text:
    Boylston Coal Company, Appellant, v. David T. Rautenbush and Harold J. Crowe, trading as Supreme Coal Company et al., Appellees.
    Gen. No. 29,774.
    1. Fraud and deceit — when evidence shows unfair competition by former employee of complainant. The property rights of complainant corporation were held to have been violated where, in injunction proceedings to prevent the wrongful appropriation of confidential information from complainant, a mail order coal dealer, the evidence established in substance that complainant had expended a large amount of money and labor to obtain a list of agents for its business, the great value of which was lost when disclosed to a competitor, and that one of the defendants, through his employment as sales manager for complainant, obtained such list and used it, before he left complainant’s employ, for the benefit of a competing firm of which he became a member, and that such competing firm, by reason of said defendant’s use of such list, was enabled to begin business practically without expending any money or labor in creating a list of agents, and that thus complainant’s chief asset was appropriated to such competing business, and 214 of its most valuable names were so appropriated and used by defendants.
    2. Property — lists of agents of mail order house as property. The right of a complainant corporation engaged in the mail order coal selling business, in its list of agents, which came into being only as the result of years of work and great expense, and which when it had come into being, was entirely unique and in itself a source of sales and profit, was a definite, appreciable and valuable property right, and such list, as between the parties to proceedings to enjoin the wrongful appropriation of confidential information, was considered a property.
    3. Master and servant — duty of servant not to disclose or use confidential information. As employee was bound not to disclose or use confidential matter which he gained by reason of his former employment, and it is immaterial whether as an employee he copied or memorized the secret information which he undertook to use in a competing business; and the use by the latter was a violation of the employer’s property rights.
    Appeal by plaintiff from the Superior Court of Cook county; the Hon. Charles M. Foell, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1924.
    Reversed and remanded with directions.
    Opinion filed June 17, 1925.

      John M. Zane and David Jetzinger, for appellant.
    No appearance for appellees.
   Mr. Justice Taylor

delivered the opinion of the court.

On July 6, 1923, the complainant, Boylston Coal Company, a corporation, filed a bill of complaint in the superior court for an injunction to prevent the defendants, David T. Rautenbush and Harold J. Crowe (whose proper name was Bernard H. Brahm), partners doing business as the Supreme Coal Company, from wrongfully appropriating certain confidential information of the complainant as a mail order coal dealer, which had been obtained by Rautenbush while an employee of the complainant.

The bill also prayed for an accounting for unfair trade. Rautenbush filed an answer and an amended answer, and one Ortlund was subsequently made a party defendant, and an order entered that the answer of Rautenbush be adopted as the answer of all the defendants. There was a reference to a master in chancery, and an original and supplemental report by him. He recommended that the bill be dismissed for want of equity. Objections thereto were filed on behalf of the complainant and overruled, and in June, 1924, after exceptions to the master’s report had been heard, the chancellor approved the master’s report and entered a decree dismissing the bill of complaint for want of equity. This appeal is therefrom.

The bill of complaint alleged that the complainant is a corporation, organized about April 1, 1922, under the laws of the State of Illinois; that the business conducted by the complainant had been conducted for more than eight years prior thereto under the name of the Bernice Coal Company, and on the above-mentioned date one Ruby Levy, who was the owner of the Bernice Coal Company, transferred to the complainant all the business, trade name, lists of customers, lists of agents, good-will and assets of the Bernice Coal Company; that the business of the Bernice Coal Company and, since the date of the transfer above mentioned, the business of the Boylston Coal Company consisted of a mail order business for the selling of coal in carload lots; that the complainant and its predecessor had developed a large and valuable business through a mail order method of selling coal; that in order to carry on said business, the complainant and its predecessor had obtained a large number of agents who resided in different parts of the Mississippi Valley; that the complainant and its predecessor had obtained and located agents at various points in said territory, through whom the sale of coal in carload lots was conducted in the manner of a mail order business; that the number of agents exceeded 8,000 and through those agents there had been developed a large and profitable business; that Bautenbush was employed by the Bernice Coal Company about April 1, 1921, and continued in the employment of that company and its successor until about May 23, 1923; that during the period of such employment he was in charge of the correspondence and advertising matter transmitted to various agents and customers of the complainant and its predecessor, and signed his correspondence as sales manager; that said Bautenbush had knowledge of the lists of agents and customers, and was cognizant of the method used in complainant’s business and the form of advertising and correspondence used by it and its predecessor; that on May 23,1923, Bautenbush left the employment of the complainant and with the defendant Crowe organized the Supreme Coal Company; that thereafter circulars and advertising matter were sent out to various people who had prior to that time dealt with the complainant; that the circulars and advertising matter of the Supreme Coal Company were similar to those used by the complainant; that Bautenbush took the lists of customers and agents from the complainant, and took, also, models of its correspondence and circulars, and after his association with the Supreme Coal Company, began and was doing business with former customers of the complainant upon the forms of correspondence and with, the circulars which he had taken and appropriated from the complainant; that by reason of the similarity of the price lists, correspondence and circulars sent out by the Supreme Coal Company, and the fact that many of its circulars were signed by Rautenbush, who had theretofore signed the correspondence of the complainant while in its employment, a large number of persons who were customers of the complainant were, and would be in the future, misled; that by reason of the acts complained of, complainant has been and will be exposed to great damages and loss of business; that the defendants Rautenbush and Crowe have made large profits, for which they should be required by a court of equity to account to complainant; that the acts of the defendants constitute a continuing trespass on the rights of business of the complainant, which are incapable of estimation in a court of law, and are irremediable in their nature.

The answer of Rautenbush and Crowe admits that the business of the complainant consisted of a mail order business for selling coal, and that it had acquired through Ruby Levy, by consulting telephone books and other lists, names of various people throughout the United States; that the names so acquired were not agents, and a very small percentage of them ever actually sold any coal; that many of the names on the lists held by the complainant were not the agents of the complainant exclusively, but names of people who buy and sell coal for various coal companies. Rautenbush denies that the complainant has any exclusive property in the services of such persons. He admits that he was employed from April 19, 1921, up to and including May 26, 1923, but claims that such employment was not the result of a written contract and was not for a feed or definite term. He also admits that he was sales manager during the last fifteen months of that time, and that as part of his duties as sales manager he dictated personally all of the correspondence to the salesmen of the complainant, and became personally acquainted with a large number of them. He denies that he furnished to the Supreme Coal Company a list or lists of the agents and customers of the complainant, or that he ever at any time took or appropriated any lists of customers or agents from correspondence and circulars, or that he at any time began doing business by means of such correspondence and circulars. He alleges that he procured and made up lists of his own by methods entirely distinct and different from those employed by the complainant, and denies that he has in any way interfered with or taken any unfair advantage of complainant in its business. He alleges that the defendant, the Supreme Coal Company, is engaged in the honest business of selling coal through the mail, and that its lists are bona fide, and were not acquired from the complainant, and did not include the names of any considerable number of people who had theretofore done business with the complainant, and that the names of such, if any there were, were not more than eight or ten, and were acquired legitimately, being his personal acquaintances ; that the lists of the defendant, the Supreme Coal Company, were not copied in whole or in part from a list or lists of the complainant.

The evidence shows, substantially, the following: Euby and Simon Levy, husband and wife, have been in the coal business for a good many years. They conducted it practically exclusively through the mails. They bought the coal from the mine operators who produced it, and sold it, practically, directly to the consumer. Their agents, or those to whom they sold the coal, were obtained in various ways, chiefly bv advertising and the mail. The advertisements were placed in the chief papers of the large centers, and in a large number of national magazines, and a good deal of literature was sent out by the complainant itself. The actual cost of a good agent, when finally obtained, was approximately $100. That figure was arrived at by taking the amount of money spent in a season and dividing it by the nmnber of good agents obtained within that time. Since the business was started, over $2,000,000 had been spent in getting the lists of agents. The list as finally formed was accumulated as the result of continual advertising and weeding out of names, which in the aggregate amounted to 250,000 persons, until a reduced list of 8,000 or 9,000 had been created. A thousand of those were valuable agents. A name was not considered that of an agent unless he actually sold coal, or had sold more than one car within a season. The 1,000 valuable agents were those who sold enough coal to make the business of the complainant profitable. In obtaining names as prospective agents, there were sent out millions of pieces of literature to the names on various selected lists. In obtaining the names in the first place, mercantile agency books, and sometimes telephone books, were used.

In conducting the mail order business, the complainant kept no yards or places for receiving and storing coal. When it received an order for a carload of coal —and it dealt only in carload lots — it transmitted that order, with shipping directions, directly to the mine. From there the carload of coal went direct to the station or place of destination. When the car of coal arrived at its destination, the agent there would split it up, and the coal would be taken out of the car by the purchasers from the agent. The agent was compensated for his work and trouble by a commission of so much per ton. In some cases the complainant would make a contract directly with the agents, to pay, for example, 75 cents a ton commission. The business had grown to such an extent that in the coal season of 1922 and 1923 the complainant sold from 15,000 to 20,000 cars of coal.

