author: Mr. Presiding Justice Scanlan

text:
    Guardian Bancorporation, Defendant in Error, v. Chicago Title & Trust Company, Executor, and Tillie Ulmer, Executrix of the Last Will and Testament of James A. Low, Deceased, Plaintiffs in Error.
    Gen. No. 36,128.

      Opinion filed April 11, 1933.
    Eugene W. Rogers and Edward J. Kelley, for plaintiffs in error.
    Pomeroy & Martin and Bennett & Colbach, for defendant in error.
   Mr. Presiding Justice Scanlan

delivered the opinion of the court.

This was an action in assumpsit upon a promissory note in the sum of $37,625. The original defendant was James A. Low. The case was tried, judgment entered, and this writ of error sued out during the lifetime of Low. Thereafter Low died and in this court his death has been suggested and the cause has proceeded in the name of his executors. In the lower court there was a jury trial and at the conclusion of all the evidence, upon motion of plaintiff, the court directed a verdict in favor of plaintiff for $34,098.75.

Plaintiff sued to recover upon a note for $37,625, signed by Low, dated December 31, 1926, and payable to Guardian National Bank, which had been reduced by payments, hereafter explained, in the sum of $3,401.25. On September 27, 1930, Guardian National Bank consolidated with Union Bank of Chicago and all of the assets of the former bank that were not then turned over to the latter bank were turned over to plaintiff corporation that was then formed, and the stock of the latter corporation was issued to the stockholders of Guardian National Bank, and Low, as a stockholder of Guardian National Bank, became a stockholder in plaintiff corporation.

Plaintiff alleges that it became the owner of the note “both by the said The Guardian National Bank having transferred and delivered the same to the plaintiff for good and valuable consideration, and in and by reason of the same having been heretofore endorsed by the said The Guardian National Bank of Chicago to the Guardian Baucorporation, plaintiff in this action. ’ ’ The defense interposed in the affidavit of merits is want of consideration, that a prior, or original, note in the sum of $45,000 was executed by Low “as an accommodation to the Guardian National Bank,” and that Low “renewed said note as an accommodation to said Guardian National Bank from time to time, the last renewal being on January 4, 1927.”

In December, 1924, Guardian National Bank was in process of organization and directors had been chosen to act for it when organized. Low was one of them. On December 26,1924, all of the capital stock had been subscribed, at $125 a share, but $200,000 of the subscriptions had not been paid, which situation, if unchanged, would necessarily delay the contemplated opening of the bank on January 2, 1925. Henry R. Kent had been chosen to act as president of the new bank. On December 26, 1924, 14 of the “directors” executed and signed the following written agreement:

“This Memorandum of Agreement, made and entered this 26th day of December, 1924, by and between Henry R. Kent, party of the first part, Stephen H. Bridges, party of the second part, Allan O. Allshul, Thomas Brisch, Clarence B. Chadwick, G. Frank Croissant, Thomas J. Forschner, Charles M. Hayes, Jacob L. Kesner, James A. Low, Fred A. Hackman, E. C. Tourje, Emil E. Rose and Samuel B. Wechsler, parties of the third part, all of the City of Chicago, County of Cook and State of Illinois, Witnesseth That:

“Whereas all of the parties hereto are directors of the Guardian National Bank of Chicago, a National bank now in the process of organization, consisting of ten thousand shares of a par value of One Hundred Dollars each, and

“Whereas all of said stock has been subscribed at the price of One Hundred Twenty-five Dollars a share, making á total of One Million, Two Hundred Thousand Dollars,

“Whereas only One Million Dollars has been paid on said subscriptions, leaving a balance of Two Hundred Thousand Dollars approximately to be collected, and

“Whereas it is deemed advisable to open said bank, as per schedule, on the 2nd day of January, 1925, and in order to secure the charter so to do, it is necessary to raise immediately said sum of Two Hundred Thousand Dollars, and

“Whereas the party of the second part, Stephen H. Bridges, for the purpose of aiding in the raising of said money, has offered to lend, on trust receipt, to the party of the first part, Henry R Kent, Two Hundred Thousand Dollars par value securities of the United States Government for a period of time not exceeding twenty days, and

“Whereas said party of the first part has agreed to pledge his individual credit, backed by the security of said bonds belonging to the party of the second part in order to immediately raise the money needed, and

“Whereas, the parties of the third part and the party of the first part, individually, severally desire to indemnify the party of the second part against any loss, cost or damage whatsoever (except his proportionate share as one of the fourteen parties hereto.

“Now, Therefore, in consideration of the premises, and one dollar and other good and valuable considerations, each to the other in hand paid, the receipt of which is hereby acknowledged, it is mutually covenanted and agreed by and between the parties hereto as follows:

“1. The party of the second part hereby deposits with the party of the first part Two Hundred Thousand Dollars face value securities of the United States Government, in trust nevertheless for the uses and purposes as set forth in Paragraph 2 hereof.

“2. The party of the first part hereby accepts said Two Hundred Thousand Dollars face value United States Government securities in trust for the specific purpose of hypothecating same as collateral to his individual note and borrowing thereon Two Hundred Thousand Dollars for the specific purpose of paying same to the Guardian National Bank, in process of organization, so that the full total of said bank capital may be had in order to obtain the chhrter. Said loan, to be made by the party of the first part, shall be with one of the reputable banks of Chicago or some other satisfactory party, and shall be for a period of not longer than to and including January Fifteenth, Nineteen Hundred and Twenty-five. No commission shall be paid therefor — only bank interest rates.

“3. It is mutually agreed by and between the parties hereto that any and all moneys received after the date hereof on stock subscriptions to the Guardian National Bank, shall be applied against said loan, and upon the full re-payment of said loan and the taking down of said collateral, said collateral shall be returned to the party of the second part.

“4. The twelve parties of the third part, each for himself, severally, and the party of the first part on his own behalf, agree to indemnify and hold harmless the said party of the second part, each for one-fourteenth of any loss, cost' or damage of whatsoever kind or nature which the party of the second part may sustain by reason of his having deposited said bonds of a face value, of Two Hundred Thousand Dollars hereunder to aid in the organization of the said Guardian National Bank.

“5. Two of the' directors, Edward G. Blonder and Darby A. Day have not joined in this agreement, having been absent. If their consent hereto is obtained and their signatures affixed, it shall reduce the liability of each director to one-sixteenth each.. And in the event only one of said Two absent directors consent hereto, the respective liability of each director shall be one-fifteenth.

“This agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators and assigns of the respective parties hereto.

“For convenience, this document may be signed by the several parties of the third part on various copies hereof, in which event such signature or signatures shall be as binding as if all of the parties of the third part had signed on this original.

“In Witness Whereof the parties hereto have hereunto affixed their hands and seals the day and year first above written.”

Low was one of the signers of the above instrument.

After the making of this agreement Kent borrowed from Bank of Montreal, upon Ms personal note, $200,000, which he turned over to Guardian National Bank, thus enabling the new bank to open. In securing this loan Kent put up bonds which belonged to Bridges, as collateral. Low was one of the organizers of Guardian National Bank and he subscribed for 100 shares of the capital stock, for which he paid $125 a share. Kent undertook to collect from various subscribers for stock the amounts they owed for the same, and as a result of his efforts in that regard his note to Bank of Montreal was reduced to $45,000 by October, 1925. On October 30, 1925, Low executed his promissory note to Guardian National Bank for $45,000, and to secure the payment of the same he put up with the bank as collateral sundry bonds owned by him. The bank then credited $45,000 to Low’s account and he, on the same day, drew his check on that account, payable to Kent, for $45,000, and the latter used the same in paying the balance due on his note at Bank of Montreal. Kent then received from the latter bank the collateral and returned it to Bridges. Kent testified that at the time that Low signed the note he (Kent) told him that the 360 shares of capital stock which had been issued by the bank but which had not been paid for would be held as Low’s and also as security for his note, and as fast as payments were made on the stock or the stock was sold they would be credited on his note. Low did not contradict this testimony. He testified that he made the original note and put up the collateral for the same at the request of Kent and that he never expected to pay the same; that he signed the original note because Kent asked him to and told him that the bank would be getting the benefit of it and he (Kent) would take care of the interest. On cross-examination he stated that the original $45,000 note “represented 360 shares at $125 a share”; “that is, the $45,000 note represented 360 shares at $125 a share ’ ’; that the difference between the first note and the second renewal note, for $37,625, was due to the fact that 60 of the shares “were sold by the directors’ syndicate . . . and the sale of those shares was endorsed on his note”; that he subsequently took over 300 or 302 shares. “Q. And thereafter you continued to hold that stock and you have it today, have you not? A. Yes, sir. Q. And you voted that stock, did you not, at various times as the owner of it? A. I wouldn’t say that I did. I signed the proxies in blank if I remember right. Q. Well, I have got a lot of proxies here with your signature, I believe. (Handing papers to witness.) Is that your signature? A. Yes, sir.” (Witness here identified various proxies signed by him.) Low then testified that in 1926 he received and receipted for the stock that had been reissued to him and that he indorsed the same on the back “so it could be sold and delivered, ’ ’ and that he left the stock at the bank until he received it from Murphy in 1929, at which time Low insisted that all of the shares should be delivered to him. Just before the present suit was commenced against him, after the claim had been placed in the hands of a lawyer for collection, he offered to return the certificates to plaintiff. On the same date that Low gave his check to Kent, October 30, 1925, Kent wrote Low the following letter:

“Mr. James A. Low,

“25 N. Dearborn St., Chicago.

“Dear Mr. Low:

“I am enclosing herewith a memorandum of the various securities which you deposited today as collateral to your demand note for $45,000, and for which you have on this date issued your check to my order. Said amount is to be used for the purpose of taking up a loan of $45,000 now carried with the Bank of Montreal, which amount represents the unpaid portion of the Directors’ syndicate, which was formed just prior to the opening of the bank; and which is secured by collateral loaned to us by Mr. Stephen H. Bridges, —which collateral, on the payment of said $45,000 to the Bank of Montreal is to be delivered to Mr. Bridges and his receipt taken therefor.

