author: Mr. Justice Matchett

text:
    South Suburban Motor Coach Company, Appellant, v. Edward J. Levin, Trading as Douglas Motor Car Company, Not Inc., Appellee.
    Gen. No. 36,189.

      Opinion filed February 6, 1933.
    Wetten, Pegler & Dale, for appellant.
    John Gr. Drennan and M. J. Sullivan, for appellee.
   Mr. Justice Matchett

delivered the opinion of the court.

On August 14, 1931, complainant filed its bill which averred that it was a public utility operating under a certificate of convenience and necessity issued by the Illinois commerce commission granting to complainant the right to operate busses in the transportation of persons between Chicago and Harvey and other towns in and outside of Cook county, Illinois; and that defendant without such certificate was operating a number of busses and competing with the business of complainant to its financial injury. The bill prayed that defendant might be enjoined, and upon the filing of the bill, which was duly verified, a preliminary injunction issued restraining defendant as prayed.

Defendant answered the bill denying its busses were operated in competition with those of complainant and denying that defendant conducted a public utility business subject to the jurisdiction of the Illinois commerce commission.

The cause was put at issue and referred to a master, who took the evidence and reported that the issues might be narrowed down to two propositions: (1) whether defendant was a common carrier and therefore amenable to the public utilities law of Illinois, and (2) whether defendant was in competition with complainant in such way that complainant would under the public utilities law have a right to an injunction restraining defendant from the operation of its busses. The master held that the busses of defendant were not operated in competition with those of complainant, and that it' was therefore unnecessary to decide the first question. The master reported that the equities were with defendant and that the preliminary injunction should be dissolved. Objections of complainant were overruled by the master, and by order of the chancellor these stood as exceptions. The cause was heard by the chancellor upon these exceptions. The exceptions were overruled, the injunction dissolved, and the bill dismissed for want of equity. By this appeal of complainant we are called upon to review the record.

The evidence is not, in our opinion, conflicting as to material facts. Complainant is a corporation which owns and under a certificate of convenience and necessity operates about 30 busses in its own right and as successor to a number of other companies. Complainant was organized August 17, 1925, for the purpose of maintaining and operating motor vehicles for the transportation of passengers and baggage for hire and for the purpose of buying, owning, selling and leasing motor coaches and all parts necessary to the maintenance and operation of motor vehicles. Complainant’s predecessors obtained certificates of convenience and necessity, one of them as early as 1924. The several certificates in evidence authorized complainant to operate through a number of towns and villages between Kankakee and Chicago. Only a portion of the route, however, is in question in this suit. These cer-, tificates authorized complainant to operate its busses from Chicago Heights northerly on Halsted street past the Illinois Kennel Club race track and through the City of Harvey, to 63rd street in Chicago, thence east on 63rd street to South Park avenue, north on South Park avenue to 33rd street, west on 33rd street to Michigan avenue, north on Michigan avenue to 11th street, west on 11th .street to Wabash avenue, north on Wabash avenue to 8th street, east on 8th street to Michigan avenue, south on Michigan avenue to 12th street, west on 12th street one-half block to a terminal located near the intersection of 12th street and Michigan avenue. By one of these certificates complainant was also granted the privilege of operating its busses to No. 307 Plymouth court in Chicago, which is approximately on the corner of Jackson boulevard and Plymouth court.

The race track of the Illinois Kennel Club is located about four miles south of the City of Harvey. The grounds of the club abut on Halsted street. The main entrance to the grounds is directly on Halsted street, and complainant operates its busses on Halsted street by virtue of these certificates of convenience and necessity. The track on which the dog races are run is located approximately 700 feet east of the main entrance to the grounds. From the main entrance to the race track there is a private roadway controlled by the club. Over the entrance on Halsted street is an illuminated sign which reads, “Illinois Kennel Club.” Along the private roadway are the kennels in which the dogs are kept. Complainant obtained from the club the right to run its busses into the club grounds on this private roadway and to discharge its passengers who wished to attend the races at a point on the grounds convenient to the entrance of the race track.

In November, 1929, complainant Began to operate its busses to the Sherman hotel on the corner of Clark and Randolph streets in Chicago. The Sherman hotel is five blocks north of 307 Plymouth court, — the most northern terminal named in the certificate issued to complainant. The operation of these busses north of Plymouth court to the Sherman hotel was called' by complainant its “pick-up service.” Such service had been furnished for about two years prior to the filing of this suit.

After the inauguration of this service complainant filed with the Illinois commerce commission schedules and tariffs from time to time showing such service. The commission received and filed these schedules and tariffs without protest.

Complainant seems to be a responsible concern employing from 50 to 60 persons. In connection with its transportation business it owns and operates repair shops at Harvey, Illinois. Its 30 busses cost $6,000 net apiece, and there is evidence tending to show that some of these were purchased for the purpose of providing service for persons desiring to attend the dog races.

Defendant Levin is the owner of four busses which he operates under the name of “Douglas Motor Car Co., Not Inc.” He has received no certificate of convenience and necessity; in fact, he claims that he is not operating as a public utility.

At the beginning of the dog race season in August, 1931, he begun the operation of his busses every evening from the Sherman hotel to the Illinois Kennel Club race track. These busses would be driven up to the curb in front of the hotel. Defendant would stand on the sidewalk and sell tickets to anyone who might desire to become a passenger. He charged a fare of $1 for the round trip, which included admission to the dog races, and this was the same charge made by complainant. Each of the busses held from 20 to 25 passengers. Occasionally defendant would pick- up passengers en route to the race track. When he was otherwise engaged his wife would sometimes sell tickets on the sidewalk to prospective passengers, and he also had tickets on sale in the ticket agency in the lobby of the Sherman hotel.

The evidence shows thát the route traversed by defendant’s busses in going to the Illinois Kennel Club race track was substantially the same followed by complainant’s busses. - Defendant’s busses started west on Randolph street to LaSalle street, thence south on LaSalle street to Jackson boulevard, east on Jackson boulevard to Michigan avenue, south on Michigan avenue to 63rd street, 63rd street to State street, south on State street to Vincennes avenue, southwest on Vincennes avenue to Halsted street, and south on Halsted street to the race track.

After the passengers alighted from the busses defendant’s busses remained until the races were over and then returned to the Sherman hotel by the same route. The evidence shows that a considerable number of. defendant’s passengers left the busses before they got to the Sherman hotel, and they were allowed to get off at any point convenient to them, depending on the portion of the city in which they lived.

The testimony of defendant is to the effect that when the passengers presented themselves for transportation he would look them, over, and if they were presentable he would sell them tickets. If they looked quiet and respectable he accepted them as passengers.

Defendant’s tickets were issued in the name of the “Douglas Motor Car Co., Not Inc.”; and were perforated in the center forming two sections, one good for admission to the dog races and the other for the return trip. Defendant had a sign on his busses announcing that they were to make the journey to the race track, and he was accustomed to call publicly to passersby that his bus was waiting to go back to the track. He also had a boy in the Sherman hotel who announced the waiting bus.

Upon the hearing evidence was introduced to the effect that the Illinois Central Railroad Company operated special trains from its Randolph street and Van Burén street stations, as well as other stations, to Harvey for the accommodation of patrons of the dog races; that at Harvey these trains were met by motor busses of complainant in which passengers were transported from Harvey to the race track. On the return trip the motor busses of complainant carried the passengers of the railroad company back to Harvey where they boarded trains for Chicago. This evidence was introduced for the purpose of showing that the transportation service in connection with the races furnished by the railroad and complainant was amply sufficient.

The Public Utilities Act of Illinois, Cahill’s St. ch. Illa, has adopted the principle of regulated monopoly rather than unrestrained competition. The cases are all to the effect that a complainant operator of a public utility is entitled to an injunction against private corporations or individuals who without authority of law operate a similar utility which competes with and injures his business. Springfield Gas & Electric Co. v. Springfield, 292 Ill. 236; Wilcox Transportation Co. v. Commerce Commission, 328 Ill. 455, 459, and Danville, U. & C. Ry. Co. v. T. L. Clark Truck Co., 231 Ill. App. 339.

The master concluded that defendant did not compete with complainant, and that for that reason it was unnecessary to consider the further question of whether defendant was operating a public utility. The conclusion of the master was apparently based upon a finding that the certificate of convenience and necessity did not specifically grant authority to complainant to operate in the loop district north of 307 Plymouth court or to operate east of Halsted street at Harvey and within the property of the Kennel Club there. The master seems to have been of the opinion that in thus operating, complainant deviated from the schedule and the route authorized by the commission, since the points of arrival and departure were not within the route described in the certificate of convenience and necessity. He concluded that there could be no competition within the meaning of the Public Utilities Law under these circumstances.

This interpretation of the law does not seem to us at all reasonable, and, we think, does not conform to the intention of the legislature. That there is competition in fact here is established by the evidence. .There can be no doubt that defendant transports passengers who otherwise would avail themselves of the service provided by complainant. The inevitable effect of the operation of defendant’s busses in the manner described is that complainant sustains a substantial financial loss.

