text:
    Leontine E. Myers et al., Appellants, v. American National Bank and Trust Company of Chicago et al., Appellees.
    Gen. No. 37,570.
    Opinion filed November 19, 1934.
    Rehearing denied and additional opinion filed December 5, 1934.

      Shulman, Shulman & Abrams, Russell, Murphy & Quigley and A. L. Myers, for appellants; Meyer Abrams, of counsel.
    SoNNENSCHEIN, BeRKSON, LaUTMANN, LeVINSON & Morse and Poppenhusen, Johnston, Thompson & Cole, for appellee American National Bank & Trust Co. of Chicago; An an Raymond and Isaac E. Ferguson, of counsel.
    Altheimer, Mayer, Woods & Smith, for appellee Wabash-Harrison Bldg’. Corp.; Gideon S. Thompson and Herman A. Kabaker, of counsel.
    Gottlieb & Schwartz, for appellees Charles C. Irwin et al.; Claude A. Roth and Harry E. Smoot, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Complainants, as owners of bonds secured by a trust deed on property located at the southeast corner of Wabash and Harrison streets, Chicago, filed their bill on behalf of themselves and other bondholders against the defendants, praying that a decree of foreclosure, entered in a suit brought by the trustee in the trust deed securing the bonds, be vacated and set aside on the ground that it had been entered by collusion between the parties for the reason that parties to the foreclosure suit did not represent adverse interests; that the bondholders, who were the real parties in interest, were not made parties, and that if they had been made defendants the decree would have protected the bondholders ’ rights. A further prayer was that the trustee in the trust deed be removed, that there be an accounting, that the parties found personally liable be decreed to pay complainants any amount thus found due, and that it be decreed to be a lien on the premises in question. There were other prayers for relief which need not be mentioned here.

All the defendants except two filed their answer substantially denying the material allegations of the bill. The defendants S. W. Straus & Co., a corporation, and Melvin L. Straus, individually and as trustee, filed their joint and several demurrer. On May 18, 1933, an order was entered sustaining the demurrer and dismissing the bill as to the demurrants for want of equity, to which order the complainants excepted. Two days thereafter the cause was referred to a master in chancery to take the evidence and make up his report with his conclusions thereon. The master took the evidence, made up his report, and recommended that a decree be entered dismissing the bill for want of equity. Objections to the report were overruled. Afterward a decree was entered overruling all exceptions to the master’s report and dismissing the bill at complainants’ costs for want of equity, and complainants prosecute this appeal.'

The record discloses that on July 1, 1928, the Michigan Boulevard Garage Corporation executed its trust deed to defendant Straus National Bank & Trust Company (since changed to American National Bank & Trust Company of Chicago) to secure its bond issue of $2,225,000, $2,100,000 of which was a first lien, and the remaining $125,000 a junior lien on the premises conveyed by a trust deed. It is stated that S. W. Straus & Co., a copartnership consisting of Simon W. Straus, Samuel J. T. Straus and Sidney H. Kahn, underwrote the bond issue, but the facts concerning what the co-partnership did were not very clearly brought out. The defendant S. W. Straus & Co., a corporation, was engaged in the investment bond business and apparently bought the bond issue from the co-partnership and later sold the bonds, or some of them, to the public. This corporation circularized the public in an endeavor to sell the $2,100,000 of bonds and stated, “We Own and Offer” the bonds for sale. The circular contains a picture of the proposed building, which was to be known as the Wabash-Harrison Building, and was to be 19 stories high, 12 stories of which were for office space and 7 to be used for a garage and stores. The bonds are described as “First Mortgage Sinking Fund 6% Gold Bonds.” The circular describes the property and the character of the building to be constructed, and states that the land is “owned in fee” by the maker of the bonds and the trust deed, the Michigan Boulevard Garage Corporation; that the land has been appraised by two appraisers, the lower appraisal being $1,213,360, and that the proposed building was appraised by an architect at $1,872,732, making a total appraised value of $3,086,092. The circular further states that it is estimated that the annual net earnings of the property will be $329,300. The circular further contains the statement that the construction of the building will be undertaken at once and completed in accordance with the plans and specifications free of all prior liens, and that the construction is unconditionally guaranteed to the bondholders by the defendant S. W. Straus & Co., a corporation, “which reserves the right, however, to release and discharge its liability under this guarantee by repurchasing bonds at the original purchase price and accrued interest. ’ ’ There was a further provision for a sinking fund, which requires that periodic deposits be made by the mortgagor with the trustee on account of principal and interest; the amounts and dates of such deposits are specifically set forth.

It further appears that after the circular was issued the complainant Meyers bought bonds of the face value of $1,500 and the complainant, Phelps, $10,000, and there is evidence to the effect that all the complainants were owners of bonds of the face value of $32,700. It further appears that the construction of the building was not commenced until a considerable time after July 1, 1928, the date of the bonds and trust deed, and that it was not completed by August 1, 1929, as the trust deed provided, but on the contrary the building was not actually commenced until after August 1, 1929, and was not completed until about September, 1930. Straus & Co. seems to have had considerable difficulty in disposing of the bonds, and on December 15, 1929, it issued a “Revised Circular” describing the same bonds and offering them for sale, but the picture of the building to be constructed is a great deal different in appearance from the picture of the building in the original circular. In the revised circular it is stated that the building will consist of two units, one to contain a “12-story 370-room hotel with five stores, and the other to contain a 21-story 600-car garage.” The valuation placed on the land in the revised circular is the same as in the original, viz., $1,213,360, but the building is appraised at $1,954,395, or $81,663 more than is shown in the original circular, and in addition the revised circular values hotel furniture and furnishings and garage equipment to be installed, at $300,000. The estimated net income, however, is but $211,396 or $117,904 less than the estimated net income from the building described in the original circular.

On December 15, 1929, the same date the revised circular bears, the Wabash-Harrison Building Corporation, which was a new corporation organized, acquired all the rights of the Michigan Boulevard Garage Corporation, the mortgagor, and on that date the Wabash-Harrison Building Corporation entered into a supplemental trust deed and chattel mortgage with the trustee named in the original trust deed, viz., the Straus National Bank & Trust Co. of Chicago, as trustee. By the terms of the supplemental trust deed the original trust deed was changed and modified so that the character of the building might be changed and the time within which the building was to be constructed was extended to September, 1930.

Three days after the execution of the supplemental trust deed there appears in the record a document which purports to be an agreement between the Wabash-Harrison Building Corporation and. S. W. Straus & Co., a copartnership, whereby the building corporation agrees to sell and the Straus Company agrees, among other things, to buy the $2,100,000 bonds. Just how these bonds could be sold by the building corporation to the copartnership on December 18, 1929, when the bonds were issued on July 1,1928, and a great many of them sold to the public shortly thereafter, is not explained.

The evidence further shows that on December 15, 1929, the Wabash-Harrison Building Corporation executed its junior mortgage trust deed and chattel mortgage to the Straus National Bank and Trust Compány of Chicago, as trustee, securing $200,000 of six per cent junior mortgage gold bonds. It appears that there was not sufficient money to complete the building, and S. W. Straus & Co., the corporation, apparently agreed to put up $200,000 for this purpose. It was to receive a bond issue for this amount secured by a junior mortgage on the property, upon the express condition that one of the tenants, which had been secured for the building when it should be completed and which had deposited with the Straus Bank $108,000 on account of rent which would fall due under its lease, would direct the bank to turn this money over to Straus & Co. in part payment of the $200,000 bond issue. It further appears that when the building was completed the tenant carried out this requirement and ordered the Straus Bank to turn over the $108,000 to Straus & Co., which was done.

There is other evidence to the effect that when the interest coupons came due they were presented to Straus & Co. and paid. Straus & Co. advanced the money but this was unknown to the bondholders. In the agreement of December 18, 1929, between the Wabash-Harrison Building Corporation and Straus & Co., the copartnership, which we have above referred to, it was provided that Straus & Co. might retain $203,142.50 of the purchase price of the bonds, and that that sum be applied to reimburse Straus & Co., for payments of interest theretofore made by it to the bondholders; and the agreement further provided that Straus & Co. might retain $130,640 as a reserve for the payment of carrying charges on the bond issue up to August 31, 1930, including monthly deposits on account of interest on the bonds.

There is other evidence that tends to show that more than $750,000 derived from the sale of bonds was used to purchase the fee of the property on which the building was constructed.

We find it unnecessary to mention other evidence in the record in view of the fact that there must be a retrial of the cause.

On the hearing before the master complainants offered a number of documents and evidence as to the ownership of the bonds represented by complainants, which were excluded by the master. This was error. All of this evidence should have been admitted.

The officers of S. W. Straus & Co., a corporation, were Simon W. Straus, president, Samuel J. T. Straus, vice president, Sidney H. Kahn, vice president, William W..Straus, vice president, and Melvin L. Straus, vice president; the first three officers of the Straus Corporation above named composed the partnership of S. W. Straus & Co. Two of the officers of the Straus National Bank were Samuel J. T. Straus, president, and Melvin L."Straus, vice president.

