author: Mr. Justice Murphy

text:
    Randall Dairy Company, Appellee, v. Pevely Dairy Company and A. E. Kraemme, Appellants.

      Opinion filed March 12, 1934.
    Heard in this court at the October term, 1933.

      Hensley & Hensley, June C. Smith and Hugh V. Murray, Jr., for appellants.
    Louis Beasley and Edward C. Zulley, for appellee.
   Mr. Justice Murphy

delivered the opinion of the court.

Randall Dairy Company, a corporation, the appellee herein, instituted an action in case in the city court of East St. Louis against the Pevely Dairy Company, a corporation, and A. E. Kraemme, appellants herein, and James Hines.

The declaration upon which the case was tried consisted of three counts: the first two charged the defendants with speaking slanderous words of and concerning appellee and its dairy products. The third, or additional count, which was filed sometime after the original declaration, charged defendants with a conspiracy to injure and destroy appellee’s business. No demurrer was filed to the first and second counts, but a general and special demurrer was filed and overruled as to the third. Defendants then moved to strike certain parts of the third count hereinafter referred to, but that motion was denied.

The pleas to the first two counts consisted of the general issue, and three pleas of justification on behalf of all the defendants; a fifth plea by Pevely Dairy Company denying the agency or employment of Hines and Kraemme, and joint liability with them; a sixth plea by Hines denying joint liability with appellants; and a seventh plea by Kraemme denying joint liability with Hines and the Pevely Dairy Company. Before trial, the court, on motion of appellee, struck the sixth and seventh pleas. To the third or additional count, a general issue plea was filed on behalf of all the defendants and also a special plea of limitations setting up that the cause of action declared upon in said third count did not accrue within one year prior to the filing of the same. A demurrer was sustained to this special plea.

At the close of appellee’s evidence, and at the close of all the evidence, all of the defendants moved for a directed verdict as to the third count, and each defendant severally moved for a directed verdict as to all the counts. At the close of appellee’s evidence, the appellant dairy company moved to require the plaintiff to elect whether it would proceed against it alone, or jointly with Hines, or with Kraemme. All motions were overruled, except as to the motion of defendant Hines for a directed verdict on the first and second counts.

The jury returned a verdict against appellants for $8,000, and found Hines not guilty. Motions in arrest of judgment and for a new trial were made and overruled. Appellants have perfected their appeal. No cross errors have been assigned on the action of the court in directing a verdict for Hines on the first and second counts, or in entering judgment upon the verdict in favor of Hines.

The errors that have been assigned, and which are principally relied upon by appellants, test the sufficiency of the declaration, and the rulings of the court, in striking the special plea filed by Hines denying joint liability, in sustaining the demurrer to the limitation plea filed to the third count, in admitting certain evidence, in overruling the motions for a directed verdict, in giving certain instructions, and in overruling the motions in arrest of judgment, and for a new trial.

The first count alleged that appellee was engaged in the dairy business in East St. Louis, selling milk and other dairy products at retail; that appellant dairy company was engaged in the same business in the same territory, maintaining an office or plant in East St. Louis with defendant Hines, as manager, and Kraemme as assistant manager; that it was the duty of the said employees to solicit new customers for appellant dairy company; that the defendants, contriving to injure plaintiff and its business, did, on April 24, 1932, in a certain discourse, in the presence of divers persons, speak and publish the “false, scandalous, malicious and defamatory words following, that is to say, the said defendant, James Hines, said: ‘Randall is selling watered milk’ (meaning thereby that the plaintiff, Randall Dairy Company, is selling milk to its customers that contains a large percentage of water, and is not up to the standard of milk specified by the statute of the State of Illinois), and that in the same discourse and in the presence and hearing of, to wit, the same persons above referred to, the said defendant, A. E. Kraemme, said: ‘Randall’s plant is so filthy that the milk that comes out of there is not fit for the hogs to drink’; that in the same discourse and in the presence and hearing of said persons, the said defendant, A. E. Kraemme, said: ‘Randall’s plant is so filthy that it will soon be locked up by the State Food Inspector’ (meaning thereby that the plaintiff’s place of business was dirty, filthy and unclean, and that plaintiff’s plant is being operated in violation of the statute of the State of Illinois governing the operation of dairy plants).”

Plaintiff further avers that at the time of uttering such false, malicious and scandalous words, as aforesaid, the said defendants, James Hines and A. E. Kraemme, were acting by authority and in the scope of their employment by the said defendant, Pevely Dairy Company, thereby injuring and damaging plaintiff in its good name, credit, reputation, trade and business.

• The points raised by appellants as to the sufficiency of the various counts of the declaration might well be answered by the application of the rule that if there is one count which states a cause of action although defectively stated, it will be sufficient to sustain a judgment on a motion in arrest. The first and third counts would be held defective on a demurrer but on a motion in arrest, they would be held sufficient, but, since the case must be remanded for a new trial, we will, in our discussion, consider some points not properly raised by motion in arrest of judgment.

Before verdict and judgment, pleadings are to be construed most strongly against the pleader, but after judgment, the rule is reversed and the pleading upon which the judgment is based is liberally construed and given every reasonable intendment to sustain the judgment. Smith v. Rutledge, 332 Ill. 150; Plew v. Board, 274 Ill. 232.

Where suit against two or more defendants sued as joint tort-feasors results in a verdict and judgment against two or more of them, any defendant against whom a cause of action was not stated in any count of the declaration may raise that question by a motion in arrest of judgment, Henning v. Sampsell, 236 Ill. 375, and this right is available, even after demurrer has been overruled and the defendant pleaded over. Stearns v. Cope, 109 Ill. 340; Grimmer v. Friederich, 164 Ill. 245.

The allegations against one, only, of the defendants cannot be considered in determining whether the declaration discloses a cause of action against the other. Klawiter v. Jones, 219 Ill. 626.

Joint tort-feasors may be sued jointly or severally but they cannot be sued severally in the same action, but, under par. 5, sec. 6, ch. 7, Cahill’s Bev. Statutes, the objection that some of the counts state a cause of action against all of the defendants while other counts state a cause of action against each of them severally cannot be raised on a motion in arrest. Chicago & Alton R. Co. v. Murphy, 198 Ill. 462.

The sale of or offering for sale unclean, unwholesome, unhealthful or adulterated milk or cream, or milk which has not been well cooled or to which water or any other foreign substance has been added is prohibited by legislative enactment, and provision is made for seizing of the article offered for sale, to be followed by a court action and disposal of the article so offered for sale, and the taxing of costs. Cahill’s Revised Statutes 1933, ch. 56b, If 10 et seq.

It has been held that words charging a person with selling or offering for sale impure or watered milk in violation of the criminal statute are slanderous per se. 36 C. J. 1198; Brooks v. Harison, 91 N. Y. 83 ; Geary v. Bennett, 53 Wis. 444; and that words spoken or written about one in his trade or business which tend to impair his credit or charge him with fraud or indirect dealings or incapacity which tend to injure him in his trade or business are actionable without proof of special damage. Clifford v. Cochrane, 10 Ill. App. 570; McDonald v. Lord & Thomas, 27 Ill. App. 111; Gerald v. Inter Ocean Pub. Co., 90 Ill. App. 205.

Any words which impeach the credit of any merchant or trader by imputing to him, bankruptcy, insolvency or financial embarrassment, or which impute to him fraud or dishonesty, or any mean and dishonorable trickery in the conduct of his business, or which in any other manner are prejudicial to him in the way of his employment or trade, are actionable. Willfred Coal Co. v. Sapp, 193 Ill. App. 400. Under the above authorities, we hold that the alleged words were actionable.

Appellants also contend that the first count is defective in that there cannot be joint tort-feasors in an action for slander and that if Kraemme uttered the words, as alleged, the action would be against him, alone.

There is a conflict in the decisions but we think the weight of authority supports the rule that where there is no charge of conspiracy, two or more individuals uttering the same slanderous words at the same time cannot be sued in an action for slander, as joint tortfeasors, the reason being that the oral utterance of defamatory words by one is a complete offense, and the wrongful act is committed by the individual uttering the words, so that each speaks for himself and must respond in damages for his own language. Yocum v. Husted, 185 Iowa 119; Duquesne Dist. Co. v. Greenbaum, 135 Ky. 182, 24 L. R. A. (N. S.) 955; Smith Bros. & Co. v. Agee & Co., 178 Ala. 627.

No Illinois authority has been cited and we have been unable to find any where this point has been directly passed upon but the rule announced has been recognized by the Supreme Court in two cases. In Baker v. Young, 44 Ill. 42, decided in 1867, a judgment was rendered against a husband and wife for damages, caused by the utterance of slanderous words by the wife and the court in the opinion held that under the law then in force the husband was liable for slander uttered by the wife during marriage but further held that they could not be jointly sued for slander by both. In Economy Light & Power Co. v. Hiller, 203 Ill. 518, the court in discussing joint liability of wrongdoers in a personal injury case said, “There are some wrongs like slander which cannot be joint but the great majority of torts may be committed jointly.”

The appellant dairy company, a corporation, could only speak through its agents or employees and under the doctrine.of respondeat superior is liable for slander uttered by an agent or servant while acting within the scope of his employment. Lion Oil Co. v. Sinclair Refining Co., 252 Ill. App. 92.

The next question presented is, Could Kraemme, the agent or servant of the dairy company, and the dairy company be joined as joint tort-feasors for the slanderous words uttered by Kraemme while acting within the scope of his authority?

Wrongdoers in tort may be jointly and severally liable but joint liability exists only when the wrong itself is joint. Mere similarity of conduct or intent on the part of independent wrongdoers or individual wrongful acts committed by two or more persons acting separately but at the same time do not constitute joint wrongs.

To create a joint liability against wrongdoers, it is necessary that in the commission of the wrongful act, there was co-operation or concert by the wrongdoers in the accomplishment of the particular wrong. In Economy Light & Power Co. v. Hiller, supra, it was held that if the acts of each person are entirely distinct and separate, there cannot be joint liability but where different persons owe the same duty and their acts naturally tend to the same breach of that duty, the wrong may be regarded as joint and both may be held liable.

In this case, the duty to refrain from the utterance of false and slanderous words against the appellee and its products rested upon both of appellants. The appellant dairy company is liable under the rule of respondeat superior and the fact that Kraemme was the agent of the company and acting within the scope of his employment did not lessen the duty the law imposed upon him not to utter false or slanderous words about appellee.

We are of the opinion that the uttering of slanderous words by an agent of a corporation while acting within the scope of his employment constitutes an exception to the general rule and that both the principal and the agent may be sued as joint tort-feasors. Aetna Life Ins. Co. v. Brewer, 12 F. (2d) 818, 46 A. L. R. 1499; Nunnamaker v. Smith, 96 S. C. 294, 80 S. E. 465.

The allegation of the first ' count connecting Kraemme with the dairy company would not be sufficient on demurrer but when considered on a motion in arrest of judgment, the inferences that may be drawn from the allegations are sufficient to state a cause of action against both principal and agent.

The second count is the same as the first in all material averments except that the agent Hines is alleged to have spoken the slanderous words. The first count charged the agent Kraemme with uttering the slander. The words alleged to have been spoken are identical in each count.

As above indicated, the slanderous words spoken by Kraemme and set forth in the first count stated a joint cause of action against Kraemme and the dairy company but the same words spoken by another agent' of the dairy company would be another cause of action. The first count did not state a cause of action against Hines and the second did not state one against Kraemme. Two or more causes of action for slander may be" united in one declaration but should not be joined in the same count. Ogren v. Rochford Star Printing Co., 288 Ill. 405. The court therefore erred in not sustaining Kraemme’s motion for a directed verdict as to the second count.

The law is well settled in this State that where an action on the case is brought against two defendants and one of them is liable only on account of the rule of respondeat superior for the negligence of the other, if the latter is found not guilty, such finding is a complete bar to the action against the former. Hayes v. Chicago Tel. Co., 218 Ill. 414; Anderson v. West Chicago St. Ry. Co., 200 Ill. 329; Meece v. Holland Furnace Co., 269 Ill. App. 164. Since Hines was by the allegation of the second count the agent of the appellant dairy company and the court having directed a verdict for Hines as to the said count, it erred in not directing a verdict for the appellant dairy company as to the same count.

The third or additional, count alleged that the defendants conspired to destroy the plaintiff’s business and in pursuit of that conspiracy attempted to and did by false and slanderous statements cause plaintiff’s employees to quit its employ; made slanderous statements to appellee’s customers regarding its business and dairy products (not setting up the alleged slanderous statements) and attempted to and did get the names of various customers of the plaintiff and called upon said customers and made the slanderous statements set out in the first and second counts of the declaration (without setting them forth).

The acts of the defendants from which a conspiracy may be inferred and the wrongful acts committed pursuant to the conspiracy should have been set forth with greater particularity and the court should have sustained the special demurrer to that part of the count.

In addition to the foregoing averments, this count contained an allegation to the effect that a route book containing the names and addresses of certain customers of appellee had disappeared from one of their trucks; that thereafter appellants called on said customers; that at another time appellee caught one of appellant dairy company’s employees attempting to get into a delivery truck where another route book was kept. There was no allegation connecting the loss of the first book with either of appellants. It was challenged by special demurrer and motion to strike, both of which were overruled. On the trial, appellee was permitted to prove over the objection of appellants substantially the facts as averred. No evidence was offered to connect the loss of the book with either of appellants, except that subsequently, they called on some of the customers whose names were in the book. Later this evidence was stricken but the striking of the evidence did not cure the error in its admission. The effect of the evidence as to the loss of the book was to convey to the jury the impression that appellants had stolen a book from appellee in one instance and were attempting to steal another book at another time. The allegation in this form had no place in the pleadings and it was prejudicial error to admit such evidence.

The gist of the action as alleged in the third count is a conspiracy to slander and inasmuch as it did not set forth the slanderous statements or the date of the utterance, the special plea of limitation filed by appellants should have been permitted to stand.

The thirteenth instruction tendered by appellee told the jury that if they believed that Kraemme, while acting within the scope of his employment, spoke the words set out in either the first or second count and such statements were untrue, then the dairy company was liable. Instruction 14 was to the same effect, except that it concluded that if such facts were proven, the plaintiff would be entitled to a verdict against the dairy company and Kraemme under the first and second counts. In view of our holdings as to the second count and the liability of appellants thereunder, it was error to refer to it in the instruction. Furthermore, it is not proper to give instructions which refer the jury to the pleadings to ascertain the material issues of fact in the case. Bernier v. Illinois Cent. R. Co., 296 Ill. 464. Instructions numbered 25, 26, 27 and 28, tendered by appellee, also refer to the pleadings and are subject to the same criticism.

Errors have been assigned which raise questions relative to the evidence but since the case must be reversed and remanded for a new trial, we will not comment on the evidence nor will we discuss the other errors assigned which in all probability will not be repeated in another trial.

For the reasons pointed out, the judgment of the lower court is reversed and the cause remanded.

Reversed, and remanded.


source: Caselaw Access Project

author: Mr. Justice Fulton

license: Public Domain

text:
    Liesette McHarry et al,, Appellants, v. Eliza Ada Bowman et al., Appellees.
    Gen. No. 8,803.

      Opinion filed April 11, 1934.
    Heard in this court at the October term, 1933.
    Busch & Harrington, for appellants; C. E. Tate, of counsel.
    Harry E. Kerker, H. Leonard Jones and Don D. Richmond, guardian ad litem, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

This is an appeal from a decree dismissing a bill to foreclose a-mortgage or trust deed for want of equity. Chester E. Bowman and Eliza Ada Bowman, his wife, were the owners as tenants in common and in possession of the premises in controversy by virtue of a deed dated December 31, 1907. The trust deed was executed on March 1,1926, by Chester E. Bowman in his own behalf and as attorney in fact for Eliza Ada Bowman to John C. Somers, trustee, securing five notes aggregating- the sum of $7,500. Both the trust deed and notes were signed as follows:

‘1 Chester E. Bowman (Seal) Eliza Ada Bowman (Seal) By Chester E. Bowman, her Attorney-in-fact. ’ ’

The trust deed was recorded March 30, 1926, and purported to convey the real estate which had been the homestead of the Bowmans since January, 1907. On September 28, 1925, a power of attorney was made by Eliza Ada Bowman, giving- certain authority to her husband, Chester E. Bowman. The power of attorney was filed for record in the recorder’s office on March 9, 1926. On March 7, 1928, a deed was filed for record, the deed being dated February 5, 1926. The instrument was executed by Chester E. Bowman and conveyed Ms interest in the disputed real estate to Ms wife, Eliza Ada Bowman.

The notes secured by the trust deed were made payable to an employee of the Commercial Bank in Champaign, Illinois, but they were sold by the bank to its customers, who are the complainants in this suit. On March 1, 1929, Chester E. Bowman executed an extension agreement and signed the same individually and as attorney in fact for Eliza Ada Bowman. On February 8, 1930, Eliza Ada Bowman was adjudged a distracted and feeble minded person by the county court and Emma Dull was her conservator at the time of the filing of the bill to foreclose the mortgage.

During April, 1930, Chester E. Bowman died and his wife continued to occupy the said real estate as a homestead. Foreclosure proceedings were instituted on said trust deed after the death of Chester E. Bowman. A guardian ad litem was appointed for Eliza Ada Bowman and both he and the conservator filed answers contesting the foreclosure of the trust deed. H. L. Jones answered on behalf of Mmself, being the owner of a judgment entered against Eliza Ada Bowman on March 26,1930.

The complainants contend that Chester E. Bowman had full power and authority under the written power of attorney, dated September 29, 1925, to execute the said notes, trust deed and extension agreements. The power of attorney was acknowledged before L. F. Wingard, a notary public, and purports to appoint ‘‘Chester E. Bowman, her husband,” her true and lawful attorney, for her and in her name, place and stead, ‘‘to sign any legal document with my name where such signature may be required from me as the wife of the aforesaid Chester E. Bowman.”

The case was referred to the master in chancery who found the power of attorney sufficient to authorize Chester E. Bowman to borrow money, sign notes and execute a mortgage to secure the same, and that Eliza Ada Bowman was estopped to deny her husband’s authority. Exceptions to the master’s report were argued and sustained by the circuit court.

Before decree was entered the complainants presented to the court an amended bill, which they maintained was proper to conform to the proof, but the court refused to permit the filing of the same.

At the time the notes were executed Chester E. Bowman was largely indebted to the bank but Eliza Ada Bowman was not. The proceeds of the loan were paid to Mr. Bowman or applied upon his indebtedness. There is considerable testimony tending to show that Mrs. Bowman knew of her husband’s obligations at the bank, that it would be necessary for them to borrow more money to help out their son who was in difficulties, and that it might be necessary for them to mortgage their home, but there is no proof of her actual knowledge of the transaction in question. Appellants must therefore rely upon the authority contained in the written power of attorney in order to bind the interest of Eliza Ada Bowman under the trust deed. It is our judgment that the terms set forth in the power of attorney are too general, vague and uncertain to authorize Chester E. Bowman to contract debts, borrow money, execute notes and a trust deed conveying interest in real estate belonging to his wife. A power of attorney should be construed so as to limit the power to the clear and obvious intent of the agency therein created. Joseph Bros. Lumber Co. v. Wolberg, 259 Ill. App. 123. The circuit court was correct in holding that the interest of Eliza Ada Bowman could not be sold in a suit to foreclose the trust deed in question.

It is further urged by the appellants that the court erred in refusing them permission to file an amended bill just before the entry of the decree. In this case the proofs had long been closed, a report had been filed by the master, exceptions had been argued and ' taken under advisement for some timé by the court before a decision was rendered, and it was no abuse of discretion by the chancellor to refuse to allow an amended bill to be filed just before the entry of a decree.

Appellants also complain that it was error for the court to refuse foreclosure on the interest of Chester E. Bowman, and we believe the record affords ample proof to sustain this contention. Bowman and his wife had lived in the premises as a homestead continuously since 1907 and were the record owners of the property as tenants in common. The deed from Bowman to his wife was dated February 5, 1926, but was not recorded until March 7, 1928. The trust deed was dated March 1,1926, and was recorded March 30, 1926. Under section 30 of the Conveyances Act, Cahill’s St. ch. 30, 1i 31, it is expressly provided that deeds, mortgages and other instruments in writing shall take effect and be in force from and after the time of filing of the same for record and not before as to all creditors or subsequent purchasers without notice, and all such deeds and title papers shall be adjudged void as to all such" creditors or subsequent purchasers without notice until the same shall be filed for record.

Appellees assert that there are facts proven which should have put the bank on inquiry as to the title of Mrs. Bowman, because she was in possession of the premises. However, the testimony conclusively shows that the husband and wife had been continuously in possession for many years and there had been no change in this possession either before or subsequent to the execution of the deed in question. To hold under such circumstances that the possession of a wife was notice to the world of her complete title to the real estate would make it entirely possible for husband and wife to defeat many mortgages and trust deeds by presenting unrecorded transfers between themselves at the time of foreclosure as against bona fide loans made on the strength of the title as shown by properly recorded instruments of title. In the case of Union Bank of Chicago v. Gallup, 317 Ill. 184, the court said, “Where the record owner of property is in possession and a second party is likewise in possession, the possession of the latter is not notice to purchasers or judgment creditors of rights which he may claim in the premises but his possession, in order to be such notice, must be exclusive and unequivocal,” and in Cook v. Flatt, 338 Ill. 428, the court used similar language, “Appellants claim that after the deed was executed the wife was in possession of the premises conveyed and that this possession was equivalent to the recording of the deed. This contention is not sustained by the evidence. There is no evidence as to who was in possession either before or after the deed was executed, or that there was any change in possession sufficient to constitute notice to creditors.”

Possession of property usually constitutes notice, but the possession must be open, visible and exclusive, Robertson v. Wheeler, 162 Ill. 566. Other jurisdictions have held that where the record shows a husband and wife to own land as tenants in common, possession by the wife along with the husband, as one family, is not of itself notice to a bona fide purchaser from the husband of any claim on the part of the wife to sole ownership. Schumacher v. Truman, 134 Cal. 430, 66 Pac. 591; Farmers’ & Merchants’ Nat. Bank v. Wallace, 45 Ohio St. 152, 12 N. E. 439.

For the reasons above expressed the decree of the circuit court is reversed and the cause is remanded with directions to the chancellor to enter a decree of foreclosure upon the interest of Chester E. Bowman in the premises- covered by the trust deed.

Reversed and remanded with directions.


text:
    M. H. Solliday et al., Appellees, v. John B. Colegrove and Company State Bank et al., Defendants. George W. Spates, as Executor of the Last Will and Testament of Josiah Hall, Deceased, Appellant.
    Gen. No. 8,806.
    Opinion filed April 11, 1934.
    Heard in this court at the October term, 1933.
    Provine & Williams, for appellant.
    Leal W. Reese, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

This was a suit by creditors to collect the constitutional and statutory liability of stockholders in the John B. Colegrove & Co. State Bank, which closed and ceased doing business on October 10, 1929. The case was tried upon a written stipulation of issues and facts which disclosed only one question of law for the court to determine.

The bank had been operating under a State charter since December 28, 1920, and had a capital stock of $200,000 divided into 2,000' shares of the par value of $100 per share. Josiah Hall, now deceased, was the owner of 100 shares of said capital stock at the time of closing. The bank was badly insolvent and there became due from each of the stockholders a full assessment of $100 per share. Therefore J osiah Hall became liable to the creditors of said bank for. the sum of $10,000. He was also a director in the bank, and as such director had signed an indemnity agreement to the New Amsterdam Casualty Company, which had issued a deposit guaranty bond to the Peabody Coal Company, one of the large depositors of the John B. Colegrove & Co. State Bank.

At the time the bank closed the Peabody Coal Company had on deposit the sum of $76,958.84 and under its deposit guaranty contract the Casualty Company had agreed to indemnify the Coal Company from any loss incurred upon its account, with the Colegrove Bank. At the time the Casualty Company executed its guaranty bond to the Coal Company it required the directors of the bank to sign a contract by which the directors, including J osiah Hall, bound themselves to save the Casualty Company harmless for any damages it might sustain by reason of the guaranty of the Peabody Coal Company account. Thus when the Coal Company became a depositor of the bank, its account was guaranteed by the New Amsterdam Casualty Company, and the Casualty Company in turn was indemnified against loss by a separate agreement executed by the directors of the bank. After the bank closed the Coal Company filed its claim with the receiver of the bank and the claim was duly allowed. Later it was presented to the court and allowed as a general claim against the bank. The Coal Company then executed an assignment to the New Amsterdam Casualty Company for the sum of $27,500 of its claim and the Casualty Company thereby became a creditor of the bank for that amount. On December 10, 1929, the Casualty Company made demand upon Josiah Hall for the sum of $10,000 which amount was on the same day duly paid by Josiah Hall, to the Casualty Company. The Casualty Company agreed that the amount so received was in full and complete satisfaction of all its claims against Josiah Hall, and with the agreement in so far as the Casualty Company could agree, that the liability of the said Josiah Hall as a stockholder in the bank would be thereby extinguished. The trial court held that the payment of $10,000 so made did not relieve Josiah Hall from his liability as a stockholder of the bank and that the appellant, as executor of the last will and testament of the said Josiah Hall, was liable to the creditors of the bank for an additional sum of $10,000 and this is the sole and only question presented by the record.

The payment was made by Josiah Hall just two days before the original bill of complaint was filed in this cause. No service was ever had upon Josiah Hall and he became deceased on December 27, 1929.

It is the contention of appellant that Josiah Hall owed but one stock liability and having made payment of the sum of $10,000 to a bona fide creditor of the bank prior to the institution of this suit such payment operated fully to discharge his liability as a stockholder. In support of this position appellant relies largely on the case of Thompson v. Meisser, 108 Ill. 359, which states that no doubt, the law permits a stockholder to relieve himself of this individual liability by in good faith paying the amount of such liability to any outside creditor of the corporation who has a right to demand of him such payment. But this case is also authority for the principle that in an action to enforce the individual liability of a stockholder the stockholder cannot set off a debt due from the corporation to himself. In this case if Josiah Hall had paid an outside creditor the $10,000 for the sole purpose of extinguishing his liability as a stockholder in the bank, he might properly have been discharged from further payment but it is evident that the main purpose was to settle the debt or obligation due from him to the Casualty Company growing out of a written agreement separate and distinct from his statutory liability as a stockholder. He was liable on this indemnity agreement regardless of whether or not he was a stockholder or director of the Colegrove Bank. In paying this obligation he became subrogated to the rights of the New Amsterdam Casualty Company to the extent of his payment and therefore was entitled to present a claim against the bank for the sum of $10,000 and to collect dividends on said claim. By signing the indemnity agreement to the Casualty Company, he created one liability; by becoming the owner of 100 shares of stock in the Colegrove Bank he accepted another liability. It is our judgment that the payment of either one of these obligations would not discharge him from liability on the other and therefore the circuit court was correct in holding that the payment of $10,000 to the Casualty Company did not operate to extinguish the liability of Josiah Hall as a stockholder in the Colegrove Bank, and the decree of that court is therefore affirmed.

Affirmed.


text:
    Charles Havens and Jesse Darst, Administrators of the Estate of George Havens, Deceased, Appellants, v. Bushnell Stock Yards Company et al., Appellees.
    Gen. No. 8,821.
    Opinion filed April 11, 1934.
    Heard in this court at the January term, 1934.
    George V. Helfrich, for appellants.
    R. E. Lybarger, Burnett M. Chiperfield, Claude E. Chiperfield and Robert B. Chiperfield, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

This was a bill filed by a minority stockholder of the Bushnell Stock Yards Company, a corporation, at Bushnell, Illinois, against the corporation and the majority stockholders for an accounting of the earnings of the company from April 28, 1931, the date of the death of George Havens, to the date of filing the bill. The appellees filed a general and special demurrer to the amended bill of complaint which was sustained by the court. The appellants elected to stand by their amended bill and thereupon the court dismissed the bill for want of equity, and entered a decree accordingly from which decree this appeal is prosecuted.

The material allegations of the bill show that George Havens was during his lifetime the owner of 10 shares of the capital stock of the Bushnell Stock Yards Company, which are now held and owned by appellants as the administrators of his estate. The stock of the company was divided into 80 shares so that the remaining 70 shares were owned by certain of the appellees; that since the death of the said George Havens, the company has received large earnings and profits which should have been paid out to the stockholders as dividends; that during all of said period the company has been solvent and was not indebted to any person, firm or corporation, so that the net earnings were not needed for the proper operation of the affairs of the corporation; that the majority stockholders connived and carried out a scheme to deprive the appellants from receiving any of the earnings of the company and whereby the owners of the other 70 shares of stock would receive all the earnings of the corporation; that the device was to appoint each majority stockholder as an officer or employee of the company under a fictitious title such as “traveling solicitor” or “yard solicitor” and to divide up among themselves all of the earnings of the company and to pay them out to the majority stockholders as “salaries,” except that said company should pay out of its net earnings a dividend of three per cent on the par value of the stock; that no services whatever were rendered by any of the majority stockholders for such pretended salary; that by such arrangements appellants were excluded from a proper participation in the earnings of said company; that the appellee stockholders were entitled to retain seven-eighths of the aggregate amount so paid to them respectively, but, should account to the appellants and pay them one-eighth of the amount so received by said majority stockholders;, so that thereby each stockholder would receive Ms just share of the net earnings of the company.

The hill further alleged that the appellee stockholders owning 70 out of the 80 shares of the capital stock of the company were able to control the entire management of the affairs of the company and for that reason should be required to account direct to appellants instead of to the corporation.

The prayer of the bill asked that each of the appellees account for all moneys received by them as “salaries,” dividends or otherwise from the said company from the date of the death of George Havens, tad that they be decreed to pay to appellants whatever sum they may have received in excess of their just shares in accordance with the amount of stock owned by each respectively.

While the appellees have set up many reasons in support of the action of the court in sustaimng the demurrer, the real question in issue was whether such a bill would lie by a minority stockholder against the corporation and the majority stockholders for an accounting direct to the minority stockholder instead of to the corporation. Appellants rely chiefly upon the case of Brown v. DeYoung, 167 Ill. 549. That was a suit to compel the restoration to a corporation of misappropriated funds, consisting of an excess of salary paid to an officer of the corporation. The court announced the general rule to be that the misappropriated funds should be paid to the corporation and not to the injured shareholders personally, but in that case the two largest shareholders had consented to and participated in the misappropriation and the effect of such a rule would be to permit such shareholders to benefit by the restoration of the funds as well as the innocent and nonassenting stockholders and therefore approved of a decree requiring the payment to be limited to the innocent complainants and to the exclusion of the stockholders who had known of, assented to and participated in, the misappropriation of the funds.

In this case the appellants expressly allege in their amended bill that the appellee stockholders are entitled to retain seven-eighths of the amount claimed as their share of the earnings of the company. We therefore feel that this case falls within the general rule as stated in the case of Voorhees v. Mason, 245 Ill. 256, that a stockholder may maintain a bill for an accounting to the corporation for the full amount due and not merely for an accounting to himself for his pro rata share.

The trial court was not in error in sustaining the demurrer to the amended bill of complaint and the decree is therefore affirmed;

Affirmed.


author: Mr. Justice Huffman

text:
    B and D Investment Company, Appellee, v. Ray C. Peters et al., Defendants. Appeal of Daniel D. Craft, Trustee, Appellant.
    Gen. No. 8,720.

      Opinion filed April 25, 1934.
    Heard in this court at the October term, 1933.
    ' Chessick & Rifkind, for appellant; William Rifkind, of counsel.
    G. W. McGrew, for appellee.
   Mr. Justice Huffman

delivered the opinion of the court.

Ray C. Peters and his wife were in possession of the premises involved herein, under a purchase contract therefor with appellant. Appellant, Daniel D. Craft, held title to the premises, as trustee. Peters and his wife wanted to build a garage upon this lot, and on November 1, 1929, entered into a written contract with one J. J. Lenzey, Inc., as the contractor, to furnish all labor and material necessary to erect the desired improvement. This contract was signed by Peters and wife and J. J. Lenzey, Inc. by J. J. Lenzey, president. The contract set out in detail the improvements to be placed upon the premises together with the material that was to be used in the construction thereof. Appellant gave his consent to such improvement, just below the signature of Peters and wife, in the following words: “I hereby consent to above improvement. Daniel D. Craft, Trustee.”

J. J. Lenzey, Inc., completed the improvement under the terms of the contract on or about November 26, 1929, and on December 3rd, following, assigned and transferred to appellee all its right, title and interest in the contract, together with all money due thereunder and all liens and claims for liens which might arise or accrue thereunder, with full and complete power and authority to appellee to take all steps to enforce the contract in the same manner as the said Lenzey, Inc. might do. Subsequently appellee brought this bill to foreclose against said lot under the Liens Act, Cahill’s St. ch. 82.

Appellant claims that at the time he gave his consent for the construction of the improvement upon these premises, Lenzey promised him he would sell the contract to appellant; and appellant says that he agreed in such event to give the said contractor the same discount on the contract as he could get anywhere else. Appellant claims that Lenzey in violation of his promise, sold the contract to appellee herein, and urges his consent was obtained thereto by the fraudulent representation of Lenzey that he would sell the contract to him. Appellant urges that because of such fraud, Lenzey lost his right to a lien, or was thereby estopped to assert it, and that appellee herein as his assignee is in no better legal position, and therefore without right to maintain this suit.

Appellant’s consent to the improvement to be placed upon this lot was absolute and unconditional, and free from any qualification regarding any agreement or promise on the part of Lenzey to sell the contract to him. No claim is made that appellee knew anything about such a promise. It is a fundamental doctrine in equity that where one of two innocent persons must suffer by the fraud of a third person, the loss must fall upon him who by his conduct put it in the power of such third person to cause the injury. Decatur Lumber & Mfg. Co. v. Crail, 350 Ill. 319, 325; Vetesnik v. Magull, 347 Ill. 611. The fraud claimed by appellant did not go to the execution of the instrument. He knew and understood the nature of the instrument that he signed, the purpose for which he was signing it, and the effect thereof. No trick or artifice was used to procure his signature. We do not understand that the fraud claimed by appellant in this case is such as to be effective against appellee, whose ownership of the contract as an innocent holder for value is not questioned.

Appellant by his unconditional consent to the construction of the improvement upon this property made it possible for Lenzey to effect the sale thereof to appellee, who in good faith paid its money therefor. The rule of equity which is founded on the principle that where one of two persons must suffer a loss, the one whose conduct made it possible for the loss to occur must bear the consequences, is applicable here.

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

Decree affirmed.


author: Mr. Justice McSurely

text:
    Eric E. Hall, Appellant, v. The County of Cook, Appellee.
    Gen. No. 37,199.

      Opinion filed April 30, 1934.
    Heard in the first division of this court for the first district at the June term, 1933.
    Urban A. Lavery, for appellant.
    Thomas J. Courtney, State’s Attorney, for appellee; Hayden N. Bell, Robert S. Cushman, Louis H. Geiman and Jacob Shamberg, Assistant State’s Attorneys, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff, bringing suit to recover fees amounting to $187,500, claimed to be due him as county architect of Cook county, upon trial by the court suffered an adverse judgment, from which he appeals.

The action was originally in mandamus, but was subsequently changed to assumpsit.

The appeal was taken directly to the Supreme Court, which transferred the cause to this court on the ground that there was no question involved giving the Supreme Court jurisdiction of the appeal. (353 Ill. 477.)

Plaintiff says that, acting under the directions of the county board of Cook county, he prepared architectural plans for a proposed civic auditorium or municipal hall; that after he had prepared the preliminary plans the work was abandoned; that under the schedule of fees fixed by the annual ordinances of the county board he was entitled to compensation for preliminary plans at the rate of one and one-fourth per cent on the cost of the proposed building, which in this case was $15,000,000, and on this basis he was entitled to $187,500. Defendant answers that no appropriation was ever made to pay plaintiff for these services and hence it will be deemed that such services were performed gratuitously.

October 4, 1926, the county board of Cook county adopted a resolution reciting that as it had no auditorium in which could be held outstanding civic events, such as national political conventions, it was resolved that the president of the board be authorized to appoint a committee to study ways and means for bringing about the construction by the City of Chicago and the county of Cook, acting jointly, of a stadium or auditorium.

March 3,1927, pursuant to this resolution, President Anton J. Cermak appointed a committee of more than 200 persons, which became known as The Civic Auditorium Commission of Cook county; in July, 1927, enabling acts of the general assembly were duly approved and became laws; these gave power to the county of Cook to build and finance the proposed civic auditorium, to be located on land of the City of Chicago, and to maintain and operate the auditorium jointly with the city; the auditorium to be financed from the proceeds of a bond issue of $15,000,000, to be submitted to vote of the People at the June election of 1927; the proposition was submitted at this election of June 6, 1927, and carried, and shortly thereafter, on June 15th, the county board adopted a resolution authorizing and directing the issuance of $15,000,000 of “Municipal Hall Bonds” to “be issued from time to time as needed to pay for the erection of a municipal hall and the purchase of a site therefor in said county”; on the same date, June 15th, the county board also adopted a-resolution directing the county architect (the plaintiff) to proceed with the analysis of plans of existing outstanding auditoriums for study by one of the subcommittees of the Civic Auditorium Commission; the resolution also provided that a committee of eight should be appointed, one of which was to be the county architect, to survey outstanding convention halls, and that the expense entailed in such work of the county architect and the committee should be paid out of the $15,000,000 municipal hall bond issue.

August 10, 1927, the county board adopted a resolution reporting the consent of a number of leading architects and engineers to act as associates with plaintiff, the county architect, in an effort to bring to Cook county the best civic hall that could be devised. The resolution concludes:

“Now, Therefore Be It Ordered by the Board of County Commissioners that the County Architect Eric E. Hall, be and he is hereby instructed to proceed with his said associate architects to take the necessary steps and make the necessary preliminary sketches, as architect for the Civic Auditorium building in association and with the suggestions and aid of the said associate architects aforementioned. ’ ’

Pursuant to this resolution the plaintiff surveyed some five outstanding civic auditoriums in the United States and made drawings and sketches of these various auditoriums; later plaintiff was instructed by the county board to prepare definite plans and sketches for the proposed municipal hall. The evidence shows that plaintiff did a very large amount of work in preparing and drafting the preliminary plans, involving a considerable outlay of money on his part for rental of office space and for the services of his assistants. Defendant does not question the amount of the work performed nor the value of the services rendered, but stands squarely upon the legal proposition that there was no appropriation made to pay for these services, hence plaintiff cannot recover compensation.

February 29, 1928, the county board adopted the annual appropriation bill, which contains a series of lump sum appropriations, among them an appropriation of $15,000,000 for the municipal hall, which plaintiff says includes compénsation for his services.

April 30, 1928, the plaintiff received notice from the chairman of the Civic Auditorium Commission that the Supreme Court of Illinois had held that the $15,000,000 bond issue authorized by the voters in the election of June 6, 1927, was invalid, whereupon plaintiff ceased to work on the plans.

June 9, 1932, plaintiff presented his claim to the county board for preparing preliminary studies and plans for the civic auditorium or municipal hall, at the rate of compensation for preliminary plans fixed by the board — that is, one and one-fourth per cent of the cost of the proposed $15,000,000 building, which would be $187,500; at a meeting of the county board the payment of the claim was denied, this suit followed, and upon trial in the circuit court it was held that plaintiff should take nothing.

Plaintiff’s claim is based upon'Services rendered in the years 1926, 1927 and 1928. Defendant contends that at no time did the county board in the annual appropriation ordinances make any appropriation to pay for the services of the plaintiff.

Subsec. 6 of par. 66, ch. 34, Illinois Statutes (Cahill) 1931, provides as follows:

“Said board of commissioners shall, within the first quarter of each fiscal year adopt a resolution, to be termed the annual appropriations bill, in and by which resolution said board shall appropriate such sums of money as may be necessary to defray all necessary expenses and liabilities of said Cook County, to be by said county paid or incurred during and until the time of the adoption of the next annual appropriation bill under this section ....

“After the adoption of such appropriation bill or resolution, the said board of commissioners shall not make any further or other appropriations prior to the adoption or passage of the next succeeding annual appropriation bill, and the said board of commissioners shall have no power, either directly or indirectly, to make any contract or to do any act which shall add to the county expenditure or liabilities in any year, anything or sum over and above the amount provided for in the annual appropriation bill for that fiscal year. ... No contract shall hereafter be made, or expense or liability incurred by the said board of commissioners, or any member or committee thereof, or by any person or persons, for or in its behalf, notwithstanding the expenditure may have been ordered by the said board of commissioners, unless an appropriation therefor shall have been previously made by said board in manner aforesaid.” This section also provides for penalties to be imposed on any member of the board who wilfully violates any of these provisions. Also, par. 436 of the Criminal Code, Cahill’s St. ch. 38, provides for penalties for any public officer who shall be guilty of contracting for the expenditure of a greater sum of money than may have been appropriated or authorized by law.

Courts have been strict in enforcing these statutory provisions. In DeKam v. City of Streator, 316 Ill. 123, an engineer drew plans for a sewer system for the City of Streator; a bill was filed to enjoin the city from paying for the work on the ground that no antecedent appropriation had been made for it; the injunction was granted, the court saying:

“A contract expressly prohibited by a valid statute is void. This proposition has no exception, for the law cannot at the same time prohibit a contract and enforce it. The prohibition of the legislature cannot be disregarded by the courts. (Botkin v. Osborne, 39 Ill. 101; Wells v. People, 71 id. 532; Board of Education v. Arnold, 112 id. 11; Penn v. Bornman, 102 id. 523; Cincinnati Mutual Health Assurance Co. v. Rosenthal, 55 id. 85; Borough of Milford v. Milford Water Co., 124 Pa. 610; Berka v. Woodward, 125 Cal. 119; Levison v. Boaz, 150 id. 185.) ”

The general statement that, where no appropriation to pay for work has been made it is impossible for officials to create a liability against the municipality for that work, has been repeated in a number of cases. May v. City of Chicago, 222 Ill. 595; Gathemann v. City of Chicago, 263 Ill. 292; Avery v. City of Chicago, 345 Ill. 640. The trend of these and other cases supports the contention that no county expenditure can be incurred or made without an appropriation previously made in the annual appropriation bill.

It is pointed out that for nearly 40 years no appropriation lias been made to pay the county architect for his services prior to the date they are performed, for the reason that as his compensation is upon a percentage basis it cannot be known what this will be until after the buildings are constructed and their cost determined, from which the architect’s compensation is to be computed. It is not necessary to determine the validity of such appropriations, for the question is, Was there ever at any time an appropriation made to cover the services in question?

Plaintiff’s counsel contends that there was an appropriation made in the annual appropriation bill of February 29, 1928, of $15,000,000 for the municipal hall building, which included plaintiff’s fees. Tills is as follows:

“Municipal Hall Bond Fund, Series ‘X’—
Being proceeds of an authorized bond issue for the purpose of acquiring a site and erecting a Municipal Hall in and for the County of Cook, Illinois, authorized at an election held June 6, 1927, pursuant to law (called Special Income Fund ‘B’ for identification and reference). .$15,000,000”

Defendant argues that the appropriation is too general in its terms, citing Siegel v. City of Belleville, 349 Ill. 240; People v. Cairo, V. & C. Ry. Co., 237 Ill. 312, and People v. Bowman, 253 Ill. 234, where appropriations in lump sums were condemned.

The conclusive reason why the appropriation of the proceeds of the $15,000,000 bond issue cannot support plaintiff’s claim is the decision in Campe v. Cermak, 330 Ill. 463. In that case the election of June 6, 1927, approving the bond issue for the municipal hall was held to be void and the court directed the entry of a decree restraining the county board from issuing or selling bonds for the purpose of erecting a municipal hall. It was the decision in that case that caused the suspension of the work.

It is well established by many cases that when the courts declare a law void as unconstitutional, it is as if it had never been passed. It confers no rights, nor imposes duties, nor affords protection; “it is, in legal contemplation, as inoperative as though it had never been passed.” Norton v. Shelby County, 118 U. S. 425. To the same effect is Board of Highway Com’rs v. Bloomington, 253 Ill. 164. In Mills v. Peoples Gas Light & Coke Co., 327 Ill. 508, the court said of an unconstitutional act that: “When a statute is adjudged to be unconstitutional, rights cannot be built up under it; contracts which depend upon it for their consideration are void; it constitutes a protection to no one who has acted under it. . . . ” See also People v. Schraeberg, 347 Ill. 392; City of Henderson v. Lieber’s Executor, 175 Ky. 15; and State ex rel. Nuveen v. Greer, 88 Fla. 249. In Dement v. Rokker, 126 Ill. 174, the court held that although the officials may have assumed certain contracts to be valid and have acted upon the faith of that assumption, yet if their legality is denied the question of the validity of the contracts was still open.

The decision in Campe v. Cermak, supra, nullified the vote of the People at the election of June 6, 1927, and all of the actions of the county board with reference to the bond issue. It should be noted, that in no resolution or appropriation of the county board was there any reference to the general funds of the county. These in terms made an appropriation out of the “proceeds” of the bond issue authorized at the election of June 6, 1927. When such election was declared void all of the resolutions and appropriations based upon this election also became nullified. The trial court properly held that the attempted appropriation of $15,000,000 was void and of no effect.

Plaintiff argues that he is a public officer whose claim for compensation for services rendered needs no supporting appropriation.

Chap. 34, par. 66 (20), Illinois Statutes (Cahill) 1931, provides that the president of the board shall appoint a county architect, and on February 28, 1927, the board, by resolution established “the office, position or place of employment” of the county architect; the rate of compensation was fixed at six per cent of all work under his supervision, to be divided one and one-fourth per cent for preliminary studies and sketches, three per cent for plans and specifications, and one and three-fourths per cent for supervising and superintending work.

In the same year, 1927, plaintiff was appointed to the position of county architect and has been so appointed each year to 1932 inclusive, and has been paid his compensation in accordance with the rate fixed in the resolution; each year he filed a bond in the sum of $50,000, conditioned upon his faithful discharge of the duties of the office of county architect.

Respective counsel have cited many cases which are supposed to furnish the answer to the question whether plaintiff was a public officer or an employee upon a commission basis. We do not deem it necessary to decide this question, for the reasons hereafter stated.

There is an impressive body of decisions which hold that even though plaintiff might be described as a public officer, the county has no authority to fix the compensation of a public officer on a percentage basis. Among the cases tending to support this are Koons v. Richardson, 227 Ill. App. 477; Koons v. City of Mount Vernon, 245 Ill. App. 165; People v. Arnold Bros., 282 Ill. 305; Fergus v. Russel, 270 Ill. 304; Foreman v. People, 209 Ill. 567; Coles County v. Messer, 195 Ill. 540. In McGovney v. Village of Melrose Park, 145 Ill. App. 329, affirmed 241 Ill. 142, the village adopted an ordinance which, in addition to the salary of the village attorney, provided that in certain other classes of cases he should be allowed the usual and customary fees of attorneys in such cases above and besides the sum named as his salary; plaintiff sought to recover for these extra services. The reviewing court held he could not recover, on the ground that the statute provided that such fees or compensation should not be increased or diminished during the term of the officer, and that unless the compensation was fixed at a sum certain it could not be told whether it has been increased or diminished. In Koons v. Richardson, 227 Ill. App. 477, the city was enjoined from paying the city engineer compensation on a percentage basis, the court holding that the statute required the city council to fix the compensation of city officers at a definite sum. The court said: “It will not do to fix.it on a percentage basis or upon the basis of the usual and customary charges for such services. It must be fixed by ordinance and included in the annual appropriation ordinance. If not definitely fixed it could not be known how much should be raised by taxation for that purpose.” A similar question was involved in Koons v. City of Mount Vernon, 245 Ill. App. 165. The court held against the claim for services based upon reasonable compensation, saying: “Both the annual appropriation bill and the tax levy ordinance are required to specify not only the objects for which appropriations are to be made, but also the amount appropriated for each purpose and if the ordinance shows that an uncertain amount is appropriated for some purpose it is invalid in that regard.” Also to the same effect are Fergus v. Russel, 270 Ill. 304, and People v. Arnold, Bros., 282 Ill. 305.

A further consideration against plaintiff’s claim is that even if he were an officer with compensation lawfully fixed on a percentage basis, he can recover no compensation unless an appropriation is made therefor. The statute above quoted, par. 66(6), ch. 34, which provides that no expense or liability shall be incurred by the board unless an appropriation therefor has been previously made, contains a proviso to the effect that it is not necessary for the county board to make an appropriation to provide for payment of any charge “upon said county imposed by law . . . including fixed salaries of officers required by law to be paid from the county treasury . . . and other charges fixed bylaw.”

Defendant argues properly that the compensation of plaintiff does not come within this proviso; that his compensation is not required by law to be paid from the county treasury, without action by the board. In People v. Day, 277 Ill. 543, it was held that the Cook county annual appropriation ordinance and all taxes based thereon were void because not legally published. The question then arose as to what claims came within the provision of the statute which required no appropriation by the county board. The court held that the general assembly had power,to create charges upon the counties and to require their payment without; action of the county authorities and had done so by the proviso above quoted; the court said:

“That proviso relates only to charges imposed upon the county by statute and required to be paid from the county treasury without action of the board of commissioners, either in fixing the amount of the charge or otherwise.” The case was remanded with directions to ascertain what taxes were levied to pay charges imposed upon the county by statute and to disallow claims requiring an appropriation by the county board. Pursuant to this the county court disallowed certain items and its report came before the Supreme Court and was affirmed in People v. Day, 279 Ill. 148.

Plaintiff’s compensation was not fixed by statute but by the county board. He clearly does not come within the proviso of the statute, and under the ruling in the Bay case his claim should be disallowed.

Counsel for plaintiff argues persuasively that in any event plaintiff can recover compensation for services ordered by the county, which has had the'benefit of such.services, and that the county is liable because of a quasi contractual obligation upon it to pay for such services.

A leading case supporting this proposition is Hitchcock v. Galveston, 96 U. S. 341, where the plaintiff did work on the sidewalks of the defendant. The court held that it mattered not that the promise to pay was in a manner not authorized by law, and that the defendant having received benefit at the expense of the other contracting1 party should pay for the same. There are a number of cases in this State of the same purport. Maher v. City of Chicago, 38 Ill. 266; DeWolf v. City of Chicago, 26 Ill. 443; Westbrook v. Middlecoff, 99 Ill. App. 327; Drainage Com’rs v. Lewis, 101 Ill. App. 150; County of Coles v. Goehring, 209 Ill. 142; Chicago v. Pittsburg, C. C. & St. L. Ry. Co., 244 Ill. 220; People v. Spring Lake Drainage & Levee Dist., 253 Ill. 479; McGovern v. City of Chicago, 281 Ill. 264; Stripe v. Yager, 348 Ill. 362.

In most of these cases the work resulted in something tangible, like widening a river, erecting a public building or digging a ditch. It is doubtful whether preliminary plans for a building which was never erected can be classified with the work involved in these cases. Some cases from other jurisdictions are cited where plaintiff was allowed compensation for preliminary plans and sketches, but the opinions in these cases are concerned more with the amount of the compensation to be allowed than with the question of liability, which is the question before us.

However, there are many Illinois cases in which are very strong expressions militating against plaintiff’s theory of quasi contract. In May v. City of Chicago, 222 Ill. 595, it was held that no appropriation having been made for extra work no liability to pay for same could be created. In DeKam v. City of Streator, 316 Ill. 123, the court quoted with approval from Coles County v. Messer, 195 Ill. 540:

“The county cannot be made liable for any expenditure unless the county board has fixed a sum for expenses and the aggregate expenses are necessary and within the amount. The fact that nothing has ever been fixed expressly for expenses does not authorize a recovery for expenses any more than the failure to fix compensation would authorize a recovery for reasonable compensation. If a county officer can recover from the county for expenses where no sum has been fixed or allowed for such expenses, he can recover any amount, within the fees collected, which he necessarily expends, and the provision of the constitution under which the board has the absolute power to fix and limit expenses would be nugatory and of no avail. ’ ’

In Hope v. City of Alton, 214 Ill. 102, where the plaintiff sought to recover for legal services rendered, the court held defendant not liable, saying: “In other words, the proposition is that when a city gets what it had authority to get in some way, it should pay for what it gets, whether it exercised the power in the prescribed way or not. The obvious answer is, that this contract was prohibited by a valid ordinance, and that the city council had no right to make it in some other way or by some other method. ’ ’

In Roemheld v. City of Chicago, 231 Ill. 467, the court said the fact that the labor is beneficial will not create a liability. To the same effect are Duck Island Hunting & Fishing Club v. Gillen Dock, Dredge & Construction Co., 330 Ill. 121, Gathemann v. City of Chicago, 263 Ill. 292, and Avery v. City of Chicago, 345 Ill. 640. In commenting upon the difference between the obligation of private and public corporations, the court said in Bradley v. Ballard, 55 Ill. 413: “But municipal corporations stand upon a different ground. They are not organized for gain, but for the purpose of government, and debts illegally contracted by their officers cannot be made binding upon taxpayers, from the presumed assent of the latter.” Following* these decisions, last cited, we hold that plaintiff cannot recover upon the basis of a quasi contract.

“Whenever, as here, considerable service of a highly skillful nature over a protracted period of time has been rendered at the request of a public corporation without a previous anticipatory and supporting appropriation it may seem to be a great hardship to hold that assumpsit will not lie; but the legislature has made the law apparently based on a wise public policy and the court is bound thereby.” (Judge Taylor’s opinion in the instant case.)

We have not attempted to comment upon all of the points made in the well written brief of counsel for plaintiff, and have referred to only a few of the cases cited by him. We have attempted to confine ourselves to the affirmative reasons leading to our conclusion.

For the reasons indicated above the judgment of the circuit court is affirmed.

Affirmed.

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


author: Mr. Justice McSurely Mr. Justice O’Connor

text:
    Dixmoor Golf Club, Inc., Appellant, v. Charles Evans, Jr., et al., Defendants. Henry Weinberger, Appellee.
    Gen. No. 37,247.

      Matchett, P. J., dissenting.
    Opinion filed April 30, 1934.
    Heard in the first division of this court for the first district at the December term, 1933.
    Rehearing denied May 14, 1934.
    Dennis J. O’Toole and James F. McNicholas, for appellant.
    Slottow & Leviton, for appellee; Charles Leviton, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

By this appeal complainant seeks the reversal of a decree of the superior court dismissing its bill of complaint for want of equity.

This cause has been in the courts for many years. The bill was filed in October, 1925; complainant sought to compel the defendants, eight in number, to account for secret profits made by them as organizers of the complainant club while they were directors and controlling it, and for other relief.

Upon the first hearing the chancellor granted the relief complainant asked for, finding that the eight defendants were severally liable to complainant for the share each received of the secret profits; three of the defendants, Kendrick, Weinberger and Wheeler, appealed to the Supreme Court from that decree; the other defendants apparently were satisfied to be held severally liable for the amount each had received of the secret profits and some of them settled with complainant upon this basis. Complainant assigned as cross error in the Supreme Court appeal the failure of the trial court to find that the defendants were also jointly as well as severally liable.

The opinion of the Supreme Court in Dixmoor Golf Club v. Evans, 325 Ill. 612, sets out in detail the various acts of the defendants giving rise to their liability; the court sustained the cross error of complainant and reversed the decree of the superior court and remanded the cause with directions to modify the decree so as to hold the defendants Kendrick, Weinberger and Wheeler (who, only, had appealed) jointly and severally liable. When the case was remanded to the superior court the chancellor entered a modified decree in accordance with the direction of the Supreme Court. From that decree as modified the defendant Wheeler alone appealed to the Appellate Court, contending that the superior court should have modified the decree so as to hold all of the eight defendants jointly as well as severally liable instead of holding only the three defendants, Kendrick, Weinberger and Wheeler, jointly and severally liable. That appeal was considered in this court and an opinion rendered (252 Ill. App. 468, certiorari denied by the Supreme Court, 254 Ill. App. XIV) which affirmed the decree of the superior court as modified. We there said that since “five of the defendants were not before the Supreme Court on the appeal, and since the liability of each of these five defendants as fixed by the original decree was sever-able and each of them was willing to abide by the decree, as to them it was final, and not to be disturbed on the appeal.” It should be noted that neither Kendrick nor Weinberger appealed from the modified decree. Apparently they were satisfied with the holding that they and Wheeler were jointly and severally liable.

The cause was then referred to a master in chancery to take testimony and state the account; the master made his report, finding that there was a settlement in full between the complainant and certain defendants upon the basis of their several liability, and the account was stated upon that basis as to the other defendants who had not appealed from the first decree; the master also found that there was due from Kendrick, Weinberger and Wheeler, upon their joint and several liability, $56,757.44; Weinberger and Kendrick filed objections, which were heard as exceptions.

The chancellor sustained the report of the master in all respects except as to the finding that there was anything due from the defendants Weinberger and Kendrick; the court found that these two defendants had accounted fully to complainant and that the bill should be dismissed as to them and also as to all the other defendants, and the decree was accordingly entered. This appeal by complainant is from that decree.

The burden of complainant’s argument in this court is that the joint liability of Kendrick, Weinberger and Wheeler was established by the opinions in this cause of the Supreme Court and of this court. Defendant Weinberger, who alone has followed this appeal, does not question this general rule; neither is the accounting of the master questioned.

Defendant relies upon the rule that where there is a judgment or decree against several joint tort-feasors, a settlement with one is an accord and satisfaction with all. The argument seems to be that, as three of the defendants, who had been held severally liable by the first decree, settled with complainant upon the basis of their several liabilities, that he, Weinberger, is entitled to the same treatment. If defendant Weinberger, with Wheeler and Kendrick, had not appealed to the Supreme Court, they could have settled with complainant upon the same basis. In fact, it was stated in oral argument that such a settlement was proposed but defendants refused, preferring to hold the stock which represented the secret profits, expecting to gain thereby. Unfortunately for the three defendants named, the Supreme Court not only held them severally liable but also jointly liable. If they are in a disadvantageous position as compared with the other defendants, they have only themselves to blame.

Defendant argues that complainant made a complete accord and satisfaction with Wheeler, and that under the rule announced this must be held as a satisfaction as to all. As Wheeler was one of the three defendants held to be jointly liable, a satisfaction and release as to him would release the other two defendants, Weinberger and Kendrick.

In January, 1929, which was after the modified decree had been entered and while Wheeler’s appeal was pending in the Appellate Court, complainant and Wheeler entered into a written memorandum which, after reciting the various steps in the litigation and that Wheeler is willing to compromise complainant’s claim against him, recites Wheeler’s surrender to complainant of 150 shares of the capital stock of complainant of the par value of $100 a share, Wheeler admitting that this stock belonged to complainant; also, certain notes of complainant held by Wheeler were surrendered; the memorandum recites that complainant accepts the same “as payment on account of the alleged liability of said 8. K. Wheeler under the terms of said decree.” Complainant agreed that before it would attempt to collect any additional moneys from Wheeler or attempt to enforce any decree against any money, property, etc., now owned or hereafter acquired by Wheeler, or pursue any other legal or equitable remedy to collect any additional sums under said decree, it would first exhaust its remedies against all the other defendants. This memorandum was signed by complainant and Wheeler. The master found that pursuant to this agreement WTieeler surrendered 150 shares of the capital stock of the complainant and the three notes described in the memorandum. At the same time, by a separate writing, complainant waived, as to WAeeler only, the provisions of a stipulation whereby defendants had agreed not to sell or assign any of the stock standing in their names.

This settlement was clearly not an accord and satisfaction. It was merely a payment on account, without releasing Wheeler from any further liability. His status, as jointly liable under the decree, was exactly the same as it was prior to the making of this .agreement. All that the complainant did was to agree to suspend action ag;ainst Wheeler until it had exhausted its remedies against the other defendants, reserving the right to call upon Wheeler for additional sums due under the decree. We hold that complainant made no settlement with Wheeler resulting in a release of its claim against the two other defendants, Weinberger and Kendrick.

Defendant argues with some plausibility that it is most unjust that he should be held liable for the entire amount of over $56,000, wheh, as the record shows, he has returned to complainant the 80 shares of stock which represent his share of the secret profits, retaining only eight shares for which he paid cash at $100 a share. Defendant says that having made restitution upon the same basis as the other defendants who have settled with complainant, he is entitled to a finding- that he has accounted in full. There is no doubt but that the defendant is in an unfortunate position, but we can only repeat that had he made restitution earlier he could have avoided the burden of joint liability. In any event, we could not remove his burden without going squarely contrary to the holdings of the Supreme Court and of this court. These cases settled, beyond our power to change, that the defendant Weinberger is jointly liable for the amounts found due the complainant.

It follows, therefore, that the chancellor was in error in sustaining the objections to the master’s report in the respect indicated and in ordering that the bill be dismissed for want of equity. The decree will therefore be reversed and the cause remanded with directions to enter a decree in accordance with the recommendations contained in the master’s report.

Reversed and remanded with directions.

Matchett, P. J., dissents.

O’Connor, J., concurs.

Mr. Justice O’Connor

specially concurring: I agree with what is said in the foregoing opinion and the conclusion reached, but in my opinion if the matter had not been adjudicated by the Supreme Court (325 Ill. 612, which reversed the decree of the superior court and remanded the cause with specific directions to modify the decree, which modified decree was affirmed by this court in 252 Ill. App. 468, and certiorari was denied by the Supreme Court), there never has been an accounting made, but on the contrary the parties have treated mere bookkeeping entries as actual money.

The record discloses that when there appeared to be a profit to the members of the syndicate known as Upham & Co., checks were drawn to the respective members of the syndicate, which checks in most instances were immediately indorsed by the payees and deposited by complainant golf club in its bank. In some instances the checks were deposited by the payee who drew his check to the golf club for the same amount and the golf club then deposited the check in its bank. When these checks were deposited with the club shares of stock of the club were issued to the individuals for the respective amounts, the shares being issued at $100 each. This was according to an oral agreement entered into between the members of the syndicate. The transaction was merely colorable— bookkeeping entries; the parties did not get any money. It went to the golf club and all the members of the syndicate got was shares of stock in the golf club. It was more or less in the nature of a “wash sale,” and yet the individual members of the syndicate are held liable as though the transaction involved real money. There is no evidence as to what the stock was worth except that when they could find a purchaser they would sell some of it at $100 a share. This obviously is some evidence of value (Cloyes v. Plaatje, 231 Ill. App. 183, 188), but the record discloses that all of the stock could not be sold to the public. There is no evidence in the record as to the amount of money spent in building the golf course. Obviously, the parties were liable only for the amount out of which the golf club was cheated.

Moreover, Charles K. (“Chick”) Evans, Jr., was given 75 shares of stock in the golf club. It is said he paid nothing for the stock but he is held liable for it at $100 a share, with interest. He makes no complaint nor does anyone for him. It might have been of great benefit to the golf club to give Mr. Evans this stock. Judges are not presumed to be more unfamiliar with public affairs than is the average citizen. At the time in question Mr. Evans was the champion golfer, and his connection with the club might well be of more benefit to it than the 75 shares, which the club might not have been able to sell. But even if it were able to sell the stock, it might still have been a good investment for the golf club.

As. stated, I am clear that there has never been an accounting in this case, but feel that the matter has been so adjudicated that it caunot now be gone into. .


text:
    Florence S. Tuttle, Appellee, v. Checker Taxi Company and Frank Fluckiger, Appellants.
    Gen. No. 37,426.

      Opinion filed April 30, 1934.
    Heard in the first division of this court for the first district at the April term, 1934.
    Erwin W. Roemer and John W. Costello, for appellants.
    Royal W. Irwin, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

This is an appeal by defendants from an order of the trial court granting a new trial.

Plaintiff sought to recover compensation for personal injuries, and upon trial by a jury defendants were found not guilty; plaintiff’s motion for a new trial was allowed; defendants, moving under section 77 of the Civil Practice Act, in force January 1, 1934, Cahill’s St. ch. 110, 205, petitioned this court for leave to appeal from this order, which leave was granted; briefs were filed by both sides and oral argument heard.

A question of practice in appeals of this sort is presented. The plaintiff contends that the appeal must be dismissed as the statute provides that leave to appeal must be granted within 30 days after the entry of the order allowing a new trial.

January 11, 1934, the order granting a new trial in this case was entered; February 7th, the record was filed in this court, and on the same day the defendants applied for an extension of time within which to apply for leave to appeal, and on February 9th they were allowed 15 days to file such application and their petition for leave to appeal was filed February 23, 1934. Plaintiff filed an answer, and on March 7th the petition for leave to appeal was allowed and defendants were granted leave to file a further brief 15 days from March. 7th; subsequent briefs were filed, the last one on April 23rd by the plaintiff, when the case was called for oral argument.

Section 77 is in part as follows:

“Appeals shall lie to the Appellate or Supreme Court, ... to revise the final judgments, orders or decrees . . . under such limitations and conditions as may be imposed by law and subject to such rules of court as may be established and promulgated under this chapter. An order granting a new trial shall be deemed to be a final order, but no appeal may be taken therefrom, except on leave granted by the reviewing court, or by a judge thereof in vacation within thirty days after the entry of the order, on motion and notice to adverse parties.”

Plaintiff says that the statute contemplates that leave to appeal must be granted by the reviewing court within 30 days after the entry of the order awarding a new trial, and that although this court has by rule provided for an extension of the time for filing the transcript of record and for granting leave to appeal (Bule 20), that this rule is in contravention of the statute and therefore void.

Section 79 of the Practice Act, Cahill’s St. ch. 110, Tí 207, provides that the Supreme Court may, by rules, “regulate and determine the practice and procedure by which cases shall be reviewed in the Appellate and Supreme Court, . . . the time within which any act may be done, . . . the form, contents, filing and service of records and briefs, and all other matters of practice in connection with the review of cases. ’ ’

Pursuant to this authority the Supreme Court passed rules of practice and procedure, among which is Bule 30, touching an “Appeal from order granting new trial.” This rule provides among other things that when the petition for leave to appeal is served and filed, and proof of service made, “The opposite party may file an answer within ten days after the petition is served upon him,” and further: “Upon notice and motion, made within 30 days after the entry of the order granting the new trial, the reviewing court, or any judge thereof in vacation may extend the time for filing the transcript of record and the abstract, and for the granting of leave to appeal. ’ ’ This rule is the construction by the Supreme Court of sections 77 and 79 of the Practice Act, and controls not only that court but also the Appellate Court. Bule 20 of this court is virtually a copy of Supreme Court Bule 30:

The extensions in the instant case complied with the authorized rules of the Supreme Court and of this court and the appeal is properly before us. If there seems to be some conflict between the statute (section 77) and these rules, we should bear in mind the statement of Mr. Justice Holmes in Bain Peanut Co. v. Pinson, 282 U. S. 499, 501, where he says: “The interpretation of constitutional principles must not be too literal. We must remember that the machine of government would not work if it were not allowed a little play in its joints.” ■

Plaintiff stepped into the street from the east curb of State street at a point approximately 100 feet south of the south line of Madison street; she intended to board a north-bound standing street car which was held up by the red light at Madison street; she passed between two north-bound automobiles standing- next the east curb, and as she emerged into the second lane of north-bound traffic she was struck by or collided with defendants’ cab, north-bound in the second lane of traffic; she was thrown to the street and injured.

The record shows that the trial court granted a new trial because he was of the opinion that defendants’ •instruction No. 15 given to the jury was prejudicially erroneous. Whether this,was so, necessitating a new trial, is the question presented to this court. This instruction is as follows:

“The court instructs the jury that an ordinance of the City of Chicago provides in part as follows:
“ ‘At no place shall a pedestrian cross any roadway other than by the most direct route to the opposite curbing, and when crossing at any place other than a crosswalk shall yield the right of way to all vehicles upon the roadway. ’
“You are further instructed that if you believe from a preponderance of the evidence, under the instructions of the court, that the plaintiff at the time of receiving the injuries herein complained of was crossing the roadway on State street at a place other than a crosswalk and that the taxicab of the defendants was then approaching the plaintiff and had not come to a stop and that she, the plaintiff, did not yield the right of way to defendant’s automobile, and that as a direct and proximate result thereof she was injured, then you should find the defendants not guilty. ’ ’

The instruction is erroneous in many particulars. The ordinance incorporated in the instruction was not in force at the time of the accident; this had been repealed before the accident happened.

Defendants say that the ordinance was inadvertently included in the instruction and argue that the actual ordinance in force would have benefited them more than the one presented to the jury in the instruction. This is a matter for argument. In any event, we cannot approve of an instruction which tells the jury that the ordinance set forth was in force at the time of the accident, which was not the fact.

The instruction is also objectionable in that it in effect tells the jury that if plaintiff did not yield the right of way to defendants’ cab and because of this was injured, she could not recover. It ignores the rule that both pedestrians and drivers of automobiles on the public streets are required by law to use care to avoid accidents. Drivers of automobiles on the streets must use ordinary care for the safety of pedestrians. The ordinance which was in force at the time of the accident provides that under like circumstances the operator of a vehicle shall not be relieved from the duty to exercise due care. (Traffic Code of July 30, 1931, Art. IV, sec. 15[d]; Fickerle v. Seekamp, 274 Ill. App. 310; Hathaway v. Shannon, 265 Ill. App. 600; Chicago City Ry. Co. v. Tuohy, 196 Ill. 410.)

The instruction was also erroneous in that it did not tell the jury under what circumstances the automobile had the right of way. There might be a number of circumstances, such as the speed of the automobile, the gait at which plaintiff was walking, her distance away from the automobile at the time she was attempting to cross the roadway, which would determine the right of the vehicle to proceed.

The instruction is also objectionable in that it ignores the rule, stated in many cases, that the violation of an ordinance is only prima facie evidence of negligence. Jeneary v. Chicago & Interurban Traction Co., 306 Ill. 392; United States Brewing Co. v. Stoltenberg, 211 Ill. 531; Commonwealth Elec. Co. v. Rose, 214 Ill. 545; Price v. Illinois Bell Tel. Co., 269 Ill. App. 581; Culver v. Harris, 211 Ill. App. 474.

The instruction directed a verdict, and errors it contains are not cured by other instructions.

Defendants argue that the sole question presented to the jury was whether defendants ’ cab was standing still at the time plaintiff left the curb and emerged from between the two automobiles in the east or first lane of traffic, and that the instruction is conditioned on the belief of the jury that the cab had not come to a stop but was “coasting,” as defendants claim. While the instruction does contain this condition, this is only incidental to the whole tenor and character of the instruction, which is, as we have said, predicated upon the alleged superior rights of the vehicle, regardless of the circumstances, and would tend to lead the jury to believe that the driver of the vehicle was relieved from exercising any care whatever to avoid colliding with the plaintiff.

We are of the opinion that it was prejudicial error to give the instruction in question, and that because of this the court properly ordered a new trial. This order is therefore affirmed and the case should be retried.

Order affirmed.

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