We think it was not the intention of the legislature to restrict complainant’s field or territory to the precise and specific streets and highways named in the certificates. On the contrary, it would seem that necessarily such field or territory must extend to a reasonable distance on each side of its route and beyond its terminal points. The rule has received recognition in the federal courts as to carriers subject to the jurisdiction of the Interstate commerce commission. New York Dock Ry. v. Pennsylvania R. Co., 1 Fed. Supp. 20. Complainant contends that even if its busses did not operate north of Jackson boulevard and Plymouth court, defendant nevertheless might be restrained from operating busses from a point five blocks north of its terminus at Plymouth court, and says that if defendant’s contention is correct then defendant, or any number of other concerns of like character, can operate busses from any point within the radius of a few blocks from complainant’s designated route, run into it at any convenient point and follow it to any destination they may choose, as long as they drive off the route onto private property to discharge their passengers. Complainant says, and rightly, we think, that such operation would entirely nullify the very purpose of the Public Utilities Act, Cahill’s St. ch 111a.

While the commerce commission did not in any certificate specifically grant to complainant the right to operate busses from the Sherman hotel, the schedules filed with it show the intention of complainant to so operate its busses, and as a matter of fact for two years prior to the filing of the suit, it had used its busses for the purpose of picking up passengers at this and other points within a reasonable distance of its terminus at Plymouth court.

We recognize the difficulty of determining by exact definition the meaning of the word “field” or “territory” as applied to operators of public utilities, but defendant does not claim to be a utility at all, and if he did so claim complainant as the first in the field should be given an opportunity to supply any needed service before any other is given the privilege of competing with it. Egyptian Transportation System v. Louisville & N. R. Co., 321 Ill. 580. Any other rule would make it possible to destroy the established utility which it is the very purpose of the act, as we understand it, to protect from destructive competition. Chicago Rys. Co. v. Commerce Commission, 336 Ill. 51.

There is no doubt that defendant is giving the same kind of service in exactly the same territory as that which is now being given by complainant. As was said in Choate v. Commerce Commission, 309 Ill. 248:

“If shoestring transportation companies, with no money invested in right of way and no reserve capital to provide adequate service or to protect the public from damage, are permitted to drop in here and there and take the cream of the transportation business from the permanent transportation systems, disastrous results are inevitable.”

We hold that defendant in the business which he transacts is a competitor of complainant; that he competes within the same field or territory in which complainant operates, and that upon that phase of the case complainant is entitled to relief.

Defendant, however, further contends that he is not operating as a public utility. This question the master did not deem necessary to consider because of the conclusion at which he arrived that there was no competition within the meaning of the law. Section 10 of the Public Utilities Act, Cahill’s St. ch. 111a, ¶ 25 (Smith-Hurd’s Ill. Rev. Stats. 1931, chap. 111 2/3, sec. 10, p. 2251) defines the public utility subject to that act, as follows:

“The term ‘public utility,’ when used in this Act, means and includes every corporation, company, association, joint stock company or association, firm, partnership or individual, their lessees, trustees, or receivers appointed by any court whatsoever ■ . , . that now or hereafter:

“ (a) May own, control, operate, or manage, within the State, directly or indirectly, for public use, any plant, equipment or property used or to be used for or in connection with the transportation of persons or property or the transmission of telegraph or telephone messages between points within this State; or for the production, storage, transmission, sale, delivery or furnishing of heat, cold, light, power, electricity or water; or for the conveyance of oil or gas by pipe line; or for the storage or warehousing of grain; or for the conduct of the business of a wharfinger. . . . ”

The business of defendant as conducted by him is, we hold, within this definition.

We are not unaware that in order that the property owned by a person should be affected by a public use all persons must have an equal right to the service (State Public Utilities Commission v. Noble, 275 Ill. 121) and that it is the right of public use rather than the extent to which an instrumentality is in effective use that determines whether or not it is a public utility. However, the uncontradicted evidence shows that the public without any particular discrimination was invited to avail itself of the service provided by defendant and that the contracts for carrying these persons were not in any sense private contracts. We hold that defendant in operating his business acted as a public carrier and is therefore subject to the laws and rules regulating and governing such instrumentalities. The case of Austin Bros. Transfer Co. v. Bloom, 316 Ill. 435, would seem to be conclusive on this point, and decisions in other States where similar questions have arisen are to the same effect. Motor Freight, Inc. v. Public Utilities Commission, 125 Ohio St. 349, 181 N. E. 479; Stoner v. Underseth, 85 Mont. 11, 277 Pac. 437.

We think the court erred in overruling the exceptions to the report of the master; that complainant on the uncontradicted evidence was entitled to the relief prayed; and for the reasons indicated the decree of the trial court is reversed and the cause remanded with directions to enter a permanent injunction as prayed.

Reversed mid remanded with directions.

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


source: Caselaw Access Project

license: Public Domain

text:
    Walter O. Salmon and Gertrude Salmon, Appellees, v. Henry Hornblower et al., Defendants. Paul B. Skinner, Appellant.
    Gen. No. 36,269.
    Opinion filed February 6, 1933.
    Rehearing denied February 21, 1933.
    Wilson & McIlvaine, for appellant.
    Pines, Morse & Stein, for appellees; Alvin E. Stein, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

Plaintiffs, Walter O. and Gertrude Salmon, husband and wife, sued in assumpsit. They filed a special count which alleged that defendants were stockbrokers ; that plaintiffs delivered to them stock to be sold at the price of $26 a share or more, which defendants failed to do, to the damage of plaintiffs. Later the common counts were added. Defendants pleaded the general issue. By stipulation a jury was waived. There was a trial by the court with a finding for plaintiffs in the sum of $1,248, upon which the court entered judgment.

At the beginning of the trial plaintiffs stated their theory to be that defendants were guilty of conversion of the stock; that plaintiffs waived the tort and were suing in assumpsit for the value of the stock. Propositions of fact and of law were submitted by defendants, all of which were refused.

There is little controversy as to the actual facts. The evidence for plaintiffs tended to show that on April 8, 1930, they were the owners of 48 shares of the common stock of a corporation known as H. O. Stone & Co.; that this stock stood in the name of plaintiffs as joint tenants with right of survivorship, and not as tenants in common.

On April '8, 1930, Mr. Salmon* took the certificate of stock for the 48 shares to the office of defendants, who were partners in the brokerage firm of Hornblower & Weeks. He had been recommended to them by his friend, former Judge Asa Gr. Adams. Mr. Salmon had no account with defendants. During a conversation with one of the defendants’ employees it developed that Mr. Salmon was an employee of H. O. Stone & Co. He was informed that the rules of Hornblower & Weeks forbade him to sell this stock in his name for that reason. Defendants’ employee, however, suggested that the transaction might be carried out under the name of Judge Adams and after communicating by ’phone with Judge Adams, he giving his consent, it was agreed that the transaction should be carried through in his name.

Thereupon, by use of the ’phone, defendants verified the signature of Mrs. Salmon and defendants’ cashier received the certificate for these shares of stock, giving to Mr. Salmon a receipt therefor as follows:

“Hornblower & Weeks

39 South LaSalle Street,

Chicago, Apr 8, 1930

“Received of Asa Gf. Adams Forty-eight (48) shs. H. O. Stone & Co. Common Stk.

Hornblower & Weeks

C. J. Dupre

Cashier.

“On all securities deposited with us as margin or collateral on account we reserve the right to transfer them to our possession qn the transfer books of the Company. ’ ’

While there is conflict in the evidence, defendants seem to concede for the purpose of this appeal that Mr. Salmon at that time directed the sale of the stock at 26 or better. An indorsement dated. April 8, 1930, was placed on the back of the stock and over the signature of plaintiffs transferring the stock to Hornblower & Weeks and appointing A. Margolis, attorney, to transfer the stock on the books of the company with full power of substitution in the premises. There was also stamped on the certificate the following indorsement:

“We hereby certify that we have no ownership in ...... shares of the stock above transferred, the transfer to us by the owner being merely for the purpose of sale.

Hornblower & Weeks

39 So. LaSalle St.

Chicago. ’ ’

It is uncontradicted that on the following day, April 9, the certificate for the stock was sent by defendants to the First Union Trust & Savings Bank for transfer out of joint tenancy to the name of Hornblower & Weeks. On April 10, a new certificate was issued by the company in the name of Hornblower & Weeks, and on April 11, Mr. Salmon went to the office of Adams hoping to receive a check for the proceeds. The check had not arrived, and Adams telephoned the office of defendants. Defendants offered evidence tending to show that Judge Adams at that time ordered a sale of the stock at 26 or better. Adams denied that he gave such an order on April 11. However, apparently upon the theory that evidence had not been produced tending to show that Adams had authority to act for plaintiffs, the trial court struck out this evidence as well as further evidence offered by defendants tending to show that the order to sell was canceled by an order from Adams on April 16.

There is uncontradicted evidence in the record tending to show that when stock standing in the joint names of the owners with right of survivorship, etc., is taken for sale, it is necessary according to the custom of the stock exchange to have the same transferred out of the joint names in order to make a good delivery.

It was stipulated that the price of the stock per share was 26 or higher on April 8, 9, and 10; that on April 11, the high price was 24%; and further, that after April 11, 1930, the stock never reached the price of 26. This suit was filed by plaintiffs May 7, 1931.

