and judgment. He was not even asked by appellees the names of the companies in which the risk would be taken, nor did he inform them. Before appellant had any communication with Underwood, he had seen and made all arrangements with appellees for procuring the insurance for them, and came from them to appellant with the description of the property, the amount of insurance they desired, the rate of premium they would pay, and with implied authority to select the companies.

The agents of appellant delivered the policy to Underwood, he delivered the policy to appellees, who paid him the premium, and the agents of appellant paid him, out of their commissions, ten per cent, on the amount of the premium. Delivery of the policy to Underwood, and the allowance of such commission to him, are supposed by appellees to be sufficient proof that he was agent of appellant. On a similar state of facts as to the question of agency, it was held in Lycoming Fire Ins. Co. v. Rubin, 79 Ill. 402, that the broker was the agent of the insured. See also Franklin Insurance Co. v. Weary, 4 Ill. App. 74; Kings Co. Fire Ins. Co. v. Swigert, 11 Ill. App. 590; McFarland v. Peabody Ins. Co., 6 W. Va. 434.

Aside from the delivery of the policy to Underwood and payment of the ten per cent, to1 him, there is absolutely nothing in the record from which the inference can fairly arise that he was the agent of the company. It necessarily follows that each instruction for the plaintiffs which submitted to the jury the question of Underwood’s agency for the defendant was erroneous.

The employment by appellant of an adjuster, to examine into tiie loss after it occurred, was not a waiver of the condition as to title. There is no evidence that the company or its agents knew appellee’s title was a leasehold when the adjuster was engaged. Certainly no intention to waive rights can be inferred, against one entitled thereto, when he is ignorant of the existence of such rights.

The modification by the court of the ninth instruction requested by defendant, erroneously submitted to the jury the question whether Under-wood communicated to defendant, at or before the time the policy issued, the fact that the title of the insured to the land was a mere leasehold. Ho evidence was introduced tending to prove such communication.

The second and fourth of the defendant’s refused instruetions being in conformity with the views expressed in this opinion, should have been given to the jury. The court erred in refusing them.

Finding the judgment erroneous in the particulars specified, it must be reversed and the cause remanded.

lieversed a/nd remanded.


text:
    The Illinois Mutual Insurance Company v. August Mette et al.

      Fire Insurance — ■Conditions—Fall of Part of Building — Forfeiture— A gency —Instructions.

    1. In an action on a policy of fire insurance, it is held: That the question whether the policy was revived or continued in force after a forfeiture, is unimportant, the defendant having failed to charge the defendant with notice of such facts as would prevent a forfeiture under the condition as to title; and that the broker who procured the insurance in question acted as the agent of the assured.
    2. It is improper to submit an instruction touching a point upon ^liich no evidence was introduced.
    [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Frank Baker, Judge, presiding.
    Messrs. Miller, Lewis & Judson, for appellants.
    Mr. George F. Westover, for appellees.
   Per Curiam.

By this appeal it is sought to reverse a judgment in favor of appellees in a suit on a policy of insurance. The property insured and the loss thereof by fire are the same which are involved in Security Insurance Company v. Mette et al., decided at this term. [Ante, p. 324.] The property insured by the Illinois Mutual Insurance Company contained a clause exempting the insurer from liability, if the building, or any part thereof, should fall, except the fall be the result of fire. In all other points material to this cause the policy was similar to that described in the opinion filed in the case above referred to, and the facts are substantially the same, except those concerning the continuance of the policy in force after the fall of part of the building. On the trial the appellee made an effort to prove that the policy was revived or continued in force by the company after the fall of the south two fifths of the building. But this attempt can have no influence on the result so long as there is a failure to charge the company with notice of such information as was given to Underwood concerning .the title of appellees to the land on which the building stood.

In other respects than that of the condition as to the fall of the building, this case is controlled by the decision in the Security case. It is shown by the opinion in that case there was no evidence tending to prove Underwood’s agency for the company, and hence it was error to submit that question to the jury.

The judgment of the Circuit Court is reversed and remanded.

Reversed and remanded.


author: McAllister, J.

text:
    Chicago Safe and Lock Company v. Michael Cremen.

      Sales — Safe—Rescission—Rotice—Instruction.
    In an action to recover the contract price of a safe, wherein the defendant contends that the door was so defective as .to render the safe useless, this court holds that an instruction based upon this hypothesis but ignoring the question of notice and the contention of the plaintiff that the defendant failed to close the door properly, was improperly given.

      [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Richard S. Tuthill, Judge, presiding.
    Mr. W. W. Rathboh, for appellant.
    Mr. Perry A. Hull, for appellee.
   McAllister, J.

This was an action by the appellant corporation, engaged in the business of manufacturing fire proof safes, against the appellee, to recover upon an executory contract for the sale by the former to the latter of a safe of a particular description, the agreed price thereof. The plaintiff introduced the contract in evidence and evidence tending to show that it delivered to the defendant a safe answering the description in such contract. The defendant introduced evidence tending to prove that the safe so delivered was useless for the reason that when he began using it, he found that, when the outer door was closed, it could not be opened without tipping the safe forward and down toward the floor, to accomplish which required certain implements and the services of several men. To meet that feature of the case, the plaintiff introduced two witnesses who were experts in the business of manufacturing safes for plaintiff, and they gave testimony tending to prove that the difficulty in opening said door of the safe was not due to any defective construction, but to the fact that the defendant did not, before closing said outer door, properly attend to the closing of a certain inner door of the safe and place things in their just position, which was a simple and practicable thing to do.

On behalf of the defendant the court gave this instruction to the jury:

“If the jury believe from the evidence that the safe in question was manufactured by the plaintiff, and sold to the defendant to be used by him in his business, and that the same at the time of such sale and delivery was out of condition or repair to such an extent as "to render the safe useless, or so as to prevent the defendant from unlocking or opening the door to the same, and that the same has remained in the same condition ever since such delivery, and has been unavailable and useless to the defendant for the purpose for which it was made and sold, owing to such condition, and that the defendant notified the plaintiff of such defective condition of the safe, then the plaintiff can not recover in this suit and the law is with the defendant, and the jury should find for the defendant and against the plaintiff.”

The jury found for the defendant, and the court, overruling plaintiff’s motion for a new trial, gave judgment on the verdict, from which plaintiff took this appeal.

If the difficulty as to opening the outer door of the safe was due principally to defective construction and the defendant gave the plaintiff, after reasonable time to test it, immediate notice to take it away, then the contract was rescinded and no recovery could be had for the price. 2 Kent’s Com., Marg. pp. 479, 480; Doane v. Dunham, 65 Ill. 512; Babcock v. Trice, 18 Ill. 420; Howard v. Hoey, 23 Wend. 350.

