text:
    Margaret E. Horrie, Executrix Under the Last Will and Testament of C. B. Horrie, Deceased, Defendant in Error, v. The Industrial Casualty Insurance Company of Bloomington, Plaintiff in Error.
    Gen. No. 8,757.

      Opinion filed October 13, 1933.
    Richard F. Dunn and Hall, Martin, Hoose & DePew, for plaintiff in error; Edward Barry, Jr., of counsel.
    Costigan & Wollrab, for defendant in error.
   Mr. Justice Davis

delivered the opinion of the court.

C. B. Horrie in his lifetime recovered judgment in the sum of $1,033.17 in an action of assumpsit for indemnities accruing under an accident insurance policy, issued by the Industrial Casualty Insurance Company, after which he died and defendant in error was substituted as plaintiff.

The policy of insurance is dated May 19, 1930, and plaintiff was insured against loss of life, limb, sight or time, resulting directly and independently of all other causes from bodily injury sustained through purely accidental means, during the term of the policy, subject to the provisions and limitations therein contained.

Part C of policy is as follows, “Total accident disability $100.00 per month for life.” “If such injuries, as described in the insuring clause, shall wholly and continually disable the insured from the day of the accident from performing any and every duty pertaining to his occupation for one day or more, and so long as insured lives and suffers said total loss of time, the company will pay a monthly indemnity at the rate of $100.00.”

The defense of the plaintiff in error is that the total disability of Horrie did not result directly and independently of all other causes from the bodily injuries received by him.

From the evidence it appears that in August, 1930, the assured discovered that he was passing blood in his urine, and in October of that year one of his kidneys was removed.

Doctors Wellmerling, Sloan and Meyer participated in the operation.

Dr. Sloan testified that they found a large capsulated tumor within the kidney, and that there was nothing infected except the tumor that was inside of the capsule of the tumor. By capsulated was meant that there was a definite line of demarcation between the tumor mass and the rest of the kidney, the rest of the kidney being distended and covering it; the capsule of the kidney had not been punctured. The pedicle of the tumor was clamped, and not only the malignant tumor but the entire kidney structure surrounding it was removed, so that there was practically no danger of return or extension to another part, because it was possible to remove the malignant growth.

Dr. Wellmerling testified that they found a tumor of the right kidney; that the capsule of the kidney was all intact so far as they could determine at the time of removal.

Mr. Meyer testified that when the kidney was removed he cut through it in order to see if he could determine where the hemorrhage came from, and there was a mass in the substance of the kidney perhaps as large as a nickel, and of a different color. We all agreed at once it was a malignancy that existed in the kidney; it was entirely confined to the kidney, and not even in contact with the capsule of the kidney. The kidney appeared to be enlarged. It is generally agreed that metastasis cannot result until there is regional infection, and there was no evidence of such infection.

On January 1, 1931, Horrie returned to work and continued until March 12th of that year, when he was walking along the street and slipped on the ice and fell and fractured his left hip. The fracture was of a very ,severe character, being a comminuted fracture; little pieces of bone were broken off, in addition to the break, and caused complete disability. There was no evidence of carcinoma at the time the fracture occurred. Horrie remained in the hospital until July 2, 1931, when he returned home, but was never able to bear his weight on his left leg even with the aid of crutches. About the latter part of September, 1931, he suffered a spontaneous fracture of the femur of the right leg, which, upon examination, disclosed was caused by a malignant growth or cancer.

About two weeks after this a swelling developed in the left hip; and in about three or four months, after the fracture of the right femur, it was noticed that the left hip had greatly enlarged and cancer had developed at the point of the fracture.

The suit is brought upon the theory that the cancer in the left hip was the result of the accidental fracture thereof; and is defended on. the theory that the disability was the result of malignant cancer of the right femur and the left hip, not caused by any accidental means but caused by the metastasis or extension of the primary carcinoma of the kidney to those parts of the body.

Metastasis is defined by the surgeons as a portion of a proliferating growth that gets into the blood stream or lymphatics and is carried to some other portion of the body, broken loose from its original attachment and attaches to some other portion of the body, and grows at that point.