Defendants requested the court to hold as facts that on April 11, 1930, the shares of stock were in the account of Asa G. Adams with defendants, and that Adams on that day gave an order to sell the stock at $26 per share or better which defendants accepted; that on the same day they sent a confirmation to Adams of the order; that on April 15,1930, they again sent a confirmation to Asa G. Adams of the order of April 11 to sell at $26 per share or better; that on April 16, 1930, Adams ordered defendants to cancel the order to sell, and that they canceled it on that date; that from April 11, 1930, when Adams ordered the stock sold, to April 16, when he canceled the order, the market price of the stock never reached the price of $26 a share. The court refused to hold any of these propositions and could not consistently so hold for the reason that the evidence admitted tending to show such facts had been stricken out.

Defendants also asked the court to hold as propositions of law that defendants did not on April 8, 1930, or at any other time, accept any order by plaintiffs to sell this stock; that the relationship of broker and client never existed between plaintiffs and defendants with reference to the sale of the same; that defendants did not at any time convert plaintiffs’ stock to their own use; that plaintiffs accepted the receipt of defendants for said stock in favor of Adams and placed the stock in the account of Adams with defendants by and with the consent and approval of Adams; that Adams gave an order to defendants on April, 11 to sell said stock at $26 a share or better, which order defendants accepted; that plaintiffs were bound as upon an account stated by the confirmation of the order of April 11, and were bound by the order of April 16, 1930, canceling the prior order of April 11; that defendants refused to act and did not act as the brokers of plaintiffs for the sale of the stock; that defendants acted as the agents and the brokers for Adams, and not plaintiffs. All these propositions of law were refused by- the court. No evidence was introduced upon the trial tending to show that defendants were negligent in any respect or that they failed to exercise diligence, and it is not contended here that they are liable upon that ground.

Plaintiffs, however, contend earnestly that defendants by the transfer of this certificate of stock into their own names were guilty of conversion, and they further contend, citing authorities, that they had the right to waive the tort and sue in assumpsit for the then value of their stock which the record indicates is now worthless.

Defendants, on the other hand, contend that the facts are not sufficient to show conversion. They say, citing Meyer on ‘ The Law of Stock Brokers and Stock Exchanges” (1931), pp. 275, 317, that it is customary for brokers in their dealings with other brokers not to divulge the names of their principals but to make all purchases and sales in their own names; that this is the only method of trading ordinarily permitted on stock exchanges under exchange rules and is sanctioned by the law; that the broker may, if he wishes, carry his customer’s securities in his own name, or in the name of his clerks. They cite as sustaining this view a number of cases, such as Bailey v. Bensley, 87 Ill. 556; Banta v. City of Chicago, 172 Ill. 204; Leming v. Herring, 162 Ark. 28, 257 S. W. 367; Horton v. Morgan, 19 N. Y. 170; Cleminshaw v. Meehan, 258 N. Y. S. 225; McBride v. Chisholm, 258 N. Y. S. 821; all of which state the general rule that a broker is not obligated to hold for or return to his client the precise certificate for shares of stock which was delivered to him, but that the return of a similar certificate for the same amount of shares is sufficient.

Plaintiffs, however, citing Meyer on “The Law of Stock Brokers and Stock Exchanges,” p. 317, argue that this general rule is applicable only to cases where the stockbroker is carrying the securities of his client on margin. They admit that in such cases the stockbroker is not required to retain the identical certificates, which he has received from or for his customer, but say that in other cases the identical certificates must be retained and returned on demand. They rely with other authorities on Parsons v. Martin, 77 Mass. (11 G-ray) Ill; Rimery v. Brooks, 199 N. Y. S. 517. There is language in the opinions in these cases which would seem to sustain the contention of plaintiffs, but an examination of the facts, as the same appear in those cases, shows that they are inapplicable to this record.

In Parsons v. Martin, supra, it appeared that the stockbroker had not only placed the certificates in his own name, but had actually sold and transferred the stock to third persons and failed to pay over the proceeds to the plaintiff.

In Rumery v. Brooks, supra, it appeared that the plaintiff and the defendant were both customers of the same brokerage house which failed. Two years prior to its failure the defendant purchased from this house five United Kingdom of Creat Britain and Ireland 5% per cent notes of the par value of $1,000 each, and left these notes in the possession of the brokerage house. He was at the time carrying a stock account with these brokers conducted on marginal operations. From the time of the purchase of the notes until their ultimate delivery he was occasionally indebted to the brokers by reason of advances made for his account, but for some time prior to the failure of the house he was not indebted to it. Fourteen days before the failure the plaintiff opened a margin account and deposited with the brokers three United Kingdom notes. He apparently intended to do a marginal business with the brokers and deposited the notes anticipating that they would be used to protect the proposed account which he intended to open. He gave the brokers the usual authority to pledge in case he became indebted to them, but he never in fact traded with them and never became indebted to them from the time these three notes were deposited until the brokerage house failed. Up to that time the brokers retained in their possession the identical notes which the plaintiff had delivered to them. Four days before the brokers failed defendant requested the delivery of the five notes he had purchased. The brokers delivered five of' these notes to the defendant, and of these five notes two were the identical notes the plaintiff had deposited with the brokers 10 days before. The court held that the title to the two notes had always been in the plaintiff ; that his agreement with the broker to allow a re-pledge or sale or substitution was conditional on his trading and owing money, but that since he never owed or traded, the brokers were never authorized to sell or hypothecate; that if the notes had become part of collateral for marginal transactions, they would have become fungibles, whose identity was lost, but that as they had not become such, the plaintiff could recover.

The facts here are wholly different. In this case the certificate was delivered to defendant for the purpose of selling it for not less than a given price. The uncontradicted testimony shows that by the custom of the stock exchange it was necessary that the certificate should be transferred from joint tenancy in order that upon sale a good delivery might be made. We have no doubt that a broker, to whom a customer delivers a certificate showing his ownership of stock, with directions to keep the same safely in custody, and who accepts the custody upon those terms, would be required to keep and to deliver the identical certificates. The first duty of such broker is to comply strictly with the orders of his client, and the client has a right to give such directions as he may see fit. A different situation arises, however, where the owner and client after indorsement delivers the certificate to the broker with directions to sell. By such direction the customer would seem to authorize the doing of all things appropriate to the execution of the purpose for which the certificate was delivered. The stamp upon the certificate shows that the brokers by it witnessed to every person by whom the certificate might be taken that they did not claim it as their own or appropriate it to their own use. There is not a scintilla of evidence in this record tending to show that these defendants attempted to use this certificate for their own benefit in any way or that it was put to any use which might be considered as unauthorized.

In Cleminshaw v. Meehan, 258 N. Y. S. 225, it appeared that the plaintiff left a certificate for 70 shares of Western Union Telegraph Co. stock with the defendants who were brokers. She indorsed the certificates in blank for the purpose of a sale at some future time when directed by her. She stated that she desired to place the stock near the market where quick delivery of same could be made, and the defendants (as they asserted) to insure immediate delivery in case of an order to sell, placed the certificate in street names shortly after they received it. The plaintiff gave no order to sell and afterward asked for the return of her certificate. The certificate was returned but not the same certificate which she delivered. The defendants had paid to the plaintiff the dividends declared on the stock while it was in their hands. She®made complaint that the same certificate had not been redelivered and sued, demanding the difference between the value of the stock as quoted when the 70 shares were transferred to other names and its value when the 70-share certificate for the same stock was delivered to her. The New York court said that if the defendants had always kept in their possession or control the certificates received in exchange for the 70-share certificate delivered to them, there was no conversion, and that if the defendants pledged' or disposed of the transferred certificates they would under the penal law of New York have been guilty of felony. The court said, however, that the parties evidently had in mind the holding that a stock certificate was not property; that “a certificate of shares in a corporation represents precisely the same kind and value of property as another certificate for a like number of shares in that corporation”; and cited Caswell v. Putnam, 120 N. Y. 153, 24 N. E. 287; Richardson v. Shaw 209 U. S. 365, 14 Ann. Cas. 981. The court further said that under the authorities in order to constitute a conversion of the certificate of stock, two things were necessary: (1) property in the plaintiff with a right of possession, and (2) a conversion by the defendant of the thing to his own use. Judgment was rendered for the defendants.

It is not necessary to go so far in this case. It might well be questioned whether plaintiffs are entitled to these shares of stock since the receipt by agreement of the parties ran in the name of Adams; but however this may be, there is not a scintilla of evidence in this record tending to show that the property represented by this stock certificate was in any way appropriated to the use of these defendants. We hold that the facts do not constitute a conversion, and that defendants therefore as a matter of law are not liable. The judgment is therefore reversed.

Reversed.

McSitrely, P. J., and 0’Connor, J., concur.


author: Mr. Justice O’Connor

text:
    Helge Erickson, Appellee, v. Delbert D. Ehresman et al., Defendants. Russell Firebaugh, Appellant, v. Delbert D. Ehresman et al., Appellees.
    Gen. No. 35,990.

      Opinion filed February 6, 1933.
    William Sherman Stahl, for appellant.
    No appearance for appellees.
   Mr. Justice O’Connor

delivered the opinion of the court.

By this appeal Bussell Firebaugh, as trustee, seeks to reverse an order entered by the superior court of Cook county sustaining a demurrer to his petition praying for the discharge of the receiver appointed by the court, and that the property be turned over to him.