But the controlling issue upon the trial was upon the contention of the plaintiff that the difficulty in opening the outer door of the safe was wholly due to the defendant’s own want of care and attention, as respected the manner of closing an inner door, and putting it in the right position for closing the outer door. It will be perceived that in the above instruction that issue is entirely ignored. As the case stood upon the evidence that was error. The instruction also fails to submit to the jury the question whether the defendant immediately upon discovering the defect notified the plaintiff to take the safe back and so rescinded the contract. For giving that instruction the judgment must be reversed and cause remanded.

Reversed and remandedr.


author: Garnett, J,

text:
    Bartholomew Cunningham v. William L. Wright.

      Practice — Justice—Absence of Plaintiff — Sec. 33, Chap. 79, R. S. — Discretion — Setoff—Motion to Quash Execution and Release Levy.

    1. In an action before a justice of the peace, if the plaintiff or his agent does not appear, the justice must dismiss the suit, unless the defendant consents to a continuance. The rule is imperative, and the case is not altered by the fact that the defendant claims a setoff.
    2. Where, in the absence of the plaintiff, the justice has entered juelgment for the defendant, and the latter has filed a transcript in the office of the clerk of the Circuit Court, a motion to quash an execution issued thereon and release a levy thereunder will be granted.
    [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Biohabd S. Tuthill, Judge, presiding.
    March 30, 1887, appellant and one James O’Donnell, as co-partners, brought suit before Peter Foote, a justice of the peace, against appellee; the summons was made returnable April 11,1887, at 9 o’clock a. m. At 10 o’clock on April lltli, the return day of the summons, the case was called by the justice and continued until April 18th, at 9 o’clock a. m. It does not appear that either of the parties appeared or were present at the time of the continuance on April 11th.
    On April 18th, at 10 o’clock a. m., the justice called the case. The transcript of the justice shows affirmatively that the plaintiff failed to appear, but the defendant, being present, was sworn and testified, and upon his testimony the justice rendered judgment against the plaintiffs and in favor of the defendant for $69 and costs of suit. May 10th an execution was issued on such judgment, which was returned July 19th unsatisfied. After the return of such execution the appellee, who was the defendant before the justice, procured a transcript from the justice, which he filed December 12,1887, in the ofiic-e of the circuit clerk, under the provisions of Secs. 95,96 and 97s of Chap. 79 of the Revised Statutes. December 20,1887, the circuit clerk issued an execution on such transcript, which execution was levied upon the goods and chattels of appellant. December 31, 1887, appellant moved the Circuit Court, appellee being present, to set aside such •judgment, to quash the execution and to order the levy thereunder released, on the hearing of which motion the transcript was offered in evidence; but appellee objected to the granting of such motion, and the same was denied by the court, which ruling and decision of the court is here assigned as error.
    Mr. Perry A. Hull, for appellant.
    Messrs. John H. Rollins and Sydney Stein, for appellee.
   Garnett, J,

The transcript of the justice of the peace shows a continuance at the time the summons was returnable, without showing whether either of the parties appeared. But it also shows affirmatively that the plaintiff did not appear at the time to which the suit was continued, and we have no hesitation in saying the record thus proves by its own terms that the justice then lost all jurisdiction of the case.

Sec. 33 of Chap. 79 of the Revised Statutes is so plain and unambiguous there is no room for construction. It furnishes the exclusive rule for the action of the justice in such eases. It provides that if the plaintiff or his agent shall not appear at the time appointed for trial, in any suit, and no sufficient reason shall be assigned to the justice why such plaintiff or his agent does not appear, the justice shall dismiss the suit, unless the defendant shall consent that such suit shall be continued to another day.

The case is not altered by the fact that the defendant- has cross-claims against the plaintiff. The court, in a suit before a justice, is not, as in courts of record, vested with the power to proceed to a trial on account of the defendant having an offset. The j ustice has no discretion.

The command of the statute to dismiss is peremptory, except in the case specified. The question presented to the justice who rendered the judgment in question was not one calling for his opinion on any question of law or fact with regard to which he was liable to error, but it was a question as to the actual existence of a fact about which there was no liability of mistake.

“Whenever a question is one of opinion merely, whether it be of value, or of the weight to be given to evidence legally admitted, there is no doubt discretion is subject to no dispute. But when the right to act depends on the actual existence of facts, nothing short of such actual existence will suffice, and opinion is no account.” Wall v. Trumbull, 16 Mich. 250.

The judgment of the justice was without jurisdiction. The court below erred in refusing to quash the execution and to order the levy thereunder released.

The order of the Circuit Court is reversed and remanded.

Reversed and remanded.


author: Garnett, J.

text:
    Sarah Wolf v. F. W. Michaelis.

      "Mechanic's Lien — Architect's Certificates — Defective Bill — Evidence— Improper Admission of — Secondary Evidence.

    1. Where a contract for labor and materials to be used in the erection of a building requires a certificate from the architect before each installment becomes due, a bill for a mechanic’s lien can not be maintained, unless it appears that such stipulation has been complied with, waived or excused in some manner recognized by law.
    2. In the case presented, in the absence of any allegation that the architect ever issued or refused to issue the certificates required, or statement of any matter of excuse for failure to secure such certificates, the evidence touching the question was improperly admitted.
    [Opinion filed September 19, 1888.]

      Appeal from the Circuit Court of Cook County; the Hon. Lorin C. Collins, Judge, presiding.
    Mr. Moses Salomon, for appellant.
    Mr. Levi Sprague, for appellee.
   Garnett, J.

This is an appeal from a decree fora mechanic’s lien for $1,450 in appellee’s favor against the property of appellant. The contract between the parties was in writing (Edward G. Elleock being named therein as the architect), and by its terms appellant was to pay appellee $5,450 for the» work and materials specified.

The contract price was to be paid in six installments, the first, second and third amounting in the aggregate to 82,000, to be paid at various stages of the work; the fourth ($2,000) when the building was finished, the fifth ($1,000) thirty days thereafter, and the sixth ($450) in six months thereafter. But in the contract it was provided u that in each case of said payments a certificate shall be obtained from and signed by the said Edward G. Elleock, architect, to the effect that the work is done in strict accordance with drawings and specifications; and that he considers the payment properly due; said certificate, however, in no way lessening the total and final rcsponsibility of the contractor.” The bill makes no allegation that the architect ever issued or refused to issue any certificate, nor is any fact therein stated as an excuse for not securing certificates for the amounts claimed.

The answer of appellant sets forth the written contract in haee verba, and alleges that certificates for the installments sued for were not obtained by complainant. The bill should have averred the issuing of the certificates or that they were fraudulently withheld by the architect. Barney v. Giles, 120 Ill. 154; Barton v. Herman, 11 Abb. Pr. (N. S.) 378.