In the foreclosure suit the sole complainant was the Straus National Bank and Trust Company, as trustee, and the only defendants were Melvin L. Straus, trustee under a junior mortgage and chattel mortgage, the Wabash-Harrison Building Corporation, and S. W. Straus & Co., a corporation. From this it appears that the principal officers, or some of them at least, were officers of the Straus & Co. Corporation, the Straus Bank and the Straus copartnership, and each of these concerns must be presumed to have had knowledge of the facts with reference to the construction of the building and the payment of the moneys to the various bondholders for interest and of matters of this character. Simmons v. Roseland Security Vault Co., 331 Ill. 563. And the evidence is to the effect that the mortgagor was in default and that the interest paid on the bonds, or a great part of it, was taken out of the money received from the sale of the bonds..' The building was not completed within the time provided for. Its character and size were materially changed, arid the evidence tends to show that the bondholders knew nothing of these facts but assumed, as they had a right to assume, that the interest was being paid by the mortgagor and that the building was constructed within the period provided for in the original trust deed, j Straus & Co., a corporation, unconditionally guaranteed that the building would be constructed as provided by the circular, to which reference has heretofore been made, but on account of the lack of knowledge on the part of the bondholders they were lulled into a belief that all was well with their security.

The interests of the trustee, the Straus Bank, the corporation and the partnership, were all adverse to that of the bondholders on account of the relationship of the parties. The bank, as trustee in the trust deed, should have notified the bondholders of the facts so that they would be in a position to protect themselves. Marshall & Ilsley Bank v. Guaranty Investment Co., 213 Wis. 415; Marshall & Ilsley Bank v. Hackett, Hoff & Thiermann, 213 Wis. 426. That the interest of all these parties was also adverse to the bondholders is shown by the fact that after some of the complainants had purchased their bonds, $203,142.50 and $130,640, part of the proceeds of the bonds, was kept by Straus & Company to reimburse Straus & Co., the corporation, for moneys it had theretofore paid out for interest; that $108,000 received as rent from one of the tenants, instead of going toward the payment of bonds, was applied to the payment of second mortgage bonds. If the rent could thus be diverted, the bondholders could not be paid their interest or bonds as they became due, because the sole revenue received by the corporation making the trust deed and bonds was rent from the building. If the action of the defendants in this case could be justified, the bondholders who had invested their money in first mortgage bonds would be without any protection. But the defendants, or some of them, say that by the terms of the original trust deed the trustee was empowered and authorized to modify the mortgage as was done when it joined in the execution of the supplemental trust deed. The provision of the original trust deed, which it is said gives such authority, provides that “The Trustee is hereby empowered to join the Mortgagor in modifying, amending, altering or supplementing this Indenture in its absolute discretion (but without affecting the priority of first mortgage bonds over general mortgage bonds) if it shall deem that the same is consistent with the best interests of the bondholders, provided, however, that no such amendment . . . shall impair the lien of this Indenture as security for the indebtedness hereby secured.” We think what was done after the execution of the trust deed and thé sale part of the bonds, as shown by the evidence hereinbefore mentioned, was not warranted by the provision of the trust deed above quoted. Here the character of the building was altered, and the estimated income to be derived from the building was much less than the estimate shown to the original purchasers of some of the bonds. The diversion of the rents and part of the proceeds of the sale of the bonds all tended to impair the security of the bondholders, and on account of the interrelation of the parties the bondholders should have been notified.

As said by the Supreme Court of Wisconsin in Marshall & Ilsley Bank v. Guaranty Investment Co., supra (213 Wis. 415, 422, 423): “It is our conclusion that the trustee under a bond issue does owe to the bondholders certain duties independently of the terms of the trust deed, and that these duties will be imposed regardless of any exculpatory provisions in the trust deed. Such a trustee has an obligation to exercise good faith as well as ordinary vigilance and intelligence in protecting the interests of the bondholders.”

For the reasons stated the decree of the circuit court of Cook county is reversed and the cause remanded with directions to overrule the demurrer (People v. Banks, 285 Ill. 137; Chicago & W. I. R. Co. v. City of Chicago, 294 Ill. 257) and for other proceedings in accordance with the views herein expressed.

Reversed and remanded with directions.

McSurely and Hatchett, JJ., concur.

Additional Opinion on Petition for a Rehearing.

Complaint is made in the petition for a rehearing to the effect that language is used in the opinion that might be held to preclude the defendants on the retrial of the case, and that this should not be because some of the evidence offered by the complainant, both oral and documentary, was excluded and therefore not considered by the master or the chancellor. We think it obvious that such a contention is not warranted because the case is to be tried anew, when all the facts can be adduced.

Complaint is also made to the holding in the opinion that certain of the bonds in question, which were offered by counsel for complainant, were admissible in evidence. Under elementary principles of the law of evidence, the bonds prima facie were admissible. To the suggestion made by counsel that this holding will be “an invitation to strike suits by speculators in defaulted securities” we might suggest that any facts bearing on this question obviously would be admissible. The chancellor owes the duty of being vigilant to see that complainant be not permitted to create a maneuvering value of his bonds. “Courts of equity should be deemed no less powerful today than when the first chancellor looked to his conscience for guidance, to make fair dealing between man and man the test.” Investment Registry v. Chicago & M. E. R. Co., 212 Fed. 594, 610.

To the suggestion of counsel that the opinion gives the impression “that there is something wrong about use by a mortgagor of part of the proceeds of a real estate mortgage bond issue to pay interest on the bonds during the construction period, or use of part of the money to complete purchase of the land, ’ ’ we say that whether such proceeds may be so used depends upon the terms of the trust deed and all pertinent facts.

The petition for a rehearing is denied.

Petition denied.

MoSubely and Hatchett, JJ., concur.


source: Caselaw Access Project

author: Mr. Justice McSurely

license: Public Domain

text:
    J. Wertheimer, Appellee, v. Louis D. Glanz, Appellant.
    Gen. No. 37,684.
    Opinion filed November 19, 1934.
    Rehearing denied December 3, 1934.
    Jacob Levy, for appellant; Edward McTiernan, of counsel.
    Bernard W. Mages, for appellee; Clyde C. Fisher, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff in a trial by the court had a judgment for $600, from which defendant appeals.

Defendant first says that this is an action for fraud and deceit but that the evidence does not support this charge. It is well established that in an action of the fourth class in the municipal court pleadings are not controlling and the rights of the parties are dependent upon the evidence produced at the trial. Walsh v. Fallis, 266 Ill. App. 341.

Plaintiff’s claim is that defendant, as trustee, wrongfully released a trust deed on real estate given to secure certain bonds, of which plaintiff owned $600 worth which he had bought from defendant’s bank.

In the spring of 1927 plaintiff purchased six $100 bonds from the Hatterman & Glanz State Bank; the coupon interest notes attached to the bonds were paid up to November 1, 1932, when payment failed; these bonds were secured by a first mortgage or trust deed conveying to defendant, as trustee, real estate and buildings located at 2921 Pine Grove avenue and at 1100 West 38th street, Chicago, to secure an aggregate issue of $60,000 in bonds.

In December, 1932, and January, 1933, plaintiff called up the defendant over the telephone to inquire about the nonpayment of the interest on his bonds and was told they were having some difficulty with the owner of the property, hence the delay, but that the matter would be taken care of within a certain length of time; subsequently defendant informed plaintiff that Charles C. Stringer, the mortgagor, expected to get his matters adjusted very shortly and that the interest coupons would be paid. Upon investigation it was ascertained that on November 19, 1928, defendant, as trustee, had released to Stringer the lien of the trust deed on the property located at 2921 Pine Grove avenue. Plaintiff again called up defendant and demanded payment of his bonds and was told that his bonds which matured May 1,1933, could not be paid,

Defendant admits that he released the trust deed as to 2921 Pine Grove avenue without the knowledge of plaintiff. He seeks to justify this action by showing that at the time of the release $30,000 worth of bonds were canceled and $2,000 paid by the mortgagor, so that the total bond issue on 1100 West 38th street was reduced to $28,000. He says that this latter property is worth between $25,000 and $30,000. It also appears that after 2921 Pine Grove avenue had been released, Stringer made a new loan in the sum of $29,000, secured by a new trust deed on this property.

There was evidence tending to show that the Pine Grove avenue property, which had been released, was much more valuable than the other property on West 38th street; that the former property is in what is called the Gold Coast district, north of Lincoln Park, while the 38th street property is very old and in the manufacturing district. Defendant has commenced foreclosure proceedings against both properties.

In Lennartz v. Estate of Popp, 118 Ill. App. 31, a similar situation was involved where a trustee had unwarrantably released the lien of a trust deed; it was held that the trustee was liable to the owner of the note for the damages which necessarily followed from his wrongful act. This case was remanded to the trial court but again came to the Appellate Court, as reported in Lennartz v. Estate of Popp, 175 Ill. App. 539. Again, in an opinion by Mr. Justice Baume, it was held that a trustee at his peril was bound to know that the indebtedness to the holder of the note was paid before he executed a release of the security. Moran v. Dennis, 184 Ill. App. 272, was a suit in assumpsit, based upon the wrongful release of a mortgage. Sherwood v. Saxton, 63 Mo. 78, involved a case where a trustee wrongfully released a trust deed. The opinion says that the trustee in a deed of trust to secure an indebtedness is the agent of both parties, debtor and creditor, and his duties must be performed with the strictest impartiality and integrity; that if he is guilty of a breach of trust or an abuse of his discretionary powers he will be personally responsible to the party injured, and that he would not be justified in releasing any security unless it would be clearly to the advantage of the cestui que trust. The opinion also says that while proceedings against the trustees have generally been in equity, yet where the trustee is personally liable for the abuse of his powers or a breach of trust and the party injured demands damages, he may proceed in a court at law.