The record discloses that Helge Erickson filed a creditor’s bill and had a receiver appointed for certain real estate in Chicago. The receiver entered upon the discharge of his duties and afterward Bussell Firebaugh, as trustee, filed his bill to foreclose a mortgage which was a first lien on the property. Afterward Firebaugh filed a petition in the Erickson suit and a rule was entered on the receiver to turn over the rents collected by him to Firebaugh, as trustee, to apply on the mortgage indebtedness. The receiver made certain payments in accordance with that order. Afterward Firebaugh filed another petition in the Erickson case and moved that the receivership be extended so that he would receive the benefit of it, and an order was accordingly entered. The receiver continued in the performance of his duties.

In the foreclosure suit a decree was entered and the property was sold; there was a deficiency and it was decreed that the receiver in the creditor’s bill suit turn over all rents collected by him toward the satisfaction of the deficiency decree. A decree was afterward entered in the creditor’s bill case providing that all moneys collected by the receiver after his receivership was extended should be applied to the deficiency decree, pursuant to Firebaugh’s motion, as above stated. An appeal was taken from that order and decree, to this court, and they were reversed and the cause remanded with directions to the receiver to turn over all moneys to Firebaugh as trustee. Erickson v. Ehresman, 265 Ill. App. 602 (Abst.).

The propérty was sold under foreclosure and the certificate of the master issued to Firebaugh, as trustee. Some time afterward he filed his petition, which is now before us, seeking to have the receiver discharged so that he could take possession of the property, on the claimed ground that he could handle it at 'less cost than the receivership, and that there would not be enough derived from the sale of the property to pay the deficiency decree. As stated, a demurrer was sustained to this petition; it was dismissed and Firebaugh appeals.

Whether Firebaugh, as trustee, would have the right to take possession of the premises as against the receiver is the question for decision.- In support of his contention the cases of Altschuler v. Sandelman, 264 Ill. App. 106; Consumers Bond & Mortgage Co. v. Sadin, 266 Ill. App. 141, and other cases are cited.

In the Altschuler case it was held that the right of the first mortgagee (the trustee) to, take possession of the premises covered by the mortgage was not destroyed by the appointment of a receiver under the junior mortgage, provided the first mortgagee acts within a reasonable time to assert his right. To the same effect is the holding in the Sadin case.

In the instant case we think Firebaugh is not in a position to have the receiver discharged and the property turned over to him for the reason that on his own petition and motion the receivership was extended to protect his interest. Having taken that position, we think he ought not now be permitted to have the receiver removed or discharged where no charge of wrongdoing is made against the receiver.

The order of the superior court of Cook county is affirmed.

Order affirmed.

McSurely, P. J., and Hatchett, J., concur.


text:
    The People of the State of Illinois, Appellee, v. Lionel A. Sherwin, Appellant.
    Gen. No. 36,185.

      Opinion filed February 6, 1933.
    Lionel A. Sherwin-, pro se.

    John A. Swanson, State’s Attorney, and John E. Pedderson, Assistant State’s Attorney, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

By this appeal the defendant, Sherwin, seeks to reverse an order of the circuit court of Cook county denying his motion to quash an execution, issued in a contempt proceeding, whereby the defendant was found guilty of a direct contempt of court and a fine of $300 was imposed. The judgment order provided that in case the defendant did not pay the $300 he should be committed to the common jail of Cook county for a period not exceeding 30 days or until he might be otherwise discharged according to law.

The defendant contends that since the order adjudging him to be in contempt of court and imposing the fine of $300 was entered December 11, 1925, and since nothing was done to enforce the judgment until March 26, 1926, when application was made to the court for the order authorizing an issuance of capias, and since the capias was never issued and nothing done thereafter until July 18, 1930, when an execution was issued but not placed in the hands of the sheriff, and nothing having been done thereafter until June 5, 1931, when an alias execution was issued and defendant served, he was entitled to be discharged. In support of this contention defendant cites sec. 15, ch. 38, Cahill’s 1931 Statutes, ¶ 788, and People v. Shattuck, 274 Ill. 491.

Sec. 15, ch. 38, p. 1093, Cahill’s 1931 Statutes, If 788, provides that where a court imposes a fine, an execution to enforce payment of it must be issued at the same term the sentence is imposed; that “the clerk of the court in which the conviction is had shall, at the end of the term, issue an execution for every fine that shall have been imposed during the term, and remains unpaid.”. Obviously, this section does not apply because in the instant case the defendant was not convicted of a crime but of a direct contempt of court.

In the Shattuck case it appeared that in November, 1909, the defendant pleaded guilty to an information charging him with a violation of the Prohibition Law of this State, and a sentence was imposed condemning him to pay $620 and that he be confined in the county jail until the fine was paid. Upon the judgment being entered, the defendant paid $100 on account of the fine and moved the court to vacate and set aside the jail sentence. Nothing was done with this motion until December 20, 1915; on that date the defendant moved the court to discharge him from the judgment entered November, 1909. The motion was overruled and afterward the defendant filed an original petition for writ of habeas corpus in the Supreme Court, which was awarded and he was discharged. The court discusses a number of authorities where persons were found guilty and the sentence suspended indefinitely, and said (p. 494): “In the case at bar the facts are different, as there was a judgment of conviction duly entered, but it is very apparent that the execution of such judgment was suspended by the court pending his decision on the motion by the relator that the part of the judgment imposing imprisonment for 60 days be vacated. The result is the same whether the court, upon conviction or plea of guilty, delays entering judgment and pronouncing sentence or enters judgment and then indefinitely delays the carrying out of such judgment by delaying decision of a motion to vacate the judgment.” The court then discusses section 15 of division 14 of the Criminal Code, which provides that when a fine is inflicted the court may order as a part of the judgment that the offender he committed to jail until the fine is paid. We think this case is not in point.

In the instant case the judgment finding the defendant guilty of contempt of court was entered December 11, 1925. There was no suspension of this judgment at any time. But in any view of the case there is no merit in this appeal because the delay in enforcing the judgment was brought about to a great extent by the defendant himself.

In his brief defendant says, “There was no supersedeas issued to stay the order.” And further: “It is, of course, true that had a supersedeas issued staying proceedings in the court below that appellant could not have invoked the foregoing provision in the statute. But there was no supersedeas issued and there was no order from this court staying the clerk of the court, or the State’s Attorney from enforcing the collection of the fine, and, as the record shows, from the date of the entry of the order, December 11, 1925, to June 5, 1931, nothing had been done by the clerk nor by the State’s Attorney of Cook county in the matter, and more than the term having gone by, the collection or enforcement of the fine was barred, as the provision in said Sec. 15, Div. 14, is mandatory.” The statement just quoted is wholly unwarranted. After the defendant was found guilty of direct contempt of court December 11, 1925, on defendant’s motion the mittimus was stayed for 30 days upon his giving bail in the sum of $600 pending his application in this court for a supersedeas. He sued out a writ of error from this court and made a motion that the writ of error be made a supersedeas, which was denied. Afterward, November 17, 1926, an opinion was handed down by this court, whereby the judgment of the circuit court imposing the penalty was affirmed. A few ‘days thereafter the motion of the defendant to stay the mandate of this court pending a review by the Supreme Court was allowed. November 29,1926, after the case was pending’ in the Supreme Court, defendant’s motion that a writ of error issue from that court to review the judgment of this court was made a supersedeas upon the defendant entering into a recognizance before the sheriff of Cook county in the penal sum of $1,000. Thereafter the judgment of this court was affirmed by the Supreme Court. People v. Sherwin, 334 Ill. 609. The rehearing in that case was denied June 5, 1929.

From what we have said it is obvious that the defendant is but trifling with the court. Although the judgment was rendered against him in December, 1925, he has succeeded in preventing the carrying out of the judgment, for a number of years — until the decision was rendered by the Supreme Court in 1929— and he now seeks to take advantage of the delay brought about by himself, which obviously he cannot do.

Counsel for the People in their briefs say that they were not required to have an execution issue and a demand made upon the defendant, but did this only out of consideration for the defendant; that an execution is unnecessary because a mittimus can be obtained at any time. We think this argument is sound. There is no merit in this appeal, and the order and judgment of the circuit court of Cook county are affirmed.

Affirmed.

McSurely, P. J., and Hatchett, J., concur.


text:
    Nicholas Brdar, Appellee, v. Anthony Kamenjarin et al., Appellants.
    Gen. No. 36,367.
    Opinion filed February 6, 1933.
    Rehearing denied February 20, 1933.
    Leekow & Leekow, for appellants.

      Harold J. Finder, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Nicholas Brdar filed his bill against the defendants for the cancellation of what he claims was an alleged contract for the exchange of real estate entered into between him and John Lucich and Lucy Lucich and to enjoin the enforcement of a judgment entered against him in the municipal court of Chicago. After issue was joined the cause was referred to a master in chancery who made up his report recommending a decree in accordance with the prayer of the bill. On the coming in of the master’s report a decree was entered in accordance with the recommendations of the master, and the defendants appeal.