As said by the court in Barney v. Giles, supra, “ The contract being the foundation of the petitioner’s proceeding, and being in all respects lawful and valid, it can be enforced only as the parties have made it.” On the hearing, parol evidence was introduced over the objection of the appellant, tending to show that a - certificate had been made and delivered by the architect to appellee for §300 remaining' unpaid on the fourth installment. If that was material evidence, its reception was error, as no foundation was laid for secondary evidence. There was nothing else tending to prove the making and delivery of such certificate. For the same purpose, a record of judgment in favor of appellee against appellant for said .§300 xvas introduced in evidence by appellee. But all the evidence upon which that judgment was rendered is not given .in this record, and for aught that appears the judgment may have been based on a waiver of the certificate and a distinct promise of appellant to pay that amount. There was no averment in the bill warranting the introduction of any evidence on this question and it should all have been excluded.

, But, if it had been satisfactorily proven that a certificate was given by the architect for the balance of the fourth installment, that would not excuse appellee from securing and presenting certificates for the fifth and sixth installments. The fifth was not payable until thirty days after the completion of the building, and the sixth was postponed six months. If the work and materials appeared all right when completed, serious defects might have been discovered before either of the last two installments became duo. The contract between the parties is framed in terms that leave no room for construction as to the necessity of a certificate before each installment became due. Until that stipulation in the contract is complied with, waived or excused in some manner recognized "by law, there can be no recovery. The allegations of the bill are fatally deficient in this respect. The decree is reversed and remanded.

Reversed and remanded.


text:
    Edward W. Morrison et al. v. Harry Herrick et al.

      Landlord and Tenant — Oral Agreement for Extension of Term — Part Performance — Statute of Frauds — Specific Performance — Cross-Bill— Possession as Notice.
    1. Where a lessee in possession makes valuable improvements with the knowledge of the lessor, and on the faith of an oral promise by the latter to execute a lease extending the term, the making of such improvements constitutes such part performance as will take the case out of the statute of frauds.
    2. In such a case a bill lies for a specific performance of the oral agreement for a lease.
    3. In the case presented, a demurrer to the cross-bill filed by subsequent lessees was properly sustained.
    4. The possession of a tenant is constructive notice of his rights to a subsequent lessee.
    [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Richabd S. Tuthill, Judge, presiding.
    Bill in equity, filed by appellees, praying specific performance of an oral agreement made by Edward W. Morrison with. appellees for a lease of the store and basement of premises known as number 115 Madison street, and basement of number 113, Chicago, for a term of five years. Morrison’s answer denies making the agreement, and sets up the statute of frauds. The appellants, Miner, Beal & Company, filed a cross-bill against Morrison and appellees, praying for possession of the premises, appointment of receiver to collect the rents of appellees, etc. To the cross-bill a demurrer was filed and sustained. Hearing, and decree of specific performance on amended bill, from which Morrison and Miner, Beal & Company appeal.

      Mr. S. K. Dow, for Edward W. Morrison, appellant.
    Messrs. L. H. Bodtelle, and M. W. Fullee, for Miner, Beal & Co., appellants.
    In order to take an oral agreement in respect to an interest in land, not to be performed within one year, out of the operation of the statute of frauds, (if it is sought to do this by proving that valuable improvements have been made upon the premises by the lessee or grantor, as the case may be,) upon the good faith of the oral agreement, it must be clearly shown that such improvements were made by the party while in possession of the premises, acquired under and by virtue of the oral agreement sought to be enforced, and not otherwise. This is the settled law of Illinois. Wood v. Thornly, 58 Ill. 464; Padfield v. Padfield, 92 Ill. 198; Bohanan et al. y. Bohanan, 96 Ill. 691; Warren v. Warren, 105 Ill. 568; Kaufman v. Cook, 114 Ill. 638; Long et al. v. Long, 118 Ill. 638.
    The proof must clearly establish the oral agreement. The improvements must be valuable. The improvements must be made under a possession acquired by virtue of the oral agreement.
    Messrs. Smith & Fobch, for appellees.
    The general principle so often declared, that part performance will, in equity, take a parol agreement out of the statute of frauds, has, since a very early period, been applied by the courts of England to agreements for leases. If the tenant has been put to expense on the faith of a promise of a lease, equity will decree its execution. Earl of Aylesford’s Cases, 2 Strange, 783, and note.
    Where possession alone is relied upon as part performance, of course, such possession must be taken after the parol agreement, and in pursuance of, or rather as a consequence of, such agreement. And if, at the time of the agreement, the complainant be in possession under a lease, whether expired or not, his possession will be referred to this lease, and of itself will be no evidence of a new agreement for a further lease. Pomeroy on Contracts, Sec. 123-125.

      But where the part pérformance consists of valuable improvements and large outlays (always considered the strongest and most unequivocal acts of part performance), then the fact of possession cuts no figure, provided these improvements and outlays are of such an extent and kind that they are reasonably referable to an agreement for a new lease, and not reasonably or rationally referable to the prior tenure of holding. Pomeroy on Contracts, Secs. 124 and 125; 'Fry on Specific Performance, Secs. 401 and 402; Browne on Statute of Frauds, Sec. 487.
    The ground of equitable relief in this class of cases is of a much broader character, more especially as it is applied in later years. It proceeds upon the broad ground of equitable estoppel, or estoppel by conduct, as it is sometimes termed — a principle of comparatively modern growth, and which is being extended and enlarged from year to year in its application by the courts. City of Chicago v. Gage, 95 Ill. 615.
    This principle of estoppel by conduct is applicable to every conceivable case where a party by his acts or declarations, or even by his silence (where honestly he should speak), deliberately induces another to act, either by changing his situation or pursuits, or in the expenditure of money in improvements or otherwise, or in binding himself by contract, etc., so that he can not gainsay what he has said or done without being guilty of bad faith toward the party whom he has thus induced to act. In such case he will be estopped in equity. And this principle is applied to the regulation and control of titles to, and interest in, real estate, as well as to other property rights. Broom’s Legal Maxims, 173, 174; Russell v. Hubbard, 59 Ill. 335; Favill v. Boberts, 50 N. Y. 222; Truesdail v. Ward, 24 Mich. 118.
    Says Boberts, in his admirable work on Frauds: K There does not seem, indeed, to be any satisfactory foundation for this doctrine of part performance without the intermixture oi fraud, and upon this ground, where an owner has encouraged another to go on with his improvements on the estate under a false expectation of a conveyance or lease raised in him by the assurance of the party entitled, it is agreeable to the general course of equitable relief to disappoint the contrivance by compelling the deceiver to realize the expectation he has created. This protecting jurisdiction has, indeed, stretched itself to those cases where the illusory hope has been raised, not by words and assurances, but simply by looking on in silence, while false impressions, which wre are able either to correct or verify, are inducing a fruitless expenditure on improvements. This equity is strong and salutary, and the jealousy of jurisdiction has shut out the statute of frauds where this principle of relief applies.” Boberts on Frauds, p. 132; Parkhurst v. Van Cortland, 14 Johns. 15; Harris v. Knickerbocker, 5 Wend. 642; Ryan v. Dox, 34 N. Y. 307-313; Peiffer v. Stillwater & St. Paul R. R. Co., 23 Minn. 342; Fery v. Pfieffer, 18 Wis. 510; Seaman v. Aschermann, 51 Wis. 678; Pomeroy on Contracts, Sec. 106 et seq., and cases there cited in notes; Story’s Eq. Juris., Secs. 761 — 763.
    The English cases upon this subject, and especially cases of agreements for leases, or for renewals or extensions of leases, are numerous. And these cases, especially recent ones, assei* and apply this principle of estoppel by conduct to the fullest extent. Parker v. Smith, 1 Collyer’s Ch. Reps. 608; Cole v. Pilkington, 19 Rep. Eq. Cas. 174; Williams v. Evans, L. R. 19 Eq. 547.
    Our Supreme Court has applied the same broad principle of equitable estoppel to this class of cases. Warren v. Warren, 105 Ill. 568; Irwin v. Dyke, 114 Ill. 302. See, also, Mundy v. Jolliffe, 5 Milne & Craig, 167; Wright v. Pucket; 22 Gratt. 374; Haigh v. Kay, Law Reps., 7 Ch. 469; Caton v. Caton, L. R. 1 Ch. 137. See, also, Neale v. Neale, 9 Wall. (U. S.) 1-12; Swain v. Seamans, 9 Wall. (U. S.) 254.
   Garnett, J.