‘1 The loan which was made to you today represents the unpaid subscriptions for 360 shares of Guardian National Bank stock. Said subscriptions are to be collected from the original subscribers, or sold to new stockholders. The proceeds of the sale of this 360 shares are to be applied as part payment of your note of $45,000 as the sales are made and money received, and on which transaction I accept the responsibility of acting as your agent or trustee in the liquidation of said. note. And further, I assume the responsibility of paying all interest accruing from time to time on said loan, until the same is fully liquidated, in the same manner as I have previously done on the loan made with the Bank of Montreal on the security furnished by Mr. Bridges.

“Every effort is to be made to dispose of this 360 shares of bank stock at as early a date as possible; and when your demand note for $45,000 given today to the Guardian National Bank is liquidated in full through the above method, the collateral deposited as security thereto is to be returned in the same condition as when received, with the exception of possibly such payments as may have been made on the collateral during the period it is held by the Guardian National Bank.

“Very truly yours,

“H. R Kent.”

“HRK:H

Thereafter Kent continued to make collections upon the unpaid subscriptions and apply them upon Low’s note, and Kent paid the bank the interest due upon the note. On August 31, 1926, the principal had been reduced to $37,625. On that date Low gave his renewal note to Guardian National Bank for that amount, with the same collateral as security. On December 31,1926, 300 shares of the capital stock which had been issued by the bank to several individuals but which had not been paid for by them, were turned over to Low, at his request, and they were then reissued to him, and during the years 1927, 1928, 1929 and 1930 he gave five different proxies to vote these shares at various meetings of stockholders held during those years. On January 24,-1927, Low renewed his note to Guardian National Bank for $37,625, upon the same collateral, the new note, which is the one sued upon, bearing date December 31,1926. Low left the certificates representing the 300 shares of stock with a vice president of Guardian National Bank, and the latter kept them until December, 1928, or the early part of 1929, when he gave them to Low at the request of the latter. “The bank was going at that time.” Low still had the certificates at the time of the trial. About February, 1929, Kent retired as president of the bank and Andrew T. Murphy became its president. The latter then found that part of Low’s collateral consisted of second mortgages, and he thereupon called Low’s attention to that fact and asked him “to substitute either first mortgage collateral or some other acceptable form of collateral, which he did. ’ ’ At that time Low was still a director of the bank and a member of its finance committee. Murphy testified that “in midsummer of 1930” he told Low that he would have to pay the note so that the assets of the corporation could be liquidated and the stockholders paid, and that Low said “he didn’t have the cash to pay the note in full and hoped he would be given sufficient time to turn around. I stated there wouldn’t be any attempt at immediate collection measures, that all that the Guardian Baneorporation wanted was to get the note in line for payment. He stated at that time that he had some property at Flossmoor that he expected to sell and that that would be used as an initial payment for the note. I told him that it would be perfectly satisfactory to pay the note as and when he could within a reasonable length of time.” Low denied making these statements to Murphy.

We find it somewhat difficult to follow the argument of plaintiffs in error. At the beginning of their brief they state that “the errors relied upon for reversal are: . . . (omitting certain other alleged errors) The Municipal Court erred in excluding certain evidence offered in behalf of defendant. The Municipal Court erred in limiting the examination of witnesses by counsel for defendant. The Municipal Court erred in admitting certain evidence in behalf of plaintiff, over the objection of defendant’s counsel. The Municipal Court erred in fixing the amount of the bond at $40,000, when the evidence of plaintiff’s witnesses showed that -plaintiff held collateral of the defendant to the amount of $40,000, and the court in view of that fact should have fixed nothing but a cost bond, the amount of which should not have been in excess of $200.” The first three points were abandoned. In fact, we find no reference thereafter made to any of them. As to the last point, plaintiffs in error have seen fit to argue that the trial judge was unfair in fixing the appeal bond at $40,000, but we are unable to see how this argument can aid us in determining the instant writ of error.

The sole defense interposed in the affidavit of merits is that no consideration passed from plaintiff to Guardian National Bank and that the note was “an accommodation to the Guardian National Bank.” As the trial court instructed the jury to find for the plaintiff, the sole question is, Did the defendant make out a prima facie case as to the defense interposed. Our conclusion is, after a careful study of all the evidence, that the defendant failed in that regard and that the trial court was justified in instructing the jury to find for the plaintiff. The material facts necessary to be .considered in the determination of the question of failure of consideration are not disputed. Low was an officer and organizer of the bank and he was entirely familiar with the Kent-Bridges arrangement and was one of the signers of the agreement of December 26, 1924, and as one of the signers he was bound by certain of its provisions. He knew on October 30, 1925, that Kent’s note at Bank of Montreal had been reduced from $200,000 to a balance of $45,000, and that the Bridges collateral was still held by that bank, and on that date he gave his note for $45,000 to Guardian National Bank and deposited certain collateral, that he owned, to secure it, and on the same date the bank credited his account with a deposit of $45,000 and he immediately drew his check upon that bank, payable to Kent, for $45,000, which check was honored by that bank. On the same day Kent wrote to Low the letter to which we have heretofore referred, which throws a flood of light upon the entire transaction. On the same date 360 shares of capital stock of the bank became the property of Low, of which he still held 300 shares at the time of the trial. During the years 1927, 1928,1929 and 1930 he exercised the right to vote these shares at the various meetings of stockholders. Guardian National Bank, according to the undisputed evidence, had nothing to do with the transaction between Kent and Low except to loan Low $45,000 on his note, secured by collateral, and to renew the same twice thereafter. Plaintiffs in error seem to avoid certain material facts that bear upon the question as to whether or not there was a failure of consideration, but they strenuously argue that Low, in all he did, was governed solely by a desire to benefit the bank and its depositors, and that to permit the judgment to stand would be to ‘ ‘ sanction the mulcting of one stockholder for the benefit of others.” They ignore the fact that the bank, at the time Low gave the first note, parted with $45,000, which has never been repaid to it, and that the sole defense interposed in the affidavit of merits is failure of consideration. Defendant’s counsel stated, in the argument before the trial court, that the defendant might have a right of action against the thirteen other signers of the so-called directors’ syndicate agreement, but, whether he would or would not, we fail to see how the question of alleged mulcting plays any part in the determination of this case. Nor does the argument that Low was actuated solely by a desire to aid the bank and its depositors appeal to us. Had the bank prospered, the stock that he received would have increased in value and the transaction would have become a very profitable one to him, and he could then contend that when he made the first note, he, personally and alone, assumed, in effect, to pay the balance due upon the unpaid subscriptions and that he thereby became the sole owner of the stock, and that the other 13 signers of the agreement of December 26, 1924, were not entitled to share in any way in the stock. In the fall of 1925, when the first note was signed by Low, the first stage in the cycle of the great boom that occurred in this country was in progress. The boom ended in the fall of 1929 and the great depression then commenced, and the instant defense seems to be an outgrowth of that event.

Plaintiffs in error assert that some deceit or misrepresentation was practiced by Kent upon Low, as a result of which Low signed the original note. It is sufficient to say, in answer thereto, that even if it be conceded that there was evidence to support such assertion, nevertheless, such deceit or misrepresentation on Kent’s part would not bind the bank. According to the testimony of Low and Kent, they were the sole parties concerned in the signing of the original note. The $45,000 paid by the bank upon Low’s check was used in paying Kent’s note at Bank of Montreal. As we have heretofore stated, Guardian National Bank had nothing to do with .the transaction except to lend Low the $45,000. Notice to Kent, under the circumstances, was not notice to the bank. (See Morris v. Thurman, 263 Ill. App. 78; s. c., 270 Ill. App. 621 [Abst.]; Heiple v. Boyer, 264 Ill. App. 572, 588; American Guaranty Co. v. State Bank of East Lynn, 244 Ill. App. 16, 29; Seaverns v. Presbyterian Hospital, 173 Ill. 414, 420; Higgins v. Lansingh, 154 Ill. 301, 388; Metcalf v. Draper, 98 Ill. App. 399, 406.)

The final argument of plaintiffs in error is that “there can be no recovery herein and the judgment entered on the verdict . . . should be reversed because of the fact that no court will mulct one stockholder for the benefit of the others and not having accounted in some manner for our collateral, the burden of accounting for the same being on the plaintiff, this court has a right to presume and the trial court should have presumed that the collateral was ample to satisfy our note.” No issue was raised by the pleadings nor during the trial that plaintiff had converted the collateral, nor that it was not in its possession, and after a careful examination of the transcript of the evidence we find that no demand was made by the defendant that the collateral be exhibited or accounted for, nor did the defendant question, in any way, the ability of the plaintiff to return the collateral. In fact it appears from a statement made by the trial court, at the time of the decision that it was assumed that plaintiff had the collateral. Even then, counsel for defendant did not see fit to question, in any way, the possession of the collateral by plaintiff. The present contention is plainly an afterthought and raised for the first time in this court. In view of -the record we would not be warranted in reversing and remanding this cause for the sole purpose of having the plaintiff exhibit the collateral. Plaintiffs in error have apt ways to protect their interest in the matter of the collateral.

There is no merit in this writ of error and the judgment of the municipal court of Chicago is affirmed.

Affirmed.

G-ridley and Sullivan, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Soanlan

license: Public Domain

text:
    Mildred Serota, Appellee, v. Transportation Insurance Company of New York, Appellant.
    Gen. No. 36,166.
    Opinion filed April 11, 1933.
    Ekern & Meyers, for appellant; William E. Mooney and Luther F. Binkley, of counsel.
    Sugarman & Rothman, for appellee; Samuel D. Rothman, of counsel.
   Mr. Presiding Justice Soanlan

delivered the opinion of the court.