The defendant, Rautenbush, entered into the employment of the complainant in the spring of 1921, and remained there until May 26, 1923. He first worked as traffic clerk, handling rates and tariffs, and then, about August, 1921, took charge of the correspondence in regard to sales, as sales manager. As the result of taking charge of the correspondence he knew most of the men better than anyone else in the business, according to his testimony. "When orders for coal came in from agents they were passed upon by him. The list of the names was kept in drawers in the filing department. Apparently, definite records were kept in regard to each of the agents. There was nothing of importance about the business that he was not familiar with.

In the latter part of April, 1923, the defendant Crowe made a proposition to Rautenbush that he and Crowe and one Ortlund form a coal selling company. Ortlund was a wholesale coal dealer at the time and sold to coal dealers and not to the retail trade, and had no mail order business. Ortlund had been financed by Levy under a certain contract, and shortly afterwards had agreed to sell only to the mail order business of the Bernice Coal Company, which was one of the subsidiaries of the complainant. Apparently, Ortlund, wanting to start a mail order business of his own, entered into negotiations with Rautenbush while the latter was in the employment of the complainant. As the result, the defendant, Supreme Coal Company, was established. At or prior to that time Crowe was an employee of Ortlund. The first letters and circulars sent out by the Supreme Coal Company were sent out under the direction of Crowe, from the offices of the Ortlund Coal Company. They were put in envelopes addressed by Crowe; and that was before Rautenbush left the employment of the complainant. The bills for the multigraphed letters were paid for by the Ortlund Coal Company. The evidence of Crowe when first examined was that he and Rautenbush in May, 1923, went into partnership under the name of the Supreme Coal Company, and that they took an office on May 1 at 159 North State street; at that time Crowe was working for the Ortlund Company. Crowe further stated that he financed the printing and stationery, and paid the rent in advance, and also put $150 into the bank account after the business was started, but the bills show that they were paid by the Ortlund Coal Company and not by Crowe. Crowe stated that they had a list of names on May 14, 1923, and from that list cards were made out and put into a card index. He said that he got the names himself by sending out to agents of railroads in different towns that he made a list of; that he sent out 1,300 or 1,400 letters; that friends and relatives of his gave him the names. Rautenbush stated that there was no list of names at the Supreme Coal Company when he went there; that he took there himself about 100 or 150 names; that there was a list of names there with some dates on cards that he did not understand; that he had his stenographer throw them away; that those cards originated in the office of the Ortlund Coal Company; that he has since added names to the list that was there, and that it had been growing right along. The list produced by the Supreme Coal Company contained 350 names, and, by comparison, 214 of those were identical with the names on the complainant’s list. The names of the two lists that were identical were those of active agents. The list of coal shipments made by the Supreme Coal Company showed that that coal was all shipped to the agents of the complainant. When Rautenbush was examined as to how he got the names that were the same on both lists, he said that some he remembered by having correspondence with them, and that he did not know how some, by far the greater part, came to be on the list of the Supreme Coal Company.

A summary of the facts as shown by the record may be stated as follows: The list of agents compiled by the complainant was of a peculiar character and quality, and, necessarily, a matter that required more confidence than ordinary customers. In order to carry on the mail order coal business, a list of agents was a fundamental necessity; only by the expenditure of a large amount of money and labor could such a list of agents come into being. A list of agents in the mail order coal business was in the nature of a trade or business secret; the great value of a list of agents in the mail order coal business was lost when disclosed to a competitor, and knowledge of the list of agents of the complainant was obtained by Rautenbush through his employment as sales manager. Rautenbush began to use his knowledge of the list of agents before he left the employment of the complainant, and entered into a competing business, which could not be carried on without such a list. The competing business, by reason of Rautenbush’s knowledge of complainant’s list of agents, was enabled to begin business practically without any expenditure of money or labor in the creation of a list of agents; the chief asset of the complainant’s business, for the creation of which much labor had been expended, was appropriated by Rautenbush to a competing business; Rautenbush, a former employee of the complainant, turned over to himself and his partners, who apparently for purposes of secrecy kept their own names out of the business, 214 names of the complainant’s most valuable agents; the list of agents which the complainant had compiled was desired by Ortlund, who was in the coal business, and, under contract, bound to deliver his purchases of coal to complainant, and desired to break his contract, and desired to get secret mail order lists competing with the complainant, and as a result of what was done by the defendants a fair-sized business was begun by Ortlund and Rautenbush in mail order coal selling with agents of complainant.

From the foregoing, it will be seen that the evidence quite overwhelmingly shows that the defendants undertook to obtain the very essence of the complainant’s business by unfair means. The history of their relations and conduct shows that, they set about secretly and insidiously to undermine the business of the complainant, and appropriate for their own profit that which constituted the established basis of the complainant’s business, and which it had taken years of time and, apparently, approximately $2,000,000 to establish.

The business of the complainant was chiefly advertising, circularizing, letter writing and bookkeeping, and by that work it undertook to make, and did make a legitimate profit through the sale of a large quantity of coal, which, apparently, reached the ultimate consumer at a lower cost than when sold in the general conventional way. A list of good agents, which was gradually accumulated, was the ultimate source and mainspring of the. complainant’s profit. The right of the complainant in its list of agents, which list came into being only as the result of years of work and great expense, and which was, when it came into being, entirely unique, and in and of itself a source of sales and profit, was a definite, appreciable and valuable property right, more so, perhaps, than most forms of good-will. We are not here concerned with the rights of either side as against the people, but with the rights of each as against the other. Such lists are like stock in trade; they are created at the cost of effort, method, skill and money, to be used in selling coal. As between the parties, the lists of names must be considered, therefore, as property.

In International News Service v. Associated Press, 248 U. S. 215, the court said: “The rule that a court of equity concerns itself only in the protection of property rights treats any civil right of a pecuniary nature as a property right * * *; and the right to acquire property by honest labor, or the conduct of a lawful business, is as much entitled to protection as the right to guard property already acquired.” In that same case, Mr. Justice Holmes said: “Property depends upon exclusion by law from interference.” Davis & Co. v. Miller, 104 Wash. 444, 177 Pac. 323; Loven v. People, 158 Ill. 159; Witkowsky v. Affeld, 283 Ill. 557; Krueger v. Lundeen, 211 Ill. App. 320.

Further, Bautenbush was bound not to disclose or use confidential matter which he gained by reason of his former employment. Stevens & Co. v. Stiles, 29 R. I. 399; Witkop & Holmes Co. v. Boyce, 112 N. Y. Supp. 74. And it was immaterial whether as an employee he copied or memorized the secret information which he undertook to use to the detriment of his employer. Loven v. People, supra; Davis & Co. v. Miller, supra. The use by the defendants of the complainant’s list, or any substantial part- of it, such as the evidence shows, was a violation of the complainant’s property rights.

In our judgment, the recommendation of the master and the decree of the court were erroneous.

The decree will be reversed and the cause remanded with directions to enter a decree in accordance with the views herein expressed.

Reversed and rema/nded with directions,

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


source: Caselaw Access Project

author: Mr. Justice Thomson

license: Public Domain

text:
    Annie E. McGowan, Appellee, v. London & Lancashire Indemnity Company of America, Appellant.
    Gen. No. 29,306.
    1. Forcible entry and detainer — reversal of judgment against tenant as avoiding bond in forcible detainer. If an appealing tenant prosecutes his appeal in forcible detainer with effect and accomplishes a reversal of the judgment for possession, the bond furnished under the statute becomes void, and the landlord must pursue such rights as may exist against the tenant under the lease.
    2. Forcible entry and detainer — what constitutes final determination of suit for purpose of fixing liability on appeal bond. In determining the liability of the surety in an appeal bond in a forcible detainer suit, the final determination of such suit occurred when the tenant vacated the premises and restored possession and not when the appeal was subsequently dismissed.
    3. Forcible entry and detainer — when allowance of statutory damages on appeal improper. An award of statutory damages could not be properly made in a forcible entry and detainer case where, after the tenant had restored possession to the plaintiff, the latter nevertheless filed a short record in the Appellate Court and had the appeal dismissed.
    4. Forcible entry and detainer — extent of liability on appeal bond in forcible entry proceedings. The act providing for an appeal bond in forcible entry and detainer proceedings, Cahill’s St. ch. 57, 20, construed and held that the covenant to pay “all damages and loss which plaintiff may sustain by reason of the withholding of the premises in controversy” is modified and limited by the subsequent phrase, “until the restitution of the possession thereof to the plaintiff,” and therefore where the tenant in question surrendered possession in September, and paid all rent up to that month, and the appeal was dismissed thereafter on plaintiff filing a short record, the surety company, in an action on the bond, was liable only for the costs in the trial court, with interest, the September rent and the judgment and costs in the Appellate Court in the forcible detainer suit, although the premises remained vacant until April 30 of the following year, and were rented at a lower rental for the remaining year of the term.
    5. Suretyship — construction of contract against surety for hire. In the case of a surety company acting for compensation the contract will he construed most strongly against the surety and in favor of the indemnity, which the obligee has reasonable grounds to expect.
    6. Interest — when interest not allowable on judgment in forcible detainer. Where the judgment of the trial court was reversed and judgment rendered in favor of appellee for such part only of the judgment in his favor as the defendant had admitted to be due, interest was not allowed since the trial, because the fact that plaintiff was deprived of the amount of the judgment in the interim was not the fault of the defendant.
    Appeal by defendant from the Municipal Court of Chicago; the Hon. Daniel P. Tbude, Judge, presiding. Heard in the third division of this court for the first district at the March term, 1924.
    Reversed and judgment here.
    Opinion filed June 17, 1925.
    C. E. Heckler, for appellant.
    George F. Mulligan, for appellee.
   Mr. Justice Thomson

delivered the opinion of the court.

A motion was submitted to this court some months ago in this case, in which we were asked to enter an order striking appellant’s reply brief from the files. The motion was reserved to the hearing and it will now be denied without reference being made here to the suggestions made in support of the motion.

The plaintiff, Annie McGowan, leased a third floor apartment in a three-apartment building to a Mrs. Bock for a period of two years, beginning May 1, 1921, at a rental of $175 per month. By the terms of this lease Mrs. Bock covenanted that the premises leased “shall not be used as a boarding or lodging house * *' * and none of the rooms shall be offered for lease * * * by advertising the same directly or indirectly, in any newspaper or otherwise.” Shortly after Mrs. Bock went into possession of the premises, the plaintiff, Mrs. McGowan, apparently found that her tenant was not complying with that covenant of the lease, and on the basis of such breach she brought a forcible entry and detainer proceeding against her. It was provided by the terms of the lease that a breach of any of its covenants would entitle the landlord to re-enter and take possession “without such entry working forfeiture of the rents to be paid,” and that in case of breach “the lessee shall be deemed guilty of forcible detainer of said demised premises.” Mrs. Bock obtained a jury trial in the forcible detainer case. On August 5, 1921, judgment for possession was entered in that case but the writ of restitution was stayed until September 1.

Mrs. Bock prayed an appeal from the judgment for possession and appeal was allowed and she filed her appeal bond on August 9, 1921, with the defendant in the case at bar as her surety.

The condition of the appeal bond reads as follows:

“Now, therefore, if said Lucy S. Bock shall duly prosecute her appeal with effect, and moreover pay all rent now due or that may become due before the final determination of this suit, and also all damages and loss which the plaintiff has sustained or may sustain by reason of the withholding of the premises in controversy and by reason of any injury done or to be done thereto during said withholding until the restitution of the possession thereof to the plaintiff together with all costs accrued or that may accrue, in case said judgment is affirmed or said appeal dismissed, then the above obligation to be void, otherwise to remain in full force and effect.”

Mrs. Bock failed to perfect her appeal and filed no record in this court. A few days before the first of October, plaintiff’s husband was notified that Mrs. Bock was going to vacate the premises and immediate steps were taken to find another tenant. Mrs. Bock vacated on September 29, 1921.

Mrs. Bock failing to file a record in this court in connection with her appeal, plaintiff procured a short record and filed it, and then made a motion to dismiss the appeal and prayed an award of statutory damages. On December 30, 1921, this court entered an order dismissing the appeal and awarding plaintiff judgment for $250 statutory damages, and costs amounting to $20.

After plaintiff secured judgment for possession, she found a satisfactory tenant, willing to lease the premises, and a deposit was made. This, however, was later returned and the tenant was lost to the plaintiff by reason of the uncertainty as to Mrs. Bock’s possession and her appeal from the judgment for possession. Efforts to find a new tenant continued after Mrs. Bock vacated the premises and after the appeal was disposed of. Some parties appeared wdio were willing to lease the premises at as great a rental as Mrs. Bock’s lease had called for, or greater, but only on condition that they be permitted to conduct a rooming house in the premises. This, the plaintiff was not willing to agree to do. Finally a new tenant was procured and a lease was entered into with such tenant by the plaintiff, under date of May 5, 1922, at a rental of $165 per month, being $10 less than the monthly rental called for by Mrs. Bock’s lease.

Shortly after this new lease was entered into, the plaintiff instituted the suit at bar against the defendant surety on the appeal bond filed by Mrs. Bock in the forcible detainer proceeding, seeking to recover her damages resulting from that appeal and Mrs. Bock’s failure to prosecute it with effect.

The defendant admitted liability to the extent of $550, which included municipal court costs in the forcible detainer case, with interest thereon; the reasonable rental value of the premises, fixed at $175, for the month of September (Mrs. Bock had paid all rent up to September 1) with interest thereon; and the judgment and costs in this court in the forcible detainer proceeding. The defendant submitted an instruction, at the close of all the evidence, to the effect that “under the evidence in this case the only amounts which plaintiff is entitled to recover are” a's above set forth. The trial court declined to give this instruction but gave an instruction submitted by the plaintiff, instructing the jury to find the issues for the plaintiff and assess her damages at the sum of $1,896. A verdiet was returned accordingly and judgment for that amount was entered against the defendant. To reverse that judgment the defendant has perfected this appeal.

The damages included in the judgment appealed from, in addition to the amount for which the defendant admitted liability, consisted of three items, as follows: (1) $525, claimed by the plaintiff under the condition of the bond providing for payment of “rent until the final determination of the suit,” — that is, at $175 per month from and after the month of September and until December 30, 1921, the date of the dismissal of the appeal in this court, which the plaintiff contended was “the final determination” of the suit; (2) $700, claimed by the plaintiff under the condition of the bond providing for payment of “all damages and loss which plaintiff has sustained or may sustain, by reason of the withholding of the premises in controversy,” such damages being the loss of rent at $175 per month from and after the final determination of the forcible detainer case in December, 1921, until a new tenant was procured in May, 1922; and (3) $120, claimed by the plaintiff under the same condition of the bond involved in item (2), such damages being the difference between the rental called for by Mrs. Bock’s lease ($175 per month) and the rental called for by the new lease which plaintiff procured in May, 1922 ($165 per month) for the second year, which Mrs. Bock’s lease covered, — namely, May, 1922, to April, 1923.

We shall refer to each of these items in order. As to the first one: the defendant contends that the plaintiff may not recover anything as “rent” under the condition of this bond, which represents any period after August 5, 1921, because the relation of landlord and tenant was never in effect between the parties to the lease after that time. The fallacy of this contention is demonstrated by the simple fact that this bond was not even entered into by the defendant as surety for Mrs. Bock until August 9, 1921, four days after the plaintiff had procured her judgment for possession. If defendant’s contention as to this item were to prevail, its covenant in the bond to “pay all rent now due or that may become due before the final determination of this suit,” if Mrs. Bock failed to prosecute her appeal with effect, would be meaningless. The lease itself provided that if any of its covenants were breached by the tenant, by reason of which the plaintiff became entitled to re-enter and she did so re-enter, this would not work a “forfeiture of the rents to be paid * * * during the full term of the lease.” But this action against the defendant surety is based on the bond. That bond was executed by the defendant after the plaintiff had secured her judgment for possession, and in view of its provisions we are of the opinion that the plaintiff was entitled to recover, as a part of her damages, the amount of monthly payments called “rent” in the lease, up to the “final determination” of that suit. In this connection defendant contends that the provision in the bond for the payment of rent can only apply to such time as the relation of landlord and tenant exists between the parties and it is argued that it was evidently the intention of the legislature in passing the statute, pursuant to the terms of which this bond was given, to require a defendant taking an appeal in a case of this kind to furnish a bond to secure payment of the rent until the “final determination” of the suit “no matter how the appeal may be decided,” and even if the tenant prevailed on the appeal and did prosecute it with effect and accomplished a reversal of the judgment for possession recovered in the trial court by the landlord. With that argument the plaintiff in this case seems to agree. In our opinion, it is entirely unsound. We have not been able to see any such legislative intent in the language employed in the statute in question. It seems to us to be clear that if the appealing tenant does prosecute the appeal with effect and accomplish a reversal of the judgment for possession, the bond furnished under the statute becomes void. In such event the landlord must pursue such rights as may exist against the tenant, under the provisions of the lease.

But we are further of the opinion that the “final determination” of the forcible entry and detainer suit occurred when the tenant vacated the premises and restored the plaintiff to possession on September 29, and not when the appeal was dismissed on December 30. The thing this plaintiff sued her tenant for was the possession of the premises. She recovered a judgment for possession and the defendant prayed an appeal and filed her bond. The appeal was prayed and allowed to the October term of this court. Prior to the beginning of that term the defendant vacated the premises and delivered the possession thereof to the plaintiff, who went into possession and thereby secured all she had sought to recover by her suit. That disposed of the case and there was nothing about it left to determine.

It would certainly be an unreasonable requirement if the law should be held to require that the tenant, after she had restored possession and given the plaintiff landlord all she had sued for, nevertheless, should go to the expense of perfecting her appeal in this court, merely for the purpose of getting it dismissed. As soon as the tenant abandoned her appeal and surrendered possession, the forcible entry and detainer case was at an end and “finally determined” and the liability of the tenant and her surety on the appeal bond was fixed. Under the provisions of the bond, the tenant and her surety then became liable for all rent which had become due up to the time the possession of the premises was restored to the plaintiff. In this connection, we feel we ought to say that, in our opinion, no award of statutory damages should have been made when, in December, after the tenant had restored possession of the premises to the plaintiff, the latter nevertheless filed a short record in this court and had the tenant’s appeal dismissed, for the records of this court show that the suggestions filed by the plaintiff in support of her motion set forth, among other things, the fact that the tenant had surrendered possession of the premises in September. That motion was not acted upon by this division of the court.

As to the last two items of damage awarded the plaintiff by the trial court, we are of the opinion that it was error to include them in the judgment. As we read and interpret the provisions of this bond and of the statute pursuant to which the bond was given (Cahill’s St. ch. 57, | 20), the covenant to pay “all damages and loss which the plaintiff may sustain by reason of the withholding of the premises in contro.versy,” is modified and limited by the subsequent phrase, “until the restitution of the possession thereof to the plaintiff. ’ ’ That last modifying and limiting clause may not reasonably be applied to the clause immediately preceding it, which reads, “by reason of any injury done thereto during such withholding,” which clause itself, by use of the words “during such withholding” confines its application to that period, and so the following clause, “until the restitution of the possession thereof to the plaintiff,” would be but needless repetition if it were considered as applying to that immediately preceding clause. It does apply, clearly, in our opinion, to the covenant to pay “all damages and loss which the plaintiff may sustain by reason of the withholding of the premises.” In our opinion, that interpretation should be applied to the language of the bond in the case at bar.

In Rehm v. Halverson, 94 Ill. App. 627, 197 Ill. 378, it was held that [p. 387]: “The value of the use and occupation of the premises, during the time when the possession was withheld from the appellee, was the measure of the loss and damage, sustained by reason of the withholding of the same. In other words, in order to ascertain the loss and damage sustained to the plaintiff by reason of the withholding of the premises, it was proper to show the value of their use and occupation during the period of such withholding. Shunick v. Thompson, 25 Ill. App. 619; Barrett v. Lingle, 33 Ill. App. 91.” At the time that case was decided, the statute, specifying the terms to be included in appeal bonds given in cases of this kind, was the same as it is now but the bond involved in that case was worded somewhat differently from the bond involved in the case at bar. The case of Pierson v. Lawyer, 225 Ill. App. 400, involved a bond worded more nearly like the one involved in the case at bar, and given under the provisions of the same statute, and this court there cited Rehm v. Halverson, supra, and followed the rule there laid down, as quoted above.

In connection with the argument presented in this case, counsel for the defendant has contended that the contract of a surety is strictly construed. The law is that in the case of a surety company, acting for compensation, the contract will be construed most strongly against the surety and in favor of the indemnity which the obligee has reasonable grounds to expect. In such a situation, the court will regard the contract more in the nature of an insurance contract and by necessity apply the rules covering liability applicable in that class of contracts. Gunsul v. American Surety Co. of New York, 308 Ill. 312; Marks v. Knofsky Co., 233 Ill. App. 293.

In our opinion, the trial court erred in fixing the plaintiff’s damages. They should not have been fixed at any amount greater than $550, which was the amount for which the defendant admitted it was liable.

For the reasons given, the judgment of the municipal court is reversed and judgment for the plaintiff for $550 entered in this court. We do not include interest on that amount since the trial, for the fact that the plaintiff has been deprived of the amount of the judgment for the intervening time is no fault of the defendant.

Judgment reversed and judgment here.

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


text:
    Sadie Sando, Defendant in Error, v. William R. Smith, Plaintiff in Error.
    Gen. No. 29,531.
    1. Appeal and erbob — when verdict finding the making of a gift is not reversible as against the manifest weight of evidence. Where the sole evidence of a gift by a decedent was that of the sister of the donor who was present when the alleged gift was made, and where it was claimed that the record was full of impeaching circumstances, all of which were inconsistent with the claim that any gift was made as testified to, but where all were denied by the donee and her witnesses, and where there were also inconsistent circumstances, the finding of the jury is not against the manifest weight of the evidence.
    2. Arguments of counsel — when right of argument is improperly limited. In an action by one claiming as donee of a decedent against the donor’s administrator to recover the funds in question which plaintiff had delivered to the defendant on his request, where the pleadings squarely presented the question whether the delivery of the pass books and check in question, to the defendant by the plaintiff, had been caused by a misrepresentation on the part of defendant to the effect that he had procured the entry of an order by the probate court directing that such things be done, or whether the defendant had made no false representations, but plaintiff, with full knowledge of the facts, had made voluntary delivery without claiming title, and each party submitted evidence in support of his position, it was error for the court to refuse to permit counsel for defendant to argue to the jury as to the material question of fact whether or not defendant had made the alleged false representations, even though the question of voluntary payment was not involved in the case as a question of law.
    3. Payment — recovery of voluntary payment to administrator as officer of court. The rule that money paid with full knowledge of all the facts and under a misapprehension as to legal rights may not be recovered back held not applicable to payments made to an officer of the court, such as a receiver, a trustee in bankruptcy or an administrator or executor.
    4. Estates of decedents — applicability of rule against recovery of voluntary payments to payments to administrator. A defendant, who, although the administrator of the estate of the decedent in question, was defending in his personal capacity, in an action to recover money claimed as a gift, which had been turned over to him by the donee and who took the position that the money sued for belonged to the estate of his intestate, and that he was rightfully in possession of the money as an officer of the court, could not defeat recovery on the theory of voluntary payment, or the contention that plaintiff turned over the money to him with full knowledge of the facts involved and under a mistake of law as to her rights, as those rules are not applicable to payments made to an administrator; and as he claimed rights as administrator, he was chargeable • with the obligations placed by the law upon one occupying that position.
    5. Estates of decedents — liability of administrator to heirs for nonassets received after appointment. An administrator is not responsible to the heirs of a deceased person, nor required to account to the court, for money or property which may have come to his possession after his appointment, unless such money belonged to the decedent’s estate at the time of his death.
    6. Instructions — refusal of instructions containing abstract propositions of law as error. The refusal of instructions containing abstract propositions of law could not be said to be error.
    7. Gifts — admissibility of declarations of decedent as to intention to make gift. In an action to recover money claimed as a gift from a decedent, which had been turned over by the donee to the defendant, who had been appointed administrator, testimony as to declarations of the deceased tending to show an intention to give the property in question to plaintiff was properly admitted, where there was direct testimony to the effect that the property was turned over by deceased to plaintiff, and there were circumstances in the case more or less inconsistent with the fact that such delivery was a gift.
    8. Gifts — admissibility of evidence of donative intent. In an action by one claiming as donee of money from her sister in the latter’s last illness, against the administrator of the sister’s estate individually, to whom plaintiff had delivered the funds on his request after the death, evidence concerning the plaintiff’s attentions to decedent during her last illness is admissible on the question of intention to give where there is direct evidence that decedent turned over the fund to plaintiff but there are circumstances inconsistent with the claim that such delivery was donative.

      9. Tbial — construction of special interrogatory. In an action to recover money claimed as a gift from a decedent, which had been turned over to the defendant individually, who had been appointed administrator, a special interrogatory in substance as follows: Did decedent prior to her death, deliver to plaintiff her two bank books which have been introduced in evidence, and the money represented thereby, with intent to part with interest in and dominion and control over them and to vest in plaintiff the title to said books and the money which they represented, was not subject to the construction that it assumed that there was a delivery of the property, and merely inquired as to the intent which the jury believed the deceased had in so delivering it, and the submission thereof was not error.
    10. Witnesses — when donee competent as to declarations by deceased donor. In an action by the donee to recover money claimed as a gift from a decedent, which had been turned over to defendant, the donee was competent to testify as to the occurrences which were alleged to have happened prior to the death of the deceased, as the defendant was properly sued, not as administrator, but in his individual capacity.
    11. Witnesses — application of rule of incompetency by death of party to transaction. In an action to recover money claimed as a gift from a decedent, which had been turned over to the defendant, who had been appointed administrator, plaintiff could recover only on the theory that the money she was suing for was not a part of the estate of the deceased, and, such being the case, the defendant, who was wrongfully retaining it, was liable as an individual; therefore the rules of evidence eliminating the testimony of the plaintiff in a suit against the administrator were not properly applicable.
    12. Gifts — admissibility of vyriting corroborating claim of gift. In an action to recover the value of gifts made by a decedent, where plaintiff claimed that certain bank books and a watch were contained in a bag handed to plaintiff by the decedent, where there was testimony that plaintiff turned the watch over to a third party to Whom it belonged, after the decedent’s death, it was error to refuse to admit in evidence a receipt for such article given by said third party to plaintiff, dated prior to said death, as such receipt tended to support plaintiff’s testimony that she delivered it before decedent’s death and indirectly supported her theory of the gift.
    Error by defendant to the Circuit Court of Cook county; the Hon. Philip L. Stjllivan, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1924.
    Reversed and remanded.
    Opinion filed June 17, 1925.

      Rankin & Lustfield, for plaintiff in error; Ode L. Rankin, of counsel.
    Perley H. Bishop and Frederick W. Moore, for defendant in error.
   Mr. Justice Thomson

delivered the opinion of the court.

By this writ of error the defendant Smith seeks to reverse a judgment for $5,742.39, recovered against him by the plaintiff in the circuit court of Cook county.

Margaret E. White died in June, 1921, leaving surviving as her only heirs and next of kin three sisters and a brother, — Mrs. Sando, the plaintiff; Mrs. John W. White, Mrs. Griffiths, and William R. Smith, the defendant. For some weeks prior to her death, Mrs. Margaret White had been confined to her bed by a serious illness. She was a woman advanced in years and lived in a small cottage, which was her property, with another elderly woman as her companion. During this last illness, Mrs. Sando, the plaintiff, who lived not far from the home of Mrs. Margaret White, went there daily and ministered to the comfort of her sister. Mrs. Griffiths, whose home was in California, was in Chicago at the time staying at the home of Mrs. Sando, and she frequently visited the home of Mrs. Margaret White.

The evidence shows that the deceased had savings deposits in two separate banks and that about a week prior to her death, there being need of some money to pay the current expenses of the household, it was suggested to her, apparently by her three sisters, all of whom were present, that she execute an order on one of the banks for $500, for the purpose of providing the funds necessary to meet her immediate needs. The money thus made available was procured by Mrs. Sando, and up to the time Mrs. White died $205 had been expended in her behalf and $295 remained in Mrs. Sando’s possession.

After Mrs. White’s death, Mrs. Sando also had in her possession the two savings bank books, covering the two accounts which had been owned by Mrs. White. The defendant, William E. Smith, was appointed administrator of the estate of Mrs. White and shortly thereafter he, with one Brust, a lawyer, called on Mrs. Sando, and at that time she turned over the bank books in question to the defendant, and he subsequently secured possession of the funds in the two savings accounts and has since had them in his possession as administrator of the estate.

Shortly after Mrs. Sando turned the bank books over to the defendant, she was called upon by one Wagner, another lawyer, representing the administrator and at that time she gave Wagner a check for $295, being the balance of the $500 she had received on Mrs. White’s order prior to her death, which check was likewise delivered to the defendant, as administrator.

Subsequently the plaintiff brought this action in assumpsit against the defendant, individually, to recover back the proceeds of the two savings accounts and also the $295, claiming that these funds had been the subject of a gift to her from her sister shortly before her death.

This case has been tried twice and on each trial the jury found the issues in favor of the plaintiff. On the first trial the plaintiff was allowed to testify to facts alleged to have occurred prior to the death of her sister, over defendant’s objection, and, on the theory that the admission of that evidence was error, a new trial was awarded; and, on the second trial, the plaintiff was not permitted to testify as to things alleged to have taken place prior to the death of the deceased.

The only direct evidence supporting the gift of the bank books in question, and the moneys they represented, to the plaintiff by the deceased was given by her sister, Mrs. Griffiths, who testified that on an occasion when only she and the plaintiff were present with the deceased, a short time prior to her death, the latter turned over a chamois bag to the plaintiff and made a gift'of its contents to her, saying: “Sadie, I want you to have this. Take it. You are entitled to it. Everything in it is for you.” In addition to the bank books in question, the testimony shows that.the chamois bag contained a gold watch, which had belonged to the husband of the deceased, and three diamonds, — one set in a ring and the other two in a pair of earrings.

While there could be no direct denial of this testimony supporting the theory of a gift, it being the testimony of Mrs. Griffiths that this occurrence happened when only she and the plaintiff were present with the deceased, it is the defendant’s contention that the record is full of impeaching circumstances, all of which are inconsistent with the fact that any gift had ever been made, as testified to by Mrs. Griffiths. Many of these alleged impeaching circumstances rest upon testimony of witnesses for the defendant, and they are the subject of denial on the part of the plaintiff and her witnesses. Presumably, the jury in weighing the evidence as to these circumstances concluded that they had not occurred as claimed by the defendant, and the state of the record is such that this court could not say that the finding of the jury in that regard was against the manifest weight of the evidence. But there are certain admitted facts which the defendant contends are wholly inconsistent with the thought of a gift of this money by the deceased to her sister, the plaintiff.

The first is, that after the plaintiff claims the deceased gave her these bank books, she, together with Mrs. Griffiths and Mrs. John W. White, got the deceased to execute some sort of an order on the bank for the purpose of enabling her to get the $500, to be used in meeting her immediate needs. This, it is claimed, was entirely out of fine with any theory that the deceased had already made a present of all the money in these accounts to the plaintiff. It is pointed out, on the other hand, that the evidence tends to show that there was not as cordial a feeling between the deceased and her sister, Mrs. John W. White, and her brother, the defendant, as there was between the deceased and her sister, Mrs. Griffiths, and the plaintiff. Mrs. Griffiths testified that when the deceased first gave the chamois bag to the plaintiff, and told her she wanted her to havé everything there was in it, the plaintiff refused to take it, and slipped the bag under her sister’s pillow arid told her she might yet need what was in it; and that a few days later, when she and the plaintiff were alone in the room with the deceased, and the other sister, Mrs. John W. White, was in an adjoining room, the deceased again placed the chamois bag in the hands of the plaintiff and told her to take it home and keep it, and when she did so ‘ ‘ she shook her finger to enjoin silence. Our other sister was in the other room.” The jury might consider that this explained any apparently inconsistent action of the plaintiff when she a day or two later joined with the others in suggesting to the deceased that she execute an order on the bank for the purpose already indicated, and that, those being the circumstances, the plaintiff might have desired to conceal the fact that her sister had given these bank accounts to her.

Another circumstance relied upon by the defendant in this connection is that when he and his lawyer called on the plaintiff, after their sister’s, death, the plaintiff, with apparent willingness, turned these bank books over to him without saying anything to the effect that she claimed they, or the accounts they represented, were hers; but as to these circumstances, her contention is that on that occasion she asked her brother if he had an order of the probate court directing her to turn these bank books over to him and that he' said he had and that he exhibited such an order to her, or a document she concluded was an order, and that her act in turning over these books to her brother was prompted by the fact that such an order had been entered. This incident furnishes another one of the many controverted questions of fact in the case. The defendant’s contention is that on this occasion nothing was said about a court order but that he told his sister that he had been appointed administrator and that the document he showed her was a certified copy of his letters of administration, and that when he showed her this document and told her he had been appointed and asked her to turn the books over to him, as administrator, she willingly did so.

The third inconsistent circumstance urged in this connection by the defendant is that some time later, when the other lawyer, Wagner, called upon the plaintiff and asked her about the balance of the $500 in her hands, she, according to her own testimony, told him that she had kept a careful account of the items involved in her expenditures from that fund and she exhibited a list of those items to him, and asked him to figure them up and ascertain the difference between their total and the $500, and draw a check for the difference which she would be glad to sign, “according to law, because I want everything right.” This circumstance may not be explained on the theory that the plaintiff was misled by thinking she was required to do what she was doing because the court had entered an order directing that it be done, for she testifies that in this same conversation between herself and the lawyer representing the defendant, the lawyer said he understood the deceased had some diamonds, and that she then told the lawyer that her sister had given her the diamonds to keep, and the lawyer then asked her how she happened to have given up the bank books, and she then told him that she was “tricked out of them” by her brother. There does not seem to have been any fact involved of which the plaintiff was not cognizant at the time she gave the defendant’s lawyer the $295 check.

If the only question presented on this appeal was the question of fact as to whether or not the deceased had made a gift of this money to the plaintiff, as she claims, we would not be disposed to disturb the judgment. The facts involved here are somewhat different from those involved in Barnum v. Reed, 136 Ill. 388, and in Rothwell v. Taylor, 303 Ill. 226, for in the case at bar there was positive direct evidence tending to support the gift and in our opinion it may not reasonably be said, because of the testimony as to the alleged inconsistent circumstances, that the verdict of the jury, finding that there was a gift, is against the manifest weight of the evidence. We are of the opinion, however, that such error entered into the trial of this case as necessitates a reversal of the judgment and a remanding of the cause for another trial.

The plaintiff’s declaration consisted of a number of common counts and also a special count, and in the latter the plaintiff alleged, among other things, that the defendant, “falsely pretending and representing to the plaintiff” that he was entitled to possession of the bank books and “that he had an order of some court directing plaintiff to deliver” those bank books to him, demanded that she so deliver them, and the plaintiff, believing and relying upon the defendant’s statement, complied with his demand and turned the books over to him. By special pleas which he filed the defendant alleged that as administrator of the estate of the deceased he requested the plaintiff to turn the bank books over to him, together with the balance of the $500 fund, and that “the plaintiff did voluntarily surrender said bank books to the defendant as such administrator and issued to the defendant a check for the sum of $295.” The plaintiff’s demurrers to these special pleas having been overruled, she filed replications in which she alleged that she “did not voluntarily surrender the said bank books to the defendant as such administrator and did not voluntarily issue to him the said check for $295, ’ ’ but that she surrendered the bank books and issued the $295 check to the defendant “because the said defendant falsely and fraudulently represented and stated to the said plaintiff that he had an order from the Probate Court of Cook County directing the plaintiff to surrender said pass books and to issue said check to him, and that the plaintiff, believing said statements and representations made by said defendant, and * * * relying thereon, * * * delivered the said pass books and the said check to the said defendant.”

The pleadings of the parties thus presented squarely the question of whether the delivery of the pass books and the check to the defendant by the plaintiff had been caused by a misrepresentation on the part of the defendant to the effect that he had procured the entry of an order by the court directing that these things be done, or whether, on the other hand, he had made no false representation, but the plaintiff, with full knowledge of the facts, had voluntarily delivered the balance of the $500 and the bank books to the defendant without claiming any title to them herself. Each of the parties submitted evidence in support of their respective positions on that question. At the close of the trial counsel for the respective parties went into chambers with the trial judge to settle the instructions; and in connection with his action in marking certain of the instructions for the defendant “refused” some discussion was had as to the scope of the issues of fact which the jury were to be called upon to decide and on which counsel might properly base their argument; and in that connection counsel for the defendant made it known that he wished to argue the question of a voluntary payment by the plaintiff to the defendant and also the question of the alleged fraud by the defendant in falsely representing that he had a court order, and the court stated, in substance, that in his opinion these matters were not involved and that he would not permit counsel for the defendant to cover these matters in his argument to the jury. In connection with this matter it is contended by counsel for the plaintiff that the action of the trial court was merely such as to prevent counsel for the defendant from arguing a question of law to the jury. The statements of counsel and of the court, , which have to do with this matter, appear rather fully in the record and we have examined them carefully, and in our opinion the action of the trial court went too far and improperly limited the argument of counsel for the defendant before the jury as to a material question of fact, namely, whether the defendant had made the alleged false representation or not.

So far as the question of a voluntary payment is concerned, we are of the opinion that the trial court was properly of the opinion that it was not involved as a matter of law. It is true that, as a general rule, money voluntarily paid to another under a claim of right to the payment and with knowledge of the facts, by the person making the payment, cannot be recovered back on the ground that the claim was illegal. In turning these bank books over to the defendant, the plaintiff was in effect transferring to him or paying to him the money which they represented. The general rule is further to the effect that a payment made with a full knowledge of the facts and circumstances and in ignorance only of legal rights cannot be recovered back and proof that the one making the payment was in fact under no legal obligation to pay and that the other had no right to receive the payment is of no. consequence and will not entitle the one making the payment to sue for a recovery of the money, unless the payment was compulsory to the extent of depriving him of the exercise of his free will. Illinois Glass Co. v. Chicago Tel. Co., 234 Ill. 535. But, in our opinion, this rule that money paid with a full knowledge of all the facts and under a misapprehension as to legal rights may not be recovered back is not applicable to the payments made to an officer of the court, such as a receiver or a trustee in bankruptcy or the administrator or executor of an estate. This exception to the general rule was applied to a trustee in bankruptcy by Lord Justice James in Ex parte James, 9 Ch. App. 609, where the court pointed out that the trustee was to hold money paid into his hands upon trust for its equitable distribution among the creditors. In this case a creditor had received money to which he was properly entitled under an execution sale against the bankrupt, but he paid this money over to the trustee, under the mistaken belief that the latter was entitled thereto as a matter of law. In deciding that the creditor could recover the money back from the trustee, the Lord Justice said: “The court, then, finding he (the trustee) has in his hands money which in equity belongs to someone else, ought to set an example to the world by paying it to the person really entitled to it. In my opinion the court of bankruptcy ought to be as honest as other people.” The foregoing decision was followed in Ex parte Simmonds, 16 Q. B. Div. 308, where Lord Esher said that, although the court will in general permit an individual litigant to do a “shabby thing,” — namely, to retain money thus acquired, — it will not allow its own officer to do so. In that decision Lord Esher continued: “It will direct its officer to do that which any right-minded man would do, viz., not to take advantage of the mistake of law. This rule is not confined to the court of bankruptcy. If money had, by mistake of law, come into the hands of an officer of a court of common law, the court would order him to repay it as soon as the mistake was discovered.” These decisions were cited and followed in Gillig v. Grant, in the Appellate Division of the Supreme Court of New York, 23 N. Y. App. Div. 596, 49 N. Y. Supp. 78, where the court said: “The doctrine of these cases commends itself to both reason and justice.” We desire to say here, as the court did in the New York case, that, in quoting from the English cases referred to with approval, we mean no reflection upon either the administrator in the case at har or his counsel, hut, quoting again from the New York Appellate Division, we are of the opinion that: “It would be a reproach upon the administration of justice should the court, when the question is squarely before it, hesitate to admonish its officer to desist from further efforts to augment Ms trust estate at the expense of one who is clearly entitled to the money which that officer holds.” By that latter quotation from the New York decision, we do not wish to be understood as applying that to the evidence in the case at bar on the question of whether a gift, in fact, was made, or to be considered as expressing an opinion on the right of the plaintiff to the money she is here suing for. That question of fact must be determined from sharply conflicting testimony and it will be a question for the jury to determine when this case is redoeketed in the trial court for another hearing. We are not unmindful of the fact that the defendant is being sued here in his individual capacity and not as an administrator. However, he is claiming the right to hold these funds, for which the plaintiff is suing, as admiMstrator. In other words, his position is that the money here sued for belongs to the estate of his deceased sister and that he is rightfully in possession of that money as an officer of the court and that being Ms position, following the ruling laid down in the foregoing cases, we are of the opinion that he may not be permitted to defeat the plaintiff’s recovery on the theory of voluntary payment or the contention that she turned the money over to him with full knowledge of the facts involved, and under a mistake of law as to her rights. Inasmuch as he claims the rights of an administrator as to this money, he must be charged with such obligations as the law places upon one occupying that position.

But while we are of the opimon that no question of voluntary payment is involved in this case as a question of law, nevertheless, we are further of the opinion that the question of whether the plaintiff was moved to turn the bank books and the cheek over to her brother by reason of a false representation, to the effect that he had an order from the court directing that she so do, was a material issue of fact, which counsel for the defendant should have been permitted to comment upon in his closing argument to the jury, as bearing on the question of whether there was a gift, as claimed by the plaintiff. As already stated, we have concluded from our reading of the record that the trial court did not permit that question of fact to be presented in the closing argument. The fact of false representation as alleged by the plaintiff in her declaration and denied by the defendant in his pleas, and reiterated by the plaintiff in her replications to those pleas, was an important element for the consideration of the jury, because if the jury believed from all the evidence that there was such a representation, then the apparent inconsistency of the act of the plaintiff in turning over the bank books to her brother may reasonably be explained. But if, on the other hand, the jury believe from all the evidence that there was no such false representation, then the act of the plaintiff, in turning over this property to her brother, as administrator, was so inconsistent with the fact of a gift, as claimed by her, as might reasonably lead the jury to find the issues on that question in favor of the defendant.

The defendant complains of the rulings of the trial court with reference to some of the instructions offered by the defendant. For the reasons we have already had occasion to refer to, we are of the opinion that ah of the instructions submitted on the question of a voluntary payment were properly refused. With the apparent purpose of counteracting the defendant’s contention that the plaintiff should not be permitted to recover because he (defendant) was under a legal obligation to account for the funds in his hands, as administrator, the plaintiff submitted an instruction, which the court gave, to the effect that an administrator is not responsible to the heirs of a deceased person, nor required to account to the court appointing him, for any money or property which may have come into his possession after his appointment, unless such money belonged to the decedent at the time of his death and constituted a part of the decedent’s estate at the time of his death, and the instruction proceeded: “If the jury believe from the evidence in this case that at the time of Margaret E. White’s death the money in controversy did not belong to her and did not constitute a part of her estate, then the defendant owed no duty with regard to such money, either to the heirs of the deceased or to the Probate Court.” In our opinion, the giving of this instruction was proper.

The defendant submitted a number of instructions referring to the question of the alleged false representation. The jury should have been properly instructed on that question, but it could not be said that the trial court erred in refusing the instructions which were submitted, as they were merely abstract propositions of law. On another trial of this case, proper instructions covering this issue should be presented.

The defendant complains further of certain rulings of the trial court on the admission of evidence. The court admitted testimony as to declarations of the deceased, tending to show an intention to give the property in question to her sister, the plaintiff. There is direct testimony in this case to the effect that this property was turned over by the deceased to the plaintiff. There are circumstances in the case which are more or less inconsistent with the fact that such delivery was a gift. That being the situation, in our opinion, the evidence as to the donor’s statements was proper. McIntosh v. Fisher, 125 Ill. App. 511; Smith v. Maine, 25 Barb. (N. Y.) 33. For the same reason we are of the opinion that it was also proper for the court to admit evidence concerning the attentions of the plaintiff to her deceased sister during her last illness.

A special interrogatory was submitted to the jury, reading as follows: “Did Margaret E. White, prior to her death, deliver to the plaintiff, Sadie Sando, her two bank books, which have been introduced in evidence, with intent to part with all interest in and dominion and control over said bank books and the money represented thereby, and to confer on the plaintiff and vest in her the absolute right, title and interest in said bank books and the money which they represented?” It is the contention that the trial court erred in submitting this special interrogatory to the jury, the argument being that it assumed that there was a delivery of the property and merely inquired as to the intent which the jury believed the deceased had in so delivering it. In our opinion the interrogatory is not subject to that construction. It would be more clear, however, if the words, “and if so, did she do so, ’ ’ were inserted after the word ‘ ‘ evidence.”

Inasmuch as there is to be another trial of this case, we feel that we ought to say that, in our opinion, the plaintiff should be permitted to testify, as she did in the first trial of the case, as to occurrences which arc alleged to have happened prior to the death of the deceased. The defendant is properly sued here, not as an administrator but in his individual capacity. Havill v. Newton, 202 Ill. App. 15. Whitaker v. Shuman, 161 Ill. App. 568. It is true that he claims the right to retain the money sued for, on the theory that it is a part of the estate of his deceased sister and, therefore, he, himself, will not be permitted to assume an attitude inconsistent with that position. It is for that reason that we have held that he, claiming the right to retain this money as an officer of the court, will not be permitted to invoke the rule as to voluntary payments in ignorance of legal rights. But when it comes to the rules of evidence to be applied to the plaintiff as to the proof of her case, we must remember that the plaintiff may only recover in this case on the theory that the money she is suing for is not a part of the estate of her deceased sister, and that such being the case, the defendant, in wrongfully retaining it, is liable as an individual. Inasmuch as the plaintiff may recover only on the theory that, the money sued for was not a part of her deceased sister’s estate, the rules of evidence eliminating the testimony of a plaintiff in a suit against an administrator may not properly be applied here.

There was another offer of evidence on the part of the plaintiff, which was objected to by the defendant, and in our opinion the trial court erred in sustaining the objection. It was the plaintiff’s contention that the chamois bag delivered to her by her deceased sister contained, among other things, a gold watch, which had belonged to the husband of the deceased. He was a brother of John W. White, the husband of the plaintiff’s sister, referred to in the first part of this opinion as Mrs. John W. White. Both he and his wife testified in this case that the plaintiff turned this watch over to John within a day or two after Margaret White died. The plaintiff contended that this incident occurred before Margaret White’s death. She testified that she had no conversation with Mrs. John W. White after her sister’s death. In this connection, she further testified that at the time she turned this watch over, her sister, Mrs. John W. White, signed a receipt for it and that her brother-in-law, John W. White, was not present when she delivered the watch, but that only she and her sister Mrs. White were present. The plaintiff offered in evidence the receipt which she says her sister signed at that time. It reads as follows: “Received of Sadie Sando, A. J. White’s gold watch and chain, Mrs. John W. White, June 7th, 1921.” In our opinion, that evidence was competent and material. It tended to support the testimony of the plaintiff and indirectly to support her theory of the gift, as the receipt was dated June 7, and the testimony shows that Margaret "White died on June 13,— six days later.

For the reasons we have given, the judgment of the circuit court is reversed and the cause is remanded to that court for a new trial.

Reversed and remanded.

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


text:
    W. C. Handley, Appellant, v. Stuart Drum and Alice Drum, Appellees.
    Gen. No. 29,566.
    1. Negotiable instruments — admissibility as between original parties of parol evidence to vary terms of note. Under the general rule that a party to a written contract may not contradict the terms of that contract by parol, a defendant in an action on a note, unconditional in its terms, could not show by parol, even as against the payee, that the parties had an understanding that the contract was in fact conditional.
    2. Negotiable instruments — right of makers to show by parol contemporaneous agreement for conditional delivery of note. In an action against the makers of a promissory note they may show by parol that the note was never fully executed, that although it was signed by them there was merely a conditional delivery and that the condition has failed under the Negotiable Instruments Law, sec. 16, Cahill’s .St. ch. 98, 1Í 36, which provides expressly that a negotiable instrument is incomplete and revocable until delivery, and that as between immediate parties conditional delivery, or one for special purposes, may be shown.
    3. Negotiable instruments — parol agreement to pay note from dividends only as one for conditional delivery. An agreement that the note in question was not to take effect until sufficient dividends had been declared upon the shares of stock in consideration of which the note was given, to amount to the face value of the note, with interest, did not make the delivery of the note but merely its payment conditional, and hence parol proof was not admissible to contradict the express terms of the note.
    4. Appeal and ebkob — when Appellate Court may enter judgment on reversal. Where, in the view of the Appellate Court, the plaintiff’s motion for a directed verdict should have been granted but was denied in an action on a note in which a judgment by confession had been secured and the defendants were given leave to appear and defend, the judgment standing as security, judgment may be entered for plaintiff by the Appellate Court on reversal of the judgment of the trial court, with interest from the date when the judgment by confession was entered.
    Appeal by plaintiff from the Municipal Court of Chicago; the Hon. Daniel P. Tbude, Judge, presiding. Heard in the third division of this court for the first district at the October term, 1924.
    Reversed and judgment here.
    Opinion filed June 17, 1925.

      Certiorari denied by Supreme Court (making opinion final).
    Robert W. Dunn, for appellant.
    Fassett, Abbott & Hughes, for appellees; John E. Hughes, of counsel.
   Mr. Justice Thomson

delivered the opinion of the court.

The plaintiff Handley secured a judgment for $2,500 against the defendants, Stuart and Alice Drum, on a judgment note for that amount. Subsequently the defendants were given leave to appear and defend, the judgment to stand as security. They then filed an affidavit of merits, in which they set up, among other things, that the note sued upon was executed in part payment for 290 shares of the capital stock of the Eagle Battery Sales Corporation, and at the time it was executed it was stipulated and agreed between the parties “that the note was not to take effect until sufficient dividends had been declared,” upon the stock, the shares “being then and there transferred by plaintiff to defendant Stuart Drum, to amount to the face value of said note with interest,” and that it was further stipulated and agreed between the parties “that the note should be paid only out of dividends declared by” the company.

3h support of the defense thus set up, the defendant Stuart Drum testified that Handley owned 300 of the 600 shares of the capital stock of the Eagle Battery Sales Corporation, with which he, as well as the witness, had been connected and desired to sell his interest or the greater part of it; that “I had suggested to bim that I would like to have a part interest in the business provided he would remain as the head of the company”; that they had certain negotiations which led to his agreement to pay Handley $4,000 for 290 shares of his stock; that “the talk was that I was to pay $1,500 cash and give a note signed by myself and wife due on or before twelve months, for $2,500.” The evidence shows that Handley delivered the shares of stock which were the subject of this sale to Drum and the latter paid Handley the $1,500 in cash agreed upon and he and his wife, the two defendants, also signed the note here involved and Drum delivered it to Handley as part of the consideration for the stock. That note read as follows:

“$2,500.00. Chicago, Ill., September 23, 1922.
“On or before twelve (12) months after date, for value received, the undersigned promise to pay to the order of Wm. Handley at Southwest State Bank at its office in Chicago, Twenty-five Hundred and no/100 Dollars with interest at the rate of seven per cent per annum after maturity until paid * * * (with judgment clause).
“Ño. 1 — Due Sept. 23 — 1923.
Stuart I. Drum,
Alice Y. Drum.”

Stuart Drum further testified that in the course of his negotiations with Handley, “I told him I could pay $1,500 cash, and I would be willing to give him my note, but I could only pay it from the proceeds of the business. He said that would be acceptable if the note was secured by real estate signed by myself and wife.” After thus acquiring this stock, Drum became president of the company but he testified that it had never made any profit and at the time of the trial of this case it had ceased doing business.

The court instructed the jury that they must find the issues for the defendants if they believed from a preponderance of the evidence that “it was orally agreed by and between plaintiff and defendants prior to the execution of the note sued upon that the defendants would not be liable to pay said note except from the profits of the Eagle Battery Sales Corporation, and that said corporation did not make any profits.” The jury found the issues for the defendants. The judgment theretofore entered for the plaintiff was vacated and judgment was then entered on the verdict for the defendants. To reverse that judgment the plaintiff has perfected this appeal.