The appellee, Harry Herrick, commenced to occupy number 115 Madison street, Chicago, in 1876, as a hat store. His brother, Charles K. Herrick, engaged in business with him in 1880 at the same place. The landlord, Edward W. Morrison, executed a lease for the premises annually, the last executed being dated April 8, 1884, and the term ending April 30, 1885, at a rental of1 §3,000 per year. We think the evidence fairly proves that in the summer of 1884 a parol agreement was made between Morrison and appellees, by the terms of which Morrison undertook, on the faith of appellee’s promise to make permanent and valuable improvements on said store, to give them a lease of said store and basements for a term of five years, beginning May 1, 1885. At the time the oral agreement was entered into, appellees were in the actual possession of the premises, engaged in the business of hatters, and have been in such possession and occupation over since. Soon after the agreement was made appellees proceeded, in pursuance thereof, with the knowledge and consent of Morrison, to make valuable and permanent improvements on said store, at a cost of several thousand dollars, lío written lease was delivered by Morrison for the year beginning May 1,1885, nor for the five year term. On the 8th day of July, 1885, he executed to Miner and others, appellants herein, a lease of said store, with other stores adjoining, for a term of five years beginning May 1, 1886, under which the last named lessees now claim, the superior right to possession of the store number 115.

What amounts to part performance of an oral contract for the sale of real estate (or such an interest therein as is specified in the various statutes) so as to shut out the statute of frauds, has been the occasion of no little contention in the courts of this country and England. The doctrines announced at times, have been so extreme as to give rise to the apprehension that nothing would be left of the statute. We may safely say, however, that the ruling idea with the courts has been to prevent the use of the statute in that c’ass of cases, as a moans for the perpetration of fraud. What is often designated as part performance which takes a contract out of the statute, may be as appropriately classified with those cases in which the doctrine of equitable estoppel operates to prevent fraud. That doctrine, certainly, the statute of frauds was nof intended to repeal.

In Roberts on Frauds, 132, it is said: “ There does not seem, Indeed, to be any satisfactory foundation for this doctrine of part performance without the intermixture of fraud, and upon this ground, where an owner has encouraged another to go on with his improvements on the estate under a false expectation of a conveyance, or lease, raised in him by the assurance of the party entitled, it is agreeable to the general course of equitable relief to disappoint the contrivance, by compelling the deceiver to realize the expectation he has created.”

Again, at page 134, he says: But these instances of encouragement, either tacit or express, to make improvements, incur expense or exercise acts of dominion, which must turn to the .prejudice of the mistaken party if his expectation is disappointed, are not proper cases of part performance, but of actual fraud, which courts of equity have always been forward to relieve against.” This point is illustrated in Howe v. Hutchinson, 105 Ill. 576; McClure v. Otrich et al., 118 Ill. 320.

• As a head of relief, separate from that of taking possession in pursuance of the contract, Pomeroy, in his work on Contracts, Sec. 126, considers the subject of making valuable and permanent improvements in pursuance of the oral contract, with the knowledge and consent of the vendor, saying, “it is always considered to be the strongest and most unequivocal act of part performance, by which a verbal contract to sell and convey, or to lease, is taken out of the statute. It is very plain that such proceedings satisfy the equitable principle upon which the doctrine of part performance rests much more completely than a mere possession does. If the purchaser has simply taken possession, it might seem possible for him to be restored to his former situation, and to be compensated in damages; but when he has made outlays for valuable and permanent improvements and thus changed the character of the property, it would be in the highest degree unjust for the owner, who has permitted these expenditures and alterations to be made in reliance upon the agreement, to interpose the statute and prevent the completion of his contract, and at the same time retain and enjoy all the benefit of the additional value imparted to the land.” And in the same work, Sec. 124, the author says: “It is also well settled that a tenant’s continued possession and the making by him, in pursuance of stipulations contained in the agreement, of substantial improvements on the land, constitute a part performance of a verbal agreement to grant a renewal of the lease, or, it would seem, of a contract to convey the fee.” See also Fry on Specific Perf., Sec. 585.

A case in point decided by Lord Cottenham, is Mundy v. Joliffe, 5 Myl. & C. 167, where the tenant from year to year, during such tenancy entered into a parol agreement with his landlord for a lease for fourteen years, and in pursuance thereof repaired the building, drained the lands, etc. It was held that there was no doubt these acts constituted a part performance which prevented the application of the statute of frauds.

In Williams v. Evans, L. R. 19 Eq. 547, a tenant in possession made a parol agreement for a new lease for thirty years, and on the faith of such parol agreement sub-let at an increased rent. The sub-tenant made permanent and valuable improvements with the knowledge of the landlord, and with the understanding that he was to have a lease from the original tenant. The court held that when the tenant is in possession and does anything which alters his position for the purpose of carrying out the new verbal contract, the statute of frauds can not be interpose 1 as a bar; that it was of no consequence whether the improvements were made by the tenant or sub-tenant, and there was a decree for specific performance.

The question we now decide was not presented in Wood v. Thornly, 58 Ill. 464, Padfield v. Padfield, 92 Ill. 198, or Pickerell v. Morse et al., 97 Ill. 220.