The evidence of the plaintiff tended to prove that the assured was susceptible to cancer, as evidenced by its appearance in the kidney and the right leg; that irritation of the tissues is a common cause of cancer; that the constant irritation from the sharp fragments of the broken and splintered bones of the hip could cause the cancerous growth there, and that if he had broken any other bone, the probability is that a malignant growth would have developed at the point of fracture on account of the predisposition of the assured to cancer, and that the malignancy which developed in the left hip was a primary growth and was not caused by metastasis; that the possibility of the latter causative was remote.

The evidence of the physicians who testified for plaintiff in error was chiefly to the effect that the cancer in the left hip could have been caused by metastasis; one witness placed the chances of such being the case at 50-50. It would be useless to discuss the testimony of each of the expert witnesses on this subject.

We have carefully considered the evidence in this case, however, and conclude that the testimony of the operating surgeons that the infected kidney was removed together with all of the malignant tissues in connection therewith; that the malignant growth therein was of recent origin; that in their opinion no metastasis could have originated from the kidney region; that the cancer in the left hip was at the site of fracture; that the fracture was such as caused irritation, as shown by the photograph, and by excessive pain and that irritation is a well-known cause of cancer; that said cancer in the left hip was primary and not a metastasis, is prima facie evidence that the fracture was the primary cause of the cancer. Whether this prima facie case was overcome by the expert testimony, given by the witnesses for plaintiff in error, was a question of fact for the jury to determine; and we would not be justified in reversing their judgment under these circumstances.

There is criticism of the arguments of counsel to the jury. In one instance on objection the court instructed the jury to disregard the statement; and as to the others, the remarks were not of such a character as would constitute reversible error.

The second refused instruction, offered by plaintiff in error, informs the jury that before they can find • the issues for the plaintiff, they must find, from a preponderance of the evidence, that the total disability resulted from bodily injury sustained through purely accidental means, directly and independently of all other causes. This instruction follows the language of the policy, but without modification is misleading. If a cancer in the left hip was caused by and was the direct result of the fracture thereof, then a liability was created under the terms of the policy. Central Accident Ins. Co. v. Rembe, 220 Ill. 151; Crandall v. Continental Casualty Co., 179 Ill. App. 330; Hibbs v. United States Fidelity & Guaranty Co., 262 Ill. App. 279; Sturm v. Employers’ Liability Assur. Corp., 212 Ill. App. 354; United States Health & Accident Ins. Co. v. Harvey, 129 Ill. App. 104. The same criticism applies to the 13th refused instruction. Refused instruction 4 has been held to be erroneous in a number of cases. Chicago Union Traction Co. v. Hampe, 228 Ill. 346; Elgin, J. & E. Ry. Co. v. Lawlor, 229 Ill. 621; Lyons v. Ryerson & Son, 242 Ill. 409.

Refused instruction 6 attempted to define the words, “preponderance of evidence.” It has been held that these words are in the same category as “reasonable doubt,” and require no technical explanation or elaboration, as every person of reasonable intelligence knows what they mean. Chicago City Ry. Co. v. Kastrzewa, 141 Ill. App. 10; Ledford v. Hartford Fire Ins. Co., 161 Ill. App. 233.

This suit is to recover payments for total disability from September 12, 1931, to August 15, 1932; and it is conceded that, if plaintiff could' recover at all, the amount found by the jury is correct.

In our opinion there is no reversible error in the record, and the judgment is affirmed.

Judgment affirmed.


source: Caselaw Access Project

author: Mr. Justice Davis

license: Public Domain

text:
    Oscar Nelson, Auditor of Public Accounts of the State of Illinois, Complainant, v. John B. Colegrove & Company State Bank et al., Defendants. Bank of Commerce Liquidating Company, Appellant, v. R. Digby Large, Receiver of the John B. Colegrove & Company State Bank, Appellee.
    Gen. No. 8,775.
    Opinion filed October 13, 1933.
    Provine & Williams, for appellant.
    Oscar J. Putting, for appellee.
   Mr. Justice Davis

delivered the opinion of the court. On October 11, 1929, Oscar Nelson, auditor of public accounts by virtue of the authority conferred upon him by the statute, closed the John B. Colegrove & Co. State Bank, and took possession of its assets and appointed Robert Gr. Earley receiver, whose appointment was confirmed by the circuit court of Christian county. He subsequently resigned as such receiver, and H. Digby Large, appellee, was appointed receiver in his stead.

