text:
    Stewardson Homestead Loan Association v. First National Bank of Ava, Illinois, Appellant. F. F. Yakey, Appellee.
    Gen. No. 8,449.
    Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    I. K. Levy, W. F. Ellis and Geo. B. Rhoads, for appellant.
    Ward & Pugh and W. H. Craig, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

The Stewardson Homestead Loan Association filed its hill of interpleader alleging therein that on April 1, 1920, it issued to one A. C. Mautz 100 shares of Series 38 of its Capital Stock of the par value of $100 per share when said stock matured; that it accelerated the maturity and retired the stock on April 1, 1929, when it had a value of $9,850; that the First National Bank of Ava claims to be the owner of and entitled to the proceeds of said certificate of stock and has demanded the payment of the same to it; that one F. F. Takey, defendant, also claims to be the owner of said certificate by virtue of an instrument in writing purporting to be an assignment of said certificate of stock to him executed by said Mautz and has also demanded the payment of the proceeds of said certificate of stock to him; that complainant is willing to pay the amount due thereon to the person who is legally entitled thereto as the court may determine, etc.

It appears from an order entered by the court that commencing with May 1,1928, the First National Bank of Ava and F. F. Takey each paid the monthly dues on said capital stock on account of their respective claims thereto and that the amount of excess dues so paid to the complainant is $755 and that the disposition of said excess dues should await the final determination in the cause. The complainant paid $9,850, the amount due on the certificate of stock, and also $755, said excess fees, into court and was dismissed out of court. The defendant Mautz disclaimed any interest in these funds.

The First National Bank of Ava was formerly known as the First National Bank of Willisville but the change of location and name was made in accordance with law and the corporate existence remained identical. This change took place July 1, 1927. In 1921, Mautz borrowed the sum of $2,500 from the First National of Willisville and that note was renewed from time to time and payments made thereon until November, 1923, when that bank wrote to him that the bank examiner required him to make a credit statement. Just how much was due on the note at that time is not shown by the evidence. In reply to the request for a credit statement Mautz wrote to the bank as follows :

“I received your notice, and I am offering my note herewith enclosed together with certificate representing 100 shares in our loan association as collateral instead of statement.

“The withdrawal value of this stock is at this time over $3,000 and in case this does not meet with your requirements, let me know, and I will try and arrange to pay it.”

Attached to the note was a written assignment of the certificate of stock as collateral to secure the payment of the note. This note was renewed from time to time and payments made thereon so that the debt was reduced on April 9, 1928, to the sum of $1,000 for which amount Mautz executed a renewal note with an identical assignment of the same certificate of the shares of stock as collateral security for the-payment thereof. This last note was made payable to the First National Bank of Ava. At the time the original note was executed by Mautz and payable to the First National Bank of Willisville in 1921, Mautz owed no other debt to that bank. On January 25, 1928, First National Bank of Ava loaned $3,500 to S. E. Roley and Mae Roley, his wife, upon their note executed by them. This note was indorsed upon the back by Clem Roley, J. A. Roley and A. C. Mautz. On March 5, 1928, First National Bank of Ava loaned $3,000 to Charles W. Wilson on a note executed by him. This note bore the indorsement of A. C. Mautz as guarantor of its payment. On March 30, 1928, the First National Bank of Ava loaned $1,200 to Jacob Yakey and Rose Yakey, his wife, on a note executed by them and indorsed on the back by A. C. Mautz. The evidence shows that said S. E. Holey, Charles W. Wilson and Jacob Yakey were each insolvent at the time the interpleader was'filed. It is the contention of the First National Bank of Ava that it has a lien upon the proceeds of the above mentioned certificate of stock for the amounts of the above mentioned notes on which Mautz was indorser or guarantor.

On May 25, 1928, Mautz, being indebted to F. F. Yakey in approximately the sum of $9,000, made a written assignment of this certificate of stock to Yakey in which it is recited:—

“For value received, I hereby sell, transfer, assign and set over unto F. F. Yakey of Stewardson, Illinois, all my right, title and interest in and to One Hundred (100) Shares in Series Thirty-eight (38) of the Capital Stock of the Stewardson Homestead Loan Association of Stewardson, Illinois; the Certificate of said Stock being now held by the First National Bank of Ava, Illinois, as collateral security for the payment of my personal Note for the principal sum of One Thousand Dollars ($1,000) due Thirty days after date, dated April 9th, 1928, with interest at Seven per cent per annum from the date thereof until paid. And I do hereby by these presents, constitute and appoint the said F. F. Yakey, my true and lawful Attorney for me, hereby giving the said F. F. Yakey full power and authority, for his own use and benefit, but at his own cost, to take all legal measures, which may be proper or necessary for the complete recovery of said Capital Stock, and in my name or otherwise to prosecute any suits or proceedings at Law or in equity therefor. ’ ’

The assignment to the First National Bank of Ava of this certificate of stock as collateral to secure the payment of the $1,000 note executed by Mautz April 9, 1928, heretofore mentioned gives the payee of said note and its assigns authority to sell or collect said certificate on the maturity of the note, or at any time before, at any public or private sale and that upon any such sale or collection the holder of said note was authorized to deduct and retain from the proceeds of the same all costs and expenses, including attorney’s fees, and to apply the remaining proceeds to the payment “of any note and any, either or all liabilities, as aforesaid, as such holder shall elect,' returning the overplus to the undersigned.” There is nothing in this assignment which in any way states or infers that the certificate of stock was assigned to secure any indebtedness of Mautz to the bank except that evidenced by the $1,000 note executed by him. In fact, Mautz owed no other indebtedness to the bank except what might arise from the indorsement of the three notes heretofore mentioned. As a general rule a bank has no right to extend its lien against a deposit or a collateral security on a debt as to which a depositor is a mere guarantor or surety.' 7 Corpus Juris 657. In our opinion it is clear from the evidence that it was never intended by the bank or Mautz that the certificate of stock should be held as collateral security for any other debt than for Mautz’s individual' note. “Where securities are pledged to a bank to secure the payment of a particular loan or debt, the bank has no lien on them to secure the payment of a general balance due to it from the pledgor, nor for the payment of any other claim or indebtedness than the one for which they were specifically pledged.” 3 E. C. L. sec. 214. In 7 Corpus Juris 660, .the rule is stated as follows: “The general lien of a bank upon a customer’s deposits will not be recognized where the circumstances are inconsistent therewith; and accordingly, where moneys or securities are deposited with the bank for a particular purpose, as to pay or secure a particular loan or debt, they cannot be retained by the bank for a general balance or for the payment or other claims.”

The rule announced by the above authorities, insofar as we have been able to discover, is universal and has also long prevailed in this State. Baldwin v. Bradley, 69 Ill. 32.

It is also contended by appellant that the assignment of the certificate of stock to F. F. Yakey was void because there was no delivery thereof by Mautz to Yakey as required by the Uniform Stock Transfer Act, Cahill’s St. ch. 32, fí 229 el seq. Without discussing the question whether the assignment of the interest of Mautz in the certificate to Yakey was good in equity, it.is sufficient to say that appellant is in no position to raise this question as its rights in the certificate or the proceeds thereof are fixed and it is of no concern to it who participates in the balance of the proceeds after its claim has been paid.

The chancellor awarded to appellant the amount of the principal of the note executed by Mautz, $1,000, together with the interest due thereon and also the portion of the excess dues on the stock paid by appellant. This was all appellant was entitled to and the balance was awarded to appellee, F. F. Yakey. The chancellor did not err in his finding of the rights of the parties and the decree of the circuit court is affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Justice Eldredge

license: Public Domain

text:
    Glenn A. Kenderdine and Modern Woodmen of America, Appellants, v. A. E. Rouland et al., Appellees.
    Gen. No, 8,460.

      Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    George G. Perrin, Nelson C. Pratt and Sonnenschein, Berkson, Lautmann & Levinson, for appellants.
    Johnson & Pefferle and Thomas W. Hoopes, for appellees.
   Mr. Justice Eldredge

delivered the opinion of the court.

The original complainant in the bill of equity filed in this case was Glenn A. Kenderdine, a certificate holder in the Modern Woodmen of America. After a notice to all the defendants of an application for a temporary injunction, the Modern Woodmen of America, a fraternal beneficiary society, which had been made a party defendant, petitioned the court to be realigned as an additional complainant. The petition was allowed and the latter became a party complainant. Upon a hearing for a temporary injunction an order was entered restraining the defendants from using the name “National Modern Woodman Protective Association” or the name “Modern Woodmen” or the name “Modern Woodman” or the name “Modern Woodmen of America” as part of the title of any association, corporation, organization or pretended organization heretofore formed or which may hereafter be formed or pretended to be formed, and from advertising or holding themselves out as officers of any association, corporation, organization or pretended organization using the name “Modern Woodmen” or “Modern Woodman” as part of its title. After the chancellor had indicated that the injunction order would be limited as above set forth a motion of defendants was granted for leave to withdraw their answer to the bill, and after the answer had been withdrawn they entered their motion to dismiss such parts of the bill of complaint as were not covered by the order of the temporary writ of injunction, for want of equity. This motion was granted and an order entered dismissing that part of the bill not covered by the order for the temporary writ of injunction for want of equity. From this order dismissing the remaining part of the bill for want of equity this appeal is prosecuted.

The motion to dismiss that portion of the bill mentioned for want of equity operated as a demurrer ore terms, and all the material facts aptly pleaded in the bill must be taken as true in considering the error assigned.