Plaintiff sued defendant in assumpsit and in a trial by the court there was a finding for plaintiff and damages were assessed at $1,000. Judgment followed and defendant has appealed.

Plaintiff’s statement of claim alleges that on November 21, 1929, defendant made its policy of insurance, and delivered it to plaintiff, whereby, in consideration of $20 paid by her, it insured her against all risks of loss or damage from any cause whatsoever, etc., to one Persian lamb coat, to the. amount of $1,000, etc.; that at the time of the making of the policy and until the happening of the loss she had an interest in the property to the amount of the sum fixed in the policy; that on March 16, 1930, the property became lost or stolen, whereby she sustained damage to the amount of the policy. Defendant’s affidavit of merits alleges, inter alia, that plaintiff procured the coat in Moscow, Russia, shortly prior to October, 1928; that it is composed chiefly of fur and is an article of wearing apparel; that during October, 1928, she unlawfully, and with intent to defraud the United States of the lawful import duty thereon, brought the coat within this country without „ declaring the same and without paying to the United States the import duty levied upon such article by section 1420 of Title 19 of the Revised Code of the United States and other sections applicable thereto ; that plaintiff procured the policy of insurance on the coat without disclosing to defendant “the same to be contraband and so illegally and unlawfully imported aforesaid, to protect her against any supposed loss that she might suffer as a result of her unlawfully concealing and holding and receiving within the United States said coat as aforesaid. Wherefore, this defendant says that said coat became and was forfeited to and the property of the United States of America; that the plaintiff had no lawful interest therein and that the court should not permit itself to be used as an instrumentality to enforce such an alleged contract which is contrary to public policy and void.”

The cause was submitted to the court upon a stipulation of facts containing the following:

“That, shortly prior to October 26, 1928, plaintiff . . . was visiting in Moscow, Russia, and plaintiff’s sister gave her as a present a genuine Persian Lamb coat, then of the value of $1,000; that . . . Persian lamb is a fur within the meaning of the laws of the United States . . . respecting import duties on fur coats, and that said coat was composed, (except for the lining and buttons) entirely of said Persian Lamb, and constituted wearing apparel.

“That the plaintiff brought the . . . coat into the United States of America on or about October 26,1928, . . . through the port of New York; that prior to that time the said coat had not been in the United States, nor had it originated in the United States or been made therein; that plaintiff wore said coat on her person at the time of bringing same through said port.

“That in bringing the said coat into the United States . . . the plaintiff did not, nor did anyone for her or on her behalf, declare the said coat at the United States customs at the port of New York, on her arrival, or at any other port,- — nor did the plaintiff, or anyone for her or on her behalf, pay to the United States . . . any duty or duties that may or might be lawfully due on the import of the said coat into the United States, nor did she pay any duty on said coat from thence hitherto.

“That on or about November 21, 1929, . . . defendant, . . . issued and delivered to plaintiff, in consideration of $20 as premium, its certain policy of insurance, ... by which it insured the plaintiff until noon of November 21, 1930, against all risks of loss or damage from any cause whatsoever ... on the said . . . coat ... in the amount of $1,000

“That the defendant is reserving to itself the sole defense that at the date of the issuance of the policy of insurance and at the date of the loss of said coat, the plaintiff did not have an insurable interest in the said fur coat by reason of the fact that she had brought it unlawfully into the United States of America without declaring it to the United States customs, or paying an import duty thereon.

“It is agreed that the . . . defendant . . . did not know, prior to the loss of the said coat, that the said coat had been brought into the United States of America without the payment of import duties thereon.

“. . . that the plaintiff herein did not know prior to the loss of said coat that, she was required (if she was so required) to declare and pay any duty on said fur coat at the time of bringing said coat into the United States of America.

“ . . . that the value of said coat on the date it was lost or stolen was'$1,000.”

Plaintiff’s theory is that “the title of the owner of property as to which an act of forfeiture has been committed under the revenue laws, is not divested eo instanti upon the commission of the offense, but by the judgment or decree of a court having jurisdiction in the premises, ascertaining and declaring the. forfeiture”; that state courts cannot try the question of forfeiture under the revenue laws, collaterally; that defendant cannot urge a defense of forfeiture under the United States revenue laws, except by evidence of a decree of condemnation, determining the existence of such forfeiture; that the fur coat was the property of plaintiff during the entire term of the policy sued on; that she had an insurable interest therein, and that the contract of insurance sued on was not against public policy. Defendant’s theory is that when plaintiff brought the coat into the United States without paying the duty due. on the same, an absolute forfeiture, under the statute applicable to the instant case, took place, and the title to the coat from that moment vested in the United States; that she had no right of property nor insurable interest in the coat thereafter, and “that it is against public policy to permit insurance on smuggled goods”; that under the stipulation of facts and the provisions of par. 1420, sec. 121, Title 19, Customs Duties, United States Code, 1928, the coat was subject to “50 per centum ad valorem” duty.

The following sections are found in the revenue laws of the United States, Title 19, Customs Duties, U. S. Code, 1928:

“Sec. 506. Seizures. It shall be the duty of the several officers of the customs to seize and secure any vessel or merchandise which shall become liable to seizure by virtue of any law respecting the revenue, as well without as within their respective districts.

“Sec. 509. Same; Report and Delivery of Vessel or Property to Collector ;• Report of Violations. — It shall be the duty of any officer, agent, or other person authorized by law to make seizures of merchandise or baggage subject to seizure for violation of the customs laws, to report every such seizure immediately to the collector for the district in which such violation occurred, and to turn over and deliver to such collector any vessel, vehicle, merchandise, or baggage seized by him, and to report immediately to such collector every violation of the customs laws.

“Sec.' 513. Same; Appraisement of Seized Property. The collector shall require the appraiser to determine the domestic value, at the time and place of appraisement, of any vessel, vehicle, merchandise, or baggage seized under the customs laws.

“Sec. 514. Same; Notice of Seizure, Forfeiture, and Sale Where Value $1,000 or Less. If the value of such vessel, vehicle, merchandise, or baggage returned by the appraiser, under section 513 of this title, does not exceed $1,000, the collector shall cause a notice of the seizure of such articles and the intention to forfeit and sell the same to be published for at least three successive weeks- in such manner as the Secretary of the Treasury may direct.

“Sec. 515. Same; Claims to and Condemnation of Seized Property. Any person claiming such vessel, vehicle, merchandise, or baggage may at any time within twenty days from the date of the first publication of the notice of seizure file with the collector a claim stating his interest therein. Upon the filing of such claim, and the giving of a bond to the United States in the penal sum of $250, with sureties to be approved by the collector, conditioned that in case of condemnation of the articles so claimed the obligor shall pay all the costs and expenses of the proceedings to obtain such condemnation, the collector shall transmit such claim and bond, with a duplicate list and description of the articles seized, to the United States attorney for the district in which seizure was made, who shall proceed to a condemnation of the merchandise or other property in the manner prescribed by law.

“Sec. 516. Same; Sale of Unclaimed Property. If no such claim is filed or bond given within the twenty days specified in section 515 of this title, the collector shall declare the vessel, vehicle, merchandise, or baggage forfeited, and shall sell the same at public auction in the same manner as merchandise abandoned to the United States is sold, and shall deposit the proceeds of sale, after deducting the actual expenses of -seizure, publication and sale, in the Treasury of the United States.

“Sec. 517. Same; Condemnation Proceedings Where Value Exceeds $1,000. If the value returned by the appraiser of any vessel, vehicle, merchandise, or baggage so seized is greater than $1,000, the collector shall transmit a report of the case, with the names of available witnesses, to the United States attorney for the district in which the seizure was made for the institution of the proper proceedings for the condemnation of such property.”

Defendant contends that this case is governed by section 497, Title 19, which reads as follows:

“Sec. 497. Fraudulently or Knowingly Importing or Assisting in Importing Merchandise; Buying, Selling, Transporting, or Concealing Unlawfully Imported Merchandise; Punishment. If any person fraudulently or knowingly imports or brings into the United States, or assists in so doing, any merchandise, contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise after importation, knowing the same to have been imported or brought into the United States contrary to law, such merchandise shall he forfeited and the offender shall be fined in any sum not exceeding $5,000 nor less than $50, or be imprisoned for any time not exceeding two years, or both. . . . ” (Italics ours.)

Defendant directs our attention to the italicized words in that section and contends that when plaintiff imported the coat into the United States without paying the duty thereon, the absolute title to the property was vested in the United States from the moment of the offense, and she no longer had any property nor insurable interest in the merchandise. Section 497 relates to the punishment of offenders who fraudulently or knowingly bring into the United States, or assist in so doing, any merchandise contrary to law, and it does not determine nor control the question before us. Indeed, by the stipulation of facts “it is agreed that the plaintiff herein did not know prior to the loss of said coat that she was required (if she was so required) to declare and pay any duty on said fur coat at the time of bringing said coat into the United States.”

