author: Mr. Justice Scanlan

text:
    Sam C. Cocos, Appellant, v. American Automobile Insurance Company, Appellee.
    Gen. No. 40,386.

      Opinion filed December 5, 1939.
    A. H. Brown, of Chicago, for appellant; A. J. W. Appell, of Chicago, of counsel.
    Eckert & Peterson, of Chicago, for appellee; A. R. Peterson and Tom Leeming, of Chicago, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

Plaintiff brought suit in the circuit court of Cook county against Bowman Dairy Company, a corporation, Edward Kaveny, Sr., and Edward Kaveny, Jr., to recover damages for injuries sustained through the alleged negligent operation of an automobile belonging to the Bowman Dairy Company. At the close of the evidence the trial court directed the jury to return a verdict of not guilty as to defendants Edward Kaveny, Sr., and Bowman Dairy Company. The jury returned a verdict finding Edward Kaveny, Jr., guilty and assessing plaintiff’s damages in the sum of $5,000. Judgment was entered as to both verdicts and the judgment against Edward Kaveny, Jr., remains unsatisfied. The instant case is an action to recover on an insurance policy issued by defendant to the Bowman Dairy Company. At the close of the evidence, upon motion of defendant, the jury were instructed to find defendant not guilty. Plaintiff appeals from a judgment entered upon the verdict.

No question is raised as to the pleadings. Plaintiff ' states that “it is plaintiff’s theory of the case that defendant is liable for the amount of the judgment for which this suit is brought, by reason of the terms and provisions of the insurance policy issued by defendant to Bowman Dairy Company. The pertinent provisions of the policy are the following:

“ ‘Extended Coverage.

“ ‘That in addition to the Assured named in this policy, such insurance as is granted hereunder shall be available, in the same manner and under the same conditions and to the same extent as it is available to the Assured named herein, to any person or persons, except chauffeurs and domestic servants, while riding in or legally operating the automobile covered by this policy, and to any person, firm or corporation legally responsible for the operation thereof; but only while it is being used for the purposes specified in Statement III of the “Schedule of Statements” and with the consent of the Assured named herein, or if such Assured is an individual, of an adult member of his household who is not a chauffeur or domestic servant. ’ ’ ’

“ ‘Schedule of Statements.

“ ‘Statement III: The automobile is and will be used only for private pleasure and business calls.’ ” Defendant concedes that “a policy of insurance containing the provisions recited by plaintiff was issued by the defendant insurance company to the Bowman Dairy Company.” Its theory is that “Bowman Dairy Company, . . . was the named assured in the policy issued * * *. The named assured gave consent to the use of the automobile by Edward Kaveny, Sr. who was thus included in the extended coverage of the policy as an additional insured. There is an entire absence of evidence to show that Edward Kaveny, Jr. had the consent of the named assured to operate the automobile at the time and place in question, but the evidence is conclusive that his use of the automobile was in violation of the express instructions of the named assured. ’ ’

Upon the trial it was stipulated “that judgment was entered for $5,000 against Edward Kaveny, Jr. by reason of an injury growing out of the operation of a Ford coupe described in the insurance policy”; “that the co-defendants Bowman Dairy Company and Edward Kaveny, Sr. were dismissed out of the original suit”; that the automobile involved in the accident is the same automobile as is described under the policy of insurance issued by defendant to Bowman Dairy Company.

By stipulation of the parties the testimony of Kaveny, Sr., given in the original suit of plaintiff against Bowman Dairy Company, Kaveny, Sr., and Kaveny, Jr., was read in evidence. The witness testified that he had been employed by Bowman Dairy Company for thirty-nine years and was then a division manager; that he started work as a helper in the barns and running errands, and had worked up to his present position; that he was a division manager in 1930; that he had charge of about one hundred and thirty men; that he hired them and trained them in the work that they were hired to do; that he used the Ford coupe that was involved in the accident in question, in his work; that it was owned by the Dairy Company; “Q. What instructions if any did you have from your employers as to the use of that automobile? . . . A. My instructions from the company is that I would have the exclusive rights of driving that car in the business, I used it in the business. I used it all over the territory as I was tending to the company’s business”; that when he was off duty the car was kept in the garage in the rear of his home. The following then occurred: “Q. Explain how your son Edward came to be using that Ford car on that evening. A. Well, he just— Q. Christmas, 1930. A. Well, he just asked me if I would permit him to drive it to go down and see his uncle. Q. And what did you say to him? A. Well, I said all right. Q. About what time did he leave home that evening? A. Oh, as well as I remember it was some where a little after 5:00 o’clock or thereabouts. ... I don’t know whether it was five or ten minutes one way or the other. It was after five, however. Q. When he asked permission' to use the Ford coupe was there anything stated as to the purpose for which he was using it? A. Well, he told me where he was going, that he wanted to go down and see his uncle on Christmas night. Q. Which uncle? A. His Uncle John. Q. Is that your wife’s brother? A. My wife’s brother, yes. Q. Was your son on any errand for you that evening? A. None whatever.” The witness then testified that he was not the general manager of the Dairy Company; that the Company had 13 divisions and he was the division manager of one of them; that it might be better to call bim a branch manager; that he hired the men and discharged them and had the general supervision of that branch; that the car in question was maintained by the Dairy Company for his exclusive use; that J. F. Phillips, a director of the Dairy Company, “over-sees' our branches or divisions”; that at the time witness became a division manager the then supervisor instructed him that no one else but the witness was to drive that car “off the premises, off the territory, nobody but me”; that nobody but the witness was to drive the car off of the territory covered by his division; that his home is not in that territory. Witness further testified: “Q. So that when you told your son on December 25, 1930 that he might take the car” to go to his Uncle John’s you were violating the orders given you by this supervisor? • A. I was. Yes, sir. Q. Now was your son Edward going down to his Uncle John’s to bring his Uncle John or any other member of the family back to your home for the evening? A. No, sir. Q. Weren’t they coming down there to spend the evening at your home? A. Not that I know of.” The witness further testified that Kaveny, Jr., was employed by the Dairy Company at the Englewood division as a common laborer around the barn and the Dairy Company did not furnish him with a car; that the Englewood division was not connected with the division managed by the witness. The following then occurred: “Q. You stated that you were given an instruction by the Bowman Dairy to use the car for yourself. Now did they also at the same time tell you what uses you were to make of the car? A. Yes. Q. What were those instructions ? A. Those instructions, those were to use it within my territory as I mentioned. I could send a foreman out on an errand with the car, but they could not take it. That would be in working hours. Q. Was it limited to the use of the Bowman Dairy Company business ? A. Bowman Dairy Company business, and exclusively”; that “very seldom, but occasionally,” when someone would run short of milk the foreman, but nobody else, would use the car in making the delivery. The foregoing is the only evidence in the case material to the determination of this appeal.