The appellees being continuously in possession of the premises, are not guilty of laches. Whitsitt v. Trustee, etc., 110 Ill. 126 ; McNamara v. Garrity, 106 Ill. 384.

The appellants, Miner, Beal & Co., are not bona fide purchasers, having paid no purchase money, (Brown v. Welch, 18 Ill. 343,) and the possession of appellees being notice to them. (C., B. & Q. R. R. Co. v. Boyd et al., 118 Ill. 73.)

We are satisfied the decree on the amended bill is right and works out full justice to all parties.

The demurrer to the cross-bill of Miner, Beal & Co., was properly sustained. Their remedy against Morrison is complete and adequate at law. The appellees have no interest whatever in the controversy between the appellants, and may justly object to being entangled in a litigation not germane to the original bill.

Finding no error in the record, the decree of the Circuit Court is affirmed.

Decree affirmed.


text:
    The Chicago Municipal Gas Light and Fuel Company v. The Town of Lake.

      Municipal Corporations — Gds—Ordinance Granting Authority to Lay Pixies — Failure of Performance — Injunction.
    This court affirms a decree dismissing a bill filed by a gas company to enjoin a municipal corporation from interfering with the complainant in laying gas pipes in its streets, there being a failure of performance on the part, of the complainant within the time limited in the ordinance granting it the right to lay such pipes.
    [Opinion filed September 19, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Murray F. Tuley, Judge, presiding.
    Mr. Francis Adams, for appellant.
    The ordinance and the acceptance of it and acting under it by appellant, constituted a binding contract between appellant and the town, which the town, without appellant’s consent, was powerless to annul or set aside. Dillon on Mun. Corp., 3d Ed., Secs. 314, 450; City of New Orleans v. Wardens, etc., 11 La. Ann. 244; City of Chicago v. Sheldon, 9 Wall. 53; City of Quincy v. Bull et al., 106 Ill. 337; City of Burlington v. Burlington Street Ry. Co., 49 Ia. 144; Railway Co. v. Village of Carthage, 36 C. St. 531; Springfield Ry. Co. v. Springfield, 35 Mo. 674.
    The acceptance of such a grant, if made directly to the State, would constitute an irrevocable contract between the State and the grantee, and very slight circumstances are sufficient from which to infer acceptance. Morawetz on Corporation, Secs. 23, 24. The analogy between a grant from the State and one from a municipal corporation, acting within its charter limits, is obvious, and was evidently perceived and applied by the learned judge who wrote the opinion in City of Quincy v. Bull, 106 Ill. 337.
    There is no reason why the law applicable to grants made by the State and accepted by the grantee should not also be applicable to similar grants made by a municipal corporation and accepted by the grantee.
    If, as contended, the company, by accepting and acting under the ordinance prior to April 23, 1884, acquired vested and irrevocable rights, this, of course, is decisive of the case; but the evidence of appellant’s acts after April 23,1884, the date of the alleged repealing ordinance, is worthy of consideration, as showing appellant’s good faith.
    Appellant, not being whiling, on account of the uncertainty occasioned by appellee’s conduct in attempting to repeal the granting ordinance, and its subsequent hostile attitude, to expend money in the purchase of land on which to erect and construct gas works, procured from the Chicago, Rock Island & Pacific Railway Company, October 23, 1884, a lease of that company’s gas works, With the privilege of constructing entirely new works on the premises adapted to the Springer process of manufacturing gas.
    Courts of equity will decree specific performance of contracts in respect to personal property, “ where the measure of damages resulting from the non-performance of the agreement is uncertain or difficult to ascertain, or where the thing contracted for has to the complainant some intrinsic or special value, or the like.” Cohn v. Mitchell et al. 115 Ill. 124, 131.
    This is not a case for the specific performance of a contract strictly so called. It is not prayed that the appellee be decreed to do anything which it has, in terms, agreed to do, but merely that it shall not unlawfully interfere with appellant in the exercise of the privileges which appellant undoubtedly possesses, or disturb appellant in the enjoyment of its veste rights.
    Messrs. Dexter, Herrick & Aliek, for appellee.
    It is well settled that the provisions of the act for the incorporation of cities and villages only apply to such municipalities as are incorporated under it. Guild v. Chicago, 82 Ill. 472, 476; Binkert v. Jansen, 94 Ill. 283; Town of Sparland v. Barnes, 98 Ill. 595; Champaign v. Harman, 98 Ill. 491; C. P. Co. v. Chicago, 88 Ill. 221.
    As the grant in the section relied on has reference only to cities and villages incorporated under the act, so does the proviso. It is familiar law that a proviso is to be limited in its effect to the enacting clause. In re Webb, 24 How. Pr. 247; Detroit v. Detroit, etc., Co., 12 Mich. 333; Pearce v. Bank, 33 Ala. 693; Sedg. Const. L. (2d Ed.) p. 49, and notes; Wilberforce on Sts., p. 303.
    The claim of the complainant is, that from the time the alleged contract went into effect, it had a right by contract to enter upon and occupy with its pipes any of the streets of the town, and that it was then entitled, and is therefore now entitled to a specific enforcement of the contract. But what corresponding obligation did the complainant assume?
    It is true its right was conditional on its furnishing gas to the inhabitants of the town within one year. But there was no undertaking on its part to do so. If it chose not to fulfil the condition the grant would fail. There was a mere option in its favor, and the essential element of mutuality was, therefore, lacking.
    But, if it is conceded that there was mutuality of obligation, clearly there was no mutuality of remedy. The undertaking of the complainant, if any, was to erect works and to furnish gas to the inhabitants of the town within one year.
    It is well settled that this was not such an undertaking on the part of the Municipal Gas Company as a court of equity could specifically enforce. It involved the purchase of land, the erection of works, the laying of pipes and other improvements, and a continuous service. Equity can not specifically enforce such an undertaking.
    As the alleged contract could not be specifically enforced by the town against the complainant, it can not be specifically enforced by the complainant against the town. Marble Co. v. Ripley, 10 Wall. 339; Blackett v. Bates, L. R. 1 Ch. App. 117; Johnson v. Ry. Co., 3 D., M. & G. 914; Peto v. R. R. Co., 1 Hem. & Miller, 468; Ross v. R. R. Co., Woolworth, 26; Johnson v. Ry. Co., 22 Grant (U. C.), 290; Fallon v. R. R., 1 Dill. 121; Ranger v. R. R., 1 Eng. Ry. & C. Cas. 50; Kansas Co. v. Topeka Co., 135 Mass. 34; Buck v. Smith, 29 Mich. 166; Cooper v. Pena, 21 Cal. 403; Mastin v. Halley, 61 Mo. 196.
   Per Curiam.

This is an appeal from a decree dismissing appellant’s bill, which sought to enjoin appellee from interfering with appellant in laying gas pipes in the streets of said town, under an ordinance passed March 25, 1884, by appellee’s board of trustees.

Section 3 of the ordinance required appellant to “ commence furnishing gas to the town of Lake within one year from the date of the passage of this ordinance, and the price of gas to consumers shall not exceed two dollars and fifty cents per thousand cubic feet,” etc.

The Chicago, Rock Island and Pacific Railroad Company had gas works erected on its own property in the town, which, in October, 1884, were leased to Theodore G. Springer, for two years, the lease binding Springer to put into the works what was known as the Springer process for manufacturing gas, and the railroad company reserving the right to purchase from Springer, at cost, all his improvements and apparatus at the expiration of the term. There was an understanding between Springer and Morse, the president of the gas company, that the lease was for the company; the gas works were taken possession of by the company and improved by it, and the lease was assigned to it by Springer, February 18, 1885. The lease gave Springer the right to lay gas pipes on the ground of the railroad company, but made no provisions for extending them further.

Heither lessor nor lessee had any right to lay pipes in the streets of the town. Before March 25, 1885, the works were prepared to manufacture gas, the railroad and its employes residing on its property being supplied with the article from the new gas works. But notice was not given to the town authorities of appellant’s readiness to commence furnishing gas, nor was there any public announcement thereof made.

The record fails to show that the railroad company was advised of the interest of the gas company in the works. There was no sign on or about the works indicating the proprietorship of appellant, and, in fact, its interest seems to have been known to only two of its officers, wdiile it remained a profound secret to every other person. Ho attempt was made to extend pipes from the works into the streets of the town until May 9,1885. At that time the police of the town interfered and forcibly prevented appellant’s employes from laying any pipe, the town authorities denying the right of appellant, then or at any time thereafter, to any of the privileges provided for in the ordinance. We think it plain, from this statement of facts, that appellant never performed its part of the contract, the spirit of which required something more of appellant than the building of gas apparatus under cover, and withholding all knowledge thereof from those who were to receive its advantages, until the year specified in the ordinance had elapsed. Secrecy for upward of a year could no more be justified than for five years. Consumers could not use the gas unless informed of appellant’s readiness to supply the same. Appellant is not excused by the fact that it was enjoined from laying pipe, nor by the passage by the board of trustees of an ordinance April 23, 1884, for the repeal of the ordinance of March 25th. The injunction was dissolved April 25,1884, after which time more than a year elapsed before any steps were taken for extending pipes from the works into the street. The repealing ordinance was of no force, if appellant had, as it claims, accepted the ordinance of March 25th. There was nothing to prevent appellant proceeding with its duties under the latter ordinance after the dissolution of the injunction. No force was used until the failure of appellant to comply with the ordinance for more than a year after the dissolution of the injunction. The repealing ordinance was nothing more than the wrongful assertion of appellee’s right to rescind the contract.

The decree of the Circuit Court is affirmed.

Decree affirmed.


author: Moran, J.

text:
    Chicago and North Western Railway Company v. Andrew Johnson.
    Master and Servant — Personal Injuries — Law of Another State — Question for Jury — Instructions—Special Findings — Practice.
    1. An instruction stating an abstract principle of law which is pertinent to the case, can not be assigned as erroneous, unless it has a tendency to mislead the jury.
    2. The law of another State is matter of fact, to be determined by the jury from the evidence introduced. An instruction stating the law of another State would, therefore, be improper.

      3. Where a party desires to have requests for special findings more fully answered by the jury, he should move the court to send them back for that purpose. In the absence of such a motion he can not assign a failure to answer certain questions as a ground for a new trial.
    4. In an action by an employe against his employer, to recover damages for injuries alleged to have resulted from a dangerous act out of the scope of his employment, which he was ordered to perform by the defendant’s foreman, while employed in another Slate, it is held: That the issues of fact involved were fairly submitted to the jury; that the court properly refused to give an instruction stating the law of the State in which the plaintiff’s injuries were received; and that the special findings were not inconsistent with the general verdict for the plaintiff,
    [Opinion filed December 7, 1888.]
    Appeal from the Superior Court of Cook County; the Hon. Joseph E. Gaby, Judge, presiding.

      Messrs. W. B. Keep and W. C. Goudt, for appellant.
    Mr,. Alex. Clabk. for appellee.
   Moran, J.

Appellee recovered a judgment in the trial court for injuries received while in the service of appellant at Escanaba, Michigan. Appellee was employed to assist in loading vessels with iron ore, and while so engaged he contends that he was ordered by appellant’s foreman in charge of the dock, to perform a difficult and dangerous act and one which was outside of the scope of his employment, the dangers of which were known to appellant, but unknown to appellee; that he was directed by said foreman to perform an act which required special skill, which he did not possess, to wit, to stand upon a high, unprotected platform, and free from the chute on which it had become entangled and fastened, the rigging of a vessel that was being moved along the dock; and that while obeying such order, and in the exercise of due care on his part, he was'precipitated to the deck of the vessel and received injuries which were the basis of the action.

Appellant’s contention was, that it was part of the ordinary duties for which appellee was employed to disengage the rigging of vessels being loaded at the dock, whenever the same was caught on one of the projecting chutes; that such caught or entangled ropes were sometimes pushed off by the hands and sometimes worked or pried off by means of a pole or iron bar. Appellant also contended that appellee was not in the exercise of ordinary care for his own safety, and that ho was injured through his own negligence.

The issues of fact raised by these contentions were fairly left to the jury. We have examined the instructions and we are satisfied that no error of law was committed by the court in the instructions given to the jury. The first instruction given for the plaintiff is complained of on the ground that there wasno evidence in the case on which to base the principle stated. Said instruction is as follows: “ The jury are instructed for the plaintiff that it is the duty of the master to use 'reasonable diligence to ascertain, before ordering a servant to perform an act, whether the same is within the scope of his employment and can be performed without risk not incident to the same.”

It will he observed that the instruction contains no hypothesis based on the evidence, hut states simply an abstract proposition. legally correct and pertinent to the case. Such instructions can not be assigned as erroneous, unless they have a tendency to mislead the jury. Corbin v. Shearer, 3 Gilm. 482; Bandalow v. The People, 90 Ill. 218; International Bank v. Jones, 20 Ill. App. 125.

The other instructions for the plaintiff announced corred rules of law as to plaintiff’s right to recover if the jury found the facts as in said instructions are supposed. Lalor v. C., B. & Q. R. R. Co., 52 Ill. 104.

Complaint is made that the court refused to give the following instruction asked by the defendant:

<¿8. The jury are further instructed that if they believe from the evidence that this accident happened in the State of Michigan, then the law in that State determines whether the plaintiff has a right of action against the defendant, and that, as a matter of law, the plaintiff is not entitled to recover, if yon believe from the evidence in this case that the plaintiff was guilty of any negligence that contributed in any respect, either directly oi;approximately, to the injury complained of.”