In support of its contention that at the moment of the offense the absolute title to the coat vested in the United States and plaintiff no longer had any property nor insurable interest in the coat, defendant cites United States v. 1960 Bags of Coffee, 12 U. S. (8 Cranch) 398; Gelston v. Hoyt, 16 U. S. (3 Wheat.) 246, 311; Henderson’s Distilled Spirits, 81 U. S. (14 Wall.) 44. The first case was an appeal from the sentence of the circuit court for the district of Maryland, which restored a quantity of coffee which had been seized and libeled for a violation of the non-intercourse act effective March 1, 1809. The claimants in the court below alleged, by way of plea, that the coffee was regularly entered and the duties secured according to law, after which they became the purchasers for valuable consideration. They also denied that it was imported contrary to law. The Supreme Court, in a very short opinion, held a forfeiture of goods for violation of the act in question takes place upon the commission of the offense and avoids a subsequent sale to an innocent purchaser. The case is unusually interesting because the decision had the effect of reversing a decision of Justice Story in the case of United States v. The Brigantine Mars, ib. 417, and that able justice saw fit to “introduce” in the former case his exhaustive opinion in the Mars case, to which he added the statement that he was “not yet satisfied of its incorrectness.” In the 1960 Bags of Coffee case the contest was over the right of possession of certain coffee, and in the Mars case, over the right of possession of the Brigantine Mars. In Henderson’s Distilled Spirits, supra, it appears that the government seized 100 .barrels of distilled spirits and an information was then filed by the district attorney. Henderson “appeared to the monition issued on the information and claimed the spirits as owner.” The district court gave judgment for the claimant and the circuit court affirmed the judgment. During the pendency of the legal proceedings the collector held the spirits in his possession and custody as forfeited to the United States under the act in question. In its opinion the Supreme Court held (pp. 56-7):

“Where the forfeiture is made absolute by statute the decree of condemnation when entered relates back to the time of the commission of the wrongful acts, and takes date from the wrongful acts and not from the date of the sentence or decree. Roberts v. Witherall, 1 Salkeld, 223; Robert v. Witherhead, 12 Modern, 92; United States v. Bags of Coffee, 8 Cranch, 398; The Brigantine Mars, Ib. 417; Gelston v. Hoyt, 3 Wheaton, 311; Caldwell v. United States, 8 Howard, 381; United States v. Grundy, 3 Cranch, 338; Wood v. United States, 16 Peters, 342; Clifton v. United States, 4 Howard, 248. Subsequent payment of the duties, therefore, is no defence to an information for a forfeiture founded upon antecedent wrongful acts, as the effect of such wrongful acts, where the forfeiture is made absolute by statute, is to divest the owner of all property in the goods seized and to vest the title to the same in the United States, in case a prosecution ensues, and a decree of condemnation follows, as the decree of condemnation when entered by a court of competent jurisdiction relates back to the date of the wrongful acts as alleged and proved at the trial or in the hearing of the cause. Fontaine v. Ins. Co., 11 Johnson, 293; Kennedy v. Strong, 14 id. 128. Repeated decisions of this court have established that rule in all cases where the forfeiture is made absolute by the -act of Congress, and it necessarily follows that neither the subsequent payment of the duties nor the fact that the defendant is an innocent purchaser, without notice of the wrongful acts of the antecedent owner, constitutes any defence to the charge contained in the fourth article of the information. Wilkins v. Despard, 5 Term, 112. Many such adjudged cases are to be found in the reported decisions of this court, and it must be admitted that they establish the rule beyond all doubt, that the forfeiture becomes absolute at the commission of the prohibited acts, and that the title from that moment vests in the United States in all cases where the statute in terms denounces the forfeiture of the property as a penalty for a violation of law, without giving any alternative remedy, or prescribing any substitute for the forfeiture, or allowing any exceptions to its enforcement, or employing in the enactment any language showing a different intent; and that in all such cases it is not in the power of the offender or former owner to defeat the forfeiture by any subsequent transfer of the property even to a bona fide purchaser for value without notice of the wrongful acts done and committed by the former owner.” (Italics ours.)

In Gelston v. Hoyt, supra, the court states (pp. 312-3):

“This is a seizure for a forfeiture under the laws of the United States, and consequently, the right to decide upon the same, by the very terms of the statute, exclusively belongs to the proper court of the United States; and it depends upon its final decree, proceeding in rem, whether the seizure is to be adjudged rightful or tortious. If a sentence of condemnation be pronounced, it is conclusive, that a forfeiture is incurred ; if a sentence of acquittal, it is equally conclusive against the forfeiture; and in either case, the question cannot be litigated in another forum. This was the doctrine asserted by this court, in the case of Slocum v. Mayberry (2 Wheat. 1), after very deliberate consideration; and to that doctrine we unanimously adhere. The reasonableness of this doctrine results from the very nature of proceedings in rem. All persons having an interest in the subject-matter, whether as seizing officers, or informers, or claimants, are parties, or may be parties, to such suits, so far as their interest extends. The decree of the court acts upon the thing in controversy, and settles the title of the property itself, the right of seizure, and the question of forfeiture.”

In United States v. Stowell, 133 U. S. 1, the court said (pp. 16-7):

“By the settled doctrine of this court, whenever a statute enacts that upon the commission of a certain act specific property used in or connected with that act shall be forfeited, the forfeiture takes effect immediately upon the commission of the act; the right to the property then vests in the United States, although their title is not perfected until judicial condemnation; the forfeiture constitutes a statutory transfer of the right to the United States at the time the offence is committed; and the condemnation, when obtained, relates bach to that time, and avoids all intermediate sales and alienations, even to purchasers in good faith. The rule was early applied under statutes enacting that whenever goods, the importation of which was prohibited, should be imported, they should be forfeited ; and that if any ship should leave port without clearance or giving bond as required by law, the ship and the cargo should be forfeited. United States v. Coffee, 8 Cranch, 398; The Mars, 8 Cranch, 417. It has been recognized and acted on in cases of goods imported in fraud of the customs laws. Gelston v. Hoyt, 3 Wheat. 246, 311; Wood v. United States, 16 Pet. 342, 362; Caldwell v. United States, 8 How. 366. And it has been steadfastly upheld under the internal revenue laws; in one case, under an enactment punishing by fine and imprisonment any person removing distilled spirits from the distillery contrary to law, with intent to evade the payment of the tax thereon, and providing that spirits so removed should be forfeited; and in another case under an enactment that any person fraudulently executing an instrument required by the internal revenue laws should be punished by fine and imprisonment, and the property to which the instrument related should be forfeited. Henderson’s Distilled Spirits, 14 Wall. 44; Thacher’s Distilled Spirits, 103 U. S. 679.” (Italics ours. See also Roma v. United States, 53 F. [2d] 1007, 1008.)

It is conceded that the coat was never seized by the United States, and there is no proof, competent nor incompetent, that proceedings of any kind were ever commenced by the government in reference to it, and, under the authorities, the title of the United States to the coat was never perfected. It is the settled rule “that when the act has been done which the law declares to work a forfeiture of the property, the right of the government to seize the property, and assert the forfeiture, attaches at once and may be pursued by the government whenever and in whose hands soever that property may be found. See Henderson’s Distilled Spirits, 14 Wall. 44.” (Thacher’s Distilled Spirits, 103 U. S. 679, 682.) It is equally true that the government may, in apt ways, enforce its claim against plaintiff for nonpayment of the duty. We may add, it is not even clear from the record before us that the government may not have considered the coat exempt from duty under certain provisions of the revenue law. (See Astor v. Merritt, Collector, 111 U. S. 202.)

In support of its further contention that plaintiff should be held to have no insurable interest in the coat defendant relies upon Fontaine v. Phoenix Ins. Co., 11 John. (Sup. Ct. of N. Y., 1814) 293, wherein it was held that if the owner of the schooner Phoenix breached the nonintercourse law of the United States passed March 1, 1809, the vessel would be forfeited and the property immediately vest in the United States, and the owners would have no insurable interest in the vessel. This case grew out of an alleged violation of what amounted to practically a war measure. During the proceedings counsel for plaintiff stated that he was taken by surprise by the defense of forfeiture and he seems to have raised no objection to such defense but informed the court that, possibly, if he had not been __ surprised he might have shown facts to controvert the allegation of forfeiture. That he made no objection to the manner in which the defense was raised, nor to the jurisdiction of the state court to determine the question of forfeiture, is clear. The court, in deciding the case, relied upon Wilkins v. Despard, 5 Term B. 112, but the Supreme Court of the United States, in Gelston v. Hoyt, supra, held that the courts of the United States have an exclusive cognizance of questions of forfeiture and that Wilkins v. Despard, was not an. authority to the contrary. None of the decisions in the United States courts would support the ruling in the Fontaine case, and later decisions of the New York courts, hereafter cited, run counter to it. Defendant claims that the rule in the Fontaine case, in reference to insurance, was later followed in Amory v. M’Gregor, 15 John. (Sup. Ct. of N. Y., 1818) 24, but the court in that case states that under the facts there was a distinction between the two cases and that the declaration of war virtually repealed and annulled the nonintercourse act that governed the Fontaine case, and therefore the ruling in that case was not applicable. In Wilkes v. People’s Fire Ins. Co., 19 N. Y. (Ct. of Appeals, Smith 5, 1859) 184, the court questioned the justice of the rule in the Fontaine case, saying (pp. 187-8):

“It is said that if we should hold the vessel forfeited, we are controlled by the case of Fontaine v. The Phoenix Insurance Company (11 John., 297), as to the point that the defendant (an insurance company) may avail itself of forfeiture, if there was one, by way of defence. The section declares the vessel forfeited, it is true; but I am not able to see the justice of permitting a third party to set it up to defeat a fair contract on its part, the consideration for which it has been allowed to receive and appropriate.”

In Tracey v. Corse, 58 N. Y. 143, the plaintiff claimed title to a barge, as purchaser at a sale at public auction made by the collector of internal revenue, by whom the barge had been seized for an alleged forfeiture incurred under the internal revenue law of the United States, in that the barge at the time of seizure was fitted up and used in the business of the illicit manufacture of spirits. The defendant claimed to derive title from the person who owned the barge when the seizure was made. The act in question provided “that the same shall be forfeited to the United States.” The court said (p. 149):

“It is to be assumed, in view of the proof offered on the trial and rejected, that the barge was liable to forfeiture when the seizure was made, and that the seizure was lawful. But the title of the owner of property as to which an act of forfeiture has been committed under the internal revenue laws, is not divested eo instanti, upon the commission of the offence, or by the seizure, but by the judgment or decree of a court having jurisdiction in the premises, ascertaining and declaring the forfeiture. It is true, that the statute declares that property, under certain circumstances, shall be forfeited, but it also provides that proceedings to enforce the forfeiture shall be taken in the courts of the United States. Whatever may be the. true view as to the time when the forfeiture takes place, it is by the judgment alone that it can be ascertained and determined. If the government may be deemed to have an inchoate title from the time the offence is committed, it is not consummated until after a judicial condemnation. And, if after a seizure the possession is abandoned by the government, and a decree of forfeiture is not obtained, the title and the right of possession is in the original owner. This is, I think, a fair deduction from the authorities. (Slocum v. Mayberry, 2 Wheat., 1; Gel ston v. Hoyt, 3 id., 246; U. S. v. Grundy, 3 Cranch, 350; Same v. 1960 Bags of Coffee, 8 id., 398; Caldwell v. U. S., 8 How., 366-381.) ”

In Stark v. Grant, 16 N. Y. S. 526, the court followed Tracey v. Corse, supra, and stated: “But the goods were the property of plaintiff, except as against the United States, and as to the United States, even, they continued his property until judgment of forfeiture duly rendered.” In Mitchell v. Cunningham, 29 Me. 376, it appeared that a vessel, with certain goods, was seized and libeled on the ground that she had been employed in a business not justified by the fishing license. Afterward the owner and commander of the vessel filed in the United States District Court a petition admitting the forfeiture and praying-that it might be remitted. “Due proceedings being had, the forfeiture was remitted . . . under the hand and seal of the secretary of the treasury. Afterwards the secretary revoked the remittitur, and ordered that it should be returned to him, and that the property should be withheld from Barnes. Barnes insisted upon having the property restored, and denied that the secretary could revoke the remittitur. The question was presented before the District Judge, who decided that the goods should be restored to Barnes, and that the libel should be dismissed, and that a writ of restitution should issue, which was accordingly issued. From this decree and these proceedings the United States appealed to the Circuit Court of the United States, where, upon a full hearing, the decree of the District Court was affirmed. . . . While the goods were in custody of the law, under the seizure by the collector as above named, Barnes mortgaged the goods to the plaintiffs, to secure their purchase money. And the mortgage was duly recorded. ’ ’ In its opinion the Supreme Court of Maine said (382-5):

“Wlien a vessel or goods have become forfeited by a breach of the revenue laws, they must generally be libeled and the suit prosecuted in the Court, having cognizance thereof. The mode of proceeding to final judgment of condemnation or restoration is prescribed by law, for the alleged forfeiture in the present case. Acts of Congress of Feb. 18, 1793, c. 52, secs. 6 and 35, and of Aug. 4, 1790, c. 62, sec. 67. Although the liability to forfeiture takes place upon the commission of the offence, the title of the government, when goods are required to be libeled, does not become perfected until there is a judgment of condemnation. The Margaretta, 2 Gall. 522; United States v. Palo Alto, 3 Wood. & Minot. Where the right of a party depends upon its establishment in a court of record, by a prosecution directed by statute, such right is not attained, unless the prescribed course is followed. Fire Department v. Kipp, 10 Wend. 266. In the present case, the government had an inchoate right to the property, arising from the violation of the law, if such were the fact, and could make that right absolute, if there were no laches in its officers, and the claim were duly prosecuted. The title cannot therefore be said to be conclusively and entirely fixed by the offence, until the condemnation. The legal proceedings constitute the only effectual mode of determining whether the forfeiture has accrued. . . . Between Barnes and third persons, the property was his, at the time of making the mortgage, subject to the claim of the government. Between him and the government, if there had been an offence creating a forfeiture, a right in the latter to the property was to be consummated only by a prosecution, and a final decree in its favor. . . . Whatever interest Barnes had in the property, he could transfer by a sale. And if he could sell it, subject to the claim of the government, there does not appear to be any reason why he could not mortgage it. If he could make an absolute, he could also a conditional sale.”

In Polleys v. Ocean Ins. Co., 14 Me. 141, the plaintiff sued the defendant on a policy of insurance, bearing date July 17, 1833, upon a schooner called the Mary, owned by the plaintiff, which was totally lost on June 10, 1834. It appears that a sloop was built in 1816, which was enrolled in the customs house by the name of Sophronio, and again so enrolled in 1832; that the schooner was built upon the keel of the sloop “but that the enrollment of the sloop Sophronio was not first surrendered and delivered up at the Custom House before the issuing of the enrollment of the Mary, which was on the third day of June, 1833”; that at the time an act of Congress pertaining to the registry and the recording of ships and vessels provided, “that if any certificate of registry or record shall be fraudulently or knowingly used for any ship or vessel not then actually entitled to the benefit thereof, according to the true intent of this act, such ship or vessel shall be forfeited to the United States.” The defendant contended that the policy gave no right of action to the plaintiff, because insurance on a vessel subject to forfeiture for violation of the laws of the United States is void. In its opinion the court said (pp. 150-1):

“It would be very detrimental to the commerce of the country to hold, that a vessel was not the subject of a lawful insurance because she was liable to seizure and forfeiture for a cause not connected with the policy. The laws of the United States contemplate, that vessels are thus liable for causes arising without wilful negligence or intention of fraud. Cases of that kind are not of unfrequent occurrence, and the- Secretary .of the Treasury is authorized by law to remit the forfeiture. It could never have been the design of the statute under such circumstances ta destroy the legal title, or lawful right of employment, until the forfeiture was exacted. The risk is not increased, nor is the loss for such cause within the policy. The assurers cannot place themselves in the situation of the government, and claim to act for it. None can claim a forfeiture, but those authorized by law. Nor can this matter be properly tried collaterally, and by a Common Law Court. The jurisdiction belongs to another tribunal. It is a matter between others, in which the defendants are not interested, and with which they have no concern.”

After giving the questions raised on this appeal serious consideration we are satisfied that plaintiff had an insurable interest in the coat. We may add that the contention of defendant that it would be against public policy to allow plaintiff to prevail in the instant case, is without the. slightest merit. The government is not powerless to assert any rights it may have against plaintiff, growing out of the act in question.

The judgment of the municipal court of Chicago is affirmed.

Affirmed.

Gtridlev and Sullivan, JJ., concur.


text:
    Steve Ziolkowski, Appellee, v. Continental Casualty Company, Appellant.
    Gen. No. 36,226.

      Opinion filed April 11, 1933.
    George C. Bliss, for appellant.
    Peden, Murphy & Ryan, for appellee; John C. Melaniphy and Gerald Ryan, of counsel.
   Mr. Presiding Justice Soanlan

delivered the opinion of the court.

Plaintiff sued defendant in assumpsit as beneficiary under an accident insurance policy issued by defendant to one Joseph Sarnoüski. The case was tried by the court, without a jury, and the issues were found for plaintiff and damages were assessed in the sum of $2,645. Defendant has appealed from a judgment entered upon the finding.

The declaration consisted of one count and contained a copy of the contract of insurance. Defendant filed a plea of the general issue and two special pleas, the first special plea alleging “that the injury causing the loss of life of insured resulted from an intentional act of insured or some other person”; and the second alleging “that the injury causing the loss of life of insured resulted from an intentional act of another person, to-wit, a stab wound, which assault was not committed upon the assured by such other person for the sole purpose of burglary or robbery and which assault was not incurred by insured while engaged in the proper performance of the duties of his occupation and provoked solely thereby, ’ ’ etc. Plaintiff filed replications to the two special pleas. This was the second trial of the cause. In the first there was a finding and judgment in favor of plaintiff and upon appeal to this court we reversed the judgment and remanded the cause. (See Ziolkowski v. Continental Casualty Co., 263 Ill. App. 31.)

The part of the policy upon which defendant relies for its defense reads as follows: “Part V. Not Covered. This policy does not cover any loss . . . (3) if the injury causing it results from the intentional act of the Insured or of any other person excepting, however, assaults committed upon the Insured for the sole purpose of burglary or robbery and also excepting assaults incurred by the Insured while engaged in the proper performance of the duties of his occupation and provoked solely thereby. . . .” Upon the trial plaintiff introduced in evidence a stipulation of facts, which will be found «in our former opinion, the contract of insurance and a letter sent to plaintiff’s attorney by defendant company, which will also be found in our former opinion. Plaintiff then rested. Defendant offered in evidence an affidavit of one Peter Kulik, which will be found in our former opinion, and which was part of the proof submitted to defendant by plaintiff in support of his claim. Defendant, in the instant trial, also introduced the following evidence which was not offered in the first trial: Vincent Starybrat testified that at the time in question he was on a northbound street car and when it reached the corner of 84th and Burley he “saw two Mexican fellows” running east on Buffalo avenue, and that as soon as the car “got between Buffalo avenue and Burley avenue about 100 feet from the corner I seen a man laying on the ground between the sidewalk and the curbstone. I got off the car and went to help the man. As soon as I do that, a fellow, a Mexican, right by my garage ran away, and there was another one had a hatchet and one a big pipe. They were going after that man. That man that run away took a bunch of -bricks-and throw them through the window. The Mexican threw the bricks through the restaurant window and at that time a man was lying on the ground there. This restaurant is about 100 feet from the corner of Burley and 84th. The next thing I did was to run away from there. I went upstairs in garage and called up the station. I saw three Mexicans. One stayed on southwest corner and pointed to these two fellows what to do. They were throwing bricks and rocks and everything through the window in the restaurant. I did not observe as to what was done to the man who was lying on the street. I heard him scream, that is all. ’ ’ Walter Puchalski testified that he recalled when Joseph Sarnouski was stabbed by a Mexican; that he then had charge of his brother’s restaurant at 3245 East 84th street, between Burley and Buffalo avenues; that there were about four people in the restaurant at the time; that one of them was Casmer Pryzbylsld, a Polish fellow; that Joseph Sarnouski and Peter Kulik were not in there at any time; that Pryzbylsld was looking out of the window and called to the witness to come down, “that someone was chasing them outside. I went to the window and saw a lad fall down right in front of the place right off the sidewalk. This was Peter Kulik. I did not see anyone else on the street just then. Later saw a man in the same place. Pryzbylski and I walked out and brought this lad Kulik in. After we brought him in there was a bunch of house bricks come flying through the window of the store. Sarnouski had fallen down almost in the same place Kulik did. I didn’t see Sarnouski fall down. Mexicans threw the bricks through the restaurant window. Kulik and Pryzbylski were of Polish extraction.” Dennis O’Keefe, a police officer whose beat was in the neighborhood in question, testified that it was made up “mostly of Polish and there were quite a number of Mexican families that had moved in there. I had occasion to go to 84th and Burley along about midnight, February 30th, with reference to the stabbing of Joseph Sarnouski. I got there shortly before midnight. I was informed at the station that there was trouble there earlier in the evening. When I got there I found a man lying on the street in front of a sandwich shop and another man lying behind the counter in the same shop. The man lying behind the counter was Peter Kulik and the man in the street was Joseph Sarnouski. I had them moved to a hospital. ’ ’

The court found, as a fact, “that the assault upon insured which resulted in his death was not incurred by insured while engaged in the proper performance of the duties of his occupation and provoked solely thereby,” and plaintiff does not question this finding. It is conceded, of course, that the assault was not committed for the sole purpose of burglary. Defendant contends that the undisputed evidence establishes that the act of the Mexican who stabbed Sarnouski was intentional, and that the evidence also establishes that the assault and killing was not for the sole purpose of robbery, and that Part V of the policy does not cover a loss of life under such a state of facts. Plaintiff contends that “the assault was not intentional within the meaning of the word (intentional) as used in insurance policies,” and further that “the defendant did not prove that the assault, even if an intentional act, was not for the sole purpose of robbery.” Plaintiff argues that “in the case at bar it is admitted that the assured did not know the Mexicans. Under the foregoing authority (Mah See v. North American Acc. Ins. Co., 190 Cal. 421, 213 Pac. 42), if the Mexicans mistook the insured to have been a participant in the affair early in the evening, plaintiff would still be entitled to recover. Furthermore, it was incumbent upon defendant to prove the Mexicans actually intended to kill the insured. . . . Even assuming, for the purposes of argument, that the Mexicans were looking for some one who participated in the melee earlier in the day— and came upon the insured — an assault under the mistaken impression that the insured had participated in the earlier affair would not defeat recovery under the policy. ” Defendant argues that “the fact that insured and Kulik did not know the Mexicans would make no difference if the act of stabbing was an intentional act of the Mexican. All that was necessary for defendant to prove under the allegations in the second plea was that the injury which caused the loss of life of insured resulted from the intentional act of another person. It was not necessary for defendant to prove that the Mexican intended to kill insured, nor was it necessary for defendant to prove that the intentional act of the Mexican was directed against someone he knew or had any particular grievance against.”

In Continental Casualty Co. v. Cunningham, 188 Ala. 159, 66 So. 41, the policy provided that “where the injury causing the loss results wdiolly or in part . . . from the intentional act of "the insured or any other person . . . then . . . the amount payable thereunder would be one-fifth of the amount which otherwise would be payable under the policy.” In reversing a judgment for the full amount of the policy the court said:

“What is an ‘intentional act’ may seem a matter of very simple solution to the intelligent layman, but to the judge who is familiar with the learning of the books, and who ventures into the metaphysical subtleties which incumber judicial definition, the question is full of difficulty.

“In its present application, the phrase ought to be given that simple and common sense meaning which the parties to the contract intended it should express.

“If the actor has intelligence enough to understand the physical nature and consequences of his act, and, without the compulsion of an irresistible physical force or of an irresistible insane impulse, consciously directs his action so that the injury of the insured is the natural or probable consequence thereof, then that injury is the result of an intentional act. Of course, the injury of the person must be intended, as well as the act which causes such injury. Orr v. Travelers’ Ins. Co., 120 Ala. 647, 652, 24 South. 997. But it must always be presumed that injury which is the natural or probable result of the conscious and voluntary application of unlawful force' to the person of another was the intended result of that action. . . .

“In a number of charges given at the instance of plaintiff, and also in his oral charge, the trial judge instructed the jury in effect that the killing of Cunningham, the insured, by McGruffin, was not intentional unless McGruffin shot and killed him knowing him to be John L. Cunningham; .and also that, if McGruffin shot him believing him to be some other person, the restrictive provision of the policy was not applicable, and plaintiff was entitled to recover the full amount of the insurance.

“We are indebted to the briefs of counsel for a full and helpful discussion of this theory of the case. Upon very thorough consideration we are entirely convinced of its unsoundness. We find no warrant in the language of the policy for such a narrow and exacting construction of the phrase ‘intentional act.’ We think it is wholly immaterial whether or not Cunningham was known to MeGruffin, or whether, knowing him, McGfuffin mistook him for someone else whom he intended to shoot. If in fact, having the requisite mental capacity, he intended to shoot the human being who accosted him and threatened to obstruct his flight, his act was an intentional act, and the killing was an intentional result, no matter what he may have supposed was the name or personal identity of his victim.”

In National Life Ins. Co. of U. S. v. Coughlin, 72 Colo. 440, 212 Pac. 486, the exclusion clause provided that the policy did not cover injuries, fatal or nonfatal, which were caused wholly or in part by the intentional act of another person, and the stipulation of facts showed that the insured was on or near the premises of one Elizabeth Haskett, that some time during the evening she heard someone near the premises and thereupon she went to the back door of her home and fired her revolver into the darkness to frighten away anyone who might be around, that she did not then see insured nor anyone else, nor did she know that the insured was near, nor did she intend to kill him nor anyone else, but she did intend to fire the revolver, and in so doing she killed the insured. The sole question before the court was a construction of the exclusion provision under the stipulation of facts. In its opinion the court said:

“In this case death resulted ‘wholly or in part’ from the intentional firing of the shot, though the result thereof was not intended and could not have been foreseen, just as in another case it resulted ‘wholly or in part’ from the intentional striking of a blow, though the result thereof was not intended and could not have been foreseen. Ryan v. Continental Casualty Co., 94 Neb. 35; 142 N. W. 288, 48 L. R. A. (N. S.) 524, Ann. Cas. 1914C, 1234. In that case, the only one in point brought to our attention, the same phrase was under consideration by the court. . . . This was an ‘injury caused by an intentional act’ of Elizabeth Haskett, but it was not ‘intentionally inflicted’ by her.”

In Fernando v. Continental Casualty Co., 169 Minn. 53, 210 N. W. 634, the policy provided: “The policy does not cover any loss if the injury causing it results from the intentional act of the insured or of any other person. ’ ’ In that case the insured was killed by a shot from a revolver while engaged in a quarrel with a woman. The Supreme Court held that the evidence showed that she intended to shoot the insured and that “whether she intended to kill, and her plea indicates that she did not, is unimportant. Boone’s death was the result of an ‘intentional act’ within the policy.” In Ryan v. Continental Casualty Co., 94 Neb. 35, 142 N. W. 288, the policy provided that if the injury causing the loss resulted wholly or in part from the intentional act of the insured, or of any other person, the insurer’s liability should be one-fifth of the amount otherwise payable. There the uncontradicted evidence showed that insured was intentionally struck in the face by another person, who did not intend to kill him, and that the assured fell backward, striking his head on the pavement and fatally fracturing his skull, the injury to his face by the initial blow not being serious, and the court held that under the policy and the facts the plaintiff’s recovery was limited to $100. (See also Continental Casualty Co. v. Klinge, 82 Ind. App. 277, 144 N. E. 246.)

Plaintiff contends that defendant’s contention is conclusively disposed of by the case of Nalty v. Federal Casualty Co., 245 Ill. App. 180, wherein the policy provided: “In the event of death, . . . due wholly or in part to, or resulting directly or indirectly from, injuries intentionally inflicted upon the assured by himself or by any other person; . . . —then in any such case referred to in this paragraph, the limit of the company’s liability shall be twenty per cent of the amount which would otherwise be payable under this policy.” The insured, Nalty, and Johnson were police officers. The following is the court’s statement of the testimony of the appellee, wife of Nalty: “Appellee says that soon after midnight on July 21,1922, she was standing at her window looking down on the street to see if her husband was coming and that she saw him at the hotel corner; that while she was looking at him three men came out of the hotel and as he advanced toward them they began shooting from both hands; that other people were on the corner besides Mr. Johnson and her husband; that the men who did the shooting were facing the people on the corner and shooting at them or in that direction. She says that her husband had no gun in his hand before or after the shooting began; that he was shot three times before he fell and was not shot after he fell and that so far as she knew her husband was not acquainted with the men who did the shooting. ’ ’ The court held that the parties contracted with reference to the actual intention of the slayer and not the intention which the law presumes against a wrongdoer, and the court quotes with approval from Travelers’ Protective Ass’n v. Fawcett, 56 Ind. App. 111, the following:

“ ‘The question arises under a contract by which it was stipulated that the association should not be liable on account of injuries intentionally inflicted on the assured by any other person. “Intentional injuries” inflicted on the assured by some other person, within the meaning of this contract refers to injuries which the other person actually directed against the insured and intended to inflict upon him. The parties contracted with reference to the actual intention of the person inflicting the injury, rather than such an in- . tention as the law presumes as against a wrongdoer. . . . In such a case if an act is shown which would naturally and reasonably result in injury to some one of several persons, it may be presumed that the author of the act intended to injure some one, but it can not be presumed, as against any one except the author of the act, that he intended the injury for the particular person who received it.’ ” (Italics ours.)