Plaintiff contends that “the trial court apparently overlooked the fact that Kaveny, Sr., was the Manager of the Bowman Dairy Company plant, and that the permission given by him to Kaveny, Jr., to use the automobile, was the permission of the Bowman Dairy Company. The knowledge of the Manager was and is binding on the corporation.” Defendant concedes that the action of the supervisor of all of the branches of the Company, wlio was also a director of the Company, in allowing Kaveny, Sr., to have the personal use of the automobile specified in the contract, brought Kaveny, Sr., within the additional coverage clause of the contract, but insists that under the contract and the admitted facts in the case he was not authorized to extend the coverage to his son; that the contract was between the Dairy Company and the Insurance Company, and Kaveny, Sr., could not by his acts extend the obligation of the Insurance Company beyond that provided for in the written contract; that his permission to the son to use the automobile was not an act performed in furtherance of his duties as an employee of the Dairy Company, nor was it in the interest of that Company, whereby a consent might possibly be inferred; that the permission was given on a holiday, Christmas, and the car was to be used by Kaveny, Jr., on a purely personal matter that had not the slightest connection with the business of the Dairy Company.

In view of the positive directions given Kaveny, Sr., as to the use of the car, and his admission that he violated his orders when he gave his son permission to use it for the purpose of visiting his uncle, on Christmas night, it seems idle to argue that the consent of Kaveny, Sr., was the consent of the Dairy Company and his knowledge of the transaction was the knowledge of the Dairy Company, and therefore defendant was bound under the insurance contract. “It is the general rule, séttled by an unbroken current of authority, that notice to, or knowledge of, an agent while acting within the scope of his authority and in reference to a matter over which his authority extends, is notice to, or knowledge of, the principal.” (2 Mechem on Agency (2d Ed.) p. 1384, sec. 1803.) Kaveny, Jr., was not connected with the division of which Kaveny, Sr., was division manager, and the latter had no authority over Kaveny, Jr. The permission to use the car on Christmas night was a purely personal matter between father and son.

Plaintiff contends that “the trial court erroneously construed the provisions of the insurance policy sued upon herein, and particularly with reference to the ‘Extended Coverage’ provision contained in said policy.” The argument in support of this contention is that the trial court did not give full effect to the authority of Kaveny, Sr., over the car; that he had more authority, “so far as that automobile was concerned, than any other officer or human being connected with the Bowman Dairy Company. ’ ’ This argument ignores the testimony of Kaveny, Sr., that his authority over the car was limited to the use of the Dairy Company business ‘ ‘ exclusively. ’ ’ What we have heretofore said as to the first contention applies with equal force to the instant one. Defendant argues that “the question here is not whether he could or did bind the Bowman Dairy Company but whether he could and did bind the insurance company under a contract to which he was not a party and in such manner that the plaintiff, also a stranger to the contract, could take some rights in the contract between the Bowman Dairy Company and the insurance company. ’ ’

In support of his contention plaintiff cites the following Illinois cases: Jefson v. London Guarantee & Accident Co., Ltd., 293 Ill. App. 97; Karton v. New Amsterdam Casualty Co., 280 Ill. App. 201; Jackson v. Bankers Indemnity Ins. Co., 277 Ill. App. 140. The three citations are what are known as deviation cases, that is, cases where the assured permits another (who thereby becomes an additional assured) to use the car for a specified purpose and that other person deviates from the purpose for which permission was given and uses the automobile for some purpose, of his own that is not within the scope of the permission given. Under such a state of facts the rule is that the status of the party operating the car is not changed because he fails to comply with the instructions of the assured, and the insurance company is held liable. After considering certain decisions of sister states also cited by plaintiff in support of the instant contention we find that each is distinguishable from the instant case upon the facts.

Defendant cites a number of cases which seem to support its position. We will refer to several of these: American Automobile Ins. Co. v. Jones, 163 Tenn. 605, 45 S. W. (2d) 52, involved a policy that contained the same provision as is now before us for consideration. In that case Iten Biscuit Company was the assured. Fern Jones was injured while riding as a guest by invitation of one Wilkes, an employee of the Biscuit Company, in a car owned by the Company and delivered by it to Willies for his use. At the time of the accident in question Wilkes was in the car but, without the knowledge of the Company, it was being driven by one Thrice, a stranger to the company. Jones recovered a judgment against Wilkes and Thrice. Plaintiff then sued to recover from the Insurance Company the indemnity to which Wilkes as an “additional assured” would have been entitled had he paid the judgment. Plaintiff recovered a judgment, but the Supreme Court of Tennessee reversed the judgment and remanded the cause with directions to dismiss the bill. Upon appeal the Insurance Company insisted that protection under the “additional assured” rider “[1] does not extend to this case, where the; car had not only been diverted from the purpose for which it was placed in possession of the employee, Wilkes, by the owner, the named assured, but [2] was being used in a manner, that is, being driven by a party, not only unauthorized by the owner, but contrary to its positive instructions, as shown by the stipulation of the parties in the record. ’ ’ The court held that appellant could not prevail as to the deviation point, but, upon point [2], stated:

“But here we have more, namely, a material departure, not only in place and purpose, but in use. Delivered to Wilkes for his use does not imply consent to use — in the essential sense of operation, handling, driving by some unknown and unapproved third person. In one sense, it is true, it continued to be devoted to the use of Wilkes, but it was not he who was using it in the sense of controlling, manipulating, guiding it— and a restriction on its use in this sense would appear to be called for by the nature of the obligation created by the indemnity contract. The element of risk underlies all forms of insurance. The insurer has a right to assume that the risk he undertakes shall not be enlarged. The extent of the risk is the basis of all tabulated premium charges. And this is one of the forms of insurance, of which fire policies are an illustration, wherein there is a recognized personal element resting on standards of character, responsibility, and competence. In this class of cases, theoretically, certainly, the insurer looks first to the standing and reputation of the named assured, and trusts him to select and delegate to responsible employees, only, the ‘use’ or operation — controlling, guiding, driving — of its cars covered, and on this theory agrees to cover such ‘additional assured.’ No power passes, in the contemplation of the parties, to such an agent to delegate in turn this responsibility. Such a diversion of use can hardly be said to be impliedly with the consent of the named assured, or within the contemplation of the insurer. It is a departure too radical and foreign, and involves an unjustifiable extension of the risk covered by the contract.