This instruction was properly refused by the court. To have given it would be for the court to have invaded the province of the jury, and have taken from them the decision of a question of fact.

Though evidence tending to show what the law of Michigan is was introduced in the form of an opinion of the Supreme Court of Michigan contained in abound volume of the reports of the Supreme Court of that State, yet it was for the jury to find that law, being the law of a foreign State, as a question of fact. To questions of fact the jury must respond.

While the law of a foreign country or State will, -when found as a fact, he for the court to construe, if any constructioni shall be required, the court can not, without submitting the facium as to the foreign law to the jury, instruct them as to what it is. While this doctrine may appear to be somewhat anomalous, it is well established by authority. Cecil Bank v. Berry, 20 Ind. 187; Brackett v. Norton, 4 Conn. 517; Moore v. Gwynn, 5 Ired. 187; Taylor v. Boardman, 25 Vt. 581; Ingraham v. Hart, 11 Ohio, 255; Kline v. Baker, 99 Mass. 254; Dyer v. Smith, 12 Conn. 384; Holmes v. King, 7 Metc. 384; Hoadly v. N. T. Company, 115 Mass. 304; Donegan v. Wood, 49 Ala. 242.

The question as to the law of Michigan was properly submitted to the jury in instruction No. 20, given at appellant’s request.

At the request of defendant seventeen questions were submitted to the jury for the purpose of having special findings of fact in answer thereto. The jury answered all the questions thus proposed to them, and the answers given are in no wise inconsistent with the general verdict, but it is insisted that several of the questions were evasively and not properly answered. The questions and the answers to them are as follows :

■ “ 8. Was it an ordinary occurrence for the rigging or stays of vessels to catch upon the chutes of the ore dock in question?
■ “A. Yes; but not in the dangerous manner proven in. this particular case.
“12. Would the plaintiff have been injured if he had let go of the pole when it was caught between the stay and the chute ?
“A. We do not know.
“15. Do you believe that plaintiff handled the pole with which he released the stay in a proper manner?
“A. We can not tell.
• “ 16. Was the removing of the back stay from the chute of the ore dock more dangerous than other duties which they were called upon to perform in the pockets?
“A. Yes, under these circumstances.
“ 17. Was it customary for the laborers on the ore docks to remove ropes and stays caught upon the chutes of the docks ?
“A. Not under such circumstances.35

Upon the coming in of the jury with the general verdict and the answers to questions, including those above set out, defendant moved the court to set aside the general verdict and to enter a verdict in its favor on the special findings on the ground that such special findings were inconsistent with the general verdict This motion the court properly overruled, for the special findings were not, as we- have before said, at all inconsistent with the general verdict. The only criticism to which the special findings were subject was that the jury failed to answer some of the questions put to them. If the defendant desired to have these questions answered or more fully answered, counsel should have moved the court to send the jury back to respond to each question. Such is the practice as laid down by the Supreme Court of this State, under a statute allowing special findings to be made, similar in terms and effect to the law which now authorizes such finding. St. Louis & S. E. Ry. Co. v. Dorman, 72 Ill. 504.

This is also the practice which obtains in other States under similar statutes. K. P. Ry. Co. v. Peavy, 34 Kansas, 482; West v. Cavins, 74 Ind. 265; Bedford S. O. & B. R. R. Co. v. Raibolt, 99 Ind. 551.

Waiving all question as to whether the interrogatories were material and proper for the purpose of requiring answers to them, we think that the failure to ask that the jury should be required to answer them fully, and moving on all the answers as given for a verdict in favor of defendant, places appellant in a position where its counsel can not now assign the failure to answer the questions as a ground for new trial. McElfrest v. Guard, 32 Ind. 408.

No error has been called to our attention, nor have we discovered any, which authorizes the interference of this court with the verdict, and the judgment of the Superior Court must therefore be affirmed.

Judgment affirmed,.

Gary, J., takes no part in the decision of this case.


author: Gaby, J.

text:
    The National Bank of Illinois v. Mary S. Baker.

      Collateral Security — Tower of Sale — ‘‘Depreciation''''-—Fraud—Subrogation — Agency.
    1. A power conferred upon a party adverse in interest, or upon a third person who acts at the instance of such party, must be strictly pursued.
    2. The fact that collateral securities are not what they purport to be, but are of less value and in part fraudulent, does not justify a sale under a power authorizing a sale upon their depreciation in value.
    3. In the case presented, it is held: That the power of sale only applied to events then in the future; that the fraud in question did not enlarge the power; that the sale was unauthorized; and that the utmost claim of the purchaser is to be subrogated to the position of the vendor, holding the policy of insurance as security for the payment of the original indebtedness.
    [Opinion filed December 7, 1888.]
    Appeal from the Circuit Court of Cook County; the Hon. Gwynn Garnett, Judge, presiding.
    Messrs. Brady & Northrtjp, for appellants.
    A power to sell collaterals may be given by the contract of pledge. Such a power is not against public policy, nor is it open to any objections as to its validity.
    The terms of the contract of pledge govern the rights of the parties as to the time, place and notice of sale. Colebrooke on Collateral Securities, Sec. 118; Union Trust Co. v. Rigdon, 93 Ill. 458; Loomis v. Stave, 72 Ill. 623; Zimpleman v. Veeder, 98 Ill. 613.
    When the power or contract of pledge provides that, in case of default, a sale of the collaterals may be nytde without notice to the pledgor of pledgee’s intention to sell, the pledgee has the right to sell without giving notice, and a sale so made is valid. Loomis v. Stave, 72 Ill. 623; Milliken v. Dehon, 27 N. Y. 364; Chouteau v. Allen, 70 Mo. 290.