We think it is evident that it was to the hurt of the plaintiff and other bondholders when the trustee released the more valuable of the two properties, leaving as security only the poorer property which, by the defendant’s own showing, is not worth the amount of the mortgage indebtedness. Clearly this was a breach of trust on the part of the trustee.

Defendant argues that plaintiff has sustained no damage because he has a right against Charles Stringer, the mortgagor, and that from what appears in the record Stringer is able to pay the amount of the notes held by plaintiff. A similar point was made in Lennartz v. Estate of Popp, 175 Ill. App. 539, supra, where the record contained no evidence to show the insolvency of the makers of the note. The court held that such evidence was not necessary to establish a prima facie right of recovery in the plaintiff. The law infers damage from every infringement of a right. McConnel v. Kibbe, 33 Ill. 175, 179; Brent v. Kimball, 60 Ill. 211. The burden was upon the defendant to overcome the prima facie case made by the plaintiff.

We see no reason to disturb the judgment, and it is affirmed. If this judgment is paid by defendant, in fairness the notes should b¿ turned over to him so that he may proceed upon them as he may see fit.

Affirmed.

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


text:
    Cyrena Lela Thomas, Administratrix of the Estate of Hiram Raymond Thomas, Deceased, Appellee, v. Ernest D. Buchanan, Appellant.
    Gen. No. 36,695.

      Opinion filed November 19, 1934.
    Rehearing denied December 3, 1934.
    McKenna, Harris & Schneider, for appellant.
    Erich E. Pacyna and Oscar M. Meusel, for appellee; Erich E. Pacyna, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

At the intersection of the two streets, an automobile owned and driven by Earl Anderson, in which Hiram Thomas was also riding, while going east on Church street in Niles Center, Cook county, was struck by an automobile belonging to defendant which was north-bound on Crawford avenue. Thomas was killed in. the collision; the administratrix brought suit and upon trial had verdict and judgment for $4,125; defendant appealed to this court.

The facts are stated in our opinion, reported in 272 Ill. App. 308. We there held that upon the undisputed facts, as a matter of law, Anderson was the agent of Thomas at the time of the accident; that Anderson was guilty of contributory negligence, which negligence must be imputed to his principal, Thomas; we reversed the judgment without remanding the cause.

The case was taken by the Supreme Court on certiorari, which reversed the judgment of the Appellate Court and remanded the cause to this court with directions. Thomas, Adm’x v. Buchanan, 357 Ill. 270. That opinion held that the case was not tried upon the theory that Anderson was the agent of Thomas; that if there was an issue upon this question it should have been submitted to the jury. It was also held that whether or not Anderson negligently contributed to the accident was a question for the jury.

Following this opinion we would not be justified in saying that the jury could not properly find upon these questions adversely to the contention of the defendant.

Considering the other assignments of error, the first of these is a complaint of the action of the trial court in admitting testimony of the witness Udell that on the night of the next day after the accident he drove northward on Crawford avenue through the intersection with Church street and that he saw a “Stop; state road sign” on the right-hand side of the road and a flexible sign in the middle of the two driving lanes when about 100 feet south of the intersection. Defendant argues that this was experimental evidence and incompetent. The rule is that such evidence is competent where the circumstances under which the experiment took place are very similar to those obtaining at the time of the accident. Hauser v. People, 210 Ill. 253; People v. Pfanschmidt, 262 Ill. 411; 12 Am. & Eng. Ency. of Law (2d ed.) 408. The surrounding circumstances under which the witness drove •northward and observed the stop signs would indicate that they were substantially similar to those existing at the time of the accident. Moreover, the evidence of the defendant’s negligence was so convincing that the evidence of Udell would not affect the verdict one way or the other. In fact, in the brief filed on behalf of the defendant there is virtually no argument presented exonerating the defendant from the charge of negligence.

We find no prejudicial error with reference to the instructions. Instruction No. 3 given at the request of plaintiff is not vulnerable to the criticism made, namely, that the words 1 ‘ at the time and place in question” are not sufficiently definite. The jury could not have been misled by them.

Instruction No. 7 on plaintiff’s behalf correctly stated the law that one riding as a passenger in an automobile cannot be held accountable for the negligence of the driver unless the passenger himself has been guilty of negligence contributing to the accident. Eckels v. Muttschall, 230 Ill. 462.

Defendant’s refused instruction No. 1 might have been given but its refusal was not prejudicial. It told the jury that sympathy for the relatives of the deceased should.have no influence with the jury in determining whether the defendant was liable. The element of sympathy was covered in defendant’s given instructions Nos. 1 and 10.

Defendant’s refused instruction No. 2 was the stock instruction that if the jury believed from the evidence that any witness had testified falsely the jury might disregard this testimony, except as it may have been corroborated. It might well have been given, but in view of the.record in the case we will not hold that it was prejudicial error to refuse to give this instruction.

Following the opinion of the Supreme Court in this case, we have considered all the points made by the defendant and find no errors which would require a reversal; the judgment is therefore affirmed.

Affirmed.

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


author: Mr. Presiding Justice Gridlet

text:
    In re Estate of Oscar Spindler, Deceased. Maria Helene Spindler, Claimant, Appellee, v. Continental Illinois National Bank and Trust Company of Chicago, as Executor of the Last Will and Testament of Oscar Spindler, Deceased, Appellant.
    Gen. No. 37,377.

      Opinion filed November 27, 1934.
    McCulloch, McCulloch & McLaren, for appellant.
    Miller, Gorham, Wales & Adams, for appellee.
   Mr. Presiding Justice Gridlet

delivered the opinion of the court.

The present appeal is from the following judgment order of the circuit court of Cook county, entered October 25, 1933, after a trial de novo before the court without a jury on appeal from the probate court (italics ours):

“This matter coming on to be heard upon the appeal of Maria Helene Spindler from the order of the probate court of Cook county, Illinois, entered March 4, 1933, disallowing her claim in the sum of $50,000, and disallowing her claim to a preference in a part of that sum equal to the value of her dower rights, and the court, having heard the testimony of witnesses and examined the documents received in evidence and having heard arguments of counsel and being fully advised, finds that the value of said dower rights on July 12, 1931, the date of decedent’s death, in the real estate owned by him, was $7,075; that Maria Helene Spindler is entitled to be paid out of the assets of said estate, as a fifth class claim, the sum of $7,075, and to the allowance of a sixth class claim in the sum of $42,925; that the order of the probate court disallowing her said claim is hereby reversed, and the Continental Illinois Bank & Trust Company, Executor, etc. is hereby ordered and directed to immediately pay to said Maria Helene Spindler, as a fifth class claim, out of the assets of said estate, in due course of administration, the sum of $7,075, together with interest thereon at 5 per cent from October 25, 1933; and that the balance of her demand is hereby allowed in the sum of $42,925, with interest at 5 per cent from October 25, 1933, as a sixth class claim, to be paid in due course of administration.”

From the transcript of the record of the clerk of the probate court, filed in the circuit court on March 24, 1933, it appears that on September 24, 1932, Mrs. Spindler filed in the probate court the following claim against the estate:

“Maria H. Spindler, being duly sworn, deposes and says that the annexed claim against the estate of Oscar Spindler, deceased, is just and unpaid, after allowing for all just credits; that $50,000 is due her under the terms of section 3 of the ante-nuptial contract, dated October 19, 1928, between herself and decedent, copy of which is attached hereto; . . . and that (she has) no other claim against said estate except her widow’s award and the devise and bequest left her under the will of testator.”

It further appears from the transcript that attached to the claim is a copy of the antenuptial contract executed on the day named in Germany and in the German language; that the attorneys for the executor entered their appearance; and that on March 4, 1933, there was a hearing on the claim before the acting probate judge, Honorable Harold J. Taylor, resulting in the probate court entering an order disallowing Mrs. Spindler’s claim and giving judgment against her and in favor of the estate. An appeal by the claimant was duly perfected in the circuit court.

From the bill of exceptions, contained in the record, it appears that a hearing was had on September 28, 1933, in the circuit court before Judge Daniel P. Trade; that respective counsel for the claimant and for the executor were present; that the claimant introduced certain evidence “the same being a statement by her counsel” (Mr. Frederic 0. Mason), “which was assented to” by counsel for the executor (Mr. Hugh W. McCulloch); that the' claimant also introduced in evidence, as “Exhibit 1,” a certified copy of the antenuptial contract, written in the German language and executed in Germany by and between Maria Helene Hirschlaff (now known as Maria Helene Spindler) and Oscar Spindler; and that the claimant also introduced in evidence, as “Exhibit 2,” a translation of the contract from the German into the English language, which was stipulated to be substantially correct.

The pertinent provisions of the contract are as follows (italics ours):

“Matrimony and Inheritance Contract:

“They both stated, we intend to enter into the state of matrimony before the magistrate court, No. 2 in Hamburg, cmd to exclude by this, our statement, the marital rights, and those of inheritance, resulting from this matrimony.

“Mrs. Hirschlaff stated: It is known to me, that after getting married with my betrothed Mr. Spindler —the laws of the State of Illinois., U. S. A. grant me more financial rights than would result from the free agreement made hereby between my engaged, Mr. Spindler, and myself. I hereby expressly disclaim those rights, and I am aware that our financial relations are being governed solely by the following agreement between ourselves.