“It is to be borne in mind that the ruling in the Stovall Case [Stovall v. New York Indemnity Co., 157 Tenn. 301; 8 S. W. (2d) 473, a deviation case] involves no such enlarging of the risk. A mere diversion of route or place of use suggests no increase of hazard. One is as liable to have an accident on one route or way as on another. But a change of driving, operating-control, injects a distinctly new element.

‘ ‘ Consistently with this construction, in the instant case the stipulation shows that this particular misuse was expressly prohibited; that it was against the instructions of this salesman ‘for him to permit any one to drive the car.’ We are unable to extend the required consent by implication to cover as ‘additional assured’ one who has, without authority of the owner, substituted for himself a third party, conferring on him the uncontrolled power to inflict the injury and create the liability. This conclusion is directly supported by the holding in Trotter v. Union Indemnity Co. (C. C. A. 9) 35 F. (2d) 104, denying liability where the car had been turned over by the ‘additional assured’ to a third party without apparent authority.” The foregoing-case was followed in Hunter v. Western $ Southern Indemnity Co., 19 Tenn. App. 589, 92 S. W. (2d) 878.

In Card v. Commercial Casualty Ins. Co., 20 Tenn. App. 132, 95 S. W. (2d) 1281, the “additional assured” clause in the policy is the same as the one in the instant policy. In that case Ogilvie, the insured, the owner of the automobile in question, permitted Rollin Lasseter, the general manager of his business, “to use the car as he wished, for business or pleasure. ’ ’ Lasseter testified that when Ogilvie turned the car over to him he said, “Here is a car to be used by you, use it just as if it were your own. ’ ’ On the day of the accident in question Rollin Lasseter instructed his brother, Robert Lasseter, to drive one Card to the latter’s home in the automobile covered by the insurance contract. Card had been surveying a lot belonging to Mrs. Rollin Lasseter, on which she was preparing to build a house. On the way to Card’s home the automobile collided with another automobile and Card was killed. The administratrix of Card’s estate filed suit against Robert Lasseter and others to recover damages for the wrongful death of the deceased. Judgment was rendered against Robert Lasseter in the sum of $10,000. The judgment was not paid and the administratrix then filed the suit against the Insurance Company. The suit was dismissed by the trial court and the administratrix appealed. In an exhaustive opinion filed by the Tennessee court of appeals the judgment of the trial court was affirmed. In the opinion appears the following: “The ‘additional assured’ clause in effect gives the named assured the discretionary power to select ‘additional assureds.’ This discretionary power cannot be delegated to another. . . . When the car is being driven by a person without the actual permission (either express or implied) of the named assured, then the driver is not an additional assured. Even if the person is present in the car who had permission to use it (but is not driving), there is no coverage under the policy. In that case the person who was given permission is not an ‘additional assured,’ for the reason that the named assured must personally exercise his discretion in selecting the driver. Permission to use means permission to operate. . . . ” (Citing cases.) The court, after discussing implied permission, further states: “But such ‘implied permission’ must be the act or conduct of the named assured. It must amount to an intended selection of the person to operate the car. No implied permission can arise merely because a man obtained possession of the car, without the knowledge of the named assured, regardless of what permission was given by other persons. Of course, the named assured could transmit his permission through an agent or in any other manner. The essential point is whether the named assured exercises his personal discretion and grants his own permission to the particular person. . . . Even if the named assured expressly authorized such person to permit other unnamed and unselected persons to drive the car, this would be unavailing as against the insurance company. Certainly such a right cannot be created by implication.” (See, also, Johnson v. O’Lalor, 279 Mass. 10, 180 N. E. 525; Columbia Casualty Co. v. Lyle, 81 F. (2d) 281; Standard Ago. Ins. Co. v. Rivet, 89 F. (2d) 74.) The last case follows the Lyle case and cites (p. 77) additional authorities in support of the conclusion reached in that case.

Plaintiff calls attention to an allegation in paragraph 5 of the complaint charging that on the date of the accident Kaveny, Jr., was operating a certain motor vehicle belonging to Bowman Dairy Company with its knowledge and consent, and to defendant’s answer to the allegation, which is as follows: “denies that the said defendant Edward Kaveny, Jr. was then and there using the aforesaid car with the consent of the assured, the Bowman Dairy Company, a corporation.” Plaintiff argues that as defendant did not specifically deny plaintiff’s allegation as to knowledge he “was relieved from making proof of the matter so admitted by the pleadings and defendant cannot now question the point settled by the pleadings.” He further contends that “the knowledge of Kaveny, Sr., its manager, was and is the knowledge of the Bowman Dairy Company.” It is a sufficient answer to this contention to say that under the stipulated evidence Kaveny, Sr., was entirely without authority to give consent on behalf of Bowman Dairy company to his son’s use of the car. A fortiori, the father’s consent was contrary to the specific instructions given him by the Company. The point made as to the effect of the pleadings is an afterthought, as it was not raised during the hearing in the trial court. The record shows that the trial court in his opinion stated that he found no evidence that the Bowman Dairy Company had any knowledge, actual or implied, that Kaveny, Sr., allowed the son to use the car, and counsel for plaintiff failed to call the attention of the court to the point he now makes as to the effect of the pleadings on the question of knowledge. Had counsel called the attention of the court to that point, defendant, under the liberal rules of the new Practice Act, might have amended its answer, if it deemed it necessary to do so. In Card v. Commercial Casualty Ins. Co., supra, the court held that even if the named assured expressly authorized the person it permitted to use the car, “to permit other unnamed and unselected persons to drive the car, this would be unavailing as against the insurance company.”

We find no merit in plaintiff’s contention that the trial court erred in directing the jury to find the issues for defendant as there was sufficient evidence to warrant the submission of the case t-o the jury. The motion to direct a verdict was allowed at the close of plaintiff’s case and all of the material facts were undisputed. We are satisfied that the court was justified in directing the jury to find the issues for defendant.

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

Judgment affirmed.

John J. Sullivan, P. J., and Friend, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    Florence Swanson, Appellee, v. S. S. Kresge Company, Appellant.
    Gen. No. 40,885.

      Opinion filed December 5, 1939.
    Burt A. Crowe, of Chicago, for appellant.
    Busch & Weisbrod, of Chicago, for appellee; Martin O. Weisbrod, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

Plaintiff sued to recover for injuries resulting from a fall on the stairway of defendant’s department store. The jury returned a verdict finding defendant guilty and assessing plaintiff’s damages at $750. Defendant appeals from a judgment entered upon the verdict.

Plaintiff filed a statement of claim consisting of three counts. No proof was introduced in support of the second and third counts, so that it is only necessary to state the allegations of the first count. It alleges that prior to and on November 2, 1935, defendant maintained and possessed a certain store or salesroom located at 227 South State street, Chicago, to which the general public was invited for the purpose of examining, inspecting or purchasing goods, wares and merchandise; that it then and there became and was the duty of defendant to keep and maintain said store and the floor thereof in a “reasonable” safe condition so as not to injure such members of the general public who were by the invitation of defendant in and upon the premises; that at the time and place in question and prior thereto plaintiff was in the exercise of ordinary care for her own safety; that on the date aforesaid plaintiff entered said store or salesroom lawfully and rightfully, for the purpose of inspecting, examining or purchasing goods, wares and merchandise, and while she was in said store defendant then and there, not regarding its duties in the premises, carelessly, negligently and improperly permitted the said floor and steps leading into the basement to become in a dangerous and unsafe condition, that is, a metal strip on the steps leading into the basement was loose, bent and not properly affixed to said steps; that by means of the premises and the negligence of defendant plaintiff was then and there caused to and did fall to and upon the floor and steps with great force and violence, and as a result and consequence of said negligence of defendant sustained severe and permanent injuries, etc., to the damage of plaintiff in the sum of $1,000. Defendant, in its answer, admitted that it owned, operated and controlled the store, but denied each and every allegation in each of the counts, and answered that defendant was not guilty of any of the acts charged by plaintiff in the statement of claim and that the injury and damage, if any, was sustained through plaintiff’s own fault and negligence. Plaintiff propounded to defendant several interrogatories, which were answered by defendant. Buie 149 of the Civil Practice Buies of the municipal court provides that the answers to interrogatories may be used in evidence, but defendant did not introduce in evidence any of the answers, and concedes that none of the interrogatories or answers can be considered as evidence.

Defendant produced no evidence but filed motions for a directed verdict at the close of plaintiff’s evidence and again after defendant rested. Defendant contends ; “I. Plaintiff failed to prove that the defendant was negligent. II. The court erred in refusing to direct a verdict at the close of the plaintiff’s case and again at the close of all the evidence. III. The court erred in refusing to grant defendant’s motion for a new trial. IV. The court erred in refusing to grant defendant’s motion for judgment in its favor notwithstanding the verdict. ’ ’ Points II, III and IV are based upon the assumption that point I is a meritorious one. The argument of defendant is that “the plaintiff failed to prove that the alleged defective condition of the metal stripping existed before the time of the occurrence of the accident and failed to prove that the defendant, through any negligence on its part, caused the condition or that the condition had existed for a sufficient length of time so that the defendant, in the exercise of ordinary care, should have had notice of that condition.” Defendant states in its brief that it was unable to produce any witnesses who might have been able to describe the condition of the stairway at the time in question for the reason that the trial took place over three years after the date of the. accident. Defendant, in other words, intimates that the instant suit is what is known as a blind case. The record does not justify this position of defendant. The suit was commenced on March 7, 1936. Plaintiff testified that as soon as she had fallen people gathered around her, and that she was then taken upstairs to the second floor to a “medical station,” and a nurse put some bandages on her legs and told her that the doctor was busy with someone else who had been hurt and that she should wait until he saw her; that “it got so long in waiting I was worried about mother downstairs . . . so I descended the stairs and came down stairs, very nervous and shaking,” and met her mother. It appears, therefore, that defendant had notice of the accident to plaintiff immediately after it occurred. As to the accident, plaintiff testified that on the afternoon of the day in question she went to defendant’s store to purchase a typewriter cleaning brush; that on the main floor she was told by one of the clerks that she would find such a brush in the basement; that she left her mother on the main floor and started to descend the stairway leading to the basement; that she took a step from the floor to the first step of the stairway and caught on something and it threw her; that she tried to grab the railing but she was thrown forward so rapidly that she went head over heels practically all the way down the stairway; that “my heel hooked behind something when I fell;” that when she returned to the first floor, after she had been at the “medical station,” she and her mother went to the place where she had the accident and “looked at the spot that I had fallen from and found that this stripping was raised at that right hand side of the stairway. . . . And I knew that was what I had fallen over because my heel hooked behind something when I fell, threw me head first.” After plaintiff’s mother had testified that when plaintiff returned to the main floor they went to the stairway in question, the following occurred: “ Q. Will you please state to the Court and jury what you saw when you went to look at those stairs ? A. I saw the stripping was raised, and it was raised I would say, well about an inch * # *. The Court: Describe as best you can what you saw, madam. A. I saw the stripping was raised. Mr. Weisbrod [attorney for plaintiff]: Q. By the ‘ stripping’ will you tell the Court and jury just what you mean? A. Well, it is that strip on the front that holds whatever it is down on the step, on there. Q. And what was this strip composed of? A. Metal. A sort of metal strip. ... Q. Was this strip on the tread of the stair, that is, on the flat part that you walk on? A. Oh, yes, yes. Q. Was the metal on the back or front of the tread of that step? That is, here is the stair, here is what we call the tread. This is what you step on. A. Yes. Q. There is a strip on it? A. Yes. Q. Was the strip here, or here, or here, indicating front, center or back. A. Well, I just could not describe that now. It was on the flat — Q. Yes. A. And it was raised and it sloped. The metal was raised and it was loose and it sloped down on both sides. Mr. Weisbrod: All right. The Court: Q. What sloped, the step or the strip? A. No, the metal, the stripping. Mr. Weisbrod: Q. This was laying on the step ? A. Yes. Q. Do you recall what step it was that this strip was raised on? A. It was the first step off the landing. Q. From off the landing? A. From the top. . . . Q. Now as — I see — now as you walked down those stairs will you state what part of the stair it was which had this metal strip raised, that is, was it in the middle on the right or to the left or where? A. Well, I would say about a foot and a half off the right. Q. From the right side. A. Yes. Q. And it extended for how long a distance in a raised position? A. I would say about four inches. Q. About four inches. Mr. Crowe [attorney for defendant]: She means in length. A. Yes. Mr. Weisbrod: Q. From one side to where it was flat to the other side where it was flat? A. Yes.” Upon cross-examination witness stated that plaintiff told her at the time that that was the spot where she fell.

Defendant contends that it was incumbent upon plaintiff to prove “that the alleged metal strip which is claimed to have been loose, bent and not properly affixed to the steps became loose and unsafe by reason of some negligent act of the defendant, or that the loose, bent and improper condition of the metal strip had existed for so long a time prior to the accident that the defendant, in the exercise of ordinary care, should have had notice thereofthat “there was an utter absence of any proof, that assuming it [the alleged defective condition] did exist or was created at or before the time of the occurrence of the accident, that the defendant had a sufficient length of time to have had knowledge of it and to have remedied the alleged defect.” Plaintiff contends that the jury had the right to find that the loosening and bending of the metal stripping was not something that occurred immediately prior to the accident but that it had been in existence for an appreciable period prior to the accident; that defendant’s department store, located on State street, in the heart of the loop, was frequented by great numbers of customers, and that ordinary care required it to maintain some system of inspection which would discover that condition in time to remedy it before it resulted in injury to its customers; that defendant produced no evidence in that regard.

We will briefly refer to the cases cited by defendant in support of its position: In Heneghan v. Carson Pirie Scott & Co., 285 Ill. App. 595, decided by this division of the court, the only evidence introduced by plaintiff in support of her case was that while shopping in defendant’s store she was descending a stairway into the basement when her heel caught on the steel plate on the edge of the second step from the top, causing her to trip and fall to the bottom of the stairway, a distance of about six stairs. It appeared, therefore, that there was no proof that the stairs or the metal strip was in a defective or dangerous condition. We held that plaintiff had failed to make out a prima facie case. In Jones v. Kroger Grocery & Baking Co., 273 Ill. App. 183, plaintiff slipped and fell on a small piece of spinach on an otherwise clean and visible floor. There it was held that the presence of the spinach at the instant when plaintiff fell was not proof of negligence on the part of the manager of the store. In Deitz v. Belleville Co-Op. Grain Co., 273 Ill. App. 164, plaintiff, an invitee, was injured by stumbling over a piece of iron on an open lot, where anyone might see it, and the evidence showed, affirmatively, that defendant had no knowledge of the presence of the piece of sheet iron. In F. W. Woolworth v. Williams, 41 F. (2d) (D. C.) 970, plaintiff, while in defendant’s store, slipped and was injured. She testified that afterwards she noticed an oval-shaped spot on the floor that her heel had gone into and caused her to slip. From the opinion of the court it would appear that the spot testified to by plaintiff was such as might have been caused by ‘ ‘ dropping or spilling something on the floor.” Witnesses for the defendant testified that they examined the spot where plaintiff fell, immediately after the accident, and that no substance appeared on the floor that could have caused plaintiff to slip. One of the witnesses testified that he had finished sweeping the spot in question a few minutes before the accident. There was no evidence to prove that defendant had either actual or constructive notice. Leach v. S. S. Kresge Co., 147 Atl. (R. I.) 759, differs from the instant case upon the facts. In the remaining case cited by defendant, Schnatterer v. Bamberger, 81 N. J. L. 558, 79 Atl. 324, the facts are similar to the facts in the instant case and the ruling of the court supports defendant’s instant contention. The plaintiff’s evidence showed that there was a loosened brass edging or nosing originally fastened by screws to the outer edge of the step for protection of the wood from wear, which had become loosened or raised to such an extent that plaintiff’s heel was caught in it, causing her to fall. The court held that such evidence did not make out a prima facie case; that it was necessary for plaintiff to prove that the defect (a) had been in fact brought to the previous notice of the defendant, or, failing in proof of such actual notice, that (b) the defect had existed for such space of time before that occurrence as would have afforded the company sufficient opportunity to make proper inspection of its stairways to ascertain their condition as to safety, and to repair their defects.” The Schnatterer case was decided March 17, 1911. On May 17, 1926, the same court, in Stark v. Great Atlantic & Pacific Tea Co., 102 N. J. L. 694, 133 Atl. 172, had before it a case where the trial court, apparently following the Schnatterer case, directed a verdict for the defendant. Plaintiff appealed. In the opinion, while the court did not overrule or criticize the opinion in the Schnatterer case, it saw fit to announce the following rule: ‘ ‘ But it is equally certain that there are conditions of disrepair and deterioration causing injury which from their very nature and character cannot come into existence coincident with the happening, but must, by more or less slow and gradual processes covering appreciable periods of time, have grown from a condition of reasonable safety to one not safe, as measured by the rule of reasonable care. Such cases would present a question for jury determination as to whether or not the condition had existed for such period of time as to give to the party chargeable with the care and maintenance reasonable time and opportunity to inspect and repair, if necessary.” The court held that the case presented a question of fact for the jury to determine, and reversed the judgment of the trial court and remanded the cause for a new trial. Dickey v. Hochschild, Kohn & Co., 157 Md. 448, 146 Atl. 282, presents a case similar to the instant one. The court said:

“The single question presented by the appeal is whether the facts stated, which are conceded by appellee’s demurrer prayer, are sufficient in law to justify an inference that it was guilty of actionable negligence in permitting the step which occasioned the injury of

which appellant complains to be in an unsafe condition.

< <

‘1 So that in determining whether the facts to which we have referred are sufficient to support an inference of negligence, consideration must be given not only to the particular defect in the step which occasioned the accident, but also to other facts such as the purpose for which the stairway was designed, that it was likely to be used by large numbers of persons of varying degrees of physical strength and activity, and of all ages, and that the attention of such persons might very probably at times be diverted by articles about them displayed for the very purpose of attracting their attention. Under such circumstances, ordinary care required the proprietor not only to see that the stairway was so constructed as to be reasonably safe for use by persons who were themselves exercising ordinary care, but that it was maintained in that condition. The trial court reached the conclusion that the facts of this case were not legally sufficient to permit any rational inference that the appellee had failed to discharge either of those duties, and in arriving at that conclusion much reliance was placed upon the case of Schnatterer v. Bamberger, 81 N. J. Law 558, 79 Atl. 324, 34 L. E. A. (N. S.) 1077, Ann. Cas. 1912D, 139. In that case the plaintiff, while descending a stairway in defendants’ store, caught her. shoe in a loosened brass edging or ‘nosing’ on one of the steps, in consequence of which she was thrown and injured. The court there held those facts furnished no evidence of actionable negligence, because they did not show (a) that the defendants had been actually notified of the defect, or, (b) that it had existed for a space of time sufficient to charge them with constructive notice of it. But we are unwilling to accept the reasoning of the court in that case or the conclusion reached by the trial court in this. In that case the defendants must naturally have anticipated that the stairway would be used by a large number of people, and that as a result of such use the steps and any covering on them would become in time worn and defective, and as their duty to their patrons to see that the stairs were safe for use did not end when they constructed them, they were also bound to inspect the steps at reasonable intervals to ascertain their condition, and not to wait until some person whom they had invited to the store broke his neck as a result of a defect which a seasonable inspection would have revealed. And the defective condition which caused the accident was in itself some evidence of a failure to fairly discharge that duty.

a

“If there had been any evidence that the appellee had exercised ordinary care to see that the steps were properly constructed, and that it had exercised ordinary care to see that they were kept in a safe condition, then before it could have been charged with negligence in failing to prevent or remedy the defect it would have been necessary for the plaintiff to have shown that it knew or had had a reasonable opportunity to have known of it. But in the absence of any such evidence, the condition of the step immediately after the accident was sufficient to warrant the inference (a) that its construction was defective in material or design, (b) that the loosened strap had never been properly fastened down, or (c) that appellee had failed to make a reasonably careful inspection of the stairway. Under such circumstances and in the absence of any evidence tending to show what, if any, care appellee exercised to keep its premises in a safe condition for use by those who at its invitation entered its store to examine or purchase its wares, whether it was or was not negligent in failing to prevent or remedy the defect which caused the accident in this case was a question for the jury, and there was error in granting appellee’s prayer.” (Italics ours.)

In Fowler v. South End Amusement Co. (Mass.), 12 N. E. (2d) 718, the court held that where from the nature and character of the alleged defect it could be found that the defect existed for a sufficient time to enable defendant, if due care were used, to discover and correct it before the accident, a case should be submitted to the jury, even if there was evidence for the defendant that the stairways were inspected every day.

We agree with the reasoning and the ruling of the court in Dickey v. Hochschild, Kohn & Co., supra. In our judgment the proof as to the defective condition of the step at the time of the accident to plaintiff showed a condition of disrepair that would warrant a jury in finding, especially in the absence of any proof by defendant, that the defective condition had existed for a space of time sufficient to charge defendant with constructive notice of it. In other words, plaintiff’s evidence was sufficient to make out a prima facie case. In determining whether or not defendant had constructive notice of the defect, the character and location of defendant’s store and the great number of people that shop there must also be considered. The absence of proof on the part of defendant strengthens plaintiff’s evidence, as it is a rule well recognized in this State that where the evidence to prove a fact is chiefly, if not entirely, in control of the adverse party and such evidence is not produced, his failure to produce the evidence tends to strengthen the probative force of the evidence given to establish such claimed fact.

The instant case was well tried, as is evidenced by the failure of defendant to assign any of the errors usually assigned in cases of this character.

The judgment of the municipal court of Chicago is a just one and it should be and is affirmed.

Judgment affirmed.

John J. Sullivan, P. J., and Friend, J., concur.


author: Justice Scanlan.

text:
    John E. Merrion, Appellant, v. Julia V. O’Donnell et al., Appellees.
    Gen. No. 40,894.
    opinion filed December 5, 1939..
    Charles J. Trainer, for appellant; Sheehan & Egan, for appellees; Roy J. Egan, of counsel.
   Opinion by

Justice Scanlan.

“Hot to be published in full.”


author: Justice Suanlan.

text:
    People of the State of Illinois, Defendant in Error, v. Nathan Friedman, Plaintiff in Error. People of the State of Illinois, Defendant in Error, v. Oscar H. Friedman, Plaintiff in Error.
    Gen. No. 40,954. Gen. No. 40,955.

      opinion filed December 5, 1939.
    Folsom Grossberg, Butler & Brill, for plaintiffs in error; Thomas J. Courtney, State's Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher, Blair L. Varnes and Melvin S. Rembe, Assistant State's Attorneys, of counsel.
   Opinion by

Justice Suanlan.

“Not to be published in full.”


author: Mr. Presiding Justice Denis E. Sullivan

text:
    Mary Flanagan et al., Appellants, v. Madison Square State Bank et al., Defendants. Katherine Achenbach et al., Appellees.
    Gen. No. 40,581.

      Opinion filed December 13, 1939.
    Aaron Soble, John C. DeWolfe and Robert E. Dowling, all of Chicago, for appellants.
    Edward J. Warren, Joseph L. Mack, Bullinger & Michels, John W. Jedlan, Benjamin S. Adamowski, George E. Billett, John Taylor Booz, Castle, Williams & McCarthy, Gann, Secord, Stead & McIntosh, Hopkins, Sutter, Halls & DeWolfe, Marshall & Marshall, Mayer, Meyer, Austrian & Platt, McNab, Holmes & Long, Harold L. Reeve, John Mann, Sidley, McPherson, Austin & Burgess, Frederick W. Snider and John F. Voigt, all of Chicago, for appellees; Frank Michels, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

This is an appeal from an order entered in the superior court on September 12, 1938, sustaining some 47 motions to dismiss a second amendment, as amended, to plaintiffs’ second amended and supplemental bill of complaint, which complaint was filed on February 23, 1934.

Said complaint set forth that the Madison Square State Bank, a corporation, was organized on or about March 31, 1922; that its capital stock amounted to $200,000, which consisted of 2,000 shares of the par value of $100 each; that said bank was indebted to various persons, firms and corporations, according to its books of account, in an amount of approximately $1,500,000 to depositors and creditors, and was therefore insolvent and a receiver was appointed on June 30, 1932; that since June 15, 1932, said bank has ceased doing business.

Said complaint further alleges that the National Republic Bancorporation owned 1001 shares of the Madison Square State Bank stock.

It is charged that National Republic Bancorporation was incorporated as an investment company and had the stock of other banks in the name of the said Ban-corporation as owner thereof in order to limit and defeat the liability of the stockholders who, in truth and in fact, were the real owners of the stock in these various unit banks.

The bill sought to hold the defendants who were holding the Bancorporation stock to be the real, true and beneficial owners of the stock of the Madison Square State Bank, which stock was registered in the name of the Bancorporation.

Some of the motions made to dismiss the plaintiffs ’ pleadings contained allegations of fact which are dehors the record. Other motions made do not give an adequate reason for finding the complaint insufficient. Where a motion to dismiss is made under the Practice Act, it is equivalent to a demurrer, and admits as true all the allegations that are well pleaded. Parker v. Kirkland, 298 Ill. App. 340.

Plaintiffs’ theory of the case is that the second amendment as amended, taken with their second amended and supplemental bill of complaint, sets forth a sufficient cause of action against the shareholders of Bancorporation and that the trial court erred in sustaining defendants’ motions to dismiss, and dismissing plaintiffs ’ second amendment, as amended, for want of equity, at plaintiff’s costs.

Defendants’ theory of the case is that the second amendment is based upon facts which existed at the time of the filing of the original bill of complaint, and, therefore, it was improperly filed after decree; that a final decree having already been entered, the court was without jurisdiction to proceed under plaintiffs’ second amendment; that the second amendment does not allege facts which would entitle the court to disregard the corporate entity of Bancorporation and to treat its stockholders as owners of the bank stocks; that it does not appear that the 1,217 defendants who were not originally shareholders of Madison Square State Bank were anything other than ordinary stockholders of National Republic Bancorporation, a de jure corporation; that as to the other 110 defendants, the decree of January 22,1937, was res adjudicaba; that if the officers and directors of Bancorporation illegally conducted its affairs, it would not subject its stockholders to a liability because of such acts; that the second amendment does not set up sufficient facts to support plaintiffs ’ cause of action; that if the acquisition and ownership of bank stocks by Bancorporation was illegal, as is contended by plaintiffs, then such stocks were never validly acquired by Bancorporation so as to render either it or its stockholders liable as owners of such bank stock; that the amended complaint attempts to make a collateral attack upon Bancorporation ; and that the second amendment and the notice of appeal does not purport to be on behalf of the creditors other than plaintiffs, whose claims aggregate $136.90; and therefore that sufficient has been collected under said second amendment to satisfy the claims of plaintiffs.

Reference is made in the argument supporting defendants’ theory of the case, and also in some of the motions, to a decree which defendants allege was entered in a suit against the Bancorporation, which decree would be in the nature of a release and satisfaction of any claims against it. But, such a decree does not appear in the abstract of record or in the additional abstract of record, and even though it were proper on a motion to dismiss, such evidence has not been presented for our consideration.

It appears that the real purpose of this bill is based on the theory that there are some real owners of the bank stock, and while it is not in their respective names, it is in the name of the Bancorporation and they should be subject to the added liability created by the Constitution and the statutes in this case.

In the case of Gahagan v. Whitney, 359 Ill. 419, 421, it was said:

“It may be conceded that a bank stock liability cannot be imposed upon one against his will, but the character of the obligation is such that slight evidence of its acceptance is, in the absence of countervailing proof, sufficient. This is rightly so, for otherwise the owner of stock to whom it has not been transferred on the books of the bank might permit it to lie awaiting future developments of the bank and to speculate upon the benefits of accepting or rejecting it. Here the stock was inventoried by plaintiff in error as a part of her husband’s estate. She was administratrix and sole heir of his personal estate. This she is, in law, presumed to have known. She accepted dividend checks made out to her personally, and, so far as her final report shows, used by her personally. It is a fair conclusion to be drawn from the foregoing facts that she accepted the stock as a part of her husband’s personal estate which came to her through his death.

‘' Counsel argue, however, that there was no transfer of the stock on the books of the bank, and, since a stock liability is a contract liability, only those may be held liable whose names appear on the books of the bank as stockholders. Her counsel cite Golden v. Cervenka, 278 Ill. 409, where the statement is made that ‘the liability of the stockholders to the creditors, though created by the constitution, is based upon contract.’ And also Bell v. Farwell, 176 Ill. 489, where it was said: ‘Persons who give credit to the corporation do so upon the faith of the personal liability of the stockholders, and upon what principle can it be said that the liability is not contractual1?’ The fact that this liability is contractual in its nature does not, however, prove plaintiff in error’s case. Section 6 of article 11 of the constitution declares every stockholder in a banking corporation or institution to be individually responsible and liable to its creditors in the manner and to the extent therein specified. The question properly arises, therefore, whether the party sought to be charged is a stockholder. The constitution contemplates that the actual owner of the stock shall bear the liability arising thereon. It is not necessary to the establishment of stock liability of the actual owner of the stock that the shares be transferred on the books of the company. It is a rule recognized in this State and elsewhere, that where it is sought to hold the real owner of the stock though his name does not appear upon the transfer books of the bank, the court will determine who is the real owner and decree accordingly. In Gillett v. Chicago Title and Trust Co., 230 Ill. 373, stock issued in the name of another was found in the possession of Egbert W. Gillett at his death. The evidence showed that he was the actual owner though his name did not appear as stockholder, and a decree against his executor for the face value of the stock was upheld. It is a general rule that an equitable assignee or owner of stock in an incorporated company may, in the absence of agreement to the contrary, use it as his own property, control it and receive dividends thereon, and, as between himself and his assignor, he is bound to assume the burdens of ownership imposed. Kellogg v. Stockwell, 75 Ill. 68.

“That the actual owner of stock may be held to answer for the liabilities of stock ownership though his name does not appear upon the transfer books of the bank has been frequently stated in other jurisdictions. Early v. Richardson, 280 U. S. 496; Ohio Valley Nat. Bank v. Hulitt, 204 id. 162; Commissioner of Banks v. Tremont Bank and Trust Co., 259 Mass. 162,156 N. E. 7; Western Pacific Railroad Co. v. Godfrey, 166 Cal. 346,136 Pac. 284; Pignatel v. Mobley, 38 Ga. App. 508, 144 S. E. 385; Maddison v. Bryan, 31 N. M. 404, 247 Pac. 275.”

We can see no reason why the creditors should not be permitted to show who are the real owners of the stock in these banks. If the record owners are the real owners, then there appears to he no necessity for going further to determine such fact. But, if as charged, the record owners are not the real owners, but the Bancorporation is being used for the purpose of concealing the statutory liability of the real owners, then the investigating power of a court of equity is always available for the purpose of showing the real facts.

Without discussing at length all the points raised, suffice it to say that, having read the second amended bill of complaint, as amended, we are constrained to hold that it states a cause of action and the court was in error in dismissing- the bill on this motion. An answer should be filed so that the real facts may be developed.

Chapter 110, ¶ 166, sec. 42, subsec. 2, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 104.042], reads as follows:

“ (2) No pleading shall be deemed bad in substance which shall contain such information as shall reasonably inform the opposite party of the nature of the claim of defense which he is called upon to meet. ’ ’

For the reasons herein given the decree dismissing the complaint and the amendment thereto for want of equity, is hereby reversed and the cause is remanded with directions to the trial court to enter an order overruling the motions to dismiss and directing that answers be filed to said plaintiffs’ claim within a reasonable time.

Order reversed and cause remanded with directions.

Hebel, J., concurs, Burke, J., took no part.


text:
    Mary Galinski and Morris Lauter, Appellants, v. Charles Adler et al., Defendants. On Appeal of Ernest H. Claussen et al., Appellees.
    Gen. No. 40,656.

      Opinion filed December 13, 1939.
    Irwin J. Kaplan, of Chicago, for appellants; Paul Freeman, of Chicago, of counsel.
    Edward J. Warren, Joseph L. Mack, Bullinger, Michels & Dicus, John W. Jedlan, Benjamin S. Adamowski, John Taylor Booz, Castle, Williams & McCarthy, D’Ancona, Pelaum & Kohlsaat, Mayer, Meyer, Austrian & Platt, Harold L. Reeve, John Mann, Marshall & Marshall, Frederick W. Snider, Nolan H. Tepper and John F. Voigt, all of Chicago, for appellees; Frank Michels, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

A claim was filed in the superior court for a discovery and accounting against several defendant banks and a corporation known as the Baneorporation and some hundreds of other defendants, wherein it was alleged that the defendants, some of which are the stockholders of various banks, have surrendered their stock certificates and taken in exchange therefor certificates of stock of the Bancorporation. The stockholders of the United American Trust & Savings Bank were among those who were holding stock of the Ban-corporation, so-called, and that they were the real owners of the stock, although it was carried in the name of the Bancorporation:

It appears from said claim that by this method the Bancorporation had obtained possession, control and management of a number of banks, and that this was done for the purpose of evading the extra stock liability under the constitution and statutes of the State of Illinois relating to added liability to stockholders of State banks; that this also was done to escape the inhibition against branch banking in this State. One set of officers practically managed the various banks. The defendants, who are quite numerous, made motions to dismiss and in so doing they admitted the truth of all allegations in the bill that aré well pleaded and the legal inferences to be drawn therefrom.

The amended complaint contained the following:

“ . . . that the actual plan, intent and purpose of the organizers of said Bancorporation and of those parties who thereafter become stockholders thereof, including each and every of the defendants herein named, was to organize a bank stock holding company which would acquire, by exchange of shares of the capital stock thereof for shares of stock of various banks in the Chicago metropolitan area, a majority of shares of such banks and thereby to operate a group of unit banks or system of branch banks, all to be under the domination, control and direction of said Bancorporation ; and it was the further purpose and intent of said organizers of said Bancorporation, and each and every of those parties who became stockholders thereof, including the defendants herein named, that the dividends earned by each such banking institution comprising said group of banks or system of branch banks, to the extent of the shares thereof held by the Bancorporation, should be paid and delivered to the stockholders of Bancorporation in proportion to their several holdings of shares of stock of Bancorporation, and it was also the purpose and intent of said parties that all other of the benefits and advantages of ownership of stock in such banking institutions should accrue to the holders of the stock of Bancorporation, without any of the obligations and burdens of such ownership, including the superadded, contingent liability to the respective creditors of such unit banks in the event of insolvency, all contrary to the letter, meaning, spirit and intent of the laws of the United States of America and of the State of Illinois.”

Plaintiffs’ theory of the case is that the amended complaint sets forth a sufficient cause of action against the shareholders of Bancorporation and that the trial court erred in sustaining defendants’ motions to dismiss, and dismissing plaintiffs ’ amended complaint for want of equity, at plaintiffs’ cost, and that the said orders should be reversed and remanded with directions to the trial court to expunge said orders and to require said defendants to answer plaintiffs’ amended complaint.

It is defendants ’ theory that the pendency of a prior class suit was a bar to this action; that this is the invidual appeal of two plaintiffs and not a representative appeal on behalf of the other creditors of the United American Trust & Savings Bank; that the amended complaint does not allege facts which would entitle the court to disregard the corporate entity of Bancorporation and to treat its stockholders as owners of the bank stocks; that it does not appear that the 1,430 defendants who were not originally shareholders of United American Trust & Savings Bank were anything other than ordinary stockholders of National Republic Ban-corporation, a de jure corporation; that if the officers and directors of Bancorporation illegally conducted its affairs, it would not subject its stockholders to a liability because of such acts; that the amended complaint does not set up sufficient facts to support plaintiffs ’ cause of action; that if the acquisition and ownership of bank stocks by Bancorporation was illegal, as is contended by plaintiffs, then such stocks were never validly acquired by Bancorporation so as to render either it or its stockholders liable as owners of such bank stocks and that the amended complaint attempts to make a collateral attack upon Bancorporation.

On the motion to dismiss it is claimed that sufficient facts are not alleged to sustain the stockholders’ liability. It must be remembered that the complaint filed was for a discovery and accounting. The basic reason for filing a complaint asking for a discovery and accounting, is that the complainant lacks certain knowledge and in developing the facts he may be able to obtain or discover necessary facts and information which he does not possess.

In Ohio Valley Nat. Bank v. Hulitt, 204 U. S. 162, with regard to a policy of the United States government, which would be applicable to a State case, such as the one under consideration, that court at page 168 said:

“Assuming then the established doctrine to be that the mere pledgee of national bank stock cannot be held liable as a shareholder so long as the shares are not registered in his name, although an irresponsible person has been selected as the registered shareholder, we deem it equally settled, both from the terms of the statute attaching the liability and the decisions which have construed the act, that the real owner of the shares may be held responsible, although in fact the shares are not registered in his name. As to such owner the law looks through subterfuges and apparent ownerships and fastens the liability upon the shareholder to whom the shares really belong.”

It is quite apparent from a reading of this bill that certain defendants herein made an endeavor to conceal or cover up their liability to the complainants. To dismiss the complaint at this time would prevent plaintiffs from investigating in an endeavor to discover what had happened to their deposits. Courts should assist and encourage rather than discourage the necessary procedure to bring to light an alleged wrong.

We think the bill of complaint states a cause of action. The motions to dismiss in some instances recite facts dehors the record which can only be set up in an answer or pleading other than a motion to strike. If the facts are true, and we must assume they are for the purposes of the motion to dismiss which was made in this case, then a court of equity is the proper tribunal before whom the creditors of this bank should be permitted to prove what they allege in their complaint.

It is well to remember that ch. 110, par. 166, sec. 42, subsec. (2), Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 110.042], provides:

“ (2) No pleading shall be deemed bad in substance which shall contain such information as shall reasonably inform the opposite party of the nature of the claim or defense which he is called upon to meet.”

We think it unnecessary to discuss in detail all the questions which are raised by the various counsel in their respective motions to dismiss, as many of the questions are repetitious and have been passed upon time and again by our courts. Such motions to dismiss are equivalent to demurrers. Suffice it to say that a perusal of this bill shows that it is sufficient to require an answer to be filed thereto, so that the facts concerning the allegations may be developed and we think the court erred in dismissing the bill of complaint.

For the reasons herein given the order of the superior court is reversed and the cause is remanded with directions to enter an order on defendants to answer the bill.

Order reversed and cause remanded with directions.

Hebel, J., concurs, Burke, J. took no part.


author: Presiding Justice Denis E. Sullivan.

text:
    William Philmore, Appellee, v. Otto N. Stein, Appellant.
    Gen. No. 40,689.
    opinion filed December 13, 1939;
    rehearing denied December 27, 1939.
    Rawlins & Wright and Angerstein & Angerstein, for appellant; Thomas C. Angerstein, George W. Angerstein and Charles Wolff, of counsel; Benjamin R. Williams, for certain appellee; Robertson, Crowe & Spence, for certain other appellee; Benjamin R. Williams, Carl E. Abrahamson and Edmund D. McGibbon, of counsel.
   Opinion by

Presiding Justice Denis E. Sullivan.

“Not to be published in full.”