The bill is very lengthy and sets out the history of the Modern Woodmen of America since its organization in the year 1883, and that it now has in this country and Canada more than 13,125 subordinate bodies known as local camps; nearly 1,000,000 beneficial members and about 10,600 social members; that -said society has had since its organization a lodge system, ritualistic form of work and representative form of government; that its supreme governing body is the Head Camp composed of the head officers of the society and delegates elected by the various State and provincial camps. The bill then sets out the various rates prevailing during different periods of its existence and alleges that at the end of the year 1928, the society had in force insurance in the sum of $1,128-919,000 on members who had joined prior to July 1, 1919; that assessments paid by these members during the year 1928 amounted to $16,060,011.60; that the death and disability benefits paid during 1928 on account of insurance of these members amounted to $23,243,500.00, an excess of $7,183,489.00 over the contributions of these members; that on December 31, 1928, the society was 51.95 per cent actuarily solvent; that the legislatures of the States of Michigan, Indiana and Pennsylvania had enacted laws which require that all fraternal benefit societies doing business in such State shall, within a given period of time, be placed upon an adequate premium basis, that is, that they shall be 100 per cent actuarily solvent; that the State of Maryland requires such a society to be at least 90 per cent actuarially solvent and that the commissioner of insurance of that State had refused to issue a license to the Modern Woodmen of America to continue to transact its business therein after July 1,1929, unless said society increased its rates so that it would be 90 per cent actuarially solvent; that because of the society’s low rate of actuarial solvency it had not been permitted to transact business in various provinces of Canada nor in the States of Massachusetts or South Carolina; that the commissioner of insurance of the State of South Carolina gave notice to the society that unless some new plan were adopted by the society to halt its constantly decreasing actuarial solvency, he. would refuse to relicense the society in that State at the end of the year; that during the month of April, 1929, and continuing until after the conclusion of the convention of the Head Camp held June 4 to June 7, 1929, an official examination of the affairs of said society was made by examiners representing the insurance departments of the States of Illinois, Missouri, Kansas, South Dakota, North Dakota, Wyoming, Indiana and New York, which examination developed fully the inadequate basis upon which the society was then operating and would undoubtedly have resulted in cancellation or discontinuance of the license of the society to continue to carry on its business therein unless appropriate action had been taken by said camp of June, 1929, to remedy the situation; that had the society continued to operate upon the table of rates adopted in 1919 it would have become unable within three or four years to meet in full the accrued death claims; that immediate and decisive action was necessary to avert bankruptcy and failure of the society and disastrous loss to its members and the beneficiaries named in its 1,000,000 insurance certificates; that at the regular quadrennial meeting of the camp on June 6, 1929, certain by-laws in regard to the rates to be paid by the certificate holders were adopted in order to insure the perpetuity of the society and to prevent its imminent insolvency and inability to pay its outstanding benefit certificates ; that shortly after the adoption of the 1929 plan of readjustment a bill of complaint was filed by certain members of the society against the Modern Woodmen of America and its chief executive officers and directors in the circuit court of Cook county to enjoin the defendants from enforcing said changes in the by-laws of the society adopted at the June convention in 1929; that the final termination of this case is shown by the opinion of the Supreme Court of this State in Jenkins v. Talbot, 338 Ill. 441, which decision fully sustained the action of the convention of June 1929; that about 650,000 members of the society are now holding insurance contracts and are paying the level rate of assessments as provided by the by-laws adopted at the June, 1929, convention; that there are still about 350,-000 members whose insurance has not been rewritten; that if the certificates issued prior to July 1, 1929, are rewritten preponderantly by members who are uninsurable or poorer insurance risks and there is considerable lapsation by members who are better insurance risks, the result will be that the members remaining in the society will suffer a mortality experience less favorable than the mortality table of the society which is based on the average condition of health of all the members; that lapsation of insurance by a considerable portion of the 350,000 members not yet paying assessments on the level rate basis, is more likely to be lapsation by members who can readily obtain substituted insurance in other societies or companies, resulting in adverse selection of risks still to be carried by Modern Woodmen of America; that it is of the utmost importance to said society and all of its members that substantially all existing benefit certificates be rewritten on a level rate basis in order to avoid adverse selection by lapsation; that although all members who joined prior to July 1,1919, have the right to continue to carry their insurance on the step rate basis, due to the increasing age and rapidly increasing mortality among such older members such step rates become prohibitive at advanced ages when there is decreasing ability to pay assessments, and that unless the members now carrying insurance on the current cost or step rate basis rewrite their insurance without delay there will be a high percentage of lapsation and consequent loss to beneficiaries of such members of insurance protection; that such lapsation and the discouragement of such older members will very seriously curtail the possibility of inducing new members to join the society and thereby the protective and fraternal influence of the society throughout the vast territory of' its activity will be greatly and irretrievably diminished.

It is further alleged in the bill: “Plaintiff further avers that the defendant A. E. Rouland is engaged in the insurance business and is the local agent for the City of Springfield, Illinois, of an old line life insurance company; that the defendants Robert Johnson and L. Gf. Pefferle are lawyers, with offices at Springfield, Illinois; that the defendant John W. McKissick, formerly of Beatrice, Nebraska, recently became a resident of Springfield, Illinois; that said defendants, all of whom are members of the Modern Woodmen of America, together with divers other persons to the plaintiff unknown, pretending to be opposed to the plan of readjustment adopted by the Head Camp of said Society on June 6, 1929, wrongfully, fraudulently and maliciously conspired, combined, confederated and agreed among themselves to foment dissatisfaction and dissension in the society and to injure and destroy the good name, reputation and business of the society intending and planning to take advantage of the dissatisfaction and dissension thus fomented to collect donations from members and local Camps of the society for their own use and profit and to the end that said defendants Johnson and Pefferle would receive large sums as fees for alleged legal services, and to the end that said defendant Rouland would augment his insurance business and reap large profits and gains therefrom, to the detriment of Modern Woodmen of America, and to the end that each of said defendants would receive a share of such donations in the form of salaries and expense accounts; that pursuant to said conspiracy and as a part thereof said defendants are carrying on a campaign of malicious misrepresentations and calumnies against said Modern Woodmen of America, the ex-excutive officers and directors of the society, the delegates who composed the Head Camp of June, 1929, said Frank W. Pearson, Inc. and its employees, in order to destroy confidence in Modern Woodmen of America and to destroy its patronage and to defraud said society by inducing their co-conspirators and confederates to appropriate funds of the local Camps of said society to the use and benefit of said defendants and to bring said society and its officers into public scandal and disgrace.

“25. Pursuant to said conspiracy said defendants organized themselves in a pseudo-organization first called ‘Modern Woodman of America Rate-Increase Protest Association’ and more recently called ‘National Modern Woodman Protective Association’; that the defendant Rouland holds himself out as the president of said pseudo-organization, the defendant McKissick as secretary-treasurer and the defendants Johnson and Pefferle as the attorneys of said pseudo-organization; that the headquarters of said pseudo-organization is in the Reisch Building at Springfield, Illinois, where the offices of said defendants Johnson and Pefferle are located; that said defendants, under the former and present names of said pseudo-organization and in some instances under their own names, have issued, published and circulated and are now issuing, publishing and circulating among the members of the society and the public generally divers bulletins, pamphlets, re-prints of speeches, re-prints of newspaper articles which they had caused to be inserted in various newspapers, and other printed, mimeographed, multigraphed, typewritten and written matter containing defamatory, misleading and false statements concerning Modern Woodmen of America, its officers and directors, its 1929 Head Camp, said Frank W. Pearson, Inc., and concerning the affairs of the society, its financial condition and method of carrying on its business; that among such publications so issued, published, circulated and disseminated by said defendants are exhibits Nos. 2 to 12 attached to this bill of complaint and expressly made a part hereof; that in and by said publications, and otherwise, said defendants and their confederates and agents have been and are now engaged in making the following, among other, false, malicious, misleading and defamatory representations, namely:

“(a) The Supreme Court (meaning the Supreme Court of Illinois) did the unexpected. After holding that the Head Camp rate of June, 1929, was unreasonable and not uniformly spread, a majority of the court reversed itself and said in substance that the Head Camp could do pretty much as it pleases. We know how the court reversed itself, but we don’t know why (meaning and intending thereby to impute to the Supreme Court of Illinois motives for its decision other than consideration of the legal principles involved and ' the reasons stated by the court in its opinion).

“(b) The plan (meaning the 1929 plan of readjustment) was rushed through the Chicago Convention (meaning the Head Camp held at Chicago during June, 1929) amid confusion, on a minority report, after certain other by-laws were adopted and many of the dele-. gates had left.

“(c) The head officers of the society started out nearly a year in advance of the date set for convening of the Head Camp to hand-pick delegates to the convention. Not only were such delegates selected as were in complete sympathy with the desires and purposes of the head officers, but in addition to that these delegates were carefully trained in order that the officials of the society might put into effect whatever plans or scheme they might care to adopt.

“(d) When the by-laws providing for the increase in rates had been adopted, Head Consul Talbot stated from the platform that the Executive Council had decided to have the Frank W. Pearson corporation of Chicago do the transferring. I herein now charge that a conspiracy existed between the head officers of the Modern Woodmen of America and the Frank W. Pearson corporation (meaning thereby that the head officers of the society were receiving a portion of the commissions paid to Frank W. Pearson, Inc., by the society).

“(e) The state law provides for holding a referendum on by-laws (meaning thereby the by-laws of the society fixing the schedule of assessment rates) before they are put into effect.

“(f) About $1,000,000 of the Woodmen money was lost through bank failures, notably in Iowa, because deposits were not protected and loans were made on inflated real estate values greater than the value of the property, causing depletion of the reserve.

“(g) We demand a general reduction of the exorbitant salaries which the head officers have so generously allowed themselves.