“Mr. Spindler takes notice of Mrs. Hirschlaff’s statement, and thereupon they both state:

“1. For the time of our intended matrimony, the rights of both parties are not to be governed by the legal consequences resulting from this matrimony, that is, in agreement with the laws of.the State of Illinois, U. S. A., as well as with the provisions of the German civil code, which both provide for the validity of such an arrangement by a matrimonial contract, before the marriage is performed and considered permissible to make a special agreement by contract instead. We hereby agree on separate ownership, as it is provided for, in the German civil code (1427-1431). However, we agree that the wife does not have to meet any expenses arising during the time of our marriage.

“2. The person present referred to under No. 2 (Mrs. Hirschlaff) disclaims all rights of inheritance or succession to the property of the person referred to under No. 1 (Mr. Spindler) her future husband, should such rights be granted her under the German laws, or those of the State of Illinois, no matter whether she be a citizen of Germany, or of the State of Illinois, at the time of inheritance. As a compensation for this disclaimer, Mr. Spindler hereby expressly states regarding a legacy, this to be a part of the will already executed by him, the following:

“3. I hereby agree to give to my future wife, Maria Helene Hirschlaff, the person present referred to under No. 2, a legacy of $50,000 H. S. dollars (fifty thousand U. S. dollars); this amount is to be paid immediately to the person present referred to under No. 2 (Mrs. Hirschlaff), regardless of all other things, out of the rest of my property. ■

“The Continental & Commercial Bank in Chicago, the trustee, has in case of an inheritance to pay the amount to my widow, the person present referred to under No. 2 (Mrs. Hirschlaff), for which an authorization by my other inheritors is not required. I hereby increase the aforementioned legacy by U. S. $5,000 (five thousand U. S. dollars) in favor of the person present referred to under No. 2, in the event the matrimony between myself and the person referred to under No. 2, has lasted three years until my death, and by a further U. S. $5,000 (five thousand U. S. dollars) for every three additional years of matrimony, up to the limit of U. S. $75,000 (seventy-five thousand U. S. dollars). The provisions regarding the payment of the legacy are correspondingly applicable to the added amounts.

“4. Further I herewith obligate myself, in respect of the person referred to under No. 2 (Mrs. Hirschlaff), for the purpose of buying a life insurance policy of $7,500 (seven thousand five hundred dollars) for each of her children out of the matrimony with the merchant, Erwin Hermann Hirschlaff, namely—

“A. Hans Hermann Erwin Hirschlaff, born on March 13, 1923, at Oldenfelde near Alt-Rahlstedt,

“B. Alfred Reginald Julius Hirschlaff, born on March 18, 1925, in Oldenfeldt near Alt-Rahlstedt, (total U. S., $15,000, fifteen thousand U. S. dollars).

“I hereby obligate myself to deposit such an amount with the Commerz und Privatbank Depositenkasse, A. B. Krausenstrasse No. 4 in Berlin, or any other banking institution designated by the court for the protection of wards, be it in cash money or in securities sufficiently safe for the investment of trust funds, according to the German and Prussian laws respectively, it being understood that this amount continues to be my property, and that the premiums for the two life insurances, mentioned before, are to be paid out of the interest accruing from this deposit. The insurances are to be concluded in favor of the two aforementioned sons of the person present referred to under No. 2 (Mrs. Hirschlaff), in the amount of R. M. 50,000 (fifty thousand Reichsmarks) each upon the death of the person present referred to under No. 2 (Mrs. Hirschlaff), or upon the expiration of a period of twenty years. I also agree to it that the applications for the insurances are signed already now by the person present referred to under No. 2, under the name of Helene Spindler. The aforementioned bank in Germany is being appointed as trustee for the prompt payment of the premiums. The amount of $15,000 TJ. S. dollars (fifteen thousand U. S. dollars) deposited by myself as a guarantee and an eventual surplus is to be repaid to me respectively to my inheritors as soon as the insurance amount has been paid by the Insurance Company. Should at that time the aforementioned sons not be of age, then payment has to be effected to their guardian who will have to invest the funds in accordance with the rules governing the investment of Trust Funds, and who will have to pay out the respective amount to each of the two sons only after their having completed the 30th year of age. Should the beneficiaries be of age at the time the insurance company pays out the insurance amount, then the amount is to be paid to the aforementioned bank in Germany, subject to the provision that this bank effects payment to the beneficiaries only after their having completed the 30th year of age. In that case, likewise, the principal is to be invested in securities sufficiently safe for the investment of trust monies. The interest earnings are at the free disposal of each of the two sons as soon as they have become of age.

“5. In case Mrs. Hirschlaff dies before I do, the legacy as per paragraph 3 of this contract shall be considered as having lapsed.

“6. Furthermore Mr. Spindler states:

“I shall take care of all expenses of the education of the two aforementioned sons of Mrs. Hirschlaff up to the time they become of age. It is planned that Hans Hirschlaff shall come to the U. S. A. after about one year, and Reginald Hirschlaff after about three years. It is hereby expressly agreed upon that the children are to be educated in institutions in case their presence in my house should disturb me. If the children, or one of the children, are being kept in Germany, I undertake to pay the cost for the education out of the returns on an invested capital of U. S. A. $7,500 (seven thousand five hundred U. S. dollars) for each child. This capital, consisting of German securities, will be deposited with the aforementioned bank in Germany as security. As soon as the children, or one of the children, return to the U. S. A., the amount which was deposited as guarantee for that child is released for my disposal.

“7. The person present referred to under No. 2 (Mrs. Hirschlaff), stated:

“I hereby agree to the proposed provisions of the will, which the person present referred to under No. 1 (Mr. Spindler). made to me, as per paragraphs three to six.

“8. Furthermore they both state:

“In consideration of the fact that this agreement depends on our entering the state of matrimony, and its continuance by us, we have decided to provide for the case that our marriage should be legally cancelled by divorce.

“We further determine:

“1. In the event we are legally divorced, and I, the husband, found solely guilty, the aforementioned agreement remains in force, this being expressly agreed upon hereby. This agreement does not affect the wife’s claims for support if a divorce takes place, and I be alone guilty.

“2. Should a legal divorce take place for the reason that the wife is declared alone guilty, we hereby agree that all other provisions of this agreement are void and that they are expressly made with the exception of the provisions as given in paragraph 3 of this agreement. In that case, I, the wife, will have no claim for the legacy, as per our agreement.”

In the statement of facts made on the hearing by counsel for the claimant, assented to by counsel for the executor, is the following in substance (italics ours): Shortly after the execution of the contract the parties thereto were married, and they lived together as husband and wife until the time of Mr. Spindler’s death, which occurred on July 16, 1931 (i. e., less than three years after the marriage). Prior to his death but after the marriage, Mr. Spindler guaranteed the payment of an indebtedness of $148,000 of the Decorators Supply Co. to the National Life Insurance Co., and after his death the Supply Co. failed to make payment of its indebtedness to the Insurance Co., and the Insurance Co. filed a claim in the probate court of Cook county against Spindler’s estate, which was allowed in the sum of $147,456.74. His said estate “is insolvent, and nothing will be available to the legatees under his will.” At the time of his death “the value of the real estate owned by him was $36,-000, and the computed value of Mrs Spindler’s dower interest, had she had a dower interest, in this real estate, was $7,075.” Mr. Spindler left, as his only heirs-at-law, a son, a daughter, and the claimant, his widow. His last will is dated July 11, 1929, and the same was duly proved and admitted to probate in the probate court of Cook county on September 29, 1931.

A photostatic copy of the will was introduced in evidence, as executor’s Exhibit 1. Paragraph 2 of the will is as follows (italics ours):

“(2): By and under an ante-nuptial agreement, dated the 19th day of October, 1928, by and between myself and my present wife, I have made certain provisions for her benefit and the benefit of her children. I hereby ratify, confirm, and approve said ante-nuptial agreement, and, in accordance with the terms and provisions thereof, I give and bequeath unto my wife, Helen Spindler, the sum of Fifty Thousand (50,000) Dollars, and in addition thereto, I give and bequeath unto my said wife the sum of Five Thousand (5,000) Dollars for each three (3) year period that my said wife and I may live together as husband and wife, the said three (3) year periods to date from said date of October 19, 1928, and said sum of Five Thousand (5,000) Dollars shall be paid unto my said wife for each successive three (3) year period that may be completed at the time of my death, the aggregate thereof in no event to exceed the sum of Seventy-five Thousand (75,000) Dollars, in accordance with said Agreement. The said bequest unto my said wife shall be considered a first charge upon my estate and shall take precedence over all other bequests made hereunder.”

By paragraphs 3, 4 and 5 of the will Mr. Spindler also gave to his wife all of his personal effects, the real estate owned by him and improved with an apartment building, known as 3974-76 Lake Park avenue, Chicago, and a life estate, subject to certain limitations, in a summer home owned by him at Antioch, Lake county, Illinois.

Following the hearing, but before the judgment order in question was entered, counsel for the claimant presented four propositions of law to be passed upon by the court, who, over the objection of the executor’s counsel, marked each of them “Held.” These propositions are as follows (italics ours):

“1. Oscar Spindler’s ante-nuptial contract to give Helen Maria Spindler a $50,000 legacy created her his creditor for that amount, which she could enforce by filing a claim against his estate.