Prior to its suspension said bank borrowed from appellant the sum of $35,000, and executed and delivered its note for the same, and secured said note by pledging with appellant a large number of its customers’ notes as collateral security of the aggregate face value of $101,505. .

On July 5, 1930, appellant filed with the receiver of the John B. Colegrove & Co. State Bank proof of its original claim in the sum of $13,364.33, prior to which time and subsequent to the suspension of said bank it had sold and liquidated all of the collateral security held by it. Appellant, by leave of court, filed its amended claim in the sum of $35,000 on January 12, 1933, and attached to said claim a memorandum stating that the claim was based upon the amount due claimant from the John B. Colegrove & Co. State Bank, at the time of the suspension of the State Bank, evidenced by the promissory note of $35,000 dated July 15,1929, due October 15,. 1929; that no part of the principal had been paid prior to the suspension of said bank, and no part thereof had since been paid by said bank or by the receiver thereof; that the note was secured by the pledging by said bank of certain of its customers’ notes as collateral security, and out of the collection and sale of said collateral notes claimant received a total of $21,862.67, leaving a balance then due of $13,137.33; that notwithstanding the receipt by claimant of said payments from the collateral notes held by it, it is entitled to have its claim allowed in the full amount due at the time of the suspension of said bank, to wit, in the sum of $35,000.

The proof shows that at the time the bank closed its • doors there was due appellant on said note the sum of $35,000, and that between that time and July 5, 1930, the date upon which it filed its original proof of claim, it had received by the collection and sale of the collateral securities the sum of $21,862.67, o and appellee contends that said sum should be deducted from the total amount of the claim before its allowance, and that the claim should be allowed in the sum of $13,137,33.

The circuit court entered a decree in which it found that the claimant, the Bank of the Commerce Liquidating Co., should be allowed a general claim in the amount of $13,137.33 against said John B. Colegrove & Co. State Bank, and that claimant was not entitled to the allowance of a claim in the sum of $35,000, and ordered that claimant be allowed a general claim against said bank in the sum of $13,137.33, to be paid in the due course in the general liquidation of said bank.

. The only question to be determined is whether appellant shall participate in dividends upon the basis of the amount due at the time of the suspension of the bank, to wit, the sum of $35,000, or upon the basis of the amount due after the liquidation of the collateral held by it to secure said note, to wit, the sum of $13,137.33.

This exact question seems never to have been determined in this State in so far as it applies to claims against insolvent banks, and while similar questions have been determined in cases growing out of the administration of estates, proceedings in bankruptcy and assignment for the benefit of creditors, it is claimed that such decisions were more or less based upon statutory enactments and not controlling as to the question here involved. The question is as to whether the reasoning and principles laid down in the determination of those cases should be applied here, or were such decisions so far influenced by legislative enactments as to be of so little value that the question here involved should be treated as one of first impression in this State. While there are very few cases that have been considered by our Supreme Court where the questions determined were in any way analogous to the one here involved, yet in each instance the court has consistently adhered to the rule first announced.

Our attention is first called to the case of In re Bates, 118 Ill. 524. In that case Sower Bros, on July 2, 1883, made a trust deed upon certain real. estate to secure three notes to Anna G. Paddock; on April 26, 1884, they made an assignment for the benefit of their creditors; Anna G. Paddock, appellee, filed her claim with the assignee for the full amount thereof. The assignee filed his report in the county court, showing that the total claims filed, including the claim of appellee, amounted to $14,423.58, and that the total amount in his hands subject to distribution was $5,162.65; that appellee’s claim amounted to $1,043.33, and that the property described in the trust deed was worth only $765.75. The county court ordered the assignee to pay her dividends only on the excess of her claim over the $765.75 until her rights in the mortgaged property should be determined and realized upon. On appeal to the circuit court this order was affirmed. The Appellate Court reversed the decision of the circuit court, and directed that an order of distribution be entered giving appellee a dividend upon the full amount of her claim, and the Supreme Court affirmed the Appellate Court and held that in the settlement of an insolvent estate the creditor has a right to prove his claim for the full amount due and to receive dividends thereon even though his claim is a secured one. In this case, however, nothing had been collected upon the collateral security prior to the presentation of the claim.