The court, in passing upon the testimony, said:

“We cannot say that the court was not warranted in ' finding that appellant failed to prove that the slayers of the insured actually intended to kill him. The court could reasonably find that their real intention was to avoid arrest and incidentally to injure the officers as an aid to their escape. If the court believed the testimony of appellee in preference to that of Mr. Johnson it could very well find that shooters were firing at or toward a number of persons on the corner and that their fire was not directed especially at the insured. ’ ’

In the Nalty case the court also cites the case of Mah See v. North American Acc. Ins. Co., supra, also cited by plaintiff, wherein the policy contained the following proviso: “This policy is issued upon condition that the company assumes no liability hereunder should the accident, injury, disability, death, loss of limb or sight, result wholly or in part directly, or indirectly, from injury intentionally inflicted on the insured by any person.” (Italics ours.) The defendant therein contended "that the evidence did not support the finding of the trial court that “it is not true that the death of said Fong Wing was caused wholly or directly by personal injury intentionally inflicted upon him. ’ ’ In its opinion the court said:

“It is apparent from the evidence that the person who did the shooting was at the time aiming at Fong Wing, and that the shots killed him. ■ He was killed by someone who either intended to kill the said Fong Wing, or who intended to kill some other person and shot at Fong Wing, believing at the time that he was such other person. In the former event, the company clearly would not be liable and its counsel contend that the same result would follow the latter event. They argue that the person killed was the one at whom the shots were aimed, and that when it transpires that he was in fact the insured, it follows that the injury was ‘intentionally inflicted on the insured.’ We cannot adopt this view. . . .We conclude, therefore, that the concurrence of the three elements is requisite to render the proviso operative: (1) an intention to injure, (2) directed at the insured, Fong Wing, and (3) the infliction of injury upon him. From this it follows that the company is not excepted from liability if the person who shot Fong Wing intended thereby to shoot some other person.”

The court, in passing upon the evidence, said:

“It is apparent from the evidence that the person who did the shooting was at the time aiming at Fong Wing. From this, either one of two conclusions could be drawn, either that the shooter knew and recognized Fong Wing and intended to shoot him, or that the shooter intended to shoot someone else and mistook Fong Wing for that other person. The evidence discloses nothing to indicate whether the shooting was done from close at hand or from a great distance. It does show without contradiction that it occurred after dark; that the street lamps were burning, but that ‘it was not very light’ at the point where Fong Wing fell. Cases of mistaken identity are of the commonest occur-pence in every-day human experience even under the most favorable circumstances of light, proximity, and unobstructed vision. Even though it may appear to our minds more probable that the one who did the shooting intended to shoot Fong Wing, and that, therefore, the trial court should have found in favor of the defendant upon this issue, it was not compelled to so find under the evidence.”

Plaintiff also cites General Accident, Fire & Life Assur. Corp. v. Hymes, 77 Okla. 20, 185 Pac. 1085; Newsome v. Travelers Ins. Co., 143 Ga. 785, and Travelers Protective Ass’n v. Fawcett, supra, but it is sufficient to say, in reference to the same, that in each case there was a proviso that-there was no coverage if death resulted from injuries intentionally inflicted on the insured by another person.

After a very careful consideration of the instant question we have reached the conclusion that the contention of defendant that under the undisputed evidence the act of the Mexican was intentional within the meaning and intent of Part V of the policy, must be sustained.

There remains the further question as to whether or not the evidence establishes that the assault and killing was not for the sole purpose of robbery. Defendant admits, as it must, that the burden was upon it to establish this defense, but it strenuously contends that the only reasonable deduction from the evidence is that robbery was not the sole purpose of the assault and that therefore the judgment should be reversed without remanding the cause. While this contention of defendant is not without some force, we have reached -the conclusion that justice requires a retrial of this cause. Upon the trial plaintiff relied, apparently, upon his main contention that the assault was not intentional within the meaning of the policy, and did not deem it necessary to introduce any evidence in rebuttal of that offered by defendant to sustain its defense that robbery was not the sole purpose of the assault, and upon another trial plaintiff may be able to offer additional evidence bearing upon that defense. This is the second new trial awarded defendant, and even-handed justice demands that plaintiff be given another opportunity to meet that defense.

The judgment of the superior court of Cook county is reversed and the cause is remanded.

Reversed and remanded.

G-ridley and Sullivan, JJ.., concur.


text:
    Leonard Hempstead, Appellee, v. Toledo Scale Company, Appellant.
    Gen. No. 36,232.
    Opinion filed April 11, 1933.

      Cassels, Potter & Bentley, for appellant; Ralph F. Potter, Leslie H. Vogel and E. Douglas Schwantes, of counsel.
    Leopold Saltiel and Richard D. Brown, for appellee.
   Mr. Presiding Justice Scanlan

delivered the opinion of the court.

Leonard Hempstead sued Toledo Scale Company, a corporation, and Antonio Camboni in case. At the commencement of the trial plaintiff dismissed his action against Camboni. A jury returned a verdict finding the remaining defendant guilty and assessing plaintiff’s damages at the sum of $1,300, and Toledo Scale Company has appealed from the judgment entered upon the verdict.

Plaintiff sued to recover damages for injuries sustained when he was struck by an automobile operated by Camboni. Toledo Scale Company (hereinafter called appellant) raises but one contention, viz: “The evidence not only failed to show that Camboni was an agent or servant of the defendant, but, on the contrary, the proof clearly establishes that Camboni was an independent contractor for which reason the court erred in refusing to allow the motions and give the instructions requested at the close of the plaintiff’s case and renewed at the close of all the evidence.”

The only testimony that bears upon the relationship that existed between appellant and Camboni is that of the latter, who was called by plaintiff as a witness. From his evidence the following facts appear: About three years prior to the time of the accident appellant “engaged” him to sell scales for it in the following territory: From the Chicago river on the east to the Cook county line on the west, and from 12th street on the south to Chicago avenue on the north. He was given the exclusive right to sell appellant’s scales in that territory. He received no salary and no allowance for expenses of any kind, and his only compensation was commissions on sales made by him. At the time he was engaged he owned an automobile, but no reference was then made to that fact, nor was there ever any agreement that he should operate it in the performance of his work; nor did appellant ever control or direct, in any way, the operation of the car; nor did it ever pay him any expense money for the upkeep or maintenance of it, but it knew that he used his automobile in his work. No one connected with appellant ever gave him any directions in reference to the manner in which he was to do his work. He located his own prospects and followed his own method of making sales, or, as he expressed it, he “acted in accordance with his own ideas.” He had no regular hours for work and the time he devoted to it was entirely within his control. He testified that some time after he commenced selling scales several of the older salesmen suggested to the younger salesmen that it would be a good idea for all the salesmen to have morning meetings at which they might discuss “things for advancing the interests of the salesmen of the Toledo Scale Company in Chicago”; that the salesmen voted to have such meetings but that attendance was not compulsory; that he sometimes attended the meetings; that sometimes he went to the office of appellant before starting his work, and sometimes he “started to work directly from his home.” He did not report to anyone at the office, but “once a week, maybe twice, and maybe once a month, ’ ’ he talked over the telephone with the switchboard operator and asked her if she had any messages.for him; that sometimes “the office” gave him the names of people “they thought were in the market for a Toledo scale” in his territory. He further testified that a former supervisor of defendant employed Mm. “Q. (Mr. Brown, attorney for plaintiff): Who was your superior or immediate supervisor? What is his title? The Witness : A Manager of the Chicago office. Q. And what was the arrangement under which you worked? A. On a commission basis. ’ ’ He further testified that sometimes, when he felt so inclined, “for the accommodation of the customers,” he delivered scales to them or took scales back from them to appellant’s office; that he was not directed by appellant to do this. It is conceded that at the time of the accident he was using his automobile and was on his way to visit a prospective customer.

In Ferguson & Lange Co. v. Industrial Com., 346 Ill. 632, 635-637, the court said: •

“It is impossible to lay down a- rule by which the status of a person performing a service for another can be definitely fixed as an employee or as an independent contractor. Ordinarily no single feature of the relation is determinative but all must be considered together. (Bristol & Gale Co. v. Industrial Com., 292 Ill. 16.) An independent contractor has been defined as one who renders service in the course of an occupation and represents the will of the person for whom the work is done only with respect to the result and not the means by which that result is accomplished. (Hartley v. Red Ball Transit Co., 344 Ill. 534; Lutheran Hospital v. Industrial Com., 342 id. 325; Besse v. Industrial Com., 336 id. 283; Bristol & Gale Co. v. Industrial Com., supra.) It also has been said that if the person for whom the service is rendered retains the right to control the details of the work and the method or manner of its performance, the relation of employer and employee exists. (Hartley v. Red Ball Transit Co., supra; Nelson Bros. & Co. v. Industrial Com., 330 Ill. 27.) The right to control the manner of doing the work is an important if not the principal consideration which determines whether the worker is an employee or an independent contractor. Lutheran Hospital v. Industrial Com., supra; Besse v. Industrial Com., supra; Nelson Bros. & Co. v. Industrial Com., supra; Best Manfg. Co. v. Peoria Creamery Co., 307 Ill. 238; Bristol & Gale Co. v. Industrial Com., supra; Meredosia Levee and Drainage District v. Industrial Com., 285 Ill. 68.

“The defendant in error issued cards showing that his business was hauling cinders; he owned the horses and wagon which he used in conducting the business; he defrayed the cost and expense of maintaining his horses and of keeping his equipment in repair; he sold the horses he bought from Kammerlander and purchased other horses as well as a new wagon; he employed assistants whenever necessary; he was free to do hauling for others and when ill he substituted another person in his stead. In his arrangement with the foundry company no hours were fixed for the rendition of his service; he began and quit work when he desired; he delivered the waste material to places of his own selection and when he sold a load of cinders he was neither obliged to report the sale nor to account to the plaintiff in error for it. The foundry company did not concern itself with the details of the work in which the defendant in error was engaged; the time and manner of performance were left to the latter’s discretion and his responsibility to the plaintiff in error was for the result which it sought to obtain. The fact that occasionally, when dirt and cinders had accumulated in the yard of the foundry to a considerable extent, the defendant in error was requested to remove the waste materials from a particular part of the yard before attention was given to another part is inconsequential. Such requests were made to avoid interruption of the foundry company’s business; they did not affect either the manner of performance or the disposition of the materials and they constituted no such control as would warrant a finding that the relation of master and servant existed. (Meredosia Levee and Drainage District v. Industrial Com., supra; Gallagher’s case, 240 Mass. 455.) When all the facts and circumstances are considered, it is manifest that the defendant in error performed the service of hauling free from control or supervision by the plaintiff in error. He was an independent contractor at the time he was injured and is therefore excluded from the provisions of the Workmen’s Compensation act. Nelson Bros. & Co. v. Industrial Com., supra; LaMay v. Industrial Com., 292 Ill. 76; Meredosia Levee and Drainage District v. Industrial Com., supra.”

While our Supreme Court has often stated the general principles that should be applied in determining whether a person is a servant or an independent contractor, so far as we are aware, it has not been called upon to pass upon a case involving facts similar to those in the instant case, but in the late case of Meece v. Holland Furnace Co., 269 Ill. App. 164, the Appellate Court for the third district held that a salesman was not the servant, but a subcontractor, of defendant company, which was sued for injuries sustained by plaintiff when struck by the salesman’s automobile, when he was paid for his services on a commission basis, paying his own expenses, and defendant had no control whatever over him in the prosecution of his work, nor the method of locomotion which he might select, and was only interested in the results of his work. In Pyyny v. Loose-Wiles Biscuit Co., 253 Mass. 574, it appeared that one Bancroft, a traveling salesman for defendant, “ ‘had no regular hours to work; his time is his own and the trade that he can see any time at all during the twenty-four hours a day, he tries to see them’; that he owned the automobile that was in the collision and used it in his business as traveling salesman; that his sole business was to sell biscuits for the defendant; that he was paid a salary and commission and the expense of operating the car; that he always carried a sample case and advertisements in the back of his Ford coupe car and they were in the car at the time of the accident.” The court held that Bancroft was his own master in respect to the management and control of the automobile that struck and injured the plaintiff, and judgment was entered for the defendant. In Barton v. Studebaker Corp. of America, 46 Cal. App. 707, 189 Pac. 1025, the court held that the driver of an automobile, by whose negligent driving of his car plaintiff was injured, was not a servant of the defendant, but an independent contractor, as it appeared that he was a salesman on commission; that the defendant had no authoritative control over him in respect to the manner in which the details of the work were to be performed, except the right to require him to conform to its instructions in his representations as to the cars, that is, no complete control, and that it was immaterial that he used the rooms of the company’s plant for showing machines to prospective customers, or that his authority to act for it was evidenced by its card, on which his name was printed. In Aldrich v. Tyler Grocery Co., 206 Ala. 138, 140, the court states:

“Shook (whose car ran into the plaintiff) was the grocery company’s ‘city salesman.’ He alone owned and maintained the automobile causing the injury. He ■was compensated on a commission basis. He was paid a percentage on orders taken and accepted. He received payment of bills due the grocery company and delivered such payments to it. The grocery company was only concerned in the result of his efforts as salesman. It did not control when, how, or where he secured these orders, except he was not to work another salesman’s trade in the territory he (Shook) was entitled to work. The method, means, and occasions of his calls upon the trade was left entirely to him, uncontrolled by the grocery company. The facts that he was lame, that the company knew this fact, that the company knew when he first was engaged that he would and did afterwards visit the trade in a car of his own, maintained alone by him, and that on this occasion Page, his associate or successor as city salesman, was in the car when the injury occurred, did not ' operate, singly or otherwise, to change Shook’s relation from that of an independent contractor to a servant to the grocery company as master in the operation of Shook’s automobile on this occasion.”

In James v. Tobin-Sutton Co., 182 Wis. 36, 37, 38, the court states:

“We have reached the conclusion that upon the undisputed evidence the law declares him (Sovic, the driver of the automobile) to have been an independent contractor at the time of the collision, for whose acts the Tobin-Sutton Company was not liable. The evidence shows that the Tobin-Sutton Company was a retail seller of Ford automobiles and accessories and employed seven or eight salesmen, one of whom was Sovic, who sold automobiles on a commission basis. They received no salary, but a limited checking account was advanced them which was absorbed by commissions when earned. All salesmen were required to report to the Tobin-Sutton office at 8 o’clock each morning, when the previous day’s work was discussed and suggestions or criticisms were offered and prospect cards were handed out to them. After- they reported each morning they could go where they pleased and sell cars anywhere within Milwaukee county. The Tobin-Sutton Company exercised no direct control over them. Each salesman was required to own and operate a Ford car for demonstration purposes. He had to pay for the car and its maintenance, but if he paid cash he got a slight discount for gas, oil, and repairs if purchased or made by the Tobin-Sutton Company. They were not required to buy gas or oil from or have repairs made by the Tobin-Sutton Company. After reporting at 8 o’clock each salesman controlled his day’s work in all respects, both as to length of time he would work, where he would go, and the manner of effecting sales. The salesman could come back to the Tobin-Sutton office at any time, and they often came back in the evening but not for orders or suggestions, but for their own purposes, convenience, or pleasure.” Plaintiff, in support of his contention that Camboni was a servant or agent of appellant and not an independent contractor, cites Marchand v. Russell, 257 Mich. 96; Brown v. Leppo, 194 Ill. App. 243, and Hoelker v. American Press, 317 Mo. 64, 296 S. W. 1008. In Marchand v. Russell, supra, the alleged independent . contractor was controlled by the defendant as to the details of his work and the manner of doing the same; he was paid $100 a week, which included his expenses, and if his sales exceeded a certain amount he received a commission; he was obligated to travel from place to* place, to call on dealers, collect accounts due the company, to establish new dealers wherever possible, and to promote the sale of the company’s products. Sometimes an official of the company accompanied him on his calls. Brown v. Leppo, supra, is entirely dissimilar from the instant case upon the facts. In Hoelker v. American Press, supra, the court held that under the facts the inference could reasonably be drawn “that right of control of the means was assumed and exercised by the defendant,” and that under all the circumstances the question as to whether or not the operator of the motorcycle was an independent contractor or an employee of the defendant was a question for the jury. From a reading of the evidence in that case it is plain that the plaintiff made out a prima facie showing that the defendant retained the right to control the details of the work and the method of its performance.

Plaintiff contends that the evidence shows “that the defendant could at any time discharge their salesman, Camboni, or change his territory and hire another man in his place. This, if nothing else, clearly determines the question whether or not the relation of master and servant or principal and agent existed between the defendant and Camboni.” In support of this contention plaintiff cites Densby v. Bartlett, 318 Ill. 616. The question presented in that case was whether the driver of the car was an employee of one defendant or the other, and the court held that a party who hires, for the use of his customers in the real estate business, an automobile and driver from one who is engaged in the business of loaning cars and drivers' for hire, does not become responsible for the negligence of the driver as his servant where he does not have the right to discharge the driver and does not hold himself out as owner of the car and master of the driver; and that the fact that the hirer has the right to direct the driver when and where to go, whom "to haul, and the route of travel, does not place the driver under the control of the hirer in the relation of master and servant. In its opinion the court said (p. 628) :

“The driver, while performing a special service for appellant was performing work of his employer, Saracino, within the scope of his employment, viz., driving cars for persons who hired them from his employer. ... In this case appellant was not authorized to discharge a reckless driver and replace him with another driver. At most he could dismiss the car and driver. ’ ’

The court further stated the general rule that the relation of master and servant does not exist unless it includes the right to discharge. In the instant case the testimony of Camboni fails to show whether the arrangement between him and appellant was for a definite or an indefinite period of time, nor does it affirmatively show any right in appellant to arbitrarily terminate the arrangement with Camboni. The “arrangement” between Camboni and appellant did not constitute a mere hiring of a servant as the term “hiring” is ordinarily used, but it was in the nature of a contract or agreement by which Camboni was given the right to sell, upon commission, the goods of appellant within a prescribed territory, his right in that regard being free from control or supervision by appellant; and even if we assume that appellant had the right to arbitrarily terminate the agreement, that fact could not, under the undisputed other facts of this case, determine the relationship between Camboni and appellant to be that of employee and employer, as plaintiff contends. As stated in James v. Tobin-Sutton Co., supra:

“The relation of the driver of an automobile who is selling goods on commission to the owner of the goods or to his employer is one peculiar to itself and has received construction in a number of cases. See note in 17 A. L. E. 621. In this class of cases, also, the final test is the degree of control which the employer has retained or exercised as to the manner in which the details of the work are to be done. If that is all left to the salesman he is an independent contractor. Aldrich v. Tyler G. Co., 206 Ala. 138, 89 South. 289, 17 A. L. R. 617; Barton v. Studebaker Corp., 46 Cal. App. 707, 189 Pac. 1025; Premier Motor Mfg. Co. v. Tilford, 61 Ind. App. 164, 111 N. E. 645.”

After giving the question involved in this appeal very careful attention, we have reached the conclusion that under the undisputed evidence in this case Camboni was not a servant of appellant, but an independent contractor, and that the court therefore erred in refusing to give the instructions directing a verdict for appellant requested at the close of plaintiff’s case and renewed at the close of all the evidence.

The judgment of the circuit court of Cook county must be reversed, and it is so ordered.

Reversed.

Gridley and Sullivan, JJ., concur.