“2. The mere executing of a will giving her a $50,000 legacy did not complete decedent’s contractual obligation to Helen Maria Spindler. It was also necessary to pay the legacy, and if his estate is insolvent,' she is entitled to share equally with his other creditors.

“3. Helen Maria Spindler is entitled to a preference over all other creditors to such part of her $50,000 claim as equals the value of her dower rights, which were surrendered to him by her.

“4. The Probate Court erred in denying the claim of Helen Maria Spindler, and finding for the estate. ’ ’

The first contention of counsel for the executor, as a ground for the reversal of the judgment order of the circuit court, is that “under the provisions of paragraph 3 of the ante-nuptial contract Mr. Spindler agreed to provide in his will for a legacy of $50,000 to Mrs. Spindler and he did not agree that she should be paid $50,000 in the event that his estate was not sufficient to pay his debts in full.” After considering the contract (particularlyparagraphs 2 and 3 thereof), and paragraph 2 of the will, and the stipulated facts, we agree with the contention. In paragraph 2 of the will, after reciting that by the antenuptial agreement he had made certain provisions for the benefit of his wife and of her children, it is stated in part (italics ours): “I hereby ratify, confirm, and approve said ante-nuptial agreement, and in accordance with the terms and provisions thereof, I give and bequeath unto my wife, Helen Spindler, the sum of $50,000, . . . The said bequest unto my said wife shall be considered a first charge upon my estate and shall take precedence over all other bequests made hereunder.” In the contract Mrs. Spindler expressly disclaimed all rights in Mr. Spindler’s property to which she might be entitled at the time of his death under the laws of Hlinois, and in paragraph 2 follows the language: “As a compensation for this disclaimer, Mr. Spindler hereby expressly states regarding a legacy, this to be a part of the will already executed by him, the following:” Then follows in paragraph 3 the language: “I (Mr. Spindler) hereby agree to give to my future wife, Maria Helene Hirschlaff, ... a legacy of $50,000 . . . ; this amount to be paid immediately to . . . (her), regardless of all other things, out of the rest of my property,” We think it is clear from the language of both paragraphs that Mr. Spindler’s only obligation was to include in his will a legacy of $50,000 to Mrs. Spindler, which was to be paid before all other legacies or bequests. We fail to find elsewhere in the contract any provision indicating that it was the intention of the parties that as to the $50,000 Mrs. Spindler was to rank as a creditor of the estate, as distinguished from a legatee under the will to be executed by Mr. Spindler. And the word “legacy” is repeatedly used in other parts of the contract. In Webster’s New International Dictionary (Edition of 1933) the word “Legacy” is defined to be “a gift of property by will, especially of money or other personal property; a bequest.” And it is well settled law that a legacy is payable only after all debts and claims against the estate have been settled. In 40 Cyc. p. 2060, it is said: “Legatees succeed to the estate of the testator as beneficiaries and objects of his bounty, and have no rights or equities whatever as against creditors, whose debts existed in the testator’s lifetime, and this applies even to a legacy based on a valuable consideration. ’ ’ And under the heading “Legacy based on Valuable Consideration,” it is also said (pp. 1906-7): “A legacy which is given in consideration of the legatee relinquishing some subsisting right or interest against the testator or his estate, as to a creditor in satisfaction of his debt, or to testator’s wife in lieu of her dower, ... is entitled to priority over general legacies, which are mere bounties, even though the bequest greatly exceeds the value of the right relinquished.” Counsel for the claimant, arguing in their brief that by the contract Mr. Spindler not only agreed to make Mrs. Spindler a legacy of $50,000 but also that it was to be paid to her immediately, lay great stress on the language in paragraph 3, viz., that the amount of the legacy “is to be paid immediately to . . . (her), regardless of all other things, out of the rest of my property.” We do not tliink that these particular words militate against our above holdings, or that the language of the contract in its entirety can be considered as a promise by him to pay to her $50,000, absolutely and in all events. We think that the words that the .amount “is to be paid immediately” should be considered as the statement of the parties as to when the payment of the legacy was to be made; and that the words “regardless of all other things, out of the rest of my property,” should be considered as stating the fund, remaining after settlement of all debts and charges against Mr. Spindler’s estate, out of which the legacy was to be paid.

Counsel for the claimant, in urging the affirmance of the judgment order and the correctness of the trial court’s holdings as to the first two propositions of law submitted (above set forth), cite in their brief the cases of Eyre v. Munro, 26 Law Journal 757, and Hitchcock v. Taylor, 99 Mich. 128. Both of these cases are exhaustively discussed in the printed arguments of opposing counsel. We have carefully read these cases but do not think they are applicable to the present facts. Counsel for claimant have also cited other adjudicated cases, wherein it is held in substance that if, in an antenuptial contract, a man promises to pay a stated amount to his intended wife at the time of his death (and the marriage is consummated and subsequently he dies), she is entitled to file a claim, based upon the contract, as a creditor of his estate. The facts of those cases are, we believe, to be distinguished from the facts of the present case, wherein it appears in substance that by the judgment order, contrary to the prior ruling or judgment of the probate court, the wife has been allowed to claim as a creditor against the estate of her deceased husband, notwithstanding the fact that the husband, prior to the marriage and by an antenuptial contract, only agreed to provide in his will for a legacy to her in a stated amount and thereafter made such provision in his will for that legacy.

And we also agree with the second contention of counsel for the Executor, viz., “That Mr. Spindler fully performed the obligation assumed by him in paragraph 3 of the ante-nuptial contract by executing his will, which contained a provision for a legacy to Mrs. Spindler of $50,000, and by leaving this will in force at the time of his death.” In Vol. 1 of Page on Wills, 2nd Ed., p. 182, sec. 99, it is said: “A contract to devise or bequeath property can be performed by making a valid will at any time during the life of the promisor, and leaving it in force at his death.” By the antenuptial contract the parties contemplated and agreed that Mr. Spindler was to provide in his will for such legacy to Mrs. Spindler, and, as the legacy is contained in his probated will, we are of the opinion that the obligation assumed by him in the contract was fully performed. And we are further of the opinion that the circuit court erred in holding, as it did, in proposition of law No. 2 (above set forth), that “the mere executing of a will giving her a $50,000 legacy did not complete decedent’s contractual obligations to Helen Maria Spindler.” Counsel for the claimant argue in substance that inasmuch as it appears that Mr. Spindler’s estate is insolvent, it would be a “fraud” upon her to hold that he has fulfilled his obligation contained in the antenuptial contract by the mere executing of a will giving her such a legacy and keeping the will in force at the time of his death. A sufficient answer to the argument, in our opinion, is that it does not appear from the stipulated facts that such insolvency of the estate was occasioned by any fraudulent acts of Mr. Spindler. It was stipulated as facts that after the marriage and prior to Mr. Spindler’s death he guaranteed the payment of a large indebtedness of the Decorator’s Supply Co. to the National Life Insurance Co., that after his death the Supply Co. failed to make payment of the indebtedness, and that the Insurance Co.’s claim, based upon said guaranty and filed in the probate court, was allowed in the sum of $147,456.74. And counsel for the claimant state in their brief: “Since this guaranty was made in good faith, we do not question the right of the Insurance Co. to be a creditor of the estate.”

It is further contended by counsel for the executor in substance that, even if it could be considered that Mrs. Spindler was entitled to have allowed as of the sixth class her claim of $50,000, as a creditor of the estate, she is not entitled to have allowed the sum of $7,075 as a preferential claim of the fifth class, said sum being “the value of her dower rights” as of the date of Mr. Spindler’s death, as found by the circuit court in its judgment order in question. And counsel also contend that the court erred in holding as a proposition of law (the third as above set forth) that Mrs. Spindler “is entitled to a preference over all other creditors to such part of her $50,000 claim as equals the value of her dower rights, which were surrendered to bim by her.” After due consideration we are of the opinion that there is substantial merit in both contentions. By the antenuptial contract, as we construe it, Mrs. Spindler, assuming that the contemplated marriage would be consummated (as it was), gave up her prospective right of dower in Mr. Spindler’s real estate, and in consideration thereof Mr. Spindler agreed to give to her in his will, inter alia, a legacy of $50,000. The will was subsequently executed, in which he bequeathed to her the sum of $50,000, stating that the bequest should “take precedence over all other bequests,” and in which he also made a certain devise of real estate to her. After his death in July, 1931, the will, as executed and kept in force, was admitted to probate on September 29, 1931. It was not agreed in the stipulated facts that Mrs. Spindler had any dower interest in his real estate. It was agreed that at the time of his death “the value of the real estate owned by him was $36,000, and the computed value of Mrs. Spindler’s dower interest, had she had a dower interest, in this real estate, was $7,075.” And it nowhere appears in the stipulated facts that she, within the time prescribed by the statute (sec. 11, Dower Act, Cahill’s St. ch. 41, ¶ 11), filed any renunciation of the devise or other provisions in the will in her favor. And it is to be assumed that she elected to take under the provisions of the will. In Davis v. Mather, 309 Ill. 284, 288, it is said:

“The surviving husband or wife is given one of two inconsistent interests in the estate of the deceased spouse. The survivor is under the statute entitled to dower, or under the will to the devise or provision made in lieu of dower, but is not entitled to both dower and the devise under the will. An election could not be required at the common law, and courts of equity, for the better administration of justice, were called upon to compel an election on the theory of estoppel, —that is, that the acceptance of one gift estops the devisee from asserting title to the other. (Carper v. Crowl, 149 Ill. 465.) "When the dower statute was passed it did not do away with the necessity of making an election between these inconsistent estates but provided the method by which such election should be exercised. This statute is complete in itself. If the devisee fails to pursue the course pointed out by the statute within the time limited therein, such survivor is by the express terms of the statute presumed and deemed to have elected to take under the provisions of the will. (Cowdrey v. Hitchcock, 103 Ill. 262.) ”

Furthermore, we do not think that the circuit court was legally justified in ordering that the executor “immediately pay” to Mrs. Spindler, “as a fifth class claim,” out of the assets of the estate, etc., “the sum of $7,075,” together with interest, etc. In section 70, as amended, of the Act “in regard to the Administration of Estates” (Cahill’s St. 1931, ch. 3, ¶ 71, p. 62) it is stated: “Fifth. Where the deceased has received money in trust for any purpose, his executor or administrator shall pay out of his estate the amount thus received and not accounted for.” The $7,075 is not money ‘1 received in trust. ’ ’ According to the stipulated facts it is “the computed value of Mrs. Spindler’s dower interest, had she had a dower interest,” in Mr. Spindler’s real estate. It is the amount that she would have been entitled to receive had there been no ante-nuptial contract and had she elected to renounce the will according to the statute. In Shipherd v. Furness, 153 Ill. 590, 596, it is said: “It has been decided by this court that the word trust, appearing in said statute, is to be taken as used, not in its broader sense, as embracing every case in which a confidence has been reposed, but in its more restrictive sense; that the statute applies to technical trusts only, and has no application to trusts which the law implies from a contract.” (See, also, Wilson v. Kirby, 88 Ill. 566; Svanoe v. Jurgens, 144 Ill. 507; Felsenthal v. Kline, 214 Ill. 121, 123.)

Our conclusion is that the circuit court erred in entering the judgment order of October 25, 1933, and in not dismissing the claimant’s appeal from the order of the probate court of March 4, 1933, which disallowed her said claims. Accordingly, said judgment order of the circuit court is reversed and the cause is remanded to that court with directions to dismiss the claimant’s appeal from said order of the probate court.

Reversed and remanded with directions.

Scanlan and Sullivan, JJ., concur.


text:
    Harry Onyschuk, Administrator of the Estate of Mary Onyschuk, Deceased, Appellee, v. A. Vincent Sons Company et al., Defendants. Appeal of J. K. Sharkey, Appellant.
    Gen. No. 37,391.

      Opinion filed November 27, 1934.
    Miller, Gorham, Wales & Adams, for appellant; Edward B. Adams and Herbert C. DeYoung, of counsel.
    Mitang & Baskin, for appellee.
   Mr. Presiding Justice Gridlet

delivered the opinion of the court.

On May 20, 1932, the Union Bank of Chicago, as administrator of the estate of Mary Onysehuk, deceased, commenced an action against the four defendants to recover damages for negligently causing the death of the intestate as the result of an automobile collision, which occurred in Chicago about 1:30 o’clock in the afternoon of August 6, 1931. Each defendant separately pleaded to the declaration. Several months prior to the trial, by stipulation between plaintiff and A. Vincent Sons Co. (hereinafter called the Garage Co.), it was ordered that the suit be dismissed as to it. During the trial before a jury in October, 1933, Harry Onysehuk, having become the administrator of the intestate’s estate in place of the bank, was substituted as plaintiff in the action, and on his motion, and at the conclusion of plaintiff’s evidence, the suit also was dismissed as to Joseph Dykton, father of Joseph Dykton, Jr., and owner of one of the automobiles involved in the collision, and the trial proceeded as to the two remaining defendants, J. K. Sharkey and Joseph Dykton, Jr. The jury returned a verdict finding both of them guilty and assessing plaintiff’s damages at the sum of $2,500. On November 4, 1933, after overruling Sharkey’s motions for a new trial and in arrest of judgment, the court entered judgment upon the verdict against both of the defendants. Sharkey alone has perfected an appeal from the judgment.

The declaration consisted of four counts. In the first count it is alleged in substance:

That on August 6, 1931, plaintiff’s intestate, a girl of the age of 11 years, was standing with others on the west sidewalk of South State street ( a north and south street) and south of its intersection with 111th street (an east and west street); that Joseph Dykton, by his agent or servant, Joseph Dykton, Jr., was then and there operating an automobile (hereinafter called the Nash car) westerly upon 111th street and in the intersection; that the Garage Co. and J. K. Sharkey, “by their agent or servant” (Donald Brunette), were then and there operating another automobile (hereinafter called the Packard car) in a southerly direction on South State street and in the intersection; and that while the intestate, exercising due care for her own safety, was standing on the sidewalk, defendants so negligently operated the two automobiles that the Nash car ran into and collided with the Packard car with such force that the Packard car struck the intestate on the sidewalk, knocked her down and so severely injured her that she died on the same day. And plaintiff further averred that the intestate left her surviving Harry Onyschuk, her father, and Michael Onyschuk, her brother, who are her only heirs-at-law and next of kin, and who are still living, etc.

The other counts contained similar allegations. In the second the particular negligence charged is the negligent operation of both cars “at a rate of speed greater than was reasonable and safe through Chicago, an incorporated city in Illinois, contrary to the statute, ’ ’ etc. In the fourth count the gist is the wilful and wanton negligence in the operation of both cars.

To the declaration, in addition to filing pleas of the general issue, the Garage Co., Sharkey and Joseph Dykton, Sr., filed separate special pleas. The Garage Co. denied that it, or any agent or servant of it, owned, operated, possessed or controlled the Packard car at the time and place. Sharkey denied either he, or any agent or servant of his, then operated or controlled the Packard car. Joseph Dykton, Sr., denied that he, or any agent or servant of his, was then in the control, use or possession of the Nash car. The only plea of Joseph Dykton, Jr., was that of the general issue.

On the trial it appeared that neither of the owners of the cars, Sharkey and Joseph Dykton, Sr., was in them at the time. Plaintiff called two witnesses as to the details of the accident, Cornelius Von Baardwik and Fred Henriksen, and they testified at considerable length on direct and cross-examination. Sharkey took the position that the driver of his car, Brunette, was not then his agent or servant, but was the agent or servant of the Garage Co., which was then the bailee of the car for the purpose of greasing it and making-repairs upon it. Plaintiff took the position in substance that while shortly prior to the accident Sharkey had personally brought his Packard car to the shop of the Garage Co. on 115th street, Chicago, for the purpose mentioned, he then requested as a favor that some employee of the Garage Co. drive him in the car to his nearby home, leave him there, and return to the shop with the car; that the foreman of the shop acceded to the request and assigned Brunette (an employee of the Garage Co.) to the act of driving Sharkey to his home, etc.; that the car left the shop, with Sharkey in it and Brunette driving it; that on the way to Sharkey’s home, at his direction, Brunette stopped the car at a barber shop in the vicinity and Sharkey got out of the car and told Brunette to drive it back to the shop, which he attempted to do; that on the return trip the accident happened; that the Garage Co. had temporarily loaned Brunette to Sharkey to act as his chauffeur ; and that, hence, at the time of the accident, the Packard car was being operated by Sharkey’s servant. In support of plaintiff’s position his witness, Von Baardwik, testified in part as follows:

“The police took my name at the time of the accident. ... I saw Sharkey in the Criminal Court and had a conversation with him shortly after the accident. We were talking together, four or five of us, while we were waiting there. And he was telling us that ‘he took his Packard car down to Vincent’s Garage to have it repaired, that he went to the foreman and ashed him if he could get somebody to tahe him home, that on the way home he asked the driver if he could stop at the barber shop, that he went into- the barber shop, saying, “You can go back,” and that the driver went back with the car’; and that is all I hear about it.”

While plaintiff was on the stand, and after he had testified as to the heirs and next of kin of the intestate, etc., he was asked if the Garage Co. had not been one of the defendants originally sued. Upon his replying that he “didn’t understand,” he was further asked: “Have you received some money in settlement already on account of this accident?” After the objection of plaintiff’s attorney to the question had been overruled, the judge and counsel had some conversation not in the jury’s presence and immediately thereafter before the jury respective counsel entered into the following stipulation:

“It is stipulated, gentlemen, in order to save asking the witness the question, because he might or might not understand it fully, that the plaintiff in this case has already received, on account of this lawsuit, in so far as it was against A. Vincent Sons Co., garage owners, the sum of $1200.”

At the close of plaintiff’s evidence Sharkey moved for a directed verdict in his favor, but the motion was denied. Thereupon Sharkey called as witnesses John Carleton and Peter Cook (eyewitnesses to the accident) ; Lewis L. Mills (a shorthand reporter); and Brunette (the driver of the Packard car.) Sharkey also testified in his own behalf. The other remaining defendant, Joseph Dykton, Jr., testified in his own behalf. No other witness was called by him. The pertinent portions of the testimony of Brunette on direct examination are in part as follows:

“I came into the garage around noon. Mr. Lewis, the foreman, asked me if I would drive Sharkey home after he left the car for repairs there. ... I left the garage with Sharkey. . . . While going to his home he ashed me to take him to the barber shop, at 105th and Michigan. ... I dropped him off there. . . . He knew I was going back with the car to the garage for repairs. ... I came back on State street and went south. As I got to 111th street I slowed down to around 20 or 25 miles an hour, and all at once I seen a Nash car, back of me, come right towards me and hit me. The Nash hit the rear end of the Packard, which was pretty near past the street car line, and the Packard car spun around, landed on top of the sidewalk, and the Nash tipped over.”

Sharkey’s testimony is in part as follows:

“My address is 10458 South State street. . I was not in my car at the time of the accident. . . . I drove the car to Vincent’s garage for inspection and greasing and a little repair. ... At first I refused to take any favor from the foreman at Vincent’s. After he kept urging me, I said all right. ... I did not tell Brunette to take me to the barber shop. "When he was passing the barber shop, I ashed him to stop and let me out, and then I got out and went into the barber shop, and Brunette turned to the west and went into State street to go back to the garage. ... I did not testify at a previous trial that I told him to take the car back to the garage after he had let me off at the barber shop. ... I had driven the car to the garage for repairs and he knew where the car was to go.”

At the close of all the evidence Sharkey renewed his motion for a directed verdict on the theory that he was under no liability to plaintiff in the present suit. The motion was again denied by the court. And, after certain instructions had been given to the jury, the verdict and judgment followed as first mentioned.

The main contention of counsel for Sharkey is that the court erred in refusing to direct a verdict in favor of Sharkey at the close of all the evidence. In support of their contention counsel cite, among others, the case of Perry v. Fox, 156 N. Y. S. 369. From the opinion in that case it appears in substance that Perry commenced an action against Fox to recover for damage done to his automobile. There had been a collision between it and Fox’s automobile, which at the time was being driven by one Hill, who was a mechanic and the keeper of a garage. On the day of the accident Fox noticed that the carburetor of his car was out of order and needed some adjustment, and he drove from his home to Hill’s garage, where he picked up Hill, who rode with him to a country club. Fox there turned over the car to Hill to make the necessary repairs and Hill took possession of it for that purpose and started back to his garage. On the trip back he negligently caused the car to collide with Perry’s car, resulting in damage to it. In the trial court Perry recovered a judgment against Fox, but on appeal the judgment was reversed and Perry’s complaint ordered dismissed. In reversing the judgment the Appellate Court said (p. 371, italics ours):

“The testimony, considered as a whole, presents no contradiction of fact, nor does it present a condition of facts from which contradictory inferences can be drawn. The ultimate fact is that defendant told Hill to take his automobile and repair it, knowing the repairs were to be made at Hill’s garage, at some distance from the place of delivery.

“It is undisputed that the car was turned over to Hill at the country club. It is undisputed that Hill had an established separate business, that of keeping a garage for the repair of automobiles. When Fox delivered the automobile to Hill, he parted with all control over it. He retained no supervision over Hill as to the manner or method of the car being put in repair, or being broug'ht to the repair shop of Hill. In my opinion, the sole relation existing between Fox and Hill was that of a bailor and bailee. It is a matter of daily occurrence for a garage man to take possession of automobiles either at the owner’s residence, on the road, or at the bailee’s shop. As to injuries to third persons caused by the negligence of the bailee, there is no liability upon the part of the bailor.” (Citing a New Jersey case, to which may be added the case of Mansfield v. Shapiro, 234 Ill. App. 596, 604.)

But we are of the opinion that the evidence in the present case, unlike that in the Perry case, at least presents “a condition of facts from which contradictory inferences can be drawn” on the ultimate question whether or not Brunette, the driver of the Packard car at the time of the accident, was then the servant of Sharkey, and that that question was one for the jury and not the court to determine. A case somewhat similar in its facts is that of Watson v. Trinz, which has been twice before this court (262 Ill. App. 630, and 274 Ill. App. 379). In that case Watson sued the Marigold Garage Co. and Trinz and his wife to recover damages for personal injuries sustained in an automobile accident. On the first trial before a jury the Garage Co. was found not guilty, but there was a verdict and judgment against the Trinzes. On writ of error we reversed the judgment and remanded the cause for reasons stated in our unpublished opinion. On the second trial a jury returned a verdict finding the Trinzes guilty and assessing plaintiff’s damages at $28,000. Again the Trinzes sued out a writ of error but we affirmed the judgment, and subsequently, at the June term, 1934, our Supreme Court denied their petition for a writ of certiorari. The main contention raised on the second writ of error was that the driver of the automobile, at the time of the accident, was the servant of the Marigold Garage Co., and not the servant of either of the Trinzes. In discussing the contention we quoted from our former opinion as follows (274 Ill. App. 393, italics ours):

“The law, however, recognizes that a servant in the general service of one may be transferred, under contract or otherwise, to the service of another so as to become for the time being the latter’s servant, with all the legal consequences of that relationship. (Citing cases.) In Braxton v. Mendelson, 233 N. Y. 122, 123-4, it was said: ‘Was the servant, whose negligence injnred a third party, performing work for his master within the scope of his employment or was he loaned by his master to another to do the latter’s business! In the one case the general employer is liable for his torts. In the other he is not. But while the rule is clear its application is often difficult. The true relationship between master , and servant may be obscured by circumstances seemingly contradictory. ’ In the instant case there is some testimony tending to sustain the theory of the plaintiff. Where the facts are undisputed the existence of the relationship of master and servant is for the court. (Woods v. Bowman, 200 Ill. App. 612 (615), and cases cited.) Under the pleadings and the evidence in the instant case it was a question for the jury. (Kirn v. Chicago Journal Co., 195 Ill. App. 197 (204); Shannon v. Nightingale, 321 Ill. 168 (173).)”

And we said in part in our second opinion in the Watson case (p. 394):

“In the instant case, while Smith, the chauffeur, at the time of the accident was in the general employ of Marigold Garage, nevertheless, the jury were justified in finding from the evidence that when defendants used an employee of the garage, as they did Smith on the evening in question, the employee for the time being was a servant of defendants, and not a servant of the garage; that a driver on such trips was directed and controlled by defendants and was loaned to them by the garage company as a ‘mere accommodation’ as patrons of the garage, for which accommodation the garage received nothing.”

In 46 A. L. R., at page 840, there is an annotation with the heading: “Responsibility of owner of car for negligence of one in general employment of repair man or keeper of garage while getting or delivering car,” ,,and it is said (italics ours):

“The fact that an employee is the general servant of one employer does not, as matter of law, prevent him from becoming the particular servant of another, who may become liable for his acts. . . .

“But as a general rule the owner of a car is not liable for the negligent driving of his car by a person in the general employment of a garage man while getting’ or delivering his car. (Citing* and discussing cases.)

. “ (pp. 841-2.) But it has been held, under some circumstances, that a driver in the general employment of a garage keeper was, at the time of the negligence complained of, acting as servant of the owner, so as to make the latter responsible, or at least the question was for the jury in that regard.” (Citing and discussing cases.)

We have reviewed the cited cases, as well as others wherein the facts are somewhat similar to those in the present case, and we believe that our above holding* (that under the evidence in the present case the ultimate question, whether or not Brunette at the time of the accident was the servant of Sharkey, was one of fact for the jury to determine) is in accordance with the weight of authority in this country. And in this connection the following cases may be referred to: Andres v. Cox, 223 Mo. App. 1139, 23 S. W. (2d) 1066, 1069, 1070; Holloway v. Schield, 294 Mo. 512, 526; Dalrymple v. Covey Motor Car Co., 66 Ore. 533, 541-6; Marron v. Bohannon, 104 Conn. 467, 469-71; Ryciak v. New York Oversea Co., 200 N. Y. S. 379; Rosen v. Diesinger, 306 Pa. St. 13, 16, 17; Bailey v. Smith, 132 S. C. 212, 222, 227.

Counsel for Sharkey also contend that the verdict of the jury, finding Sharkey guilty, is against the manifest weight of the evidence. The argument is in substance that, assuming Brunette to be Sharkey’s servant in driving* the Packard car at and immediately before the time of the accident, the evidence does not show that Brunette was guilty of any negligence at the time. We find no merit in the contention or argument. It appears from a clear preponderance of the evidence that the drivers of the respective cars were each guilty of negligence, which proximately caused or contributed to the collision and the resulting death of plaintiff’s intestate. The Packard car, going south on State street, approaching 111th street and entered the intersection at an excessive rate of speed, without much, if any, slackening of speed, notwithstanding there was a “slow-down” sign at the north-west corner of the intersection. The Nash car, driven by Dykton, Jr., and going west on 111th street, approached State street and entered the intersection at a more excessive rate of speed, without any slackening of speed notwithstanding there was a “Stop” sign at the northeast corner. Brunette’s testimony on cross-examination is contradictory. He testified: “When I approached 111th street I slowed down and looked to see if there was any traffic coming from the east. I seen the Nash at that time. I thought he was going to stop for the ‘Stop’ sign. I didn’t pay any attention to the Nash or anything. I was just driving and I thought, well, he will stop.' I was going my way. ’ ’ He further testified: “It is a fact that I didn’t see this Nash car until just before the impact. I don’t remember seeing any traffic coming before I started to cross 111th street. After the impact of the machines the Packard car just spun me around right on top of the sidewalk, and a tree stopped the car. The rear bumper took the bark off the tree. ’ ’

Counsel for Sharkey also contend that the trial court erred in giving to the jury four instructions offered by plaintiff and in the refusal to give three instructions offered by Sharkey. The court gave in all 19 instructions — 9 of which were offered by plaintiff and 10 by Sharkey. We have examined all of the given instructions and are of the opinion that the jury were fully and fairly instructed and that no reversible error was committed in the giving of any of the four instructions mentioned (Nos. 5, 6, 7 and 9), offered by plaintiff. No useful purpose will be served in setting forth and discussing these instructions.

The three refused instructions, offered by Sharkey, and as to which Sharkey’s counsel contend that the court’s refusal to give each and all constitutes reversible error, are as follows:

“1. You are instructed that if you' believe from the evidence that the plaintiff has received some moneys, or an agreement to pay moneys, on account of the alleged injuries for which it has brought suit in this case from some person against whom it has made claim for damages on account of said alleged injuries, then even if you should reach the question of considering damages in this case, you should take that into consideration, and if he has received fair compensation for such injuries in the manner aforesaid he may recover only nominal damages in this case; and if you believe from the evidence that he has received only partial compensation in the manner aforesaid, he may recover as damages only such sum as taken together with such partial compensation above referred to will give him fair compensation altogether. (Refused.)

“2. If you believe from the evidence that the plaintiff has made claim against another party other than the defendants for damages on account of the same damages for which he is suing the defendants herein; and if you further believe from the evidence that he has received moneys from such person in full or partial compensation for his damages, then if you find any defendant guilty you must consider such moneys already received in assessing the damages against this defendant. But the Court does not mean to intimate that you. should assess any damages against any defendant or that you should pass upon the question of damages until after you have decided the question of whether any defendant is guilty or not guilty. (Refused.)

“3. You are instructed that if you should find any defendant guilty then you will have occasion to consider the plaintiff’s damages, and in considering that question, if you have occasion to do so, you should consider whatever amount, if any, the evidence may show has been paid or agreed to be paid as compensation for plaintiff’s damages by anyone else concerned in the accident.” (Refused.)

The only evidence that we can find in the present record, upon which these instructions can be based, is contained in the oral stipulation entered into before the jury, just before the close of plaintiff’s case, between his counsel and Sharkey’s counsel. As above set forth in this opinion that stipulation is, that “the plaintiff in this case has already received, on account of this law suit, in so far as it was against A. Vincent Sons Co., garage owners, the sum of $1200.” It is not stated in the stipulation, nor does it elsewhere appear, that the sum was paid by the Garage Co. to plaintiff in consideration of a covenant not to sue or of a release. From the common law record, however, it appears that when the suit was originally commenced the Garage Co. was one of the four defendants sued, and that several months prior to the trial the court, under stipulation, ordered that the suit be dismissed as to it. It is well settled in this State that ‘ ‘where there is suit against several tort feasors the dismissal of the suit against one does not bar the action against the others.” (City of Chicago v. Babcock, 143 Ill. 358, 366; West Chicago Street R. Co. v. Piper, 165 Ill. 325, 328.) It is also well settled that “a release to one of several joint tort feasors is a release to all, and an accord and satisfaction with one of them is a bar to an action against the others.” (City of Chicago v. Babcock, supra; Gore v. Henrotin, 165 Ill. App. 222, 224.) But it is also said in the Babcock case (p. 366, italics ours): “A covenant not to sue a sole tort feasor is, to avoid circuity of action, considered in law a discharge, and a bar to an action against such tort feasor. But the rule is otherwise where there are two or more tort feasors, and the covenant is with one of them not to sue him. In such case the covenant does not operate as a release of either the covenantee or the other tort feasors, but the former must resort to his suit for breach of the covenant, and the latter can not invoke the covenant as a bar to the action against them.” In the present case we think it must be assumed that the $1,200, mentioned in the stipulation as having been received by plaintiff from the Garage Co. was paid in consideration of a covenant not to sue it and not in consideration of any release of it, because, if the latter, further prosecution of the suit against Sharkey would have been barred, and it is not so contended here by counsel for Sharkey.

Counsel for Sharkey, in their printed brief here filed and in support of their contention that the trial court committed reversible error in refusing to give each and all of the three instructions above quoted, make the following argument :

“All of these instructions bear on the question of whether plaintiff received money from a corporation (A. Vincent Sons Co.), originally made a defendant to this suit. The evidence shows that plaintiff had received from it the sum of $1200, and that the suit was dismissed as to it prior to the trial. Courts of this State have heretofore recognized that it is proper for a defendant to show the amount paid to a plaintiff by another defendant, who might be jointly liable, in consideration of the dismissal of the suit as to such defendant. In the recent case of Garvey v. Chicago Rys. Co., 339 Ill. 276, the court held that where a trial had been had and there was a verdict assessing the damages against two defendants, on a motion of the plaintiff to dismiss the suit as to one defendant after the case had been continued for the hearing of arguments for a neto trial, it was error to refuse to allow the other defendant to make a showing as to the terms of the dismissal. . . . There is no doubt but that it was proper for the defendant, Sharkey to show the amount paid to plaintiff by the A. Vincent Sons Co., originally a codefendant. It would seem to follow, therefore, that it was also proper to instruct the jury on the effect of such payment. We perceive no sufficient reason, therefore, why the instructions in question should not have been given to the jury. ’ ’

Counsel for plaintiff, on the other hand, contend that each of the three instructions was properly refused, and in support of their contention cite the case of Devaney v. Otis Elevator Co., 251 Ill. 28. It appears from the opinion in that case that the action was for damages for personal injuries, originally brought by Devaney against the Elevator Co.; that by amendment the Standard Co. and one Harris were joined as defendants; that in consideration of $375 Devaney gave to the Elevator Co. a covenant not to further prosecute suit against it; that the suit thereafter proceeded against the Standard Co. and Harris, but was subsequently dismissed as to Harris; that upon a trial Devaney obtained a verdict and judgment for $2,000 against the Standard Co.; that the judgment was affirmed by the Appellate Court and subsequently by the Supreme Court. In the course of the opinion the court said (pp. 38, 39, italics ours):

“Plaintiff in error (Standard Co.) complains that the court erred in giving instruction No. 2 for defendant in error. This instruction, after stating the rule for estimating the damages in case the defendant in error was entitled to recover, proceeds to inform the jury that from the amount of actual damages sustained should he deducted $375 paid by the Otis Elevator Co., provided the jury believe that the Otis Elevator Co. was jointly guilty with the plaintiff in error of the negligence that caused the injury; and the jury were also informed that if the Otis Elevator Co. was not guilty of negligence which approximately contributed to the injury, the $375 should not be deducted from the actual damages sustained by the defendant in error. This instruction had no proper place in this case and should not have been given. It improperly submits to the jury the issue as to whether the Otis Elevator Co. was guilty of negligence in connection with the injury when no such issue was made in the pleadings. The Otis Elevator Co. was not a party to this suit, and it was improper to submit the question of its responsibility for the injury to the jury by this instruction. The $375 paid the defendant in error by the Otis Elevator Co. was not paid as part compensation for the injury he received. It was paid for a covenant not to further prosecute the suit against that company. The jury had nothing to do with that question and the instruction should not have been given. The $375 paid by the Otis Elevator Co. could not be considered by the jury in part payment of defendant in error’s damages. . . . The rule in regard to joint tort feasors is that each wrongdoer is responsible for the whole amount of damages, and that there is no such thing as apportioning the damages among joint wrongdoers. This instruction was improper and should not have been given, but we are of the opinion that it ought not to lead to a reversal of the judgment. ’ ’

In commenting upon the holdings and decision in the Devaney case counsel for Sharkey argue in their reply brief in substance that the same are “completely out of harmony with decisions of the Federal Courts and in most of the jurisdictions in the United States ’ ’; that the holdings in the opinion in the Garvey case (which does not mention the Bevaney case) are authority for the proposition that “the consideration paid by one of the two joint tort feasors for a dismissal after verdict may be shown by the co-defendant in mitigation of damages”; and that, hence, it was reversible error for the court in the present case to refuse to give the three instructions in question, offered by Sharkey. In view of the holdings in the Bevaney case, as to a somewhat similar instruction (which holdings, so far as we are advised, have not been overruled or modified by our Supreme Court in any subsequent case) we cannot agree with counsels ’ argument. And we do not think that the holdings in the Garvey case are in point as to the instant controversy (whether or not the trial court committed reversible error in refusing to give the said instructions). The controversy in the Garvey case arose after a verdict had been rendered and during argument on the motion for a new trial. In the opinion in that case it is said (339 Ill. 286): “The terms of the offer made by counsel for plaintiff iq error in the present case were sufficiently specific in their nature to enable the court to see that the proof contemplated by the offer, if made, would have a direct bearing either upon the amount of damages recoverable against plaintiff in error (citing City of Chicago v. Babcock, 143 Ill. 358; O’Neill v. National Oil Co., 231 Mass. 20), or upon the question of the further liability of plaintiff in error. (Citing Wallner v. Chicago Traction Co., 245 Ill. 148.) ” In the present case there was evidence, introduced before the jury, by stipulation, that the plaintiff “has already received, on account of this laiv suit, . . . the sum of $1,200, ’ ’ and there is nothing in the present record to suggest that the jury, in rendering its small verdict in plaintiff’s favor of $2,500, did not take into consideration said sum so received by plaintiff. And we conclude that the trial court did not commit reversible error in refusing- to give said three instructions or any one of them.

The judgment of the superior court of November 4, 1933, in favor of plaintiff for $2,500, should be affirmed, and it is so ordered.

Affirmed.

Scanlan and Sullivan, JJ., concur.