The record discloses that complainant was a laborer and unable to read or write the English language except that he could sign his name. He owned a half interest in certain real estate in Chicago on Lake Park avenue. Anthony Kamenjarin, who will hereinafter be called defendant, was in the real estate business. Complainant had known him for some time and went to defendant’s real estate office to transact some business and while there defendant suggested the exchange by complainant of his interest in the real estate for other property, and at defendant’s suggestion they both went to see the property which it was proposed to exchange for complainant’s. This property was on Princeton avenue, Chicago. They spent a few minutes looking at the property, returned to the real estate office and defendant drew up the contract whereby complainant was to exchange his property for property of defendant, John Lucich. Complainant signed the agreement and at the same time executed his note for $1,500 payable to Lucich and left both of them with the defendant. Afterward, on the same day, Lucich and his wife called at the real estate office and signed the contract. Some considerable time thereafter complainant refused to go through with the transaction and defendant caused judgment to be entered by confession in the municipal court on the $1,500 note. It is the enforcement of this judgment that complainant seeks to have enjoined. It further appears that some time after complainant refused to carry out the exchange of the properties, defendant caused a bill to be filed by Lucich to enforce the specific performance of the contract.

The evidence shows that the property mentioned in the contract, which was • to be exchanged for complainant’s, did not belong to Lucich as the contract stated, but was owned by Kamenjarin; that Lucich was a mere dummy and held the title for Kamenjarin. This is admitted by counsel for defendant in his brief. Counsel further says that before the contract was signed Kamenjarin told complainant that he, Kamenjarin, owned the property.

We have carefully considered the evidence on this question and think it not at all clear on this point. The evidence shows that Kamenjarin spoke about “his” property, but that may have been said in the sense that he was merely the real estate agent. In complainant’s bill he charged that Lucich, in holding the title to the property, was a mere dummy for Kamenjarin, and that they entered into a conspiracy to cheat and defraud complainant out of the property; that the property owned by defendant was not worth as much as defendant represented it to be. The bill further alleged that on April 18, 1930, a bill was filed by Lucich to enforce specific performance of the contract and that on the hearing of that case it was admitted that Kamenjarin was the actual owner of the property. In the instant case Kamenjarin filed his answer and denied that Lucich was a dummy for him, and denied that on the hearing of the specific performance case he admitted that he was the real owner of the property. The defendant having denied in his answer that Lncich was holding title as a dummy for him and further having denied that any such admission was made on the hearing of the specific performance case, much credence cannot be placed upon his testimony to the effect that prior to the signing of the contract involved here he told complainant that he was the owner of the property.

The master found that complainant was unable to read or write the English language except to sign his name; that the contract and note were left with the defendant as broker, and that the contract contained a clause that brokerage fees should be paid; that the property which was to be conveyed to complainant was not worth as much as the. defendant stated prior to and at the time the contract was signed; that the defendant took unfair advantage of the complainant’s inexperience and his, inability to read or write the English language.

Defendant argues a number of propositions to the effect that a broker is not precluded from offering his own property for sale where all the facts are disclosed, and that fraud must be proven by clear and convincing evidence and will never be presumed. These contentions may be admitted but are not controlling when applied to the facts here. Just why the defendant should require complainant to execute his note for $1,500 does not appear, unless it was to defraud complainant. The evidence also tends to show that defendant Lucich also gave his note for a similar amount to defendant Kamenjarin. This of course was a mere subterfuge, because Kamenjarin owned the property. It is clear to us that Kamenjarin overreached the complainant, and the recommendation of the master that the contract be declared void and removed as a cloud, and the judgment rendered in the municipal court be enjoined, is in accordance with equity and good conscience.

Before affirming the decree, we regret to say that we have been given no assistance by counsel for complainant. In his brief the only suggestion made is that the merits cannot be considered because the original master’s report and the evidence taken by him are in the record in this court, and that such original matters have no place in the record. Martin v. Todd, 211 Ill. 105; Pinkerton v. Pinkerton, 209 Ill. App. 393, and another case are cited to this effect.

Counsel for the defendant, in his reply brief, calls attention to the fact that after these decisions were rendered the legislature amended the statute which authorizes the incorporation of the master’s report instead of a copy in the record for this court. And although the case was set for oral argument, counsel for the defendant did not appear. There is no merit in complainant’s contention because in 1931 the legislature enacted that “parties to such an appeal . . . may by agreement, have the original bill of exceptions, or certificate of evidence, or report of master in chancery, . . . instead of a copy, incorporated in such transcript of the record.” Cahill’s 1931 St. ch. 53, ¶ 102, p. 1464.

The decree of the circuit court of Cook county is affirmed.

Affirmed.

MoSurely, P. J., and Hatchett, J., concur.


text:
    S. Hayden, Trading as S. Hayden Company, Appellee, v. Wabash Railway Company, Appellant, and John Doe.
    Gen. No. 36,376.
    Opinion filed February 6, 1933.
    Rehearing denied February 20, 1933.
    John Gibson Hale, for appellant.
    Short, Rothbart, Willner & Lewis, for appellee; Seymour M. Lewis, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

The question for decision in this case is whether plaintiff, the holder of a chattel mortgage on an automobile, can maintain an action of replevin to recover the automobile transported from a point in Texas to Chicago on a- through bill of lading, the transportation charges of $120.35 being unpaid. The trial judge held that he could, entered judgment accordingly, and the defendant railway company appeals.

The facts are stipulated, and so far as it is necessary to state them here are that February 21, 1928, Paul G. Green, who lived in Chicago, bought a Whippet sedan automobile from the Logan Motor Sales Company, an automobile dealer in Chicago. At the same time Green gave a chattel mortgage which was properly acknowledged and recorded in Cook county, to secure the payment of the balance of the purchase price, $360. It was in the usual form and provided that Green might retain possession of the automobile but must keep it in Chicago, Cook county, Illinois. At the time Green executed his note for $360, payable in monthly instalments of $60 each. The automobile was delivered to him, but what he did with it does not specifically appear. The first $60 instalment became due March 21, 1928, but was not paid. April 12, 1928, Green, at Houston, Texas, delivered the automobile to the International-Great Northern Bailroad for transportation and delivery to the Logan Motor Sales Company of Chicago. The railroad company issued its uniform, through, straight bill of lading. The automobile was delivered to the defendant, Wabash Bail' way Company, at St. Louis, Missouri, and it completed the transportation to Chicago. Upon arrival of the automobile at destination, the defendant railway company gave notice of that fact to the consignee, the Logan Motor Sales Co., ¿nd the latter notified plaintiff, the owner of the chattel mortgage and note, which plaintiff had purchased from the Logan Motor Sales Co., on the date of their execution. Plaintiff, upon receiving notice that the car was in possession of the defendant railway company in Chicago, instituted the instant action of replevin, and the automobile was taken by the sheriff of Cook county and delivered to him.

It further appears from the stipulation of facts that according to the tariffs filed by the International-Great Northern Railroad Company with the interstate commerce commission at Washington, there was $120.35 due for transportation charges which is still due and unpaid; that plaintiff had no notice or knowledge that Green had removed the automobile from Illinois and no notice or knowledge that he had delivered the automobile to the International Great Northern Railroad Co. to be transported to the Logan Motor Sales Co. until plaintiff was notified, as above stated, by the Logan Motor Sales Co.; that Green has paid no part of the $360, the balance of the purchase price of the automobile; that plaintiff, after March 21, 1928, when Green first defaulted in payment, tried with all due diligence to locate Green or the automobile but was unable to do so.

Plaintiff contends that under the law of Illinois, when Green took the automobile out of Cook county and again when he defaulted in the payment of the $60 instalment which fell due March 21, 1928, the legal title to the automobile was vested in plaintiff absolutely; and Frankenthal v. Mayer, 54 Ill. App. 160; Simmons v. Jenkins, 76 Ill. 479, and other cases are cited. Whether this is the law when it appears that the mortgagee has not demanded possession of the title we think is not important here. But we think it obvious that the provision in the chattel mortgage that Green was to keep the automobile in Cook county, must be understood in a Pickwickian sense. Of course the Motor Sales Company knew that Green would take the car out of Cook county, — an automobile is bought “to go places.” This is not the day of the oxcart. If the provision in the chattel mortgage were to be taken seriously, there would never be an automobile sold upon which a chattel mortgage was given for part of the purchase price.

Is the defendant railway company’s lien for the transportation charges superior to that of plaintiff’s chattel mortgage? The question is an important one and not free from difficulty. No authority has been cited and we have been unable in the limited time at our disposal to find any that decides the precise point. The defendant contends that the transportation of the automobile being interstate is governed by the federal law; that the Bill of Lading Act, which is chap. 4, title 49, of the Transportation Act, provides that in an interstate shipment a railway company has a lien on the goods transported for its lawful charges, and that it has the right to hold the goods until the charges are paid; that in the instant case, Creen, at the time he delivered the car in Texas to the railway company, was the owner of the automobile and therefore had the right to have fit transported to Chicago. It is true that the law respecting charges for transportation in interstate commerce must be decided according to the United States Statutes so far as they are applicable. Adams Exp. Co. v. Croninger, 226 U. S. 491; American Ry. Exp. Co. v. Mohawk Dairy Co., 250 Mass. 1.

The question then is, Was Creen, at the time he delivered the automobile to the railway company in Texas, the owner of the automobile with authority to bind the mortgagee for the transportation charges? We think he was not. He was not authorized by the Logan Motor Sales Co. nor by plaintiff, the owner of the mortgage, to incur the expense of transporting the car. Neither of these parties knew that the car was in Texas and was being sent by Creen to Chicago until the defendant railway company had delivered the car in Chicago and notified the motor company. In these circumstances we think plaintiff’s claim is superior to the defendant’s transportation charges. The defendant could have protected itself by demanding payment of Green before the car was transported. Not having done so, it cannot now saddle the expense of the transportation charges on plaintiff.