In the case of Furness v. Union Nat. Bank, 147 Ill. 570, the bank filed a claim in the probate court of Cook county against the estate of the deceased, which was secured by certain collateral notes that had not been realized upon. The claim was tried by the probate court and taken under advisement, and while so under advisement the bank disposed of the collateral and realized an amount equal to about one-third of the claim. The allowance made by the probate court was for the balance of the claim as filed and proved upon the hearing, after deducting the net amount realized from the collateral.

When the case reached the Supreme Court it was held that when a creditor, holding a claim secured by a collateral against an insolvent estate of a deceased person, filed and proved his claim for the full amount, and after it had been filed and proved realizes from his collateral a sum which is less than the whole amount of his claim, is entitled to a dividend upon the whole amount of his claim as proven:

The court further held that the right to sue on the debt and the right to enforce the security are concurrent rights, and proceedings to enforce both of them may be prosecuted until they are paid in full. It was, however, said: “Of course, this right is subject to the condition that the whole amount of his claim is due to him when he files and proves it. If he has realized upon his collateral before filing* and proving his claim, he voluntarily parts with the double right secured to him by the law and can only proceed for what is actually due to him, that is to say, for what remains of his claim after deducting the amount realized from the collateral.” .

Appellant contends that no such question was involved or presented for decision in the Furness case, and that the above quotation from the opinion was in no way necessary to the decision of the case. We are of the opinion that this is not strictly true, as what was said was a part of and explanatory of the rule announced, and this must be true as this same language is quoted with approval in a later case. Levy v. Chicago Nat. Bank, 158 Ill. 88.

In the case of Levy v. Chicago Nat. Bank, 158 Ill. 88, the rights of a creditor to participate in the estate of an insolvent debtor is involved. Herman Schaffner & Co. made an assignment for the benefit of creditors on June 3, 1893, at which time they were indebted to the Chicago National Bank in the sum of $100,000. The bank held as collateral security for this indebtedness certain customers’ notes. On September 9, 1893, the day that the bank filed proof of its claim, it had collected upon the collateral security the sum of $66,012.88. ■ This sum consisted of various amounts paid by the.makers of the collateral notes at different times between June 3,1893, the date of the assignment, and September 9, 1893, the day of the filing of the claim. Nothing had been paid on these notes, held as collateral, at the time the assignment was made.

The county court allowed the bank to participate in the dividends on the basis of its claim as it stood on the day of the assignment. This order of the county court was affirmed by the Appellate Court. Upon appeal the Supreme Court, in reversing and remanding the judgment of the county court, said: “The county court erred in not deducting from appellee’s claim the amounts collected from the collateral notes prior to the day on which the proof of claim was filed, to-wit, September 9, 1893.”

In this case the question was directly presented to the court whether the bank was entitled to receive dividends on the amount of its claim as it existed on the day of the assignment or on the amount of the debt as it existed on the day of the filing of the proof of claim. The court held that the proper basis was the amount due at the time the preliminary proof of the claim was filed and not at the date of the assignment.

The court, in the Levy case, after having reviewed a number of authorities, said: “Our conclusion is, that the amount, upon which the secured creditor is entitled to receive dividends from the assets of the insolvent estate, is the amount actually due to the creditor when he files his proof of claim, or presents his claim under oath; that the subsequent hearing upon objections or exceptions should be directed to the inquiry as to what was due at that date; that the amount due at that date is to be ascertained by the deduction from the principal debt of all payments made before that date, whether realized from collaterals, or otherwise, but that amounts realized from collaterals after that date are not to be deducted, subject always to the qualification that the dividends received from the general assets, and the amounts realized from the collateral security, shall not together exceed the amount due the creditor upon his claim. ’ ’

The estate of the John B. Colegrove & Co. State Bank • was being administered under a receivership, and was an insolvent estate, and the rule announced in the above case applies equally to all insolvent estates, and we can see no reason why it should not be applied in the adjudication of claims against the estate of insolvent banks. The fact that the rule may be in conflict with the one adopted by other jurisdictions is no reason for its abandonment and the adoption of another and a different rule. The doctrine of stare decisis should be enforced whenever possible, especially as to the business and commercial relations of the country in order to maintain stability therein.

The decree of the circuit court is affirmed.

Affirmed.


author: Mr. Justice Fulton

text:
    Minnie Moore Seaman and Emma Seaman, Appellees, v. Florence A. Poorman et al. Appeal of Nell Shrontz, Appellant.
    Gen. No. 8,646.

      Opinion filed October 13, 1933.
    Hunter & Minor, for appellant.
    Donald B. Craig, Fred H. Kelly, James W. Craig, Jr., and James Craig Van Meter, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

Appellees filed a bill for the partition of certain real estate .in Coles county, Illinois, on June 11, 1931, directed to the October term 1931, of the circuit court of said county. On June 27, 1931, the appellant, Nell Shrontz, a sister of appellees, and one of the defendants to the original bill, filed a plea setting forth a contract which was entered into between the then owners of about 360 acres of land, all of whom were brothers and sisters, on the 11th day of June, 1926. The plea averred that because of the terms of said contract the bill involved in this case was filed prematurely. Upon a hearing on the plea before the court it was held insufficient. Appellant elected to stand by her plea and was defaulted. After a reference to the master in chancery, and the return of his report, a decree for partition was entered in this cause, from which the appellant has prosecuted this appeal. Appellant does not complain of that part of the decree which fixes the interests of the parties but contends that the filing of the bill was premature.

The contract relied upon by appellant recites that the parties of the first part are the owners of 400 acres of land, more or less; that their father, Hosea D. Moore, departed this life testate on August 3, 1909, leaving said land to their mother, Sarah M. Moore, for her lifetime; that the said Sarah M. Moore departed this life intestate on the 5th day of June, 1926; .that the parties to the contract had agreed that the parties of the second part should take charge and control of said farm land, rent the same, collect the rents, obtain bids for the sale thereof, and otherwise act as attorneys in fact for the parties of the first part; “shall take charge of the following described premises (here follows description of land), shall rent the same, collect all rents therefrom, keep the buildings and other improvements thereon in repair and insured, pay the insurance premiums and pay the general taxes and special assessments thereon.”

The contract contained the following references to the duration thereof:

“Whereas, the parties hereto have agreed that the parties of the second part shall take charge of the said farm land and rent the same, collect the rents, obtain bids for the sale thereof, and otherwise act as Attorneys in Fact for the parties hereto with- reference to the said i;arm land, for a period of five (5) years from this date; Now Therefore, . . .

‘ ‘ This said contract and power of attorney shall run for a period of five (5) years from this date.”

Then follows a provision for the earlier determination of the contract by action and notice to the attorneys in fact by a majority of the parties to the agreement. The contract then provides as follows:

“The parties hereto further mutually consent and agree that during the life of this said contract, none of them will file a bill for partition, or any other suit or suits, seeking to have said land divided and seeking to have the same sold, and the parties hereto agree that if any person should file a bill in chancery or a suit at law seeking the partition of the said land, or seeking' to have the same sold, that said party so filing said suit will be liable for all court costs and all solicitors’ fees, attorneys’ fees, and will be liable for all damage caused to the other parties hereto by the bringing of said suit.”

It is the contention of appellant that in ascertaining the date of the expiration of the period of five years from June 11, 1926, the rule requires the exclusion of the day of the commencement of the contract, and that so reckoned the period was completed at midnight on June 11, 1931, and that this bill filed on June 11, 1931, was filed in violation of the agreement not to partition, and for that reason appellant’s plea should have been sustained and the bill dismissed. In support of appellant’s theory she relies upon those decisions of our courts which lay down the rule that: “When an act is required to be performed within a specified time from a day named, the rule is, to exclude the day from which the time commences to run and include the day on which the act is to be performed. ’ ’

But this is "not a case where an act is required to be performed but the contract prohibits an act from being done for a certain limited time. Under similar cases our courts have held that the computation of time commences with the day specified. In the case of People v. Coffin, 279 Ill. 401, the Supreme Court of this State had occasion to construe an ordinance of the City of Chicago covering civil service employees, which provided: “Original appointment shall be on probation for a period of six months.” The ordinance further provided that if the employee was not discharged before the expiration of the period of probation, the appointment should be deemed complete. In that case the petitioner was appointed on November 13, 1914, and discharged on May 13, 1915, and in passing upon the method of computing the time the court said:

“The act is not to be done within a particular time after a specified day but" is to be done within a particular period of time beginning with a specified day. ‘At or before the expiration of the period of probation’ refers to the duration of such period, and the discharge was authorized only during that time.' The plaintiffs in error assume that the six months’ period of probation is a period of time excluding the day of appointment. No reason is suggested for such construction. The appointment was complete on November 13, 1914. . . . The time within which a probationer may be discharged, is not within six months from and after his appointment, but at or before the expiration of the period of six months beginning with the day of-his appointment. That period ends six tiionths after his appointment on the corresponding day of the month, less one. The statute provides that if he is not then discharged his appointment shall be deemed complete. ‘Then’ refers to the expiration of the period of probation. On May 12, 1915, the petitioner ’s period of probation expired and the attempted discharge on the next day was ineffectual. ’ ’

In the suit of Irving v. Irving, 209 Ill. App. 318, the court approved this same method of computation. In that case a divorce was granted on June 27, 1913. The statute then prohibited either party from marrying within one year from the time the decree was granted. A marriage by one of the parties on June 27,1914, was held valid. We believe the rule adopted in those cases applies to the contract relied on in this case and that the trial court properly held the plea of the appellant insufficient <and that the decree of said court should be affirmed.

Affirmed.


text:
    Edward Connors and P. J. Fleming, Appellants, v. Clyde H. Yocom et al., Appellees.
    Gen. No. 8,710.
    Opinion filed October 13, 1933.
    Chapman & Du Hadway, Sumner & Reardon and H. W. Cross, for appellants.
    F. A. Whiteside and Gillespie, Burke & Gillespie, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

This was a proceeding in equity filed to the September term, 1929, of the circuit court of Jersey county, by appellants against the appellees, as the administratrix of the estate, the widow and children of George W. C-1 Yocom, - deceased, to. set aside certain conveyances alleged to have been made with the intent to defraud creditors. -Answers were filed by defendants and on a hearing the circuit court held that the complainants had failed to establish the material allegations of their bill of complaint and entered a decree dismissing the bill for want of equity, from which decree appellants have prosecuted this appeal.

On July 10, 1920, Lytle Daniels and wife executed a note for $11,300 to the State Bank of Jerseyville, secured by a first mortgage on a 160-acre farm in Jersey county, and then the bank assigned the note and mortgage to appellants. On October 15,1920, Lytle Daniels and wife conveyed the mortgaged premises to George W. C. Yocom subject to the mortgage indebtedness which Yocom assumed and agreed to pay. Yocom entered into possession and remained there until his death on February 2,1927. During his lifetime he paid off $1,300 on the note, leaving a balance of $10,000 due on the principal indebtedness at the time of his death. He died intestate leaving his widow, Laura A. Yocom, and his three children, Clyde H. Yocom, Claude M. Yocom and Jessie “Maude Chappell as heirs. During his lifetime Yocom owned other farm lands in Jersey and Sangamon counties, and on June 16, 1926, he and his wife conveyed all these other lands to his two sons and his daughter for the expressed consideration of love and affection and one dollar. The inventory in the estate of Yocom shows a small amount of personal property in addition to the 160 acres on which the appellants held the mortgage, and the bill of complaint alleges that Yocom was insolvent on June 16, 1926, at the time the conveyances to the children were made.

A bill to foreclose the Lytle Daniels mortgage was filed to the September term, 1927, of the circuit court and decree of foreclosure was entered December 10, 1927, a portion of the interest due on August 1, 1926, and one year’s interest due on August 1, 1927, being in defáult. The mortgage, having been given in June, 1921, was foreclosed under the Act of 1917, so that the sale came after the redemption period in 1929. Complainants bought the land in at the sale for the sum of $4,900 and on May 3, 1929, secured a deficiency decree for the sum of $7,533.60 against Lytle Daniels and Anna Daniels, personally, and against the estate of George W. 0. Yocom, deceased, to be paid in due course of administration.

The bill in this case required answers under oath and each of the appellees in their answer attempts to set up good and valuable consideration for the conveyances to-them by way of assumption of mortgage indebtedness on the lands conveyed to them and for services rendered Yocom in the home and on the farm after arriving at full legal age.

Appellants contend that the 160-acre farm retained by Yocom on June 16, 1926, when he parceled out his property to his children was not worth $10,000; that the conveyances were made with intent to defeat complainants in the collection of a certