author: Mr.. Justice Shurtleff

text:
    Barbara Gerrib, Appellee, v. Northwestern Mutual Life Insurance Company, Appellant.
    Gen. No. 8,341.
    Opinion filed February 3, 1930.
    Rehearing denied April 4, 1930.
    Gunn, Penwell & Lindley, for appellant; George Lines and Herbert N. Laflin, of counsel.
    Graham & Dysert and Acton, Acton & Snyder, for appellee.
   Mr.. Justice Shurtleff

delivered the opinion of the court.

This suit is brought by appellee against appellant to recover upon a contract for insurance made by the husband of appellee, and upon his death claimed by appellee to be a binding contract for indemnity.

The court below sustained a demurrer to defendant’s pleas to the declaration in assumpsit, and defendant, having elected to stand by its pleas, the court rendered judgment nil elicit against the defendant and assessed the plaintiff’s damages at $5,000 and costs. It is from that judgment that this appeal is prosecuted.

For convenience, we shall refer to the parties as they were below, namely, Barbara Gerrib as plaintiff, and the Northwestern Mutual Life Insurance Company, a corporation, as defendant.

The declaration is in assumpsit and consists of one count. It avers that oh April 25, 1928, the defendant, for a valuable consideration, executed and delivered to Walter Gerrib a certain instrument in writing, which is set out in haec verba as follows:

“No other form of receipt for advance payment of premium will be recognized by the Company.
“Received of Walter Gerrib the sum of three hundred nine and 70-100 dollars as the first annual premium for $10,000.00 insurance on his life on the ordinary life plan, for which application has been made to The Northwestern Mutual Life Insurance Company, such premium being paid in accordance with the conditions of agreements (1) and (2) contained in said application (copy of agreement on back hereof).
“Westville, Ill., 4-25-1928.
“Place and date.
John F. Haworth, Agent.
(On side of above.)
No. 715256 E
“If the premium is paid at the time of application this receipt must be completed and given to the applicant; if it is not so paid the receipt must not be detached.”

(On back.)

Copy of Agreement Contained in Application.

“It is agreed (1) that if the premium for the insurance hereby applied for is paid to the agent at the time of making this application the attached receipt form, duly executed, to be the only evidence of such payment, and if the Company shall be satisfied that the applicant was, according to the rules and standards of the Company, an acceptable risk for the amount of insurance and upon the plan hereby applied for on the date hereof, or on the date of the medical examination therefor, whichever is later, the insurance shall be effective in accordance with the provisions of the policy applied for from the date hereof; or from the date of the medical examination, whichever is later, and such policy shall be issued and delivered to the applicant, or his legal representative, the Company having until the delivery of said policy to consider the question of such acceptability; and (2) that if the Company shall reject this application, the amount paid as premium shall be returned, and that the failure of the Company to deliver' a policy as applied for within sixty (60) days after the date hereof may at the option of the applicant be deemed a rejection of this application; and (3) that if the premium for the insurance hereby applied for is not paid to the agent at the time of making this application, no insurance shall be effected and no liability shall exist unless and until a policy as applied for is issued and delivered to the applicant and the first premium thereon actually paid during his lifetime.”

The declaration then avers that the foregoing document constitutes a contract for temporary insurance; that applicant underwent medical examination and was an acceptable risk; that applicant paid the premium of $309.70; that by reason of the terms of the foregoing instrument, the insurance therein applied for became effective from the date of the medical examination; that applicant died and notice of death was given to defendant.

The defendant filed a general demurrer to this declaration which was by the court overruled and proper exceptions of defendant preserved.

Thereafter, defendant filed seven special pleas, as follows:

The first plea avers that the defendant did not, at any time, issue a policy of insurance on the life of Walter Gerrib.

The second plea avers: (1) That on April 25, 1928, Walter Gerrib made application in writing for insurance upon his life to defendant, which said application contained certain agreements set out in haec verba, identical with the agreements set forth in the declaration.

(2) That the defendant was not satisfied that said applicant was, according to the rules and standards of the defendant, an acceptable risk for the amount of insurance and upon the plan applied for by the said Walter Gerrib on the date of said application, or on the date of the medical examination.

(3) That no policy on the life of said Walter Gerrib was issued or delivered to the said Walter Gerrib or his legal representative.

The third plea has the same averment as one, two and three of the second plea, and in addition avers:

(4) That within six days after the signing of the said application by said Walter Gerrib, defendant returned to said Walter Gerrib the amount paid as premium by him, to wit: the sum of $309.70.

The fourth plea has the same averments as one, two and three of the second plea and then avers: (4) That said applicant, Walter Gerrib, became insane and afflicted with acute mania on April 27, 1928, and was, on April 29, 1928, by action of the county court of Vermilion county, adjudged an insane person and committed to the Eastern Illinois Hospital for Insane at Kankakee, Illinois.

(5) That no conservator was appointed for the said Walter Gerrib, an insane person, at any time during his lifetime.

(6) That defendant, not being satisfied that the applicant was an acceptable risk for the amount of insurance and upon the plan applied for, attempted to return to said applicant the amount of the premium paid by him; that said Walter Gerrib, being an insane person, defendant was unable to return the amount of said premium to him; that there was no conservator appointed for said Gerrib to whom said premium could be returned; that defendant returned to said applicant the said sum of $309.70, being the amount of the premium paid by him, by causing the same to be deposited in the general banking account of the said Walter Gerrib in the First National Bank of Westville, Illinois, on May 1, 1928, which bank account had been maintained by said applicant in said bank for a long-space of time, to wit: two years immediately prior thereto.

(7) That plaintiff was thereafter and during the lifetime of said Walter Gerrib notified that the amount of said premium had been credited to his account in said bank.

(8) That plaintiff is the duly appointed, qualified and acting administratrix of the estate of Walter Gerrib.

(9) That said sum of money, to wit, $309.70, is still standing on deposit in said bank to the credit of the said Walter Gerrib, and that title to said, money is vested in the plaintiff as administratrix of the estate of said Walter Gerrib, deceased.

(10) That said plaintiff, as such administratrix, has been notified by defendant that said sum of money is so on deposit and that plaintiff, as such administratrix, has the exclusive right and authority to withdraw said money from said bank.

The fifth plea has the same averments as one, two and three of the second plea, and then avers: (4) That in said application so executed by the said Walter Gerrib the said applicant in reply to the following question: “Do you make or contemplate making aerial flights 1 If so, give particulars,” answered, “May make airplane flights while in Europe in connection with taking moving pictures.”

(5) That according to the rules and standards of defendant, one who might make airplane flights in connection with taking moving pictures was not an acceptable risk for insurance on the date of said application.

(6) That by reason of said answer regarding airplane flights this defendant was not satisfied that the applicant was, according to the rules and standards of the defendant, an acceptable risk for the amount of insurance and upon the plan applied for, and that no policy of insurance was issued and delivered to t^e applicant or his legal representative.

Then follow averments the same as four to ten inclusive of the fourth plea.

The sixth plea has the same averments as one, two and three of the second plea and then avers: (4) That the application executed by the said Walter Gerrib required him to state his actual weight in ordinary clothing without overcoat and provided that if the weight approximated the maximum or minimum, the examiner tiiust weigh the insured, to which question the applicant answered and gave his weight as 215 pounds; that the application showed that the medical examiner did not weigh the applicant.

(5) That the weight of the said Walter Gerrib approximated the maximum weight according to the.rules and standards of defendant.

(6) That the application showed that the applicant approximated the maximum weight and showed that the applicant had not been actually weighed by the medical examiner in accordance with the rules and standards of the company, and that the application, with such answer, did not show and the defendant was not satisfied that the applicant was, according to its rules and standards, an acceptable risk.

This plea then has the same averments as four to ten inclusive of the fourth plea, with the additional averment that the defendant died while an inmate of the Eastern Illinois Hospital for Insane on May 3, 1928.

The seventh plea avers that the defendant did not, at any time, contract or agree to insure the life of the said Walter G-errib.

The plaintiff filed general and special demurrers to defendant’s pleas, which were sustained by the court. The defendant elected to stand by its pleas.

The facts, in brief, as shown by the pleadings, are: that on April 25, 1928, Walter Gerrib, of Westville, Illinois, made a written application to defendant for insurance on his life in the sum of $10,000, paid the first annual premium of $309.70, and was given a written receipt, which made a part thereof of certain agreements, the said receipt and agreement being set forth in full in the declaration. On the same day the applicant for insurance underwent a medical examination.

The defendant pleads that it was not at any time satisfied that the applicant was, according to the rules and standards of the defendant, an acceptable risk for the amount of insurance and upon the plan applied for by said applicant, and no contract or policy of insurance was ever issued or delivered to said applicant or his legal representative, but the defendant within six days after the signing of the application returned to the applicant the amount of the premium paid by him when he signed the application. The premium was returned May 1, 1928, and Walter Gerrib died on May 3, 1928. This suit is based upon the receipt given applicant on the theory that it is a contract of insurance.

On April 27, 1928, two days after signing the application for insurance, the applicant became insane and was afflicted with acute mania. On April 29, 1928, the said applicant was, by the county court of Vermilion county, adjudged an insane person and committed to the Eastern Illinois Hospital for Insane at Kankakee, Illinois. No conservator was appointed for said applicant during his lifetime.

In answer to a question contained in the application for insurance, signed by him, the said Walter Gerrib stated in writing: “May make airplane flights while in Europe in connection with taking moving pictures. ’ ’ According to the rules and standards of defendant, one who might make airplane flights in connection with taking moving pictures was not an acceptable risk for insurance on the date of said application.

The application also disclosed that the applicant weighed 215 pounds, which approximated the maximum weight acceptable for insurance, and when one so approximated the maximum weight the application required the medical examiner actually to weigh the applicant and so to certify. This application showed that the medical examiner had not actually weighed the applicant, and, under such circumstances, the applicant was not an acceptable risk for insurance.

The defendant, having determined that the applicant was not, according to the rules and standards of the defendant, an acceptable risk for the amount of insurance and upon the plan applied for by said applicant, attempted, on May 1, 1928, to return to him the premium which- he had paid when the application was signed.

At that time the applicant was confined in the Eastern Illinois Hospital for Insane, having become insane on April 27, 1928, and committed to that institution on April 29, 1928. The premium, therefore, could not be returned to the applicant, as there was no conservator appointed for him. Therefore the defendant, on May 1, 1928, caused the amount of said premium to be deposited in the general bank account of the applicant in the First National Bank of Westville, Illinois, an account which the applicant had maintained at said bank for a long space of time prior thereto, and notified the plaintiff, who was the wife of applicant, one of the proposed beneficiaries named in the application, that the amount of the premium had been so credited to her husband’s account in said bank.

Thereafter, on May 3, 1928, the applicant died. Plaintiff was appointed and is still acting as administratrix of his estate and, as such administratrix, was notified that the amount of the premium, $309.70, was standing to the credit of said deceased in said bank account, title thereto being vested in the plaintiff, as such administratrix, with the exclusive right in her to withdraw said money.

A great many cases have been cited in the briefs of each party, many of which construe contracts with varying phraseology and few of the cases cited have a direct bearing upon this case. The one question in the case is, whether the .receipt and contract contained in the application and declaration constitute a present contract and agreement or in any manner became effective before the defendant passed upon the application, and whether the declaration will support the judgment. The plaintiff, by every case that could be found approaching the nature of this case and by similar cases, has persuasively argued that the contract and receipt, should be given the effect of a binding agreement, and bases her argument upon two cases: Reynolds v. Northwestern Mut. Life Ins. Co., 89 Iowa 76,176 N. W. 207, and Stanton v. Equitable Life Assur. Soc., 137 S. C. 396, 135 S. E. 367.

In the Reynolds case the application contained the following clause:

“If the amount of such premium is paid to the said company’s agent at the time of making this application, the insurance (subject to the provisions of the company’s regular form of policy for the plan applied for) shall be effective from the date of my medical examination therefor, and such a policy shall be issued and delivered to me or my legal representatives, provided the said company in its judgment shall be satisfied as to my insurability on the plan applied for, on the date of such medical examination.”

In that case the applicant signed a written application which, for all material purposes, is identical with the one signed by Gerrib in the case at bar.

The applicant there paid the premium and the application, premium and medical examiner’s report were forwarded to the home office. These were received December 7.

On the morning of December 8 the applicant died from heart disease. Thereafter, the application was rejected upon the ground that applicant was not insurable on the date of the medical examination and premium returned to the widow.

The court holds that the evidence shows that the applicant was not in such physical condition as to be entitled to the insurance on the date of the application and medical examination and that no liability existed upon the defendant.

The court does use language in its opinion indicating that a temporary contract of insurance was effected by the application and receipt, but defendant insists that the language was entirely obiter dictum and not in any way necessary for decision in the case. The decision of the court would appear to be contrary to its obiter dictum.

In the Stanton case in October, 1917, one Stanton applied to the defendant company for a policy of life insurance and paid his premium. Stanton was in good health and his physical condition was excellent, but his application showed that he had been addicted to an excessive use of intoxicating liquors. In reply to the application, the company wrote that it was unwilling to issue a policy to Mr. Stanton at that time, but that, after the lapse of one year, they would be pleased to give the case further consideration. At the lapse of the year, in- October, 1918, the home office of the company in New York wrote its general office in Rockhill, South Carolina, to open negotiations with Mr. Stanton. The general agents did so, and Stanton signed another application and again paid his premium by check. The second application was refused. Mr. Stanton took the flu and died before he heard from his application, which had been marked “refused” before his death by the insurance company, but was delayed in transit and never reached him.

The court places its decision squarely on the ground that the company, knowing all the facts, induced the applicant to apply for insurance, took his money and gave him a receipt declaring the applicant insured from the date of the receipt, subject to the terms and conditions of the company.

The court said:

‘ ‘ The undisputed facts show that in 1911 a Ml investigation was made and all the facts were known. With full knowledge of the facts up to that time, the application was not refused as claimed by the appellant, but merely postponed for a year. With full knowledge of the facts, the insurance agent offered to take up the application in 1918. This was at the suggestion of the home office. This offer was on condition, of course. The company has not attempted to show a failure to comply with the conditions .... There was not a word of testimony that the deceased had taken a single drink of intoxicant since his previous application in 1917. There was evidence that the applicant had not taken a drink of intoxicants since 1917. Knowing all of the facts, the company induced him to apply in 1918, took his money, gave him a receipt declaring the applicant insured from the date of the receipt, subject to the terms and conditions of the company.”

The court here based its decision upon an element not present in the case at bar. It is also interesting to note that the Stanton case was decided by a three-to-two decision and the two dissenting judges filed opinion.

In the Stanton case the court approved of an instruction in the following language:

“That under the terms of this receipt, the defendant insurance company was also irrevocably bound to give Stanton insurance under the conditions named in the receipt.”

The court, in commenting upon this instruction, said:

“His honor did not charge the jury that the company was bound absolutely to give insurance, but that, if Mr. Stanton conformed to the rules of the company on the day the receipt was given, he was entitled to insurance,” and that the application and the receipt made the contract between the parties, and if the applicant was bound to take the policy, so the company was bound to give the policy, if the applicant measured up to the standard.

There is still in the agreement in the application of the deceased in the case at bar the following language:

“And if the company shall be satisfied that the applicant was, according to the rules and standards of the company, an acceptable risk for the amount of insurance and upon the plan hereby applied for on the date hereof,” etc.

To determine the acceptability of the applicant, the company is not confined to the application itself, but may investigate the applicant in every manner, and we believe that has been the holding in a very great majority of the cases. In Northwestern Mut. Life Ins. Co. v. Neafus, 145 Ky. 563,140 S. W. 1026, Neafus applied to the defendant company for a policy of insurance upon his life, giving a note to the agent for the first premium and was given a receipt reading: “Application for a $1,000 policy having been made by T. J. Neafus to the Northwestern Mutual Life Insurance Company, there has been collected the sum of $27.71 to be considered the first annual premium on said policy; provided the application is approved by the company at its home office; and, in that event, the insurance as applied for will be in force from the date of the medical examination; if the application is not so approved, the sum collected will be returned. ’ ’

The application was signed by Neafus and was made upon the usual printed form, which, among other things, provided, “I agree . . . that if the amount of said premium is paid at the date of making this application, the receipt for the advancement of premium given- me, if on the form now attached hereto, shall determine the conditions upon which and the time when the insurance applied for is to take effect.”

On the same day the applicant was examined by the medical examiner. Neafus died suddenly on September 5, 1908, before either the application dr the medical report had been forwarded to the company. The company declined to pay, on the ground that the application had not been accepted during the life of the applicant. Neafus was not an acceptable risk and the examining doctor suggested that he submit to another examination, in the hope that it would be more favorable, in which event the examining doctor could make a more favorable report to the company. To this Neafus agreed, but died before he could come in again.

The court, in its opinion, said:

“There is nothing unfair, unreasonable- or oppressive in the conditions of this receipt. It is simply a proposition made by the company to the applicant. It, in substance, tells him that if he wants insurance he can pay the first premium, submit to a medical examination, and then, if the company regards him as a desirable risk, it will issue to him a policy that will relate back to and be in effect from the date of the medical examination. When the applicant accepts this proposal, he agrees to its terms and conditions, and cannot be excused from knowing when his insurance will begin. If we should say that under the receipt the applicant was insured from the date of his medical examination, although the company might reject the application, we would be putting the company in the attitude of insuring a person whether he was a desirable risk or not. It would place upon it the burden of carrying without its consent a risk that it did not and would not assume.”

The court held that the insurance was not in force from the date of the medical examination and as the application was not approved by the company, there had never been a contract of insurance and said that the jury should have been instructed to return a verdict for the insurance company.

Another case involving the same company as the appellant herein is Wheelock v. Clark, 21 Wyo. 300, 131 Pac. 35.

On November 10, 1909, Clark signed an application for insurance on his life and paid the first annual premium, being a promissory note, and received a receipt reading, “An application for a $10,000 policy having been made by Wm. . Scott Clark to the Northwestern Mutual Life Insurance Company, there has. been collected of him $401.70, to be considered the first annual premium on said policy, provided the application is approved by the company at its home office, and in that event the insurance as applied for will be in force from the date of the medical examination. . If the application is not approved, the sum collected will be returned.”

On the same day applicant was examined by the company’s local medical examiner and the application, medical examiner’s report and the note, in payment of the premium were forwarded to the home office of the company at Milwaukee, Wisconsin, where they were received November 15.

On November 16 Clark telegraphed the company that he could not accept the policy and wrote a letter the same day confirming his telegram, and asking that his application be canceled and his note returned. The company took the matter up with their agent, who asked them to issue the policy as applied for. On November 23 the application was approved and on November 26 a policy was issued dated November 10, and forwarded to Clark, who refused to accept it and returned it to the company. The agent to whose order the note was payable instituted suit on the promissory note given by the applicant.

The court said:

“We have no hesitancy in holding that no contract of insurance was entered into between Clark and the company. His application was a mere proposal to enter into a contract and until accepted by the company no contractual relations existed between them and until such acceptance he had a perfect right to withdraw his proposal.”

Appellee cited Kempf v. Equitable Life Ins. Co. (Mo. App.), 184 S. W. 133, but upon appeal to the Supreme Court of Missouri—State ex rel. Equitable Life Assur. Soc. v. Robertson (Mo.), 191 S. W. 989, the court held:

“Upon the facts stated, the Court of Appeals held they constituted a contract of insurance between Kempf and the company; we are of a contrary opinion, and held that there was no contract of insurance existing between them. Under this state of the facts, the opinion and judgment of the Court of Appeals are in direct conflict with the last decisions of this court, as shown by the cases cited. For the reason stated, the judgment of the Court of Appeals is quashed and for naught held.”

In a recent Wyoming case, Raymond v. National Life Ins. Co., 273 Pac. 667, the application embodied certain agreements similar to the one at bar, as follows:

“It is understood and agreed . . . (2) that if the amount of such premium is paid to the agent at the time of making this application, the company shall consider and act upon said application in accordance with its rules and practice of selection; that if it is satisfied that I was at the time of my medical examination insurable upon the plan and for the amount of insurance hereby applied for this application shall be approved and the insurance shall be effective in accordance with the terms of the policy applied for from the date of said medical 'examination, notwithstanding the provisions of the policy as to the delivery, in my lifetime, and good health, which provisions, in event of, and in consideration of said advance payment, are hereby waived, and such policy will be delivered to me or to my personal representatives, but the company may at any time before delivery of said policy, on receipt of additional information, reconsider any approval hereof, and decline the insurance if it is not then satisfied that I was insurable on the date of said medical examination, and that if said company shall not be so satisfied, the amount of the premium paid shall be returned.”

The court cites a large number of cases on the subject and then says:

“The application of Raymond was merely an offer, a proposal on his part fon insurance upon certain terms, at the same time advising the insurance company that, before it decided to finally accept his proposal, it might make certain additional investigations to satisfy itself of his being insurable at the time his medical examination took place. His insurance was to be effective from that date, in the event such final acceptance occurred. It is plain that life insurance is a contract. The meeting of the minds of the parties is vital to the execution of a policy. Honest, trustworthy underwriting demands careful inquiry into the moral character, habits, family .history, financial standing and physical condition of an applicant for life insurance. ... As we read the terms of clause two (quoted above), appearing in both the application and on the premium receipt in the case at bar, as already intimated, the risk was to take effect on the date of the medical examination, if the company finally accepted Raymond’s application after such an additional investigation—reasonably and in good faith made—as satisfied the company concerning his insurability on that date. When that was done the insurer was willing that the risk should so commence, although the execution of the policy, embodying all the terms of the contract, might be delayed for a considerable period. Any other construction of the clause would, we think, impose upon the company heavy liabilities for a temporary insurance before the chief medical officers of the company had any time or opportunity to examine and approve risks, and before any thorough and careful independent investigation thereof could possibly be made. . . . Our conclusion upon this branch of this case is, therefore, that no contract of insurance was completed between the parties and this result is in entire harmony with the authorities herein cited presenting somewhat similar situations and with whose reasoning we are in accord.”

. In the opinion of this court the provisions in the application quoted have no other or further meaning than that, in case the defendant shall be satisfied that the applicant is an acceptable risk and approve the application, then the contract shall be considered as having become effective on the date of the medical examination, and until the application is approved the applicant may withdraw the application and demand the return of the premium, as the application is a mere offer to accept insurance and the weight of authority in the various States confirms us in this opinion.

Accordingly, the judgment of the circuit court of Vermilion county is reversed, with a finding of fact.

Reversed with a finding of fact.

We find as a fact to be incorporated as a part of the judgment in this cause, that there was no contract of insurance between Walter Gerrib and the defendant company.


source: Caselaw Access Project

author: Mr. Justice Shurtleff

license: Public Domain

text:
    In re Estate of James B. Purefoy, Deceased. P. W. Coleman, Appellee, v. R. M. O’Connell, Appellant.
    Gen. No. 8,344.

      Opinion filed February 3, 1930.
    Modified and refiled April 4, 1930.
    Rehearing denied April 4, 1930.
    Bichard M. O’Connell and Edward A. Prindiville, for appellant.
    Morrissey & Morrissey, for appellee.
   Mr. Justice Shurtleff

delivered the opinion of the court.

This cause arose upon a claim presented to the probate court of McLean county to recover upon a bill for undertaking. James B. Purefoy. died intestate on October 21, 1927. His heirs were six cousins. Appellant was appointed administrator of his estate on October 24, 1927, by the probate court of McLean county.

On November 4, 1927, appellee, P. W. Coleman, a Bloomington undertaker, filed his claim against said estate for the funeral of deceased in the sum of $1,793.25. The first item in said claim is for a casket • at $1,600. The administrator objected to said, claim in the probate court, and after a hearing it was allowed in full. The administrator appealed to the circuit court,, where a hearing was had before the judge without a jury, resulting in a judgment allowing the claim in full. The administrator has appealed to this court.

At the time of his death James B. Purefoy was over 70 years old. Formerly he had been a saloon keeper and at the time of his death lived on Folsom Street in the City of Bloomington with a housekeeper, Nellie Herrin. Up to the time of his death he was in perfect health, and he died very suddenly about 9 o’clock in the evening. His estate consisted of farm and city property and personal property amounting to a net of about $23,000.

All of the relatives of deceased lived in Chicago. Without making any effort to notify the relatives, the housekeeper, who was a witness for appellee, consulted a Bloomington lawyer, D. J. Sammon, who also was a witness for appellee, and this lawyer consulted the probate judge. The probate judge said that in the absence of relatives they could go ahead with the funeral arrangements.

Nellie Herrin, the housekeeper, who was not related to the deceased, went to appellee’s undertaking establishment and selected a casket costing $1,600. Appellee went to the telephone and called the probate judge, asking him regarding Nellie Herrin’s authority to make the funeral arrangeemnts, but did not tell the judge that she had selected a $1,600 casket.

The funeral was on Monday morning. On Sunday evening about dark three women who were heirs, and a man who was not an heir came from Chicago. At the time they arrived at the house the body was in the casket and the house was well filled with mourners.

Proofs were presented tending to show that the charge for the casket was the usual and customary charge for similar caskets in Bloomington. There were no proofs presented showing or tending to show that the casket or the expense of the casket or the expenses of the funeral were suitable to the condition and station in life of the deceased. The law upon this phase of the subject is very well stated in Weinstein v. Lotsoff, 232 Ill. App. 566, where the court says, on page 582: “We are of the opinion that in order that the plaintiff may recover it is essential that he should prove by a preponderance of the evidence that the expenses of the funeral were suitable to the condition and station of life of the husband, the defendant. 1 Bishop on Marriage, Divorce and Separation, sec. 1258, p. 538;' 15 Amer. & Eng. Encyc. of Law, p. 880 (2nd ed.); Kenyon v. Brightwell, 120 Ga. 606, 609, 610; Jenkins v. Tucker, 1 H. Blackcstone, 91, 94. As far as we are able to discover, there is no evidence at all in this respect. What may be a proper expense for the funeral of the wife of one husband, may be wholly inappropriate for the funeral, of the wife of another husband. The mere fact that the cost of the items for the funeral may be reasonable is not sufficient. In addition to proof of the reasonable cost of the items for the funeral, it must be shown that the funeral expenses were suitable and proper to the condition and station of life of the husband. For example, according to the testimony in the case at bar, some caskets cost as much as $1,000. This may be a reasonable cost of some caskets, but before a husband could be held liable to pay for such a casket it would be necessary to show that the casket was suitable and proper to the condition and station of life of the husband.”

It has been further held: “In America, funeral expenses are sometimes classed with debts of the deceased. . . . It is clear that if the executor voluntarily pays them, he must be allowed credit for the disbursement as an expense incident to the administration, because the funeral is a work of necessity, as well as of charity and piety. Hence it is the duty of the executor or administrator to bury the deceased in a manner suitable to the estate he leaves behind him, there is no distinction in this respect between an executor and an administrator; and if this duty, in the absence or neglect of the executor is performed by another—not officiously, but under the necessity of the case—the law implied a promise to reimburse him for the reasonable expenses incurred and paid.” (Woerner, American Law of Administration, sec. 357, page 1188, vol. 2, 3rd ed.; O’Reilly v. Kelly, 22 R. I. 151, 50 L. R. A. 483.)

The above rule is sustained by the overwhelming weight of authority. The reason for the rule is well stated by the New York court in Patterson v. Patterson, 59 N. Y. 574,17 Am. Rep. 384, in which that court says:

“I have no doubt that the reasonable and necessary expenses of the interment of the dead body of one deceased are a charge against bis estate, though not strictly a debt due from him. The ground of this is the general right of everyone to have . . . his body carried, decently covered, from the place where it lies to a cemetery or other proper enclosure, and there put underground. ... In the last case, in which an infant, a widow, was held liable on her contract for the funeral expenses of the burial of her deceased husband, it was said: ‘There are many authorities that lay it down that decent Christian burial is a part of the man’s right, and we think it no great extension of the rule to say that it may be classed as a personal advantage and reasonably necessary to him.’ This right existing, the law casts upon someone the duty of seeing that it is accorded. . . . So it would seem, at common law, that if a poor person of no estate dies, it is the duty of him under whose roof his body lies, to carry it, decently covered, to the place of burial. . . . And where the owner of some estate dies, the duty of the burial is upon the executor. . . . From this duty springs a legal obligation, and from the obligation the law implies a promise to him who, in the absence or neglect of the executor, not officiously, but in thé necessity of the case, directs a burial, and incurs and pays such expense thereof as is reasonable. . . . And so in Rogers v. Price, ... it was held that an executor, with assets, is liable to a brother of the deceased for the proper expenses of a funeral ordered and paid for by the latter in the absence of the former. ”

The above rule is recognized in this State. We have found no Supreme Court cases passing upon the question, but it has been passed upon by the Appellate courts. In Golsen v. Golsen, 127 Ill. App. 84, the court says:

“The deceased had to be buried before the issuance of letters of administration, and there can be no question that the plaintiff could have legally contracted for the services of an undertaker to conduct the funeral of her deceased husband, and the things necessary therefor, and that the estate would be chargeable therewith, and if she could so contract, she could authorize another to do so. A stranger, under such circumstances, and especially a relative of the deceased, may contract for the funeral of the deceased person and pay for the same, and the expense, if reasonable, will be allowable” (citing the Patterson case, above mentioned, and a case in 16 Pickering 343).

Funeral expenses have always been regarded as necessary charges to be paid out of a decedent’s estate, and it is intended by the law that funeral requirements should be furnished upon the credit of the estate rather than that there should be any hesitation in rendering the service and furnishing the necessary articles until inquiry can be made as to who is liable to pay, and his financial responsibility. Stevens v. Williamson, 222 Ill. App. 258.

“The ancient notions upon the subject of funerals have undergone considerable change in the efflux of time, both in England and America, in respect of the services and incidentals deemed requisite, as well as the magnitude of the outlay therefor. . . . It is to be observed, however, that there is a difference, in the amount that may be a proper expenditure, between estates that are solvent or insolvent, large or small, as appears in the two following sections. The rights of creditors should not be defeated or jeopardized by the allowance of credit for extravagant monuments or tombstones. . . . It has never been questioned that the funeral expenses are to be restricted to the amount necessary to bury the deceased in the style usually adopted for persons of the like rank and condition in society. A distinction is observed in this respect between solvent and insolvent estates, the rights of creditors being looked upon as more imperative than those of the next of kin. In early times very strict rules were established to limit the amount allowed for funeral expenses as against creditors; but, probably in consequence of the change in the value of money, and also, no doubt, because more liberal views prevailed in the courts of the time, the limitations were, from time to time, extended by the courts. . . . But no precise rule is laid down at the present time, either in England or America; as in cases of solvent estates, so in those of insolvents, reasonable expenses according to the decedent’s condition in life must be allowed. In determining what is reasonable, an undertaker is chargeable with only such knowledge as to the decedent’s property, etc., as is apparent upon reasonable observation, and is entitled to payment of his demand in full, if in accordance with decedent’s apparent condition, although the estate prove insolvent. . . .

“Impossible as it is to lay down a precise rule to be followed in respect of the funeral expenses allowable in insolvent estates, even greater latitude is necessary where there are sufficient assets to pay the debts. The circumstances determining what is reasonable in such cases are numerous, and the degree of importance attached to each is incapable of exact measurement, impressing themselves more or less strongly on different minds. Public opinion and general expectation, fashion, the feelings of friends and neighbors, the age, standing1, property and habits of life of the decedent, as well as the standing and rank in society of the surviving family, must all be considered. . . . Nor can a testator absolutely limit the executor in the performance of his duty to give a decent burial to the testator by any provision in the will, when such provision is inadequate.” (Woerner’s Adm. secs. 358-360, 3rd ed., vol. 2, pages 1190-1196.)

There can be no doubt in this case as td the right and propriety of Nellie Herrin, living in the home of the deceased and in the absence of the next of kin, to make the arrangements for the funeral, and acting-in her individual capacity or as an executrix de son tort, to bind the estate. Whether the nature and expense of the casket “was in the style usually adopted for persons of the like rank or position in society’ ’ in the neighborhood of the residence of the deceased, as laid down by the authorities cited by appellee, is purely a question of proofs to be presented by those familiar with such matters in the City of Bloomington, at the time deceased passed away. There are no such proofs in this record and the circuit court of McLean county erred in allowing the claim of appellee for the full amount without the proofs to sustain such a finding.

Appellee, over the objection of appellant, was permitted to testify to various statements made by the deceased in his lifetime against the appellant as administrator. This was error. The witness "Nellie Herrin was also an interested party and liable to appellee for any part of the bill not allowed against the estate, and therefore an incompetent witness as to any statements made by the deceased in his lifetime to the witness.

Appellant assigns error that “the court erred in assessing damages against the defendant.” This assignment of error is sustained and the judgment of the circuit court of McLean county is reversed and the cause remanded to the circuit court of McLean county for further proceedings, not inconsistent with the views expressed in this opinion.

Reversed and remanded.

It is contended on petition for a rehearing, that under the proofs in this case that the witness Nellie Herrin was not an interested party, and that her testimony was competent and that the deceased was entitled to such a funeral and at such an expenditure, as the deceased had indicated to his housekeeper,, in his lifetime, that he desired.

. It may be, from the proofs, that the claimant took the sole responsibility for the expenditure, and that the deceased had made statements as to the nature of the memorial planned. He expressed nothing in writing or by will, and the judgment of the court below is in error in ignoring the fundamental requisite in the proofs, that the expenses of the funeral were suitable to the condition and station in life of the deceased and his estate, and we do not feel that we are permitted, in this case, to lay down a rule directly contrary to the rule established in Weinstein v. Lotsoff, 232 Ill. App. 582, and many other cases. The petition for a rehearing is denied.


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    Johnson Oil Refining Company, Appellant, v. Bart Gillam and Vesta Gillam, Appellees.
    Gen. No. 8,347.

      Opinion filed February 3, 1930.
    Modified and refiled April 4, 1930.
    Rehearing denied April 4, 1930.

      L. E. Murphy, C. W. Flack and Flack & Kerman, for appellant.
    George V. Helfrich and Hartzell, Cavanagh & Martin, for appellees.
   Mr. Justice Shurtleff

delivered the opinion of the court.

This is an action of forcible entry and detainer instituted by appellant before a justice of the peace and tried in the circuit court on appeal.

The only pleading is the complaint of appellant, which alleges that appellees unlawfully withheld possession of the property therein described.

Appellant has its principal office in Chicago and is, among other things, engaged in the sale of gasoline and oil products, and leases real estate for the establishment of filling stations where its products are sold at retail by its agents or employees.

On and prior to September 27, 1926, appellee Bart Gillam owned and was in possession of a certain tract of farm land, about 57 acres, abutting on State Highway 9, 8 miles east of Macomb. On said date he and his wife, the defendant Vesta Gillam, executed a lease demising to appellant a tract 95x136 feet off of the corner of his farm to be used for oil station purposes, said lease to run for a period of 10 years from said date at an annual rental of $120, payable in equal monthly instalments in advance.

The lease contained provisions in reference to certain tank wagon quantity discounts that were to be allowed to appellee on gasoline if he sold gasoline on said premises, and contained the further provision that during the time the tank wagon quantity discount agreement was in force the payment of the rental should be suspended, and if the tank wagon quantity discount agreement should be terminated for any reason, then the rental provision should again become effective.

Section two of said lease as first submitted to appellee Bart Gillam, provided for employment of appellee by appellant to operate the filling station on said demised premises and this was stricken out at the request of appellee and his attorney before the instrument was signed.

Appellee, as a defense to this action, relied upon a verbal agreement entered into between the parties some time following the execution of the lease whereby appellee Bart Gillam was to operate for appellant a filling station on said demised land, selling appellant’s gasoline and oil products, the appellant to furnish pumps, tanks, air compressor and appellee to erect a small building thereon. The evidence in this regard does not disclose that the verbal agreement was to continue for any- definite, certain period of time. Subsequent to the verbal agreement and the furnishing of said material by appellant and the erection of said building by appellee, appellant furnished paint for the building, signs, and advanced some money for lights and drain tile under driveway, and appellee erected an additional building for dwelling purposes and moved his family into same and occupied it as a residence. Appellee continued to sell appellant’s gasoline and oil products and to operate said oil station under said verbal contract until October 1, 1928, at which time a dispute arose between the parties hereto as to said verbal contract, and appellee Bart Gillam quit the. employ of appellant on said date and discontinued the sale of appellant’s gasoline and oil products but retained possession of the demised land and the equipment placed thereon by appellant and continued the sale of gasoline and oil products furnished by another company.

Appellant served a written notice on appellees demanding possession of said premises after appellees had ceased to handle appellant's,products and after-wards instituted suit for possession.

Ill the circuit court the jury found the defendants not guilty of unlawfully withholding said premises, and the court, after overruling appellant’s motion for a new trial, entered judgment on the verdict and for costs.

The lease is under seal and further provides an option by which appellant may purchase the premises at any time prior to the expiration of the lease. The lease also provided that if appellant should employ appellee to sell its gasoline at this station he would be bound by certain conditions and discounts set out in the provisions of the lease. Under the instrument in question, called a lease, appellee was under no obligations, if he did not see fit to do so, to run the oil station and sell the gasoline, but availed himself of that privilege under the terms of the lease. In our opinion he occupied no other position than that of employee or agent of appellant. It is not contended but that appellant carried out all of the covenants and agreements in the lease upon its part to be performed. Any verbal agreements made between the parties in regard to commissions for the sale of gasoline are entirely distinct and independent of the covenants for possession under the terms of the lease, and cannot protect appellee in withholding the possession of the lands from appellant.

Appellant complains of the giving of appellee’s tenth instruction as follows:

“The court instructs the jury that before the plaintiff can recover possession of the real estate involved in this suit it must prove, by the greater weight of the evidence, that it was at some time prior to the commencement of this suit, in the actual possession of the real estate described in the complaint, and if the plaintiff has failed to prove by the greater weight of the evidence, that it was, at some time before the commencement of this suit, in the actual possession of the real estate in question, you should find the defendants not guilty.”

This instruction does not state the law in Illinois and doubtless furnished the jury the incentive to find a verdict for appellees. In Peters v. Balke, 170 Ill. 304, 309, it was held:

“The present action of forcible entry and detainer was begun under clause 6 of section 2 of the Forcible Entry and Detainer Act, which is as follows: ‘When lands or tenements have been conveyed by any grantor in possession, or sold under the judgment or decree of any court in this State, or by virtue of any sale in any mortgage or deed of trust contained, and the grantor in possession, or party to such judgment or decree or to such mortgage or deed of trust, after the expiration of the time of redemption, when redemption is allowed by law, refuses or neglects to surrender possession thereof after demand in writing by the person entitled thereto, or his agent,’ the person entitled to such possession may be restored thereto.. (1 Starr & Curtis’ Stat. p. 1175.) If there be eliminated from said sixth clause the portion thereof not here applicable, the part applicable to the case at bar is as follows: ‘When lands or tenements have been conveyed by any grantor in possession . . . and the grantor in possession . . . refuses or neglects to surrender possession thereof after demand in writing by the person entitled thereto or his agent. ’
“It is evident, that the sixth clause contemplates a case where the grantor, having conveyed away land by deed, remains in possession, and refuses to surrender possession to his grantee in accordance with the terms of the deed. It follows, that the introduction of a deed is necessary, in connection with the fact of possession, to show that there was a grantor who conveyed, and a grantee to whom a conveyance was made. Before the addition of clause 6 to section 2 of said act, the remedy, in such a case as the case at bar, was by action of ejectment. Before the adoption of said clause, an action of forcible entry and detainer could not be brought under-the state of facts contemplated by that clause; and deeds were inadmissible upon a trial of such action, except for the purpose of proving the extent of possession or the animus of the entry. In 1861, the legislature extended the benefits of the Forcible Detainer Act to purchasers at judicial sales; in 1874, the benefits of the act were extended to purchasers at sales under powers, in mortgages or deeds of trust; in 1881, the legislature further extended the benefits of this remedy to the grantee of land as against the grantor, who refuses to surrender possession. It is plain, that no suit can be maintained, under the portion of clause 6 now under consideration, without the introduction upon the trial of a deed to the lands sought to be recovered. Such deed must be introduced, not merely for the purpose of showing the extent of the possession, but for the purpose of showing the plaintiff’s right to the possession. In this action of forcible entry and detainer, the question of title, as between the plaintiff and the defendant or any one else, cannot be tried. As the right to possession only is involved in this action, and as its object is merely to secure possession of the premises in controversy, a judgment therein is not a bar to an action of ejectment between the same parties regarding the same premises. Here the right of possession does not depend upon the title, but upon the existence of the particular facts specified in clause 6, as grounds for the action of forcible entry and detainer. The title can no more be inquired into for any purpose in this action now than it could before the passage of clause 6. But while this is so, plaintiff cannot recover under the statute unless he offers in evidence a deed for the purpose of showing that he is a grantee entitled to possession. Such has been the ruling of this court in a number of cases. (Kepley v. Luke, 106 Ill. 395; Kratz v. Buck, 111 Ill. 40.) ”

The cause was tried, in the admission and rejection of testimony and the instructions to the jury, upon the theory that appellee’s instruction number ten stated the law of this State, and it was error. Appellees contend that they had a homestead right in the premises which the lease did not release, and that, therefore, appellant cannot recover in this suit. There can be no freehold involved in this cause before this court, and appellees have waived any such right by not moving that the cause be transferred to the Supreme Court. (Gillespie v. Fulton Oil & Gas Co., 236 Ill. 188, 203.) The lot in question, at the time the lease was executed, was a part of a 58-acre tract, upon which appellees had a dwelling in which they resided, over 30 rods north of said lot. It has been further held that the party relying upon a homestead in a certain tract, must prove its worth, not to exceed the sum of $1,000. Gillespie v. Fulton Oil & Gas Co., supra.

It is further contended by appellees that instruction number ten and appellant’s refused instructions and errors in the admission of evidence, cannot be considered because the abstract does not state that the instructions given are all of the instructions given by the court, and that neither the abstract nor the record are certified that they contain all of the evidence offered in the case. Appellees do not argue the particular certificate attached to the bill of exceptions. The abstract, after reciting certain evidence submitted on the part of “Plaintiff” states: “And thereupon plaintiff rested its case.” And after reciting certain evidence offered on behalf of “defendant” states: “And thereupon the defendants rested their case.” This has been held sufficient.

We also find in the abstract: “Thereupon the court at the instance of the ‘plaintiff’ gave the following instructions, ’ ’ followed by various instructions including the tenth, and a similar statement as to the instructions for the “defendant.” Even if the rule as to instructions in the record was not complied with as completely as it should have been, which we do not hold, the giving of instruction number ten, as certified by the abstract and record, was in effect a mandatory instruction to find for appellees in this cause, which the giving of other instructions could not have overcome.

For the errors pointed out the verdict and judgment of the circuit court of McDonough county are reversed and the cause remanded for further proceedings not inconsistent with the views expressed in this opinion.

Reversed and rema/nded.

On motion for rehearing it is contended that the interest of appellant in the lands, being a leasehold, which is personal property, citing Thornton v. Mehring, 117 Ill. 55; Zimmerman v. Dawson, 294 Ill. 380, that clause 6 of section 2 of the Forcible Entry and Detainer Act, Cahill’s St. ch. 57, ¶ 2, does not provide for the bringing of forcible entry and detainer for the recovery of a leasehold estate in land. Clause 6 provides for a case—“When lands or tenements have been conveyed by any grantor in possession,” etc. It does not require that the conveyance should cover a freehold. Under section one of the Conveyance Act, Cahill’s St. ch. 30, ¶ 1, it is made plain that the term,—“Conveyance” may be applied to any,—“deed, mortgage or other conveyance in writing,”—and when signed and sealed by the parties making* the same, . . . “shall be sufficient, without livery of seizin, for the giving, granting, selling, mortgaging, leasing* or otherwise conveying or transferring any lands,” etc. Under the terms of this section, the word “conveying” is used synonymously with “leasing,” and in clause 6 of section 2 of the Act on Forcible Entry and Detainer, the term “Grantor” includes the term “Lessor” and such construction must be placed upon the act, otherwise there would be no remedy for lessees, to secure the possession of lands leased and the landlord in a lease, under no circumstances could be construed to be or called a “grantor.” We see no merit in the contentions, and the petition for a rehearing is denied.


text:
    David B. Grounds, Appellant, v. E. M. VanLaningham and Loren Combs, Appellees.
    Gen. No. 8,356.

      Opinion filed February 3, 1930.
    Rehearing denied April 4, 1930.
    Raymoud G-. Real, for appellant.
    Craig & Craig, for appellees.
   Mr. Justice Shurtleff

delivered the opinion of the conrt.

Appellant filed his bill of complaint in equity in the city court of the City of Mattoon, Coles county, Illinois, on February 4,1929, praying for an injunction against appellees, prohibiting them from operating a clothes cleaning and pressing establishment in the said City of Mattoon or within 10 miles of said city for a period of 10 years. Application was made by appellant for a temporary injunction, which was granted.

Appellees, at the March term, A. D. 1929, filed a general demurrer to the bill of complaint and also filed a motion to dissolve the temporary injunction. The court sustained the demurrer to the bill, allowed the motion to dissolve the temporary injunction and dismissed the bill for want of equity. Appellant prayed for and was allowed an appeal and the lower court ordered that the temporary injunction should .remain in effect until the disposition of the appeal.

The bill filed in this cause alleged that on July 31, 1928, appellant and appellees entered into an agreement, a copy of which was attached to the bill, by which appellant sold to appellees a cleaning and pressing business in the City of Mattoon, Illinois, together with certain specified chattel property used in connection therewith, which said chattel property is described in said contract and agreement; that in addition to the sale of said cleaning and pressing business and such chattel property, appellant leased to appellees a business property owned by him and located at 2008 Prairie Avenue in the City of Mattoon, Illinois, for which property appellees agreed to pay to appellant the sum of $100 per month from December 1, 1928, said rent to be due in advance on the first day of each and every month; and that appellant performed all the covenants of said contract to be performed on his part, in accordance with the terms and conditions of said contract.

The bill further alleged that appellees in and by said contract stipulated and agreed that in case of the breach of any term of said contract by appellees, and their rights under and by virtue of said contract were forfeited by appellant, then and in such event appellees would not enter the cleaning and pressing business within the City of Mattoon, Illinois, or within 10 miles of the corporate limits of the City of Mattoon, Illinois, for a period of 10 years, commencing on the first day of August, A. D. 1928; that on February 1, 1929, there was due from the appellees as rent for the foregoing premises the sum of $100, and that appellees failed to pay said rent when the same was due and appellees thereupon advised the appellant that they were not going to pay said rent and were going to default under the terms of their contract. They thereupon turned over to appellant the keys to the property owned by him and located as aforesaid at 2008 Prairie Avenue in the City of Mattoon, Illinois, and appellant thereupon took possession of the said premises. The appellees thereupon terminated their possession of said premises, the appellant has proceeded to and has forfeited the rights of the appellees under and by virtue of their contract aforesaid, and appellant has foreclosed all the right, title and interest of the appellees in and to the property sold to them by appellant under and by virtue of said contract.

The bill further alleged that appellees are operating a cleaning and'pressing establishment at 1409 Broadway Avenue in the City of Mattoon, Illinois, in violation of the covenants of their contract and agreement as aforesaid, and that as a result of the conducting of said cleaning and pressing business by appellees in violation of their said contract, the business of appellant located at 2008 Prairie Avenue in the City of Mattoon, Illinois, is greatly damaged and irreparable injury will be caused to appellant if appellees are permitted to continue the conducting of their cleaning and pressing business in the City of .Mattoon, Illinois, in violation of said contract.

The bill prayed that appellees might be enjoined from engaging in the clothes cleaning and pressing business, either directly or indirectly in the City of Mattoon, Illinois, or within 10 miles of the corporate limits of the City of Mattoon, Illinois, at any. time within 10 years from the first day of August, 1928.

In support of the demurrer to the bill and the motion to dissolve the temporary injunction, it is' contended by appellees that appellant was entitled to ño relief in equity for the following reasons:

First. The contract provides that if second parties make default in any of the terms of the contract and second parties thereupon foreclose their interest in the business and equipment thereby sold to them, then, in • such event, second parties will not re-enter the clothes cleaning business, etc. '

It is argued that this provision is meaningless, as “second parties could not foreclose their own interest,” etc. We regard the use of the term “second parties” in place of “first party” as a mere clerical error and cannot agree with appellee’s contention.

It is further contended that the whole contract is so harsh and inequitable that equity will refuse to enforce it by injunction; that appellant, in his bill, did not offer to do equity, as it contained no allegation of a return or offer to return the balance of appellee’s notes given as the purchase price of the property, totaling $9,495.80; that the covenant not to re-enter the clothes cleaning business is a penalty or forfeiture provided in the contract if appellees default, which equity will not enforce, and it is further contended that the paragraph- in the contract which provides that if second parties make default under this contract they will not sell to anyone operating a clothes cleaning plant in the City of Mattoon, or to anyone intending to operate such a plant, any of the equipment used by second parties in the clothes cleaning business at Mattoon, is illegal and void because it is unlimited as to time, and also illegal as tending to prevent competition and being against public policy, and this paragraph being invalid the whole contract must be held invalid under the rule that where valid provisions of a contract are blended with invalid provisions the whole contract will be held invalid.

An analysis of the contract shows that Grounds, appellant, who had run a cleaning and pressing establishment in Mattoon for several years, sold the said business to appellees for a consideration of $10,600, the same to be paid for by appellees in monthly instalments of $220.84 each, during 48 months, with interest thereon at the rate of 6 per cent per annum, the same to be secured by chattel mortgage covering all of the property, and represented by 48 notes falling due monthly. Appellant also leased the real estate to appellees for a period of 5 years at a monthly rental of $100, all of which provisions were contained in the same contract. The chattel mortgage was to cover further: “Such other chattel property as second parties, appellees, are about to install in the premises.” Appellant was to place the premises in tenantable shape and in case the covenants were carried out, appellant agreed that he would not enter the clothes cleaning business, directly or indirectly, in the City of Mattoon or within 10 miles of the corporate limits for a period of 10 years. In consideration thereof, appellees agreed that upon default made by them appellant could foreclose their interest in the business and equipment sold to them, and in such event appellees covenanted that they would not within 10 years from default re-enter the clothes cleaning business, directly or indirectly, in the same territory, Mattoon or within 10 miles of the corporate limits of said city. It was further agreed and covenanted that in case appellees made any default, either in the payment of any note or interest or rent, or in keeping the premises tenant-able, that if any such default occurred that the damages which the first party would sustain as the result of such breach, were very indefinite and difficult of ascertainment, and “second parties therefore agree that any payments that may have been made upon this contract shall be kept by first party as such liquidated damages, in case second parties default in any manner,” and appellant was given- the right to forfeit the contract and foreclose. It was further agreed that in case the second parties made default that “they will not sell to anyone operating a clothes cleaning plant in the City of Mattoon, Illinois, or to anyone intending to operate such a plant, any of the equipment used by second parties in the clothes cleaning business in Mattoon, Illinois.” To the latter clause there was no limitation as to time. Under the terms of this contract, appellant, the seller, received the full purchase price of his property in the notes and chattel mortgage, amounting to the sum of $10,600, and the covenant to pay rent, and appellant has agreed in the contract that for any default on the part of appellees appellant shall retain and keep all payments made as liquidated damages. It is plain to be seen that the resulting injury and damage to appellant by reason of any default on appellees’ part was not made an equation in the value of the property and did not enter into the question of consideration for which the property was sold. That appellant may be injured by the default of appellees in the value of the property or in the good will and success of the established business which he had run, while not a question in this case, is not to be denied, but under the provisions of this contract such loss and damage is protected only by a provision standing independently and alone in the contract, based upon no monetary or property consideration, covenanting not to engage in a similar business in a defined territory, which becomes in law a mere penal clause or forfeiture of rights. This possible loss or damage might have been protected by a bond or other security. Appellant may have some other remedy but it is elementary that a court of equity will not aid him to enforce a mere penalty or forfeiture.

In Tarr v. Stearman, 264 Ill. 110, 116, the court held: “Courts of equity, as well as courts of law, recognize the rights of the parties to a contract to stipulate for penalties and forfeitures, but it is a rule .of universal application that courts of equity will never affirmatively enforce either a penalty or a forfeiture. (2 Story’s Eq. Jur.—13th. ed.—sec. 1319; 16 Cyc. 80.) It is a well settled and familiar doctrine that a court of equity will not interfere on behalf of the party entitled thereto and enforce a forfeiture, but will leave him to his legal remedies, if any, even though the case might be one in which no equitable relief would be given to the defaulting party against the forfeiture. The few apparent exceptions to this doctrine are not real exceptions. In fact, there are no exceptions. Those which appear to be so all depend upon other rules and principles. (1 Pomeroy’s Eq. Jur.—3d ed.—secs. 459, 460.) Equity does not favor forfeitures and will never lend its aid actively to enforce them, but will leave the parties to their remedy at law. (2 Beach on Modern Eq. Jur. sec. 1013; Bispham’s Principles of Equity—7th ed.—sec. 181; Worthington v. Moon, 53 N. J. Eq. 46.) Though a court of equity will not generally relieve against a forfeiture, it will ‘never lend its assistance in the enforcement of one.’ (Ohio C. R. R. Co. v. A. & G. W. R. R. Co., 57 Pa. St. 65.) In Harlev v. Sanitary District, 226 Ill. 213, this court stated (p. 225): ‘Equity will not interpose to enforce or carry into effect a forfeiture. ’ The same rule, in effect, was laid down by this court in Douglas v. Union Mutual Life Ins. Co., 127 Ill. 101; Toledo, St. Louis and New Orleans Railroad Co. v. St. Louis & Ohio River Railroad Co., 208 id. 623, and Moore v. Martin, 233 id. 512. ... ‘If the decree of the circuit court, in its nature, enforces a penalty or forfeiture it cannot be sustained. ’ (Bucklen v. Hasterlik, 155 Ill. 423.) This case is one in which a court of equity cannot take jurisdiction, for ‘equity never, under any circumstances, lends its aid to enforce a forfeiture or penalty or anything in the nature of either.’ Marshall v. Vicksburg, 82 U. S. 146.” To the same effect are Launtz v. Vogt, 133 Ill. App. 255, 258; Toledo, St. L. & N. O. R. R. Co. v. St. Louis & Ohio R. R. Co., 208 Ill. 630; Douglas v. Union Mut. Life Ins. Co., 127 Ill. 101, 116; Calame v. Paisley, 296 Ill. 618, 623. Tarr v. Stearman, supra, in all respects is very similar to the case at bar.

In Victor Chemical Works v. Iliff, 299 Ill. 532, 551, the court said: “To award the injunction prayed for in this case would amount to compelling specific performance. An injunction against the breach of any negative covenant in any case is, in effect, enforcing specific performance.” In all of these cases it runs into the questions of partial restraint of trade, the reasonableness of the contract and whether the contract has a valuable consideration to support it. (Tarr v. Stearman, supra; Hursen v. Gavin, 162 Ill. 377, 380.)

In Tarr v. Stearman, supra, it was further held: “In all such contracts the law has regard not only to the financial profits to be made from trades or .professions, but the convenience of the public as well. The convenience of a given community or locality will be promoted if every such locality has its proper accommodation and service from every art, trade and profession, hence the authorities generally state that a contract in restraint of trade or profession in any given locality will not be upheld unless it is shown that the place of such individual so restrained is to be supplied by some other person of the same trade or profession. The public have an interest in and a right to the skill of appellee in the business, trade or profession in which he is the most successful or useful.”

It is contended by appellees that the clause in the contract by which the appellees bind themselves perpetually never to sell to anyone operating a clothes cleaning plant in Mattoon, or to anyone intending to operate such a plant, any of the equipment used by second party in the clothes cleaning business in Mattoon, in case of their default, is unlimited as to time and therefore unreasonable and void. Inasmuch as there was a limit of time during which a default could occur, we cannot agree with appellees’ contention.

Appellees contend that appellant in his bill does not offer to do equity; that in and by the said bill appellant has not offered to return the $9,495.80 of unpaid notes and has not returned them; that according to the terms of the bill appellant collected $1,104.20 on the notes, $500 upon rent and has foreclosed and now retains all of the property sold and also retains all of said unpaid notes. This is not equity. It is further contended that when a contract provides for a certain sum as liquidated damages for its breach as the contract provides in this case, that is the limit of appellant’s recovery, citing Parker-Washington Co. v. Chicago, 267 Ill. 136, 140; Hennessy v. Metzger, 152 Ill. 505, 514; Peine v. Weber, 47 Ill. 41, 47; Kay Gee Amusement Co. v. Cave, 177 Ill. App. 250, 254; vol. 17 Corpus Juris, sec. 266, page 966.

In Parker-Washington Co. v. Chicago, supra, the whole subject of damages is discussed and the rules of law laid down as follows :

“The law permits parties competent to contract and free to do so, in the exercise of their judgment, to make their own contracts, and the proper function of courts is to enforce such contracts as made, where they do not conflict with any rule of law or good morals or the declared public policy of the State. When the intention of the parties to a contract is ascertained it is ordinarily the duty of the courts to carry it out (United States v. Bethlehem Steel Co., 205 U. S. 105), and they cannot properly assume a guardianship over those who have the requisite capacity and are free to make such contracts as they may choose. Contracts by which parties who are under no compulsion agree beforehand upon the amount of damages which shall be allowed for a breach are as lawful as any others unless they are inhibited by some rule of law. There is a class of contracts in which stipulations for liquidated damages are not permitted because the law has fixed a definite standard for such damages and an agreement to pay more is necessarily in violation of the law. Those are cases where there is an agreement to pay a certain sum of money, or in default to pay a sum exceeding the lawful rate of interest, as liquidated damages. (Tiernan v. Hinman, 16 Ill. 400; 13 Cyc. 101.) That rule was alluded to in Peine v. Weber, 47 Ill. 41; and in the case of Scofield v. Tompkins, 95 id. 190, where the agreement was held to be for a pen-' alty and not liquidated damages, the contract was to pay $22,770 as the price of land, and also as liquidated damages in case the sum was not promptly paid. Where the agreement does not interfere with any rule of law the intention of the parties, as in all other cases, must govern. Where the intention of the parties is in doubt the courts are inclined to construe the stipulated sum as a penalty, because the theory of the law generally is that compensation shall be the rule and the application of that rule works justice between the parties. (Iroquois Furnace Co. v. Wilkin Mfg. Co., 181 Ill. 582.) In order to determine whether a stipulated sum to be paid for the breach of a contract was intended to be a penalty or liquidated damages, the court will consider the language used and the subject matter of the contract to ascertain the intention of the parties. The use of the word ‘liquidated’ does not always determine the question, and in the case of Iroquois Furnace Co. v. Wilkin Mfg. Co., supra, the fact that the supplemental contract recited that the purchaser was desirous that the contract should contain a penalty in the nature of stipulated damages was given weight. With respect to the subject matter of the contract, if the provision has reference to uncertain damages and the case shows that serious damage might have been incurred, and no fraud has been used in procuring the contract, the courts cannot interfere and the stipulated sum furnishes the full measure. Generally, the language in which the parties have expressed their intention will control. One matter to be considered is the question whether different'acts to be performed are of unequal degrees of importance, some resulting in great damage and others in trifling and inconsiderable loss. In such a case, if a stipulated sum in gross is to be paid for a failure to perform any one of the acts the sum will be construed as a penalty, because it cannot be presumed that the parties intended to satisfy a breach of either condition by the same stipulated sum. (19 Am. & Eng. Ency. of Law, 40; 13 Cyc. 101.) That doctrine does not apply to this case, for the reason that the sum agreed upon as liquidated damages related to the completion of the entire work. Where the damages that will result from a failure to perform the contract are of such a nature that they cannot be definitely ascertained or proved and the parties have stipulated a sum as liquidated damages, there is no reasonable ground for saying that the parties did not intend to fix and define the amount of damages and their agreement will be upheld. These rules are to be gathered from the following decisions: Peine v. Weber, supra; Poppers v. Meag her, 148 Ill. 192; Gobble v. Linder, 76 id. 157; Hennessy v. Metzger, 152 id. 505; Westfall v. Albert, 212 id. 68; Pinkney v. Weaver, 216 id. 185; Western Gas Construction Co. v. Dowagiac Gas and Fuel Co., 146 Mich. 119; 10 Ann. Cas. 224.”

Primarily, the damages for failure to pay any note or interest would he the amount of the notes and interest secured upon a foreclosure and deficiency judgment and would not he uncertain in amount. Any failure to pay rent would be the amount of the rent for the term, less the reasonable value of the use of the premises for the remainder of the term, which is susceptible of determination. It may be presumed that the parties in drafting the contract and inserting the clause as to indefinite and uncertain damages, and providing the clause for liquidated damages, had in mind some injury or damage by reason of appellees further engaging in the same business after a default, and therefore in the contract provided for a liquidated damage, in money, calculated to measure the whole financial damage (Parker-Washington Co. v. Chicago, supra), and in addition inserted the covenant in question that appellees should not further engage in the same business, not on the ground that such engagement would be a financial damage, already liquidated, but as a penalty or forfeiture to make it more certain that appellees would carry out the terms of the contract.

In the case at bar, without passing upon all of the contentions argued, the contract provided for liquidated damages in case of a breach, which damages appellant has recovered. We are of the opinion that the bill in question is brought solely to enforce a negative clause in the contract to enforce a penalty and forfeiture, and that the chancellor below did not abuse his discretion in dismissing the bill for want of equity.

In the case of Bondy v. Samuels, 333 Ill. 535, the court held that a prayer for injunction is addressed to the sound discretion of the court and a decree refusing an injunction will only be reversed for an abuse of such discretion. In that case, the court said, on page 550; “A prayer for relief by injunction is addressed to the sound discretion of the chancellor and the decree will be reversed only on account of its abuse. (City of Kewanee v. Otley, 204 Ill. 402.) An injunction is properly denied where the right of the complainant is doubtful. (Labadie v. Morris, 303 Ill. 321.) A mandatory injunction will be refused where the balance of convenience is in favor of the defendant. (Hill v. Kimball, 269 Ill. 398; Dunn v. Youmans, 224 id. 34.) ”

The same, rule is recognized in the case of City of Kewanee v. Otley, 204 Ill. 402, where it is said: “The granting or refusal to grant an injunction rests in the sound discretion of the trial court, and its action cannot be disturbed in the absence of clear proof of an abuse of such discretion. (Platt v. Waterbury, 72 Conn. 531.) As indicated above, we are of the opinion, not only that there has been no abuse of the discretion which the law vests in an equity judge, but that there has been a proper application of equity principles in the case at bar.”

For the reasons stated, the decree of the city court of the City of Mattoon, Illinois, is affirmed.

Affirmed.


text:
    First National Bank of Waverly, Illinois, Appellee, v. Charles Reynolds and Gertrude Reynolds, Appellants.
    Gen. No. 8,379.

      Opinion filed February 3, 1930.
    Rehearing denied April 4, 1930.
    Stone, McLaren & Webb, for appellants.
    Ed. D. Henry, for appellee.
   Mr. Justice Shurtleff

delivered the opinion of the court.

Appellants appeal from an order of the circuit court of Sangamon county, refusing to open or vacate a judgment entered by confession against appellants. The note on which the judgment was taken was signed on December 20, 1920, in Waverly, Morgan county, Illinois. On May 14,1924, this judgment was taken in the circuit court of Sangamon county, Illinois. No execution upon said judgment was ever served on any of the defendants, and no one of the defendants ever knew that a judgment had been taken against them, or any of them, until the 28th day of February, 1929, at which time one of the defendants, Gertrude Reynolds, received a letter from the attorney who acted for appellee in taking the judgment, advising her that a judgment had been taken; that he controlled said judgment and that he would proceed in a few days to levy on her interest in certain property. As soon thereafter as appellants could move in the matter, they consulted counsel in Springfield, Illinois, and on the 6th day of March this proceeding to open said judgment for leave to plead was begun. It was six days from the time appellants had notice that the judgment had been taken until this proceeding was filed. On the 12th day of March, 1929, said cause was heard in the circuit court of Sangamon county on the motion and affidavits thereto attached, which affidavits in brief state that A. 0. Moffet, who was the president of appellee, threatened Charles Reynolds, the father of Gertrude Reynolds, with prosecution and imprisonment if they all did not sign the note in question for the purpose of taking up an overdraft of Charles Reynolds at the First National Bank of Waverly; that appellants signed said note in the fear that the said Moffet would carry his threat into execution and not otherwise; and that no consideration of any kind or character was given by A. C. Moffet or appellee to appellants for the signing of the note, as stated in the petition. As to the consideration for the note, the affidavit of appellant Charles Reynolds states that on December 20, A. D. 1920, he became indebted to appellee in a small amount, the exact amount of which the appellee does not now remember; that such indebtedness was incurred by means of overdrafts on his checking account which he then carried with appellee, which said overdrafts were well known to the said A. C. Moffet, who was then and there president of appellee, and who then and there as president and acting manager of appellee permitted this appellant to make said overdrafts on his account so carried with appellee. Whatever liabilities the cashier of a bank may incur to the bank by cashing an overdraft, it certainly is not an offense of any kind towards the bank for a customer to overdraw his account. Appellants’ petition and affidavits presented no ground in law or in equity for which appellants should be permitted to plead. In Rendleman v. Rendleman, 156 Ill. 568, 572, the court held: “And mere threats of imprisonment, for which there is no ground, do not constitute duress, as the person threatened could not be put in fear thereby. Nor do threats of criminal prosecution constitute duress when neither warrant has been issued nor proceedings commenced. (6 Am. & Eng. Ency. of Law, p. 64, note 1, and cases cited.) In Hamilton v. Smith, 57 Iowa 15, it was' held that where the evidence showed the conveyance was an intelligent, voluntary act, the fact that the deed was executed reluctantly and after some threats had been made, was insufficient to. establish undue influence or duress. See Baldwin v. Murphy, 82 Ill. 485.” And the same rule is laid down in Hintz v. Hintz, 222 Ill. 248, 253, and Huston v. Smith, 248 Ill. 396, 400.

It is further held in Farwell v. Huston, 151 Ill. 239, 246: “Yet, such relief will not be granted, if it appears that the debtof owes the amount of the judgment, and has no defense, either legal or equitable, to the debt for which the judgment is rendered. Colson v. Leitch, 110 Ill. 504; Hier v. Kaufman, 134 id. 215.”

Appellants’ petition shows that appellant Charles Reynolds owed the bank for overdrafts for the collection of which the statute of limitations has now run. It would be manifestly inequitable, in this proceeding, to aid him to defeat his honest debts. For the reasons stated, the judgment of the circuit court of Sangamon county is affirmed.

Affirmed,