In the case of American Ry. Exp. Co. v. Mohawk Dairy Co., supra, which involved the question of the carrier’s charges in interstate transportation, it was held that since the Interstate Commerce Commission Act imposed no liability on any particular party to pay the charges, the parties were left free to contract to pay the transportation charges sub ject to the law which prohibited discrimination and it was there further held that while the ownership of property carried in interstate commerce was an important factor in determining the liability for the transportation charges, the fact of ownership alone was not enough to render the owner liable for transportation charges as a matter of law, but that other factors which were shown by the evidence in that ease must be considered.

We are of the opinion that if Green may be considered the owner of the automobile when he delivered it to the railway company in Texas, yet under the rule announced in the Mohawk Dairy Co. case that fact alone wuuld not authorize him to have the automobile transported to Chicago and thereby give the railway company a lien for its charges superior to the lien of plaintiff’s chattel mortgage.

The judgment of the circuit court of Cook county is affirmed.

Affirmed.

HcSurely, P. J., and Hatchett, J., concur.


author: Mr. Presiding Justice Wilson

text:
    W. H. McGrahan, Appellant, v. Public Indemnity Company, Appellee.
    Gen. No. 36,014.
    Opinion filed February 8, 1933.
    George F. Ballinger, for appellant; Leo B. Condit, of counsel.
    Joseph H. Hinshaw, for appellee; Oswell G. Tread-way, of counsel.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

Plaintiff, W. H. McGrahan, brought his action against the Public Indemnity Company, a corporation, in the superior court of Cook county to recover indemnity under a policy of insurance issued by the defendant. The defendant filed a demurrer to the declaration which was sustained. Plaintiff • elected to stand by his declaration and judgment was entered against the plaintiff for costs.

In his declaration the plaintiff allóges that the defendant issued its policy of insurance by which it agreed to indemnify the plaintiff against loss by reason of the liability imposed by law upon the plaintiff for damages on account of bodily injury accidentally suffered, while the said policy of insurance was in force and effect, by any' person or persons not in the employ of the plaintiff, by reason of the ownership, care, maintenance, occupation or use of the said premises or any business operations therein conducted by the plaintiff.

The declaration further charges that during the term of said policy of insurance one Ethel Bradley, while rightfully upon the premises of the plaintiff as a customer or patron, was injured because of hot boiling coffee having been spilled upon her thus causing injuries; that suit was instituted by the said Ethel Bradley against the plaintiff herein and that notice of said suit and of said action was furnished the defendant company which refused to appear and defend said action, as provided in said policy; that a judgment was obtained against the plaintiff for the sum of $500 which was paid and satisfied.

The declaration further charges that the plaintiff was compelled to and did expend considerable money in defending said suit and asks for a judgment against the defendant for the amount of the judgment rendered against him the plaintiff, together with the costs of defending the action.

Attached to the policy, which was made a part of tbe declaration, was a rider entitled, “Food and Drink Endorsement.” This rider provided:

‘ ‘ This Policy is issued by the Company and accepted by the Assured with the express understanding and agreement that it does not cover any loss or expense arising or resulting from claims upon the Assured for damages on account of bodily injuries suffered or alleged to have been suffered, including death resulting any time therefrom, by any person or persons by reason of any food or drink sold or dispensed by the Assured; anything in this Policy to the contrary notwithstanding.”

Under this rider the defendant insists that Ethel Bradley, the customer and patron of the plaintiff, was injured by reason of food or drink sold or dispensed by the assured, and that by reason of this rider defendant was not obligated to defend the suit or to pay any judgment entered therein. Plaintiff contends that, by the language of the rider, it was intended that the insurance company would not be liable for injuries or death sustained by reason of any person eating or drinking any foods or beverages dispensed by the plaintiff, but did include injuries to a person upon the premises received in the manner in which the said Ethel Bradley claimed to have been injured.

It is a rule in this State that a policy of insurance should be liberally construed in favor of the insured, and where the language is susceptible of two interpretations, the one in favor ■ of the insured should be given preference. Niagara Fire Ins. Co. v. Scammon, 100 Ill. 644; Healey v. Mutual Accident Ass’n, 133 Ill. 556; North American Life Ins. Co. v. Maryland Casualty Co., 213 Ill. App. 391. The policy of insurance in this case covered the entire premises of the assured, including the part or portion where the accident occurred, and agreed to indemnify the assured against any loss by reason of bodily injuries accidentally suffered by a patron while on the premises. In the absence of the rider to the policy, there is no question but that the defendant would be liable. The only question before this court is the interpretation to be placed upon the rider thereto attached.

The language used in the rider sets forth that the company will not be liable for damages on account of bodily injuries sustained by reason of any food or drink sold or dispensed by the assured. The coffee in question was not sold or dispensed to the customer who was injured, but the injuries were purely the result of an accident. It might be argued that coffee was sold and dispensed by the assured, but it appears to this court that the evident purpose of the rider was to exempt the company from those accidents which might arise by reason of the partaking of food or drink sold by the assured, such as food poisoning, ptomaine poisoning or illness caused by the quality or character of the food or drink sold or dispensed. Injuries received by reason of the partaking of foods and drinks constitute a well defined and well recognized branch of the law covering liability arising under such circumstances. Retailers who become liable under such circumstances have a right of action against manufacturers placing such articles for consumption upon the market. We do not believe the rider in question covered a situation, as charged in the declaration, where a customer was injured while upon the premises and by reason of an accident such as is charged in the declaration. At the time of the accident the coffee was not being sold or dispensed. It certainly does not appear to have been sold and, If dispensed, it was in a manner strange to the trade.

The declaration charges that the customer Ethel Bradley was accidentally injured by having some hot coffee spilled over her person. This would not be much different from having a heavy can or tin of foodstuff fall upon her while upon the premises. If she had been injured under the latter circumstances,, it could not be very well contended that she was injured by the sale and dispensing of foodstuffs. The proximate cause of the injury was not the sale or dispensing of food or drink, but the accidental spilling of hot coffee upon the person of Ethel Bradley, and in our opinion this circumstance does not come within the meaning of the rider to the policy. Cases somewhat similar in point are Healey v. Mutual Accident Ass’n, 133 Ill. 556; Travelers’ Ins. Co. v. Dunlap, 160 Ill. 642.

For the reasons stated in this opinion the judgment of the superior court is reversed and the cause remanded with directions to overrule the demurrer and to take such other steps as are necessary in accordance with the views expressed in this opinion.

Judgment reversed and cause remanded with directions.

Hebel and Hall, JJ., concur.


text:
    Asheville School for Training in Christian Leadership, Appellee, v. Wallace F. Kirk and Mrs. Wallace F. Kirk, also known as Florence McF. Kirk, Appellants.
    Gen. No. 36,062.

      Opinion filed February 8, 1933.
    Kirkland, Fleming, Creen & Martin, for appellants ; Jay Fred Beeve and J. B. Martineau, Jr., of counsel.
    England, Dodge & O’Toole, for appellee; Edward L. England and Frederick B. Nyberg, of counsel.
   Mr. Presiding Justice Wilson

delivered the opinion of the court.

Plaintiff brought its action to recover damages for a breach of contract and recovered a judgment for damages in the amount of $800 in the municipal court of Chicago. The cause was tried by the court without a jury. The only question before this court is whether or not the correspondence between the parties constituted a valid agreement under which the defendants agreed to send their son to the plaintiff’s school for the year commencing in September, 1929.

The boy, Samuel Alexander Culbertson II, was the son of Mrs. Wallace F. Kirk, by a former marriage, and a stepson of Wallace F. Kirk, her husband, defendant herein, and was during the circumstances hereinafter described living with, and a member of the family. Under the circumstances, Wallace F. Kirk, defendant herein, stood in loco parentis to the boy and was liable for the expense of his education. Chicago Manual Training School Ass’n v. Scott, 159 Ill. App. 350.

October 2, 1928, Wallace F. Kirk wrote to plaintiff asking it to enter his stepson in its school for the following year. A written catalogue setting forth the requirements for admission, the annual charges for tuition, and the request for certain information to be furnished by the applicant, was furnished the defendants. Thereafter a written application was signed by Florence McF. Kirk and forwarded to the plaintiff. The application was in writing and provided as follows :

“Application is hereby made for the admission of Samuel Alexander Culbertson, II, to Asheville School, for entrance at the opening of school, September, 1929.

“In signing this application, the parent or guardian accepts the regulations given in the catalogue.

“The annual charge is $1,500, payable $800 at the opening of school in September, and $700 on February 1st. Boys are accepted in September only with the understanding that they are to remain for the full year.

“No part of the semi-annual fee will be remitted in case of dismissal, withdrawal or absence.

“I agree to the regulations and conditions of payment stated above.

“(Signed) Florence McF. Kirk,

Parent or Guardian.”

The catalogue furnished the defendants, among other things, contained as a requirement that “every applicant must furnish a record of his previous work and must present his certificate of honorable dismissal from his former school.” Upon receipt of the signed application, plaintiff, on January 24, 1929, wrote the defendant Mrs. Wallace Kirk, who is the same as the Florence McF. Kirk who signed the application, the following letter:

“January 24, 1929.