In our opinion the instruction given by the trial court was not in accord with the law of this State. The promissory note was a written contract to pay $2,500, which was absolute in its terms. It is elementary that the defendants could not show by parol, even as against the payee of the note, that the parties had an understanding that the contract in fact was conditional. It is a fundamental part of the law of contracts, to which there are very few exceptions, that a party to a written contract may not contradict the terms of that contract by parol. But it is equally well established that such a party may show that the contract claimed to exist was in fact never fully executed, — that although it was signed by him, he never delivered it or that there was merely a conditional delivery and that the condition has failed. In so doing, the written terms of the contract are not varied by parol but the showing made is merely to the effect that the contract never was completely executed. Those principles apply to contracts entirely apart from negotiable instruments. Northwestern Consol. Milling Co. v. Sloan, 232 Ill. App. 266; Ideal Tool & Manufacturing Co. v. Staff, post, p. 624. They have also been applied to negotiable instruments, as they were in Schneider v. Lebanon Dairy & Creamery Co., 73 Ill. App. 612. After that and other similar cases were decided in this State, the Negotiable Instrument Law was adopted by our legislature. Section 16 of that Law (Cahill’s St. ch. 98, ft 36) provides expressly that: “Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto,” and further, that as between immediate parties, “the delivery may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the instrument.”

From what we have already said, it will be seen that the statement found in Straus v. Citizens State Bank of Elmhurst, 164 Ill. App. 420, to the effect that the section of the Negotiable Instrument Law, above quoted, “must be held to change the law in this State” is inaccurate. The principle announced in that section is a part of the law of contracts generally and was applied to the law of negotiable instruments in the decisions of Illinois courts before the Negotiable Instrument Law was adopted in this State. As pointed out in 8 C. J. 203, the provision of section 16 of that Act, as to the necessity for delivery, “is merely a legislative enactment of the common-law rule. ’ ’

Applying the rule to the facts presented in the case at bar, it is quite apparent that counsel for the defendants appreciated the limits and extent of the rule, for in their pleadings they set up a conditional delivery. Their pleading was “that the note was not to take effect until sufficient dividends had been declared” upon the stock “to amount to the face value of said note with interest.” But, in our opinion, it is equally apparent that the proof submitted did not make out the defense thus pleaded. That proof was not to the effect that the delivery of the note was conditional but that the parties had agreed that its payment was to be conditional and depend on the profits to be derived from the stock in the way of dividends. In contending the contrary, counsel for the defendants urge that this was not a delivery of the note “for the purpose of giving effect thereto” as required by the statute before such an instrument can be considered complete and irrevocable. The evidence in this case fails to support that contention. The consideration for this note, together with the cash payment made, was 290 shares of stock of the company in which both these parties were interested. The note, together with the balance of the consideration, $1,500 in cash, was delivered to the plaintiff and the stock was delivered to the defendant Drum and was transferred on the books of the company to his name and by means of the voting of this stock the defendant became the president of the company and proceeded to manage its affairs. That being the situation, it must be held that the defendants delivered the note “for the purpose of giving effect thereto,” and even if, as the trial court put it in the instruction above quoted, the parties agreed prior to the execution of the note, “that the defendants would not be liable to pay said note except from the profits” of the company and the company made no profits, the defendants are nevertheless liable in this action because the alleged agreement did not impose a condition precedent to a complete delivery of the note but rather one which applied to the payment of the note and as this contradicted the express terms of the note, to be binding on the parties, it must have been made in writing and could not be shown by parol. Hensley v. Mitchell, 147 Ill. App. 161; Schultz v. Meyer, 181 Ill. App. 335; Hesch v. Dennis, 194 Ill. App. 663; Weinstein v. Sprintz, 234 Ill. App. 492; First Nat. Bank of Beecher v. Wolf, 208 Ill. App. 283; Shinner v. Raschke, 213 Ill. App. 324.

The case of Bell v. McDonald, 308 Ill. 329, cited by the defendants, is not applicable to the facts of the case at bar. In the case cited, there was a purely conditional delivery. The notes there involved were delivered as collateral security only. Their complete delivery was dependent upon the condition that the maker would fail to pay over money to be collected by him as the representative of the payee. The court held that “evidence that the instrument was not intended to take effect as a valid obligation until the occurrence of some future contingency is usually held admissible between the original parties * * * and those taking with notice. Such evidence, it is held, does not contradict the terms of the writing or vary its legal import but tends to show that it was never delivered as a present contract.” In that case there was no consideration received by the maker of the notes at the time he made the conditional delivery of them. It was clearly the intention of the parties that such delivery was not “for the purpose of giving effect” to the notes and that they were never to become effective unless and until the maker defaulted in turning over the collections he was to make. That is not the situation presented in the case at bar, where the maker of the note sued upon received the stock, Avhich was the consideration for the note, at the time th.o note was delivered and used the stock as his oavh. While the defendant pleaded a conditional delivery, his testimony tended to show an unconditional delivery but a contemporaneous agreement involving a condition attaching to the ultimate payment of the note. Such a condition may not be proved by parol.

In their brief filed in this court counsel for the defendants have emphasized the desirability of uniformity in the decisions of our different jurisdictions, Avith regard to the law of negotiable instruments, a.ud they have called our attention to a number of decisions by the courts of other states, which they contend support the judgment appealed from and the principle set forth in the instruction given by the trial court to the jury, which we have already quoted. We have examined all these decisions carefully. Some of them, such as Gleason v. Saunders, 121 Mass. 436; Paulson v. Boyd, 137 Wis. 241; Vincent v. Russell, 101 Ore. 672; George v. Williams, 27 Colo. App. 400; and Carpenter v. Maloney, 138 App. Div. 190, 123 N. Y. Supp. 61, may, in our opinion, be clearly distinguished from the case at bar, on the facts. Among the other cases cited are: Smith v. Brown, 50 Utah 27; Gandy v. Weckerly, 220 Pa. 285; Evans v. Freeman, 142 N. C. 61. In Smith v. Brown, the defendant filed a long answer involving a number of defenses, including failure of consideration. In the course of its opinion the court referred to a statute of Utah requiring a liberal construction of the averments of such an answer. The court referred to the provision of the Negotiable Instrument Law, providing that, as between the original parties, it may always be shown that a promissory note was delivered upon condition or that it was made without consideration or that the consideration failed. So far as a decision of the court in that case applied the principle of conditional delivery to the facts which were there presented, we are unable to follow it. In referring to the Ga/ndy case, counsel for defendants quote a sentence to the effect that: “No principle is better settled than that parol evidence is admissible to show a verbal contemporaneous agreement which induced the execution of a written obligation, though it may vary or change the terms of the written contract.” The Pennsylvania court, in the Gandy case, quoted that sentence from another Pennsylvania case, Juniata Building & Loan Ass’n v. Hetzel, 103 Pa. St. 507. Standing alone, that sentence in our opinion is inaccurate. As it was applied by the court, however, the inaccuracy disappears. The sentence which follows the one above quoted announces that “therefore it was competent for the defendant to prove, if he could, that it was agreed before and at the time he signed the bond that it should not be resorted to until after the security of the mortgage was exhausted, and that the security of the mortgage was lost through the plaintiff’s negligence.” Although the first sentence quoted is much broader in its application, the court confines it to a situation which unquestionably was one of conditional delivery. In the North Carolina case, Evans v. Freeman, a bond was involved which apparently recited its consideration upon its face, for by the terms, of the bond the maker promised to pay $50, “being the purchase money for the right to sell an automatic stock feeder in Hartford county. ’ ’ The court held that it was proper for the maker to prove in defense of an action on the instrument that it was given upon the express agreement that the payment thereof was to be made out of the proceeds of the sales of the stock feeders and that if there were no such sales there was to be no payment. The court said that while it was true that, when parties reduced their agreement to writing, parol evidence was not admitted to contradict it or add to it, that rule applied only where- the entire contract had been reduced to writing, but if only part of the contract was written and the other part was left in parol, it was competent to establish the latter by parol evidence, provided it did not conflict with what had been written. In the first place the decision of the court was inconsistent, in our opinion, for the part of the alleged agreement claimed to be in parol, which the court permitted the defendant to prove, did contradict the part of the contract which was in writing, namely, the bond or note, which was an absolute promise to pay the amount named therein. Furthermore, we think the decision is unsound. As this court recently had occasion to point out in Ideal Tool & Manufacturing Co. v. Staff, supra, it was held in Thompson v. Libby, 34 Minn. 374, that to allow a party to lay the foundation for parol evidence altering the terms of a written contract by parol testimony to the effect that only a part of the contract Was reduced to writing, and then prove the part not reduced to writing by parol, would be to work in a circle and permit the very evil which the rule prohibiting the alteration of a written contract, by parol, was designed to prevent.

For the reasons we have given the judgment of the municipal court must be reversed. The record shows that the plaintiff made a motion for a directed verdict at the close of the evidence, which was refused. In our opinion it should have been allowed. This court is, therefore, in a position to enter judgment for the plaintiff here. Adam v. Columbian Nat. Life Ins. Co., 218 Ill. App. 54; Nelson v. McCarthy, 234 Ill. App. 639. The judgment of the municipal court is reversed and judgment for the plaintiff is entered here for $2,500, with interest at 5 per cent from October 5, 1923, the date when the judgment was entered for plaintiff by confession in the trial court, amounting in all to $2,712.56.

Judgment reversed and judgment here.

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