‘' (h) That we urge the organization in the various states opposing this change in rates to take such legal steps immediately as may be necessary to determine whether or not the banks which have these deposits (meaning deposits of the money of the society) are paying any interest to any person or persons other than 2 per cent paid to the society (meaning and intending thereby to imply that the officers of the society were personally receiving from banks moneys for permitting funds of the society to remain on deposit in said banks at 2 per cent on daily balances.

(i) That the officers and directors of the society spent $10,000,000 of the money of the society contrary to the laws of Illinois and the by-laws of the society; that they paid delegates to the Head Camp $15 a day for attendance for fifteen days while the convention lasted only four days, said overpayments amounting to $84,810.

“(j) We condemn, the enormous, reckless, unwarranted and unlawful expenditure of Modern Woodmen funds by our head officers and in their unneighborly conduct of making a political hash box of our society.

“(k) Our laws should restrict expenditures of the general fund to the end that it may be used only for legitimate purposes and not for the benefit of our head officers so that they can perpetuate themselves in office (meaning thereby that the head officers have used the funds of the society for illegitimate purposes).

“(1) While these officers (meaning thereby the officers of the society) have been drawing all of this money from the Modern Woodmen of America, most of them were engaged in other lines of business. For years Head Consul Talbot has owned and conducted the Highway Motor Underwriters of Kansas City, Mo., with the executive office in Lincoln, Nebraska. We are also informed that he owns and controls what is known as the Woodmen Accident Insurance Company. Now, what about George Hatzenbuhler, one of our national Directors? Well, he is, or was as late as May 11, 1929, secretary of the Illinois Highway Motor Underwriters, Inc., Illinois managers of Highway Motor Underwriters, the organization owned by Head Consul' A. E. Talbot. S. S. Tanner, one of the national directors, was at the time of his death last spring president of the Illinois Highways Motor Underwriters, Inc.

“(m) The head officers (meaning thereby head officers of the society) have deliberately planned to gradually change the Modern Woodmen of America to a mutual legal reserve life insurance company so they may perpetuate themselves in office and draw large salaries.

“ (n) Whereas the head officers of the Modern Woodmen of America, by their neglect of Modern Woodmen business and by their wrongful seizing of the power which belongs to the membership, have forfeited all right of confidence of Modern Woodmen membership.

“ (o) If this plan (meaning thereby the readjustment plan of June 6, 1929) adopted at Chicago is allowed to stand, the great fraternal society which we so dearly loved will be nothing but an ordinary life insurance company.

(p) We will never allow the Modern Woodmen to be turned into an old line life insurance company. It must remain a fraternal benefit society (meaning thereby that by the 1929 plan of readjustment Modern Woodmen of America would cease to be a fraternal benefit society and become an old line life insurance company).

(q) The Head Camp is violating the contract of insurance with the members by changing from the assessment plan to the legal reserve plan.

“(r) Neither will we permit the head officers to sell out the membership. Are you going to let this bunch of traitors and deceivers at Bock Island (meaning thereby the head officers of the society) get away with this stuff? See that every member attends camp meetings hereafter and prevent Bay (meaning J. Gr. Bay, Head Clerk of the society) and Talbot (meaning thereby A. B. Talbot, Head Consul of the society) and other traitors (meaning thereby other officers of the society) from putting in more of their deceitful work. We won’t stop until every last traitor (meaning thereby the officers and directors of the society) at Bock Island is thrown into the street.

“(s) It would seem that they (meaning thereby the officers of the society) had changed over comparatively few members (meaning thereby that only a comparatively few members had rewritten their certificates to the level rate assessment plan).

.“ (t) We (meaning thereby the said defendants) have an almost unanimous membership offering their moral and financial support.'

“26. And plaintiff avers that each of said representations made by said defendants as aforesaid was and is false and known by said defendants to be false when made, and was made, published and circulated by said defendants in utter disregard of the truth and with the wrongful, malicious and unlawful purpose thereby to further the conspiracy of said defendants to injure and destroy the business of the Modern Woodmen of America.”

It is further alleged in the bill that by reason of the acts and conduct of the defendants and the disaffection and the dissension of the members thereby created, more than 100,000 members of the society have lapsed their membership; that many of those so lapsing their insurance were younger men, in good health, and good insurance risks; that by reason of the disaffection and dissension so created the society has been unable to obtain many new members; that notwithstanding said decision of the Supreme Court said defendants and their confederates, agents and servants have continued their unlawful course of conduct, and are threatening to continue the course of conduct with which they are charged in this bill, and will carry out such threats unless restrained and enjoined by the order of this court; that to permit the further carrying out of the conspiracy and to permit the continuance of their course of conduct would result in great and irreparable damage and injury to the society, substantial interference with its business, and its ultimate destruction and inability to meet its beneficial certificates as they mature; that the effect of the false representations and wrongful acts of defendants is so insidious and so difficult to trace and refute that it is impossible to measure the damage done and that hereafter will be done thereby; that the said defendants are utterly insolvent and unable to respond in damages to the society, could the society trace in money the damage done by said defendants through their conspiracy aforesaid. The prayer of the bill asks for an injunction restraining the defendants from doing the acts complained of.

It is the contention of appellees that that part of the bill which was dismissed for want of equity simply attempts to enjoin appellees from publishing libels because part of the relief asked is to restrain the appellees from maliciously charging the officers of the association with being robbers, misappropriating the moneys of the association and other felonies which in themselves are mere libels, and that a court of equity has no jurisdiction of the subject matter. To this we cannot agree. Such libels are but incidental to the main objects of the bill which are to restrain appellees from doing unlawful acts which would ultimately result or may ultimately result in the destruction of the association and cause immense loss to the certificate holders thereof. The facts in this case as set out in the bill are not intrinsically different from those which appeared in the case of National Life Ins. Co. v. Myers, 140 Ill. App. 392. In that case the same contention was made that is made in this case, that a court will not enjoin the publication or circulation of a libel. In disposing of this question the- .court said in part:

“If a libelous publication is in violation of a valid contract, if it is in pursuance of a wrongful conspiracy to destroy property rights and injure the business of appellee, if the parties issuing the libelous publications are insolvent and no remedy at law exists, if it is inflicting irreparable injury the extent of which cannot be definitely ascertained and for which there is no adequate remedy at law, if the bill shows that not only by publications, but by letters to appellee’s agents and employees, appellant is interfering with appellee’s business, is seeking to cause policyholders to lapse their policies and to cause its business to be so far ruined as to throw it into the hands of a receiver, and all this wronfully and with malicious purpose, it is difficult to see why equity should withhold its preventive authority.”

Another part of the opinion in that case is also very applicable to the case at bar.and we adopt it as pertaining to the facts disclosed in the bill in this case:

“In the case at bar the publications are, according to the bill, more than mere libels, and where, as here, the bill distinctly avers essential facts forming the basis of the prayer for relief so as clearly to apprise the appellant of what he has to meet, it is not necessary that it contain the evidence or recite the circumstances in detail which would support its general statement. The present bill is particularly full in this respect. It clearly shows an irreparable damage which would not be adequately compensated by action at law. The injunction does not attempt to restrain a mere libel. It restrains wilful, malicious and irreparable injury to appellee’s property rights, for which the bill shows there is no other adequate relief.”

The Myers case, supra, but followed and applied the principles of law announced in a number of other decisions in this State. Carpenters’ Union v. Citizens Committee, 333 Ill. 225; Wilson v. Hey, 232 Ill. 389; Barnes & Co. v. Typographical Union, 232 Ill. 424; O’Brien v. People, 216 Ill. 354; Boremus v. Hennessy, 176 Ill. 608. The same rule is announced in Maytag Co. v. Meadows Mfg. Co., 35 F. (2d) 403, in which a certiorari was denied by the Supreme Court of United States Also in Evenson v. Spaulding, 150 Fed. 517; Emack v. Kane, 34 Fed. 46; Beck v. Railway Teamsters’ Protective Union, 118 Mich. 497.

Under the allegations in the bill appellees unlawfully and maliciously entered into a conspiracy to do, and have done under said conspiracy, acts which have and will result in irreparable injury to the Modern Woodmen of America and to the certificate holders thereof. This is all admitted to be true by the demurrer and appellants are entitled to protection from such unlawful acts. The decretal order of the chancellor in dismissing that part of the bill dismissed is reversed and the cause is remanded with directions to overrule the motion to dismiss, rule the defendants in the bill to answer the same and hear the case upon its merits.

Reversed and remanded with directions.

Mr. Justice Shurtleff took no part.


text:
    A. Judson Alton and First State Bank & Trust Company of Canton, Illinois, Appellee, v. The American Insurance Company of Newark, New Jersey et al., Appellants.
    Gen. No. 8,462.

      Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    Burnett M. Chiperfield and Robert B. Chiperfield, for appellants.
    A. E. Taff and F. F. Putman, for appellees.
   Mr. Justice Eldredge

delivered the opinion of the court.

A. Judson Alton and First State Bank & Trust Company of Canton, Illinois, appellees, filed their bill in chancery to compel the American Insurance Co. of Newark, New Jersey, one of the appellants, to pay the amount named in a fire insurance policy to them as their interests might appear. The cause was referred to the master in chancery whose report recommended that the bill be dismissed for want of equity. The objections of appellees to the master’s report were ordered to stand as. exceptions thereto in the circuit court and upon a hearing of the same the exceptions were sustained and a decree entered by the chancellor ordering that the amount named in the policy be paid to the First State Bank & Trust Company of Canton. Before the hearing, a supplemental bill was filed setting out the death of the defendant George Melvin, the appointment of the defendant Eva L. Melvin, his wife, as the administratrix of his estate and making her, as such administratrix, party defendant to the bill.