“Mrs. Wallace Kirk

20 E. Cedar Street,

Chicago, Illinois.

“Dear Mrs. Kirk:

“I have just received your application for admission here in September 1929 of Samuel Alexander Culbertson, II, and he is duly enrolled, pending receipt of honorable dismissal from his present school, which I assume will be sent upon completion of his course there.”

On or about February 1, plaintiff received from the principal of the school at which defendants’ son was in attendance, a certain form filled out, as required by the catalogue of the plaintiff, showing the course of studies pursued by defendants’ son.

The defendant Florence McF. Kirk testified that she wrote to the plaintiff on or about July 2, 1929, notifying it of the withdrawal of her son from the school. Plaintiff testified that no such communication was received. On the opening of school in September, 1929, plaintiff wrote to the defendants inquiring about' the whereabouts of their son and was informed that the boy had been entered in another school and would not attend the school of the plaintiff.

It is contended that the contract between the parties was not complete in that it still became necessary to furnish a record of the boy’s work and present a certificate of honorable dismissal from his former school before he would be accepted by the plaintiff. The fact is that the boy did receive an honorable discharge as evidenced by the communication from the head of his school to the Shoate School, to which he was admitted. No question, however, is raised in this record as to the inability of the son of the defendants to answer the requirements of admission to the school conducted by the plaintiff.

Witnesses for plaintiff testified that after the boy had been enrolled, a place was provided for him among the body of students to be received in the fall of 1929.

At the time the defendants, or either of them, signed the application for the admission of the son to the institution of the plaintiff, the defendants assented to the conditions provided for in the catalogue and agreed to fulfill these conditions if the son was received as a member of the school. These conditions were fully known to the defendants at the time the agreement was signed and it was with full knowledge of these conditions that the application was signed and returned to the plaintiff. It became necessary for the plaintiff to make arrangements extending into the future for the care and education of the boy if the conditions required by the catalogue were fulfilled. Upon the signing of the application and the receipt of the letter of acceptance, the contract was completed. Head v. Theis, 106 N. J. L. 281; Dwyer v. Cashen, 232 Ill. App. 493; Teeter v. Horner Military School, 165 N. C. 564.

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

Judgment affirmed.

Hebel and Hall, JJ., concur.


author: Mr. Justice Hall Mr. Presiding Justice Wilson

text:
    Joel E. Bullard et al., Appellees, v. Arthur C. Turner et al., Defendants. Appeal of Standard Chair Company, Appellant.
    Gen. No. 35,725.

      Opinion filed February 8, 1933.
    Rehearing denied and opinion modified February 23, 1933.
    Helmer, Moulton, Whitman & Holton, for appellant; Charles R. Holton and Herbert R. Tews, of counsel.
    Frank E. Hayner, Q-eorge Gtllette, Elmer M. Leesman and Altheimer, Mayer, Woods & Smith, for appellees; Jesse L. Cohen, of counsel.
   Mr. Justice Hall

delivered the opinion of the court.

This cause comes to this court on appeal of defendant and cross complainant, Standard Chair Company, from a decree of the superior court of Cook county in favor of complainant against defendants in a proceeding to foreclose a mortgage given by defendant, Turner, to complainant on July 1, 1929, on industrial property in the City of Chicago. Prior to the execution of the mortgage by defendant Turner, on the property involved, Turner had made a lease of a portion of the premises to one of the defendants, the Brockton Heel Company, for a term of 10 years, and after the making of such lease, and prior to the execution of the mortgage, Turner had assigned to defendant and cross complainant Standard Chair Company, a Pennsylvania corporation, the lease to the Brockton Heel Company, together with the rents to be derived thereunder. The assignment was not recorded. A receiver for the property was appointed in this proceeding, and thereafter a petition was filed by the receiver in which the receiver prayed that the tenant, Brockton Heel Company, be required to attorn and pay rent to the receiver. The Brockton Heel Company filed an answer to the bill and an answer to the petition in each of which is set forth the alleged facts concerning the assignment of the lease and rentals thereunder to defendant, Standard Chair Company.

In the order appointing the receiver, the court found that by the trust deed, a copy of which is attached to the bill of complaint and described therein, the defendant, Turner, had conveyed to complainant all rents, issues and profits of the premises described in the trust deed, and an examination of the trust deed shows such to be the fact. The court also found that it is provided in the trust deed that upon the filing of a bill to foreclose, a receiver should be appointed to take and receive the rents, issues and profits of the premises described. Upon the bill of complaint, petition and the answers of the Brockton Heel Company, the court ordered a reference to a master who found and reported that the court had jurisdiction, and that after considering the facts concerning the assignment of the rents, he, the master, concluded that the receiver is entitled to an attornment by the Brockton Heel Company, and that such receiver is entitled to the rents of the premises occupied by the Brockton Heel Company commencing October 1, 1930, and that the court enter an order in accordance therewith.

Upon a hearing following the report of the master, the court entered an order approving the report, and ordered the Brockton Heel Company to attorn and pay the rents to the. receiver. Thereafter, the defendant, Standard Chair Company, filed its answer and a cross-bill in which it set forth its right to the rents under the assignment of the lease and rentals to it by Turner, to which cross-bill an answer was filed by complainant, asserting his right to the rents of the premises under the terms of the trust deed. A reference was had to a master, other than the master who made the first report, upon the cross-bill, answers and replication with direction'to take testimony and report his findings.

By witnesses testifying on the hearings, it is shown that the Brockton Heel Company entered into possession of a portion of the mortgaged premises prior to July 1, 1929, the date of the making of the mortgage sought to be foreclosed in the instant ease, and had been in continuous possession of such portion since that time; that prior to August 1, 1927, the Brockton Heel Company had paid its rent to the defendant, A. C. Turner, and that after the last mentioned date it had paid the rents for the premises occupied by it to the Standard Chair Company of Union City, Pennsylvania, upon the direction of the defendant, Turner; that the Brockton Heel Company had entered into possession as a tenant of Turner under and by virtue of a lease from him, and that Turner occupied the portion of the mortgaged premises not leased to and occupied by the Brockton Heel Company. It is also shown that signs indicated clearly the portions of the premises occupied respectively by the Brockton Heel Company and by Turner.

The defendant, Turner, testified that at the time he procured the loan from complainant and executed the notes, he had not advised the complainant, nor any one for him, of the assignment by him of the lease and rentals to the Standard Chair Company. Bullard, the complainant, testified that at the time he made the loan and accepted the mortgage from Turner, he was not and had not been advised by any one that the lease and rentals had been assigned,.as alleged in the cross-bill. Thereafter the last designated master filed his report recommending that a decree of foreclosure be entered in favor of complainant; that the cross-bill of defendant, Standard Chair Company, be dismissed for want of equity, and found the assignment of the rentals to the Standard Chair Company to be subordinate and inferior to the lien of complainant’s trust deed and the assignment of the rents thereunder to the complainant. Exceptions to the report were heard by the court, overruled, and a decree entered approving and confirming the report, from which decree this appeal is prayed.

Two main points are urged by appellant as alleged grounds for reversal. First, that the appointment of the receiver was improper under the allegations in the bill, and the circumstances surrounding the appointment ; second, that the complainant took the mortgage on the property involved subject to the assignment of the lease thereon with the rentals thereunder, to the Standard Chair Company of Pennsylvania, although the assignment of the lease and rents was not recorded, and it is not shown but denied that the mortgagee, complainant, had any notice thereof. It seems to be agreed by both complainant and defendant (appellant), the Standard Chair Company, that complainant’s mortgage was taken subject to all the rights of the Brockton Heel Company, the tenant of Turner, so the question to be determined is whether or not the mortgagee was put upon inquiry as to whether or not the mortgagor had assigned the lease and the rents thereunder to the Standard Chair Company prior to making the mortgage sought to be foreclosed in this suit, in spite of the fact that the assignment of the lease and the rents thereunder had not been recorded.

In Willoughby v. Lawrence, 116 Ill. 11, our Supreme Court holds that a lease of the character of the one involved is a chattel real, and as such should be recorded in order to give notice of a leasehold interest in an estate. To the same effect is the case of Vombrack v. Wavra, 331 Ill. 508, page 512, in which the court says:

“The public records of conveyances and instruments affecting the title to real estate are established by statute to furnish evidence of such title, and a purchaser may rely upon such records in security unless he has notice, or is chargeable in some way with notice, of some title, conveyance or claim inconsistent therewith.” See also Lennartz v. Quilty, 191 Ill. 174; Holbrook v. Dickenson, 56 Ill. 497.

Appellee insists that the rule is that unless the purchaser (in the instant case the mortgagee) had actual notice of the assignment of the lease in question and the rents and profits arising therefrom, the assignment not having been recorded, he had the legal right to assume that no such instrument existed.

In the case of Willoughby v. Lawrence, supra, a lease had been made by Magie & Tree to Lawrence & Martin of a tract of land in Chicago to be used as race track' property. Subsequently, the lessees made a contract with Willoughby & Hill by which they sold and conveyed to Willoughby & Hill the right -to the use of the fences and buildings to be erected on the demised land for advertising purposes. This contract was recorded. Thereafter, the lessees conveyed their interest under the lease to a corporation, the Chicago Jockey and Trotting Club, which corporation refused to allow the use of the premises by Willoughby & Hill as provided by the contract made between Willoughby & Hill and the lessees of the premises. A bill was filed by Willoughby & Hill, seeking to enjoin the assignees of the lease from interfering with their use of the property under their contract with the lessee. In passing upon the question as to whether or not the assignment of the lease was an instrument to be recorded as contemplated by the Conveyance Act, Cahill’s St. ch. 30, and whether the recording of such an instrument is notice to a purchaser, the Supreme Court said, page 21:

“Was it an instrument of such a character that its record operated as notice to the club? The 31st section of the Conveyance Act provides, that ‘deeds, mortgages and other instruments of writing relating to real estate, shall be deemed, from the time of being filed for record, notice to subsequent purchasers and creditors, though hot acknowledged or proven according to law.’ The 38th section of the same act provides, that ‘the term “real estate,” as used in this act, shall be construed as co-extensive in meaning with “lands, tenements and hereditaments,” and as embracing all chattels real.’ The lease from Magie & Tree to Lawrence & Martin was a chattel real, and was entitled to record to give notice of the leasehold interest of the lessees therein. The contract in question, conveying the use for certain purposes of the fences and buildings upon land, which is particularly described, and involving a right of way upon the land in order to enjoy such use, is an instrument in writing relating to a chattel real. Under the 28th section of the Conveyance Act it is an instrument ‘relating to or affecting the title to a chattel real. ’ It imposes a charge or burden upon the leasehold interest of Lawrence & Martin, and designates an interest, which is carved out of that estate or included in it. We do not perceive why it is not embraced in the class of instruments whose record affects subsequent purchasers and creditors with notice. (Reed v. Kemp, 16 Ill. 445; Dundy v. Chambers, 23 id. 369; McCann v. Day, 57 id. 101; Harris v. Johnson, 31 N. J. Eq. 174.)”

Counsel for appellant cite the case of Smith v. Heirs of Jackson, 76 Ill. 254, as authority for the proposition that even though the assignment of the lease and rents was not recorded, still the complainant in the instant case must not only have taken notice of the tenant in possession, but also the person to whom the tenant paid the rent, in the case cited last, one Jackson had been indicted for a criminal offense, and in order to procure bail, had conveyed his farm as security to his attorney, one Hackney, who went his bail. The attorney delivered to Jackson an agreement to reconvey, which was not recorded. The criminal proceedings against Jackson were dismissed, but his attorney, in the meantime, had recorded the deed, conveyed the land to a third person named Smith and had absconded. At the time Jackson conveyed his land to his attorney, his (Jackson’s) tenant was in possession of the land, and this tenant remained in possession and continued to pay rent to Jackson. Jackson died and a bill was filed by his heirs, seeking to have the conveyance set aside. In passing upon the question of the bona fides of the transaction, the court said, page 258:

“It is the tendency, and properly, so, of the American courts, under the policy of our recording acts, not to extend the doctrine of constructive notice from possession beyond its proper limits. The doctrine itself is firmly established, and yet not favored. There is nothing unreasonable in a rule which requires a purchaser of land in the open, visible and exclusive possession of a person other than his vendor, to make inquiry as to that person’s rights, and to take subject to those rights if he neglects to do so. It has been the rule of all the courts, so far as we are aware, that, in case of a tenancy, the possession of the tenant would amount to constructive notice to a purchaser of such tenant’s title. The divergence of authority has been upon the question whether notice of a tenancy would affect the purchaser with constructive notice of the lessor’s title, and that question is involved in this case. Jackson was not in the actual occupation of the premises, but in possession by others, and known to be in the receipt of rents from the persons in actual occupation. This latter is an important circumstance, for, while it might not be an unusual circumstance for a vendor to remain in possession, after conveyance, as a mere tenant at sufference of his grantee, yet it is an unusual circumstance for him to not only remain in possession but to be in the receipt of rents, after conveyance, as in this case.

“It is true, this fact was not known to Smith, but he, according to his own testimony, purchased without even going or employing an agent to see the land, or make inquiry of the persons in occupation. Had inquiry been made, the fact would readily have been ascertained that they were paying rents to Jackson. The counsel who appear for him in this court were his legal advisers, he says, and to whom he presented the abstract for examination. It is not likely that counsel of such eminence would have failed to advise him of the necessity of inquiry whether there was any tenancy by others; for the law had been laid down by this court, as early as the case of Pittman v. Gaty, 5 Gilm. 186, that possession by the tenant was the possession of the landlord, and constructive notice of the landlord’s title. That is the settled law in Pennsylvania, also in Iowa. See Dickey v. Lyon, 19 Iowa 544, where the principal cases upon both views of the question are collected and ably commented upon.

“In Barnhart v. Greenshields, 9 Moore, P. C. 18, referred to in the Iowa case, it was held that, in all the cases, the possession relied upon was the actual occupation of the land, and that the equity sought to be enforced was on behalf of the party so in occupation; and it was further said, there was no authority for the proposition that notice of a tenancy is notice of the title of the lessor, or that a purchaser, neglecting to inquire into the title of the occupier, is affected by any other equities than those which such occupier may insist on.. This doctrine has since leen modified in its application, and it has leen laid down that the court, in the passages of that judgment in which they speak of the person in occupation, did not mean merely the person who, ly himself or his lalorers, tilled the land, lut also meant the person who is known to re ceive the rents from the persons in occupation of the land. 2 Sug. on Vend. & P. 8 Am. Ed. 774, 775; Knight v. Bowyer, 23 Beav. 609; 2 DeG. & J. 421.

“Smith lived in Springfield, the distance of only a few miles from the county seat of Logan county, where the land is situated, accessible by railroad. It is a singular and suspicious circumstance that he purchased without ever having seen the land, or made, or caused to be made, any inquiry of the persons in occupation in respect to their or their lessor’s title. Common experience teaches us that, unless the purchase is a mere sham, men do not conduct in that way. What man of common prudence would pay $3,500 cash for a quarter section of land so easy of access, without any view of the property or inquiry as to possession? Under these circumstances, the proof of payment of the consideration is not satisfactory. It was done by merely producing drafts with Hackney’s indorsement upon them. Smith was on the stand and could have shown, if such was the truth, that Hackney received and retained the proceeds of these drafts. He did not do it, nor did- he testify that he, in fact, had no notice of Jackson’s equities.

“The court are of opinion that he was clearly affected with constructive notice of those equities, if he did not have actual notice.” The doctrine in this case has been followed in Gallagher v. Northrup, 215 Ill. 563; Macaulay v. Dorian, 317 Ill. 126, and in many other Illinois cases.

No rights of the tenant are involved in this proceeding. The mortgagee, of course, was bound to and did take notice of the tenant’s possession, right and title. In so far as the controversy between the complainant and cross complainant is concerned, we believe the equities to be with the complainant. It would have been a very simple matter for the cross complainant to have recorded its assignment of the lease and rents, and then all trouble would have been avoided. When the mortgagee examined his abstract, he found nothing to indicate that the mortgagor had parted with any portion of his estate in the land mortgaged, except a prior mortgage to which his lien is subject. It seems to us that the very purpose of the act providing for the recording of such documents is that notice be had of the status of land titles. However, in view of the holdings of the Supreme Court that a purchaser of land must take notice of the person to whom a tenant in possession pays rent, we feel that we have no discretion in the matter. This court is therefore of the opinion that Standard Chair Company is entitled to the rents of the mortgaged premises under the terms of and as provided by the assignments in evidence. The decree of the superior court is reversed and the cause remanded with the direction that a decree be entered in conformity with the terms expressed in this opinion.

Reversed and remanded with directions.

Hebel, J., concurs.

Wilson, P. J., specially concurring.

Mr. Presiding Justice Wilson

specially concurring:

I concur in the foregoing opinion in view of the fact that it seems to enunciate the rule in this State, but I have been unable to concur in the reasons stated by the cases in this State in arriving at this conclusion.

Turner made a 10-year lease of part of the premises to the Brockton Heel Company. While the lease had still over five years to run, Turner assigned the lease, together with the rentals, to the Standard Chair Company. Thereafter, and while it still had over five years to run and by reason thereof was an interest in the real estate, he executed a trust deed to the premises to Bullard but did not tell him of the assignment of the lease. Bullard filed his bill to foreclose and asked for a receiver to collect the rents. The Standard Chair Company entered its appearance and claimed the rentals under the lease. This lease was never recorded.

In the cases cited from the Supreme Court of this State and followed in the main opinion, the reason for the rule is enunciated that Bullard could have ascertained the fact by inquiry from the tenant. In my opinion, the rule that a person taking a mortgage or trust deed on premises does so subject to the right of tenants in possession, does not extend to the rights of an assignee of the tenant’s lease. The rights of the tenants are in nowise changed by the assignment of his lease by his landlord. The change made by such assignment is a change of the person to whom he pays rent. He is not concerned with the payment of rentals nor is he interested in the fact that by the assignment he is required to pay the rentals to some other person other than to the landlord from whom he originally leased. His rights in the premises remain exactly the same, and he is protected by his lease. If he should be inquired of by a prospective mortgagee or trustee he might conceal the fact that he paid rent to another, other than his landlord. The rule under the decisions, however, would remain the same, as the assignee could not be bound by misrepresentations by the tenant. On the other hand, the recording of the assignment of the lease would protect all parties and be notice to the world.