      If the pledgee, under a power of sale conferred on him, makes a bona fide sale of the collateral to one capable of buying, the sale will pass the title to the collateral beyond the pledgor’s reach. Zimpleman v. Veeder et al., 98 Ill. 613; Stokes v. Frazer, 92 Ill. 428; Lewis v. Mott, 36 N. Y. 395; Duncomb v. N. Y., etc., R. R. Co., 84 N. Y. 190; Union Trust Co. v. Rigdon, 93 Ill. 458; Jerome v. McCarter, 94 U. S. 734; Newport Bridge Co. v. Douglas, 12 Bush, 673; White Mountain R. R. Co. v. Bay State Iron Co., 50 N. H. 57.
    A bona fide sale of collaterals made after default, under a power of sale, vesting the title in a purchaser for value, in good faith, is not affected by a tender of the debt and charges made subsequently thereto. Colebrooke on Collaterals, Sec. 122; Loomis v. Stave, 75 Ill. 623; Chouteau v. Allen, 70 Mo. 290.
    The bona fide assignment of a policy of life insurance, issued in favor of the wife and assigned by the husband and wife to a creditor of the husband, will enable the assignee to recover. Kerman v. Howard, 23 W is. 108; Charter Oak Ins. Co. v. Brant, 47 Mo. 419; Baker v. Young, 47 Mo. 453; Foster v. Gile, 50 Wis. 603.
    The above doctrine was fully sustained in a case in this State, where only a part of the policy had been assigned. Pomeroy v. The Manhattan Life Ins. Co., 40 Ill. 398.
    Policies of insurance are choses in action, and governed by the same principles as other agreements of that character. Bliss on Life Ins., pp. 517, 596, Sec. 325; Palmer v. Merrill, 6 Cushing, 282; St. John v. American Mutual Life Ins. Co., 3 Kernan, 31.
    Messrs. Abbott & Bakek, for appellee.
    The attempted sale by Kretsinger to Freeman was not made in good faith, of which fact Freeman had notice, and therefore the sale is void.
    The pledgee of personal property is the trustee for the pledgor. Union Trust Co. v. Rigdon, 93 Ill. 458; Joliet Iron & Steel Co. v. Scioto Fire Brick Co., 82 Ill. 548; Zimpleman v. Veeder, 98 Ill. 613.
    Transferee taking with notice of the violation of trust takes it subject to trust. Fawcett v. Nat. Life Insurance Co., 5 Ill. App. 274.
    "While a power may authorize a sale either at public or private sale, the pledgee nevertheless is bound to use reasonable care and diligence to obtain the best price for the pledge. Like all trustees he must act in good faith.
   Gaby, J.

The facts of this case, so far as it is necessary to state them for decision of it, are that on the 2d of October, 1880, the FTew England Mutual Life Insurance Company issued a policy of life insurance on the life of William Baker for §5,000, for the benefit of Mary S. Baker, his wife, the appellee. He died on the 15th day of February, 1886, she surviving.

On the 14th of December, 1885, he and she made a promissory note, payable in ninety days thereafter, to the order of W. H. Kretsinger, for §600, with a warrant of attorney attached to confess judgment, and a recital that as security for the payment of the note a deposit had been made with Kretsinger of a certificate for 100 shares of the stock of the Journal of Commerce Company of §100 each, and the policy of insurance before mentioned; and following was this provision :

“And in default of payment of the said note, or any part thereof, at maturity, I do hereby authorize said Kretsinger, or his assigns, to sell and dispose- of said security, or any part thereof, at public or private sale, in his or their discretion; and in the event of said security, or any part thereof, depreciating in market value, I do hereby authorize said Kretsinger, or his assigns, at his or their option, to sell and dispose of said security, or any part thereof, at any time before or after the maturity of said note, at either public or private sale, and in the event of sale before or after the maturity of said note,- as aforesaid, no notice of such sale shall be required to be given to the undersigned, or to any other person or persons whomsoever, either by advertisement or - otherwise; and the proceeds of such sale or sales so made as aforesaid shall, after the payment of all expenses and commissions attending said sale or sales, be applied on said note, and the balance, if any, after payment of said note with interest, shall be returned to the undersigned, his heirs, executors, administrators or assigns; and at any sale of said collaterals, or any part thereof, made by virtue hereof, it shall be optional with the legal owner or holder of said promissory note to bid off and purchase said collaterals, or any part thereof.”

On the lUtli and 22d days of December, 1885, William Baker became indebted to the appellants in the sum of §10,000 for money loaned, under representations grossly fraudulent, made by him to the appellants, and on the 31st of the same month failed in business.

The certificate of shares in the Journal of Commerce Company was a forgery. On the 22d of January, 18S6, an attorney of the appellants went on their behalf to Iowa, where Kretsinger was. and Kretsinger sold to the attorney the certificate of shares and the policy for the amount of §612.10, and delivered to the attorney a bill of sale of them and assigned the note to him. The attorney on the next day made a like transfer for a consideration named of §785.80 to the appellants. The case turnaron the validity of this sale by Kretsinger. It is said in support of it, that when the fact that the certificate of shares was a forgery became known to Kretsinger, he was entitled to act under the power of sale.

It is not shown that the appellee participated in, or in the proceeds of, the fraud practiced upon the appellants by the deceased, or that she had any knowledge of the forgery of the certificate of shares.

The position of the appellants is, that if the securities pledged were not in fact what they purported to be, but were something of less value, that was a depreciation. “ Depreciating ” as used in the power, is the present participle of the verb depreciate, used intransitively, which verb, as defined by Webster, means “ to fall in value; to become of less worth; to sink in estimation.” As used in the power it applied only to what might happen in the then future.

What remedy Kretsinger might have had, if he had rescinded the contract on account of the fraud of William Baker, by assumpsit for money had and received, as the note was given for money loaned, or by special action on the case, it is not necessary now to inquire. • If, instead of rescinding, he claimed under the contract, he took it as it was written. He could make no sale except upon the happening of an event specified in the power. The power was not enlarged by the fraud.

It is the same principle as applies where a vendee of goods procures a sale by fraud upon credit. Assumpsit for goods sold and delivered will not lie before the credit expires, for the vendor adopting the contract of sale adopts its terms. 1 Chitty on Cent. 570, and cases therein cited.

So a principal who adopts the unauthorized act of an agent adopts the whole of it. Morris v. Tillson, 81 Ill. 607; Story on Agency, See. 250, and cases there cited. The cases are very numerous that hold, either by express words, or necessary implication, that a power conferred upon the party adverse in interest, or upon & third person who acts at the instance of such party, must be strictly pursued. The rule has been applied to judgment notes, mortgages and trust deeds with power of sale, and to pledges. Waterman v. Jones, 28 Ill. 54; Waite v. Dennison, 51 Ill. 319; Flower v. Elwood, 66 Ill. 438; Union T. Co. v. Rigdon, 93 Ill. 458; Keith v. Kellogg, 97 Ill. 147. There are too many cases upon the subject, even in this State, to attempt a reference to all of them.

Holding, then, that the power only applied to events then in the future, that the fraud of the deceased did not enlarge the contract or the remedy upon it, it follows that the sale by Kretsinger was unauthorized, and that the utmost claim the bank has upon the fund which accrued from the policy, is to be subrogated to Kretsinger’s position, holding the policy as security for the payment of the §600 note and interest.

The case came into the Superior Court on a bill of inter-pleader filed by the insurance company, to which the parties to this appeal were defendants.

The money due on the policy was paid into court and the decree gives to the appellants the amount of the $600 note' and interest, with their costs, and the residue to the appellee. There is no error in the decree and it is affirmed.

Decree affirmed.

Jndge'GABNBTT, having tried this case in the Superior Court, takes no part in the decision.