It is alleged in the bill, in substance, that prior to the 21st day of February, 1923, A. Judson Alton was the owner in fee simple of certain real estate on which was a one-story, frame dwelling house; that on said day mentioned, Alton, together with his wife, executed a deed of trust to the First State Bank & Trust Company to secure payment of a promissory note in the principal sum of $9,000, due five years after date with interest at six per cent, payable annually; that by said trust deed the dwelling house was to be kept insured against loss by fire for the benefit of the holder of the trust deed as its interest might appear, and Alton, in compliance with said provision, insured the dwelling house in the American Insurance Company of Newark, New Jersey, which insurance was in full force up to February 18, 1924; that on the 21st day of February, 1923, Alton entered into an agreement for the sale of said premises with George Melvin and Eva L. Melvin, his wife; that by said agreement Melvin agreed to renew any and all insurance then on said premises and to keep all buildings insured against loss by fire for the benefit of said Alton as his interest might appear; that Melvin entered into possession of the premises on the 21st day of February, 1923, and so continued until about March 1, 1927; that on February 18, 1924, Melvin in compliance with his agreement to Alton aforesaid made his application with the Insurance Company for insurance on the dwelling house and on the same day the Insurance Company executed its policy of insurance against fire in the sum of $1,700; that Melvin paid the premium and that said policy was to remain in force until February 18, 1927; that the Insurance Company was fully acquainted with the extent and condition of the title and interest of George Melvin in said premises at the time of the application for and the delivery of said contract of insurance and had full knowledge of the interest of the complainants and knew under the terms of said trust deed that Melvin, as vendee of said premises, was required and obliged to insure the improvements on said premises for the benefit of the First State Bank & Trust Company as its interest might appear; that wholly disregarding such knowledge it negligently omitted to provide in said policy that loss, if any, should be payable to the complainants as their interest might appear; but on the contrary the Insurance Company executed a memorandum, called a rider, on said contract of insurance as follows:

“It is hereby understood and agreed that the title of the assured to the above described property is under and by virtue of contract for deed from First State Bank & Trust Co., and loss, if any, hereunder is made payable to the assured and the said First State Bank & Trust Co., as their respective interests may appear.”

It is also alleged in the bill that the Insurance Company by said rider recited that the title of Melvin to said premises was by virtue of a contract for deed from the First State Bank & Trust Company when it well knew that the title to said premises was under a contract for deed from said Alton and that the loss, • if any, should have been, by said rider, payable to Melvin, Alton and the First State Bank & Trust Company as their respective rights and interests might appear; that the application, policy, rider and all other instruments connected with or required concerning the issuance of said policy and contract of insurance and rider attached thereto were each wholly prepared by the Insurance Company; that while said contract of insurance was in full force on February 14, 1927 the dwelling house aforesaid was totally destroyed by fire; that the Insurance Company had notice of loss within 15 days thereafter and full compliance with all the requirements of the terms of said policy had been made; that the value of said dwelling house was greater than the amount of the insurance thereon; that complainants have an equitable lien on the proceeds of said policy and the Insurance Company became liable to pay to Alton and the First State Bank & Trust Company the said sum of $1,700 together with interest ; that complainants have made repeated demands for such payment which have been refused; that it may be decreed by the court that the policy of insurance was issued, contracted for and taken out for the use and benefit of complainants; that they have a lien on the proceeds of said policy; that the Insurance Company be required to pay the proceeds of said policy to complainants as their respective interests may be determined; that the rights and interests of complainants and defendants may be definitely fixed and ascertained, etc.

The policy is attached to and made a part of the bill of complaint and it is provided therein that the application therefor shall be made a part thereof but the application is not set out in the bill nor made a part of the same.

The answer of the Insurance Company admits the execution of the application and the policy and its rider but denies substantially all other allegations in the bill and avers affirmatively that no proofs of loss were made as required by the terms of the policy and said policy became therefore void.

The proofs show that in the application the following question and answer thereto appear:

“Is there any other party interested in the property or real estate on which the same is situated? 1st State Bank & T. Co.”

The following clause also appears in the application :

“Loss, if any, on buildings, payable to First State Bank & Trust Co., mortgagee, of Canton P. 0. State of Illinois as interest may appear, subject, however, to terms and conditions of policy.”

The rider- in the policy is as follows:

“It is hereby understood and agreed that the title of the assured to the above described property is under and by virtue of contract for deed from First State & Trust Co., and loss, if any, hereunder is made payable to the assured and the said First State Bank & Trust Co., as their respective interests may appear.”

The proofs show that the assertion in the rider that the title of the assured was by virtue of a contract for deed from the First State Bank & Trust Company was erroneous as the title was by virtue of a contract for deed from Alton but in our view this error was immaterial and has no bearing upon the merits of the case.

It is conceded that as a general proposition under a policy of insurance requiring a proof of loss no recovery can be had unless such proofs are furnished pursuant to the conditions of the policy, but the contention of appellees is that in the absence of an express provision in the policy a mortgagee or vendor of the assured to whom the loss is made payable is not required to make proof of loss as a condition precedent to recovery. It is conceded by appellants that a “loss payable” clause in a policy under such circumstances may be so worded as to support the above contention made by appellees but that under the application which is made a part of the policy and the terms of the particular policy in this case including the rider or “loss payable” clause the mortgagee arid vendee became simply appointees of the insured to receive the proceeds of the policy to the extent of their respective interests and to place their respective indemnities at the risk of every act and omission of the mortgagor or assured that would avoid, terminate or affect the insurance of the latter’s interest under the terms of the policy.

In support of their theory appellees have cited three cases: Queen Ins. Co. v. Dearborn Savings, Loan and Building Ass’n, 175 Ill. 115; Northern Assurance Co. v. Chicago Mutual B. and L. Ass’n, 98 Ill. App. 152; Oakland Home Ins. Co. v. Bank of Commerce of Grand Island, 47 Neb. 717. In the first case cited by appellees the fire insurance policy was issued by the appellant to one Graham to which was attached a slip or rider commonly known as the “New York standard Mortgagee clause” making the loss payable to the appellee as its interest might appear. In the policy itself was the following provision:

“If, with the consent of this company, an interest under this policy shall exist in favor, of a mortgagee, . . . the conditions hereinbefore contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended thereto. ’ ’ One of the defenses in this case was that the proof of loss was not made within sixty days. The court there held: “That there existed between the appellant insurance company and the appellee, the mortgagee of the insured property, a contract of insurance distinct from that which existed between the company and the owner is not and cannot be questioned. . . . The question is, what are the terms of that contract? Manifestly, the loss clause alone would not be sufficient to constitute such a contract. It is not sufficiently complete to be given that effect. Do all the terms and conditions imposed on the owner in bis contract apply also to the mortgagee’s contract? The answer must be found in the stipulations, construed in the light of the surrounding circumstances. ’ ’ The court then cites the clause last above quoted and proceeds: “The meaning of this clause is, as we understand it, that in case a mortgagee clause is added, the contract with the mortgagee shall include only such conditions as appear in such mortgagee clause or slip. The language of the policy, particularly in determining whether the liability is limited, is always to be strictly construed against the insurer. . . . Under the well known rule of construction, ‘Expréssio unius est ex-clusio alteriusthe statement in this clause that certain conditions shall apply, but only as set forth in the mortgagee slip, excludes all conditions not contained therein. The mortgagee slip in this case contains no such conditions as are claimed by the defendant. Had it been desired to impose the obligation on the mortgagee to make proof of loss, that requirement should have been inserted in the conditions applicable to the mortgagee.”

In the policy under consideration in the case at bar there is no provision that if an interest under the policy shall exist in favor of a mortgagee the conditions contained shall apply in the manner expressed in such provisions and conditions of insurance relating to such interest as shall be written upon, attached or appended thereto. In the case cited the court holds in substance that none of the provisions of the policy shall apply where the policy is for the benefit of a mortgagee except such as are specifically mentioned in the clause providing for the same and thus excludes the necessity of the insured making any proofs of loss. The court does state specifically that the loss clause alone would not be sufficient to constitute such a contract.

In the second case cited by appellees the policy contained the same clause as in the first case cited and in addition thereto contained a clause to the effect that it was understood and agreed that the insurance as to the interest of the mortgagee or vendee only therein should not be invalidated by any act or neglect of the mortgagor or owner of the property insured.

In the Nebraska case cited the “loss payable” clause in the policy under consideration was substantially the same clause as appears in the other .two cases. The decision in each of these three cases is based solely upon the provision of the policy involved therein that no conditions of the respective policy should apply to the “loss payable” clause except such as were contained in said clause and are not applicable to the facts as shown in the case at bar.

One of the earliest cases in this State in which the question here involved was discussed is that of the Illinois Mut. Fire Ins. Co. v. Fix, 53 Ill. 151. The issue involved in the case as stated by the court was as follows:

“The appellee, Fix, being indebted to Mayer, for whose use this suit is brought, executed to him his notes, secured by mortgage on a brewery, and at the same time assigned to him a policy of insurance, issued by the appellants, upon the building and fixtures. This assignment was made with the consent of the company indorsed upon the policy. The present suit was brought in the name of Fix for the use of Mayer, and resulted in a verdict and judgment for the plaintiff, from which the company appealed.

“On the trial, the company offered to prove that the building was set on fire by the plaintiff, Fix. The evidence was objected to by plaintiff’s counsel, and the objection was sustained. This ruling presents the main question in the case, to wit, whether, where a policy of insurance has been assigned by the assured to one holding a mortgage on the premises, with the consent of the company indorsed upon the policy, its validity can be destroyed by acts done by the assignor in violation of its conditions.”

After á very full discussion of the early authorities the court concluded as follows:

“It is, in our opinion, very clear, if we attempt to dispose of cases of this character on the theory that the assignment is to be treated as a new policy, issued directly to the mortgagee, for his exclusive benefit, and to adjust the rights of these parties in accordance with what we may suppose such a policy would contain, we shall be wandering in a. labyrinth where there would be but one thing certain, and that is, that great injustice would be done these companies. We should practically be enforcing liabilities against them which they never intended to incur, and giving to the mortgagor the benefit of a policy in which he has forfeited all his rights.

“We deem it safer and more just to say, that where a policy is assigned as collateral to a mortgage, though with the consent of the company, the assignee takes it subject to the conditions expressed upon its face, or necessarily inhering in it, and that no recovery can be had merely in consequence of the equities of the assignee, if the assignor has lost the right to recover by violating the terms of the contract.

‘ ‘ The evidence, offered to show that the plaintiff set the building on fire, should have been admitted, and the instruction asked for defendants, in regard to the effect of a second insurance, should have been given. ’ ’

In the case of Home Mut. Fire Ins. Co. of Chicago v. Hauslein, 60 Ill. 521, the insured assigned his policy to his mortgagee with the consent of the Insurance Company. Subsequently he conveyed the property to other persons contrary to the terms of the policy. The court held:

“It has been fully settled by this court, that the assignee of a policy takes it subject to the conditions expressed upon its face 5 and his equities confer no right, if the assignor has lost all right of recovery by a violation of any of the terms or conditions of the policy. ’ ’

In the case of Continental Ins. Co. v. Hulman & Cox, 92 Ill. 145, the policy contained this provision:

“Loss, if any, payable to Messrs. Hulmán & Cox, of Terre Haute, Indiana, mortgagees, as interest may appear.”

The policy also contained a provision that if the insured shall thereafter make any other contract of insurance on the property without the consent of the company then the policy shall become void. It appeared from the evidence that the assured did obtain other policies of insurance on the property in violation of the above provision. The court held:

“Making the ‘loss, if any, payable to Hulmán & Cox, mortgagees,’ was not an insurance of their mortgage interest in the property. As said in Flanders on Fire Insurance, p. 441, ‘It is merely a designation of the person to whom it is to be paid, and is not an assignment of the policy. Hence it is the damage sustained by the party insured, and not by the party appointed to receive payment, that is recoverable from the insurers. The insurance being upon the interest of the insured, if he parts with that interest before the fire, no loss is sustained by him, and of course none is recoverable by his assignee or appointee. In other words, a policy made “payable to A in case of loss” is an agreement on the part of the insurers that “A” shall recover whatever the person originally insured may be entitled to recover in case of loss; that is, it is a contingent order or assignment of what may become due under the contract, and not an absolute transfer by virtue of which the assignee acquires the full rights of an assignee of a chose in action. ’ In Franklin Savings Institution v. Central Mutual Fire Insurance Co., 119 Mass. 240, upon this subject, the court say: ‘The plaintiffs held a mortgage of the property, and on the day after the policy was issued, an indorsement was made upon it that it was to be payable, in case of loss or damage, to them “as their mortgage claim may appear.” It has been repeatedly held by this court that such an indorsement does not operate as an assignment of the policy, nor as a contract to insure the interest of the mortgagees, but that they can claim only what the party originally insured is entitled to recover under his contract. Fogg v. Middlesex Mut. Ins. Co., 10 Cush 337; Hale v. Mechanics’ Mut. Ins. Co., 6 Gray 169; Loring v. Manufacturers’ Ins. Co., 8 Gray 28.’ ”

In the case of American Central Ins. Co. v. Birds Building and Loan Ass’n, 81 Ill. App. 258, the policy contained the provision: “Loss, if any, payable to the Birds Building & Loan Association, as its interest may appear.” One of the defenses was that no proofs of loss had been made in accordance with the terms of the policy and another one was that the assured subsequently mortgaged the property to other individuals contrary to the terms of the policy. The court held: ‘ ‘ The fact that the loss was made payable to appellee as its interest might appear, did not prevent a breach of condition of the policy from making it void as to appellee. ’ ’

In Clark v. Trainor, 237 Ill. App. 269, the policy contained the provision that as to the interest of the mortgagee it should not be invalidated by any act or neglect of the mortgagor or owner of the property. The court held:

“If in the case under consideration the clause attached had provided, ‘loss, if any, payable to E. C. Stokburger, trustee, as his interests may appear, ’ there would have been no liability on the part of appellee insurance company, but owing to the clause providing that as to the mortgagee of trustee said policy should not be avoided by the various acts of the insured, there exists a liability on the part of the company, subject only to the terms of said mortgage clause including the right of subrogation to the security held by said trustee or mortgagee.”

The case of Queen Ins. Co. v. Dearborn S. L. & B. Ass’n, supra, approves the same doctrine we have already mentioned. In the case of Orenstein v. Star Ins. Co., 10 Fed. (2d) 754, 757, in discussing a similar clause in an insurance policy the court said:

“It was a mere open loss payable clause, the effect of which was to make the mortgagee the simple appointee of the insured to receive the proceeds of the policy to the extent of his interest, and ‘to place his indemnity at the risk of every act and omission of the mortgagor that would avoid, terminate, or affect the insurance of the latter’s interest under the terms of the policy. ’ Del. Ins. Co. v. Greer, supra; Brecht v. Law, Union & Crown Ins. Co. (C. C. A., 9th Ct.) 160 F. 399, 87 C. C. A. 351, 18 L. R. A. (N. S.) 197; Orenstein v. New Jersey Ins. Co., 127 S. E. 570, 131 S. C. 498; Collinsville Savings Society v. Boston Ins. Co., 60 App. 647, 77 Conn. 676, 69 L. R. A. 924; Hill v. International Indemnity Co., 225 P. 1056, 116 Kan. 109, 38 A. L. R. 362; Hanson v. National Liberty Fire Ins. Co., (N. J. Sup.), 126 App. 453; 14 B. C. L. 1084; note of Judge Freeman, 58 Am. St. Rep. 671, el seq. The rule is tersely stated by the New Jersey Supreme Court, in the Hanson case, supra: ‘The law is settled . . . that a mortgagee cannot recover if the owner could not. ’ ’ ’

The remarks made by the court in the case of Syndicate Ins. Co. v. Bohn, 65 Fed. 165, 173, are pertinent to the question here involved:

“We all know that 20 years ago a contract between a mortgagee and an insurance company, like that before' us, was novel and rare. At that time the customary method of indenmifying the mortgagee against loss by fire was to indorse upon the policy the words, ‘Loss, if any, payable to —:-, mortgagee, as his interest may appear, ’ or words of similar import. Today such an indorsement is rare, and a contract similar to the mortgage clause before us is in general use. Why this change? The reason is not far to seek. The old indorsement made the mortgagee a simple appointee of the mortgagor, and put his indemnity at the risk of every act or neglect of the mortgagor that would avoid the original policy in his hands. Baldwin v. Insurance Co., 60 N. H. 164; Martin v. Insurance Co., 38 N. J. Law 140; Insurance Co. v. Maackens, 38 N. J. Law 564. Indemnity so precarious, so liable to be destroyed by the ignorance, carelessness, or fraud of the mortgagors, was not satisfactory to the mortgagees ; and they proceeded to make contracts with the insurance companies similar to that before us, for the purpose of securing indemnity to their interests that should not be affected by any act or negligence of the mortgagors. ’ ’

In the case of Delaware Ins. Co. of Philadelphia v. Greer, 120 Fed. 916, the clause in the policy was in the following words: “Loss, if any, payable to James H. Truskett, mortgagee, as his interest may appear.” “Loss, if any, under this policy, payable to Greer Mills Live Stock Commission Company, as their interest may appear, subject to a prior mortgage held by James H. Truskett.” The court held:

“But the clause which these parties selected and attached to the policy had a known, definite, and adjudicated meaning; it had a settled legal effect when they chose and appended it to the contract — :the meaning and effect that the indemnity thereby secured to the mortgagees was subject to the risk of every act and neglect of the mortgagor which would avoid the original policy in his hands. No form of words could have been devised or adopted, relating to the insurance of these mortgagees, which would so clearly and conclusively have expressed the intention of the parties to this contract to subject the indemnity secured by the mortgagees to the risk of the acts and omissions of the mortgagor, as the clause which they selected and attached to the policy, because a long line of adjudications, covering more than 40 years, had established the fact that this was its true meaning and effect. Grosvenor v. Atlantic Fire Ins. Co., 17 N. Y. 391, 393; Bates v. Equitable Ins. Co., 10 Wall. 33, 36, 19 L. Ed. 882; Smith v. Union Ins. Co., 120 Mass. 90, 91; Baldwin v. Ins. Co., 60 N. H. 164, 166; Martin v. Ins. Co., 38 N. J. Law 140, 142, 20 Am. Rep. 372; State Ins. Co. v. Maackens, 38 N. J. Law 564; Loring v. Manufacturers’ Ins. Co., 8 Gray 28; Savings Inst. v. Central Ins. Co., 119 Mass. 240; Brunswick Savings Inst. v. Com. Union Ins. Co., 68 Me. 313, 28 Am. Rep. 56; Bank v. Amazon Ins. Co., 125 Mass. 431. The true construction of the clause ‘Loss, if any, payable to -, mortgagee, as his interest may appear, ’ or of words of similar import, when attached to policies of fire insurance, is, and has been for more than 40 years, that the mortgagee is thereby made the simple appointee of the mortgagor, and that his indemnity is at the risk of the acts and omissions of the latter which would avoid, terminate, or affect the mortgagor’s insurance under the original policy.”

And in Brecht v. Law, Union & Crown Ins. Co., 160 Fed. 399, 403, the court said:

“Now, if it had been the intention of the defendant to insure the plaintiff in error absolutely and without reference to any breach of the conditions of the policies by the St. Johns Lumber Company, such insurance could have been effected by the use of the ‘union mortgage clause’ in defining the rights of the plaintiff in error under the policies; but, instead of doing this, the parties adopted a form merely designating him as the person to whom the loss, if any, should be payable, a form which, under well-settled rules, subjects the appointee to the risk of all acts and omissions of the person to whom the policy was issued.”

A great many more cases, both State and Federal, might be cited upholding the same construction of such a clause as appears in the case at bar, and counsel for appellees have cited none in their brief which hold to the contrary and our attention has not been called to any holding otherwise except some of the very early New York cases which were subsequently overruled.

Appellees could have protected their interests by having had inserted in the policy the clause known as the “union mortgage clause” in common use in such policies but they were content to accept that form which placed them at the mercy of all the defaults of the insured. While the courts of this State, where ambiguity exists in insurance policies, have been liberal in their constructions in favor of the insured where possible, yet they cannot make new contracts between the parties and ove'rrule legal principles which have been established for many years.

Appellees now contend that appellants waived proofs of loss. No such contention was made in the bill of complaint but on the contrary the allegations therein were that appellees had performed all the conditions of the policy. The point was not raised before the master in chancery who heard the proofs nor before the chancellor in the court below and cannot for the first time be raised in this court. The main defense set up in the answer was that no recovery could be had because no proofs of loss were made in accordance with the provisions of the policy. The bill was not amended to meet this defense and if it had been, in our opinion, it would not have been sustained by the proofs.

The decree of the circuit court is reversed and remanded with directions to dismiss the bill for want of equity.

Reversed and remanded with directions.


text:
    Myrtle Adams, Appellee, v. Maude Thomas Combes, Appellant.
    Gen. No. 8,465.
    Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    Jesse Peebles and James H. Murphy, for appellant.
    Snell & Seyerit, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

Appellee sued appellant in an action of replevin to recover the possession of an automobile given as a prize or reward in a subscription contest inaugurated by a newspaper published in Gillespie, Macoupin county. Five prizes were offered of which the first was the automobile in question. Votes were given to the contestants who procured subscriptions for the newspaper. The contest extended over seven weeks and was participated in by a great many individuals. Under the rules the votes were deposited in a sealed ballot box and at the end of the contest were canvassed by three business men who declared that appellant had received a total vote of 6,300,580 and that appellee had received 3,874,370. The first prize was awarded to appellant and the automobile was delivered to her by the publishers of the paper. Two of the rules and regulations governing the contest are as follows:

“17. This newspaper guarantees fair and impartial treatment to all participants; but should any question arise the decision of the management will be absolutely final.

“18. In becoming a candidate, participants agree to abide by the above conditions.”

The basis of the claim of appellee to the automobile is that appellant paid for a large number of subscriptions herself and that if such subscriptions were eliminated the total vote would show that appellee had received legitimately more votes than appellant. The case was tried before a jury similarly to an election contest and the jury found the issues in favor of appellee and that she rightfully was entitled to the possession of the automobile. The court below entered a judgment on the verdict.

No votes were counted except those for appellant and appellee although there were many other contestants for the prize. In replevin the plaintiff must recover upon the strength of his own title or must show a general or special property in the goods. Perkins v. Knisely, 204 Ill. 275; Pease v. Ditto, 189 Ill. 456. Under the terms of the contest the decision of the management of the newspaper on all questions arising was to be absolutely final. Appellee never had possession of the automobile and never had any actual title to it. She is in no position to maintain an action of replevin.

The judgment of the circuit court is therefore reversed with the following finding of fact: This court finds as a fact that appellee never had possession or title to the automobile in question.

Reversed with finding of fact.


text:
    John Deere Plow Company, Appellant, v. L. A. Hershbarger, Appellee.
    Gen. No. 8,477.
    Heard in this court at the October term, 1930. ■
    Opinion filed January 26, 1931.
    H. W. Pike and B. L. Kirk, for appellant. Green & Palmer, for Busey’s State Bank.
    Campbell & Graham, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

January 6, 1930, G. W. Burnett, a tenant farmer in Champaign county, together with his wife executed a chattel mortgage to secure four promissory notes on certain machinery, live stock and his undivided half interest in 35 acres of growing wheat located on the of SE% of sec. 21 of Somers Twp., Champaign county, Illinois. On May 19,1930, G. W. Burnett executed another chattel mortgage to secure the same notes on his undivided half interest of 80 acres of growing oats, 105 acres of growing corn and 40 acres of soy beans all located on the said premises. These mortgages were duly acknowledged and filed for record. The first mortgage provides as follows:

“The Undersigned, of Urbana, Section 15, 21 and 22, Township Somers, Range 19, of the county of Champaign and State of Illinois, for the purpose of securing the payment of my several promissory notes hereinafter described, payable to S. E. Dillavou of Champaign, 111., assigned, to John Deere Plow Co. of Moline, 111., Mortgagee, herein, whose postoffice address is Moline, 111., to-wit: (then follows a list of notes giving their amounts and due dates.) ”

The last note listed is for $5,894.76, the date of the note is marked 12-31-29 and the date due is marked 12-31-32. The second mortgage is in substantially the same language and each mortgage provides that the notes were payable to S. E. Dillavou and assigned to John Deere Plow Co. of Moline, Illinois.

Appellee recovered a judgment in the circuit court of Champaign county on July 25, 1930, against the said Gr. W. Burnett for the sum of $796.14 and an execution was issued thereon. On July 23, Burnett delivered to the elevator of Corray Brothers in the City of Urbana 412 bushels and 50 pounds of wheat which were originally included in the chattel mortgage given on the 6th day of January, 1930. On July 25, 26 and 28, said Burnett delivered to said elevator 1,275 bushels and 30 pounds of oats which said oats were originally mentioned in the second chattel mortgage above mentioned. The wheat and oats above specified was delivered to Corray Brothers by Burnett and received by them in the usual course of their business as grain merchants. The sheriff of Champaign county by virtue of the execution issued upon the judgment entered in favor of appellee levied upon the above mentioned wheat and oats, whereupon appellant brought this trial for right of property in the county court. All the facts are admitted by a written stipulation and the court entered a judgment in favor of appellee.

The stipulation provides as follows:

“It is further stipulated and agreed that one of the notes mentioned in both of the mortgages hereinabove specified to-wit the note for Five Thousand Eight Hundred Ninety-four Dollars and Seventy-six cents ($5,894.76), and shown by said mortgages to have been given on the 31st day of December A. D. 1929 and to mature on the 31st day of December 1932, was made, executed and delivered by the said G. W. Burnett, payable to Busey’s State Bank, of Urbana, Illinois, and that the indebtedness evidenced by said note was originally the indebtedness of the said G. W. Burnett to the said Busey’s State Bank, and not to the said John Deere Plow Company, but was included in the said mortgages pursuant to an agreement between the said John Deere Plow Company and the said Busey’s State Bank for the purpose of attempting to secure the said Busey’s State Bank and that said note since the time of its making has been and now is in the possession of and owned by the said Busey’s State Bank.”

It is apparent that the note executed by Burnett for the sum of $5,894.76 was never made payable to S. E. Dillavou and assigned by the latter to appellant but was made payable to Busey’s State Bank and is still held by it. It was included in the mortgages pursuant to an agreement between appellant and Busey’s State Bank for the purpose of attempting to secure the bank. The chattel mortgages, therefore, in so far as this note was concerned, were fictitious and including it in the mortgages under a false statement of facts was at least a constructive fraud upon the creditors of Burnett.

It is repeatedly asserted by counsel for appellant in their brief and argument that the wheat and oats were delivered to the elevator with instructions to hold the same. There is nothing in the stipulation of facts which substantiates this assertion but on the contrary it is shown by the stipulation that the grain was delivered to Corray Brothers in their regular course of business as grain merchants which can mean but one thing, that it was delivered to them for sale, and appellant, after it became aware of the delivery of the grain to the elevator by Burnett allowed 14 days to elapse before it took any steps to assert its title thereto. Moreover, there is nothing in the stipulation to the effect that the grain was delivered by Burnett to the elevator without the knowledge of appellant. A sale of mortgaged property by the mortgagor with the consent of mortgagee renders the mortgage invalid. William Deering & Co. v. Washburn, 141 Ill. 153.

The county court properly found the right of property in appellee and the judgment of the county court is affirmed.

Affirmed.


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    Harry Fishwick et al., Appellees, v. John L. Lewis et al., Appellants.
    Gen. No. 8,480.

      Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    Henry Warrum, Charles E. Feirich, Moses Pulverman and Gillespie, Burke & Gillespie, for appellants.
    Floyd E. Thompson, A. C. Lewis, Joseph A. Londrigan and Boy C. Martin, for appellees.
   Mr. Justice Eldredge

delivered the opinion of the court.

The prior history of this case is contained in the opinion of this court in Fishwick v. Lewis, 258 Ill. App. 402, to which reference is made. That appeal was brought to this court from an order entered by the chancellor in the court below denying a motion made by appellants here to dissolve a temporary injunction restraining appellants from revoking or attempting to revoke, or carrying into execution any order purporting to revoke the charter of District No. 12; from deposing and suspending or removing from office or claiming that they have deposed or removed from office any of the complainants in the bill referred to; from interfering with the performance of the duties of the officers of District No. 12 and from setting up or attempting to set up a provisional government for said district. The question in that case was whether the court below had jurisdiction to grant the temporary injunction under the facts as shown by the bill and answer thereto and we held that the court had jurisdiction to grant the temporary injunction on the ground that property rights were involved and that a temporary injunction maintaining the status quo may properly be issued until the'merits of the controversy could be determined upon a hearing, and the order of the chancellor denying a motion to dissolve the temporary injunction was affirmed.

Subsequently appellees here filed their petition in the court below for a citation on appellants to show cause why they should not be punished for contempt of court for violating* the temporary injunction. Upon a hearing upon this petition the chancellor, while he found that a number of the appellants had violated the temporary injunction, discharged all except appellant John L. Lewis, against whom he inflicted a fine of $500, to reverse which order this appeal is prosecuted.

It is admitted by counsel for appellants that their acts were violations of the temporary injunction but they claim that appellees are estopped from seeking* the enforcement of the injunction by their own acts subsequent to the issuance thereof. As stated by counsel for appellants; “The question presented reduces itself to a single question of fact, which is: — Since the injunction was issued, have the appellees, complainants in the¡ original bill, changed the status the injunction was granted to preserve and severed their relations with the original organization?”

No motion was made by appellants in the court below to dissolve the temporary injunction, or dismiss the same, on the ground that the acts of appellees, after the temporary injunction was granted, changed the status quo and created the estoppel to have the injunction order enforced, but they, of their own volition, assumed to determine that such was the case and were free to violate the injunction.

In the case of Court Rose v. Corna, 279 Ill. 605, the court held: “Where an injunction, order, mandate or decree of a court has been disobeyed or disregarded and there is a proceeding for contempt of the court for such disobedience or disregard, the only question to be considered is whether the court had jurisdiction to make the order or decree. Jurisdiction is the power to hear and determine a matter in controversy, and if the power existed, the question whether the court erred or the power was improperly exercised is not involved and errors of the court constitute no defense whatever. ’ ’ This rule has long been held as the law in this State. Christian Hospital v. People, 223 Ill. 244; Lyon & Healy v. Piano Workers International Union, 289 Ill. 176; Vulcan Detinning Co. v. St. Clair, 315 Ill. 40, and cases cited in the above. Upon the former appeal we held that the chancellor had jurisdiction to grant the temporary injunction and that question is res adjudicata.

There may be some exceptions to the rule as above announced as where a complainant may procure an injunction against a defendant restraining the latter from committing a continuing trespass upon his land and subsequently conveys the land to the defendant, or by an agreement, for a consideration or otherwise consents to such trespass, then such conveyance or agreement would ipso facto have the effect of dissolving the injunction.

Appellants have cited the case of Holbrook v. Ford, 153 Ill. 633, in support of their theory. In this case one Palmer obtained a judgment against the Power-ville Felt Roofing* Co., a corporation organized under the laws of the State of New York, and after an execution had been issued on said judgment and returned unsatisfied he filed a creditor’s bill and Holbrook was appointed receiver of the books and accounts receivable, notes receivable, debts due and all choses in action of said defendant corporation, or held in trust for it, with the usual powers and duties of a receiver. Among the accounts due to the defendant corporation were two claims against firms in Nebraska and one against a firm in Missouri. Ford, being also a creditor of said defendant commenced attachment proceedings against said defendant in the courts of Nebraska and Missouri and garnisheed the firms in those States who were debtors of said corporation. ílolbrook notified Ford of his appointment as such receiver and claimed the right to collect said debts under his appointment and requested Ford to withdraw said suits and dismiss the garnishee proceedings. Upon a hearing upon a petition filed by Holbrook to have Ford punished for contempt of court on the ground that Ford by attaching and garnisheeing said claims was interfering with the property belonging to the receiver, it appeared that Holbrook as such receiver had appeared in the Nebraska courts and moved to be made a party defendant to the suits there pending between Ford and the Powerville Felt Roofing Co. which motion was granted and he was made party defendant with power to appear and assert his rights in said action. Under these circumstances the Supreme Court held: “We are inclined to think, that the answer thereby showed, in connection with the other circumstances heretofore mentioned, a good defense to the motion or petition for an attachment, on the ground that the action of the receiver in submitting to the jurisdiction of the foreign court with a view of having his rights determined there amounted to a waiver of the contempt. ’ ’ The decision in this case is wholly inapplicable to the facts in the case at bar.

Section 13 of Article XX of the Constitution of the United Mine Workers of America provided as follows: “Sec. 13. This constitution shall be in effect from April 1,1924, until March 31,1929, and can be amended only by a majority vote of the delegates attending the regular International Convention.” The original bill in this case was filed October 11, 1929, and the temporary injunction was issued on the same day the bill was filed. In the original bill the constitution was made a part thereof and it was claimed as one of the grounds for relief that the constitution at the time appellant Lewis attempted to revoke the charter of District No. 12, had expired by its own terms' and that Lewis as president of the International Union of the United Mine Workers of America had no power to issue any such order. Subsequent to the issuance of the temporary injunction writ (the exact date of which we are unable to determine from the record) and prior to March 1, 1930, Fishwick and 20 others issued a call for a convention of the United Mine Workers of America as follows:

“Call for International Convention of the United Mine Workers of America to meet in Springfield, Illinois, March 10, 1930:

“Whereas, there is no international constitution, of the United Mine Workers of America and no law by which the activities can be governed, and

“Whereas, the former'international officials have no legal right to exercise the prerogatives provided by the lapsed international constitution and now hold their respective positions merely by sufferance of the membership, and ,

“Whereas, the said usurping officials have no authority to call a convention and that authority lies solely with the membership of the United Mine Workers of America, and that membership desires that said United Mine Workers of America be recognized and revived so that it can again assume its former proud place among the labor unions of the world and can again give its members that protection for which it was first established, and

“Whereas, the members of the United Mine Workers of America, affiliated with the various Districts and representing the various coal mining regions on the continent, have formed an Organization Committee and have directed that committee to take the necessary steps for the rehabilitation of the United Mine Workers of America:

“Therefore-Be It Resolved, that a convention of delegates representing local unions in good standing with their respective organizations and representing groups of coal miners from localities where the organization has been destroyed because of the Lewis policies, and who are desirous of rebuilding the United' Mine Workers of America, is called to meet in the City of Springfield, Illinois, on the tenth day of March, 1930, at 12 o’clock noon, for the following purposes:

“1: To establish an international organization of the United Mine Workers of America.

“2: To adopt an international constitution of the United Mine Workers that will place the control of the organization in the hands of the rank and file by restoring home rule to the districts; secondly, that will prevent the international officers from meddling in the affairs of self-supporting districts, and thirdly, that will place the ownership and control of the property of the districts, sub-districts, and locals in the hands of those who created it.

“3: To elect international officers of the United Mine Workers of America in accordance with the provisions of said constitution.

“4: To adopt ways and means to accomplish the complete reorganization of the United Mine Workers of America, to unionize the unorganized coal fields and stabilize the coal industry, and for the transaction of such other business as may properly come before such convention, and be it further

“Resolved, that local unions are entitled to one delegate for each one hundred dues-paying members or fraction thereof, and one additional delegate for each additional one hundred dues-paying members or major fraction thereof (but that no local union shall have more than five delegates), who shall vote the entire membership of such local union, and that groups of coal miners where the organization has been destroyed because of the Lewis policies but who meet the conditions of this call be entitled to delegates on the same basis, and be it further

“Resolved, that the secretary of this Organization Committee send this call to the Recording Secretary of all such Local Unions and coal miners as he can by diligent inquiry ascertain now to exist.

Organization Committee.

Alexander Howat John H. Walker J. M. Thornton Oral Daugherty August Dorchy Peter Markunos Fox Hughes John Brophy Adolph Germer Harry Fishwick George L. Mercer Walter Nesbit Joseph B. Cassasa Carl Wright Joseph Loda Allan S.. Haywood F. W. Wenchoff Gust Fritz Joe Hartley Brice Holland Geo. W. Stouffer.”

Pursuant to said call a convention was held in the City of Sprinfield and a constitution was adopted, Article I of which is in the identical language of the previous constitution and contains among other things the following: “The organization shall be known as United Mine Workers of America.” At this convention Alexander Howat was elected president, Adolph Germer, vice president and John H. Walker, secretary-treasurer. The constitution adopted contains substantially the same provisions as prevailed in the old constitution. At no time have appellees attempted to set up an independent organization. Many of the local unions, districts and subdistricts as they existed under the old constitution have recognized the new constitution and the officers elected thereunder. Some, however, have maintained their allegiance to the old organization. It is claimed by appellants that the action of certain individual members of District No. 12 in signing the call for a new convention and in participating therein made them seceders from the United Mine Workers of America and thus have destroyed the status quo which existed when the injunction was granted and cannot now avail themselves of the advantages. thereof. With this contention, under the facts as shown by the evidence in this case, we cannot agree, but conceding the proposition to be true the remedy of appellants was to apply to the court to relieve them from- the injunction and not seek relief, from the terms thereof by violating them. In the case of Breinmeyer v. Star Bottling Co., 165 Mo. App. 383, 147 S. W. 526, it was held: “Before going into the merits of this case, it may be well to state that much of the return of both of the respondents sets out facts which, if true, might be a ground for equitable relief in an independent proceeding by the respondents against the plaintiffs in the suit in which the injunction was granted. We do not understand that such facts are any excuse for violating the original injunction. If the respondents have any ground of equitable complaint against the plaintiffs in that original suit, the courts of law and equity are both open to them. . . . This case, as far as the injunction is concerned, was closed ivhen the order of injunction was made by this court . . . and the only question involved in the case, according to our judgment, is whether or not the defendants have violated that injunction.”

In the case of Emergency Hospital v. Stevens, 146 Md. 159, 126 Atl. 101, it was held: “Certainly, where changes in the relations of the parties or the conditions upon which it is based, occurring after a final decree of the nature of that passed in this case, render its further operation unreasonable, unjust, oppressive or inequitable, the court which passed it must necessarily have the right to dissolve it, and it is wholly unnecesary to resort to so disorderly a proceeding as the commission of a contempt to secure relief.”

In De La Mater v. Graves, 69 Colo. 255,193 Pac. 552, it was said: “If facts arise which would justify a vacation of the order, that is no excuse for disobeying the order. The remedy of the party desiring to be relieved from the necessity of obeying the order is to take formal and due steps in the proceeding in which the order was made and not to impeach the order in a contempt proceeding brought to punish a disobedience thereof.” In State v. Haiman, 100 Wash. 632,171 Pac. 529, it was held: “Even if it were a fact that the appellants became members of the corporation after the decree restraining them from interfering with the business and affairs of the corporation, it was still the duty of the appellants before violating the decree of the court in the original action to apply to the court to have the decree modified upon the changed condition, and not to violate the decree of which they had notice.” In St. Joseph Brewing Co. v. Hauber (Mo.), 132 S. W. 54, in a similar case, it was held: “As the case stands, this respondent has taken the law into his own hands, and presumed to pass upon the Brewing Company’s rights cmd the authority of the court. To permit such course would be to invite confusion and disorder in the administration of the law.” So also in the case of Alcorn v. Newark & Hackensack Traction Co. (N. J. Chan.), 48 Atl. 235, it was read: “The only regular course for the defendants to have pur-, sued, if they supposed the subsequently acquired rights to entitle them to be relieved from the injunction, was to have brought these rights to the notice of the court by an application to file a supplemental answer and to modify the injunction.”

In our opinion the only question before this court is whether there was a violation of the temporary injunction. That there was such a violation is not only proven but admitted and the chancellor did not err in fin fling the appellants guilty of contempt and the decree of the circuit court is therefore affirmed.

Affirmed.


text:
    Vina Broughton, Appellee, v. City of Lincoln, Appellant.
    Gen. No. 8,483.
    Heard in this court at the October term, 1930.
    Opinion filed January 26, 1931.
    Ubi Krissinger, City Attorney, and Peter Murphy, for appellant.

      Harold F. Trapp, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

In an action on the case appellee recovered a judgment against the City of Lincoln for the sum of $2,000. The accident to appellee occurred on the sidewalk on the main business street in the city known as Broadway. The sidewalks on this street and on a number of other streets in the city were constructed of Joliet limestone laid in slabs about twelve feet long, six feet wide and seven or eight inches thick. On the evening of March 28, 1929, appellee, with two other ladies returning from church where they had been attending pre-Easter services, were walking along the sidewalk in question about 8:45 o ’clock and as they were passing over one of these flagstones it broke and precipitated them into the area way below in consequence of which appellee was injured.

The first error urged by appellant is in regard to the notices of the accident served upon the city as required by statute. Two such notices were served, the first of which described the point of accident at 424 Broadway Street, “and at a point about forty-five feet northwest of the southeast corner of Block eleven (11) in the original town now City of Lincoln, Illinois at a stone in said sidewalk being to wit, the tenth stone in said sidewalk northwest of the northeast corner of said Block eleven (11) on the northeast side of said Broadway Street”; the second notice is identically the same except that the tenth stone is described as being northwest of the southeast comer of said Block eleven. By inadvertence the word “northeast” was used in the first notice instead of the word “southeast.” The statute requires that such a notice shall be served upon the city within six months. The second notice correctly stating the place of accident was served upon the city within that time. It is claimed by counsel for appellant that the city was served with notice of the accident for two different places and therefore no sufficient notice was served as the second notice did not purport to be an amended notice. Both of the notices gave the point of accident at, to wit, 424 Broadway Street and at a point forty-five feet northwest of the southeast corner of Block eleven which would have been a sufficient notice of the locality, but, in describing the location of the particular stone in the first notice the word “northeast” was used in place of “southeast.” All the statute required was that a sufficient notice should be filed with the city clerk within six months after the accident and this condition having been complied with the notice was sufficient.

The court permitted evidence that other slabs of Joliet limestone in the sidewalks in the city had cracked and fallen without notice in a similar manner and it is claimed that the admission of such evidence was erroneous. It was proven by a number of experienced witnesses that Joliet limestone is a stone that contains clay seams and when it is first quarried the seam is not noticed but that the elements and weather will decompose not only the seam but also the calcium carbonate and magnesium carbonate in the stone; that moisture or acid will decompose or react with the calcium carbonate and the magnesium carbonate ; that the moisture decomposes where the stone is subject to weather continuously and that capilarity from underneath the stone brought up through the brick or on whatever the stone is resting will decompose it at that point in particular; that the seams cannot be observed by the naked eye but that after such decomposition has taken place the stone will crack and fall unless supported from beneath. Very similar facts existed in the case of Hindle v. City of Joliet, 200 Ill. App. 159, and in which a certiorari was denied by the Supreme Court. In the case at bar, as in the Hindle case, the sidewalk was composed of Joliet limestone and had been in existence from thirty to forty years. It was held in the Hindle case: ‘ ‘ There is no question that the city was charged with notice that concealed curly seams were likely to exist in a slab of Joliet limestone of this kind and character, and if such a seam was there it would probably sometime result in the breaking of the stone, as happened in this case. It was also charged with notice that the stone extended over this area way with no support except at the sides; also that a similar stone near by had broken. If the plaintiff’s two witnesses above mentioned are to be believed, there had been an open visible crack in the stone long enough so that the city was charged with notice of that, which would leave no question as to its liability. If they are not to be believed, it was a question for the jury whether, considering the known character of the stone, the great amount of public travel at that place and that a similar stone in the same walk had lately broken, the city was in the exercise of ordinary care in permitting that stone to rest with that support in that place, with the liability that it might break and occasion great loss and injury. It is not so much a question whether it should have discovered the seam as whether it should have guarded against the danger of an undiscoverable defect that it had notice might exist.”

It was further held in the Hindle case: “Appellant argues that the court erred in allowing evidence to go to the jury that Joliet limestone flags may have latent defects, or seams, and in allowing evidence that there was no center wall or support under the stone, and in refusing an instruction that the failure to have such center wall or support was not of itself negligence. We find no error in these respects.”

In the case of City of Bloomington v. Legg, 151 Ill. 9 it was said:

“Evidence was admitted, over the defendant’s objection, that other accidents had occurred of a similar character to that which resulted in injury to the deceased. Evidence of other accidents occurring from the same cause is by many courts held incompetent.

“This court has held such evidence competent, not for the purpose of showing independent acts of negligence, but as tending to show the common cause of these accidents is a dangerous, unsafe thing. Where an issue is made as to the safety of any machinery or work of man’s construction which is for practical use, the manner in which it has served that purpose, when put to that use, would be a matter material to the issue, and ordinary experience of that practical use, and the effect of such use, bear directly upon such issue. It no more presents a collateral issue than any other evidence that calls for a reply which bears on the main issue. Such evidence is held competent by the weight of authority. Ottawa Gas Light & Coke Co. v. Graham, 35 Ill. 346; City of Chicago v. Powers, Admx., 42 Ill. 170; City of Fort Wayne v. Coombs et al.,107 Ind. 75; City of Topeka v. Sherwood, 39 Kan. 690; Dist. of Columbia v. Armes, 107 U. S. 519; Darling v. Westmoreland, 52 N. H. 401.”

The principles announced in the Legg case have been followed in many later cases among which are City of Taylorville v. Stafford, 196 Ill. 288; City of Chicago v. Jarvis, 226 Ill. 614; Moore v. Bloomington, Decatur & Champaign R. R. Co., 295 Ill. 63.

Appellant offered and the court refused to give the following instruction:

“You are instructed that the defendant, City of Lincoln, is not liable for latent or unseen defects in its sidewalks not discoverable by the exercise of ordinary care, and if you believe, from the evidence, that the sidewalk in question was, at the time and place of the alleged accident, in a reasonably safe condition, so far as was discoverable by the defendant by the use of ordinary care, for ordinary travel thereon by persons using such degree of care and caution as reasonably prudent persons would use for their safety under all the circumstances shown by the evidence, then you should find the defendant not guilty.”

The court did, however, give an instruction of its own motion which in fact is but a modification of the refused instruction and is as follows :

“You are instructed that the defendant, the City of Lincoln, is not liable for latent or unseen defects in its sidewalks (not arising out of defective construction or material) and not discoverable by the exercise of ordinary care, and if you believe from the evidence that the sidewalk in question was at the time and place of the alleged accident in a reasonable safe condition (except as to latent defects not arising out of defective construction or material) so far as discoverable by the defendant by the use of reasonable care, for ordinary travel thereon by persons using such degree of care and caution as reasonably prudent persons would use for their safety under all the circumstances shown by the evidence, then the City has discharged its duty in that regard.”

It is urged that this was error. The refused instruction disregarded entirely the material with which the sidewalk was constructed and the manner of its construction. The city was charged with notice that Joliet limestone contained seams of clay or other material which in time would decompose and that such stones were liable to break and fall at any time. The evidence showed also that many such flagstones in the City of Lincoln had developed open cracks therein and had to be supported by beams or props underneath. The refusal of the instruction as offered was not error and the modification thereof was proper.

No other errors are suggested and the Judgment of the circuit court is affirmed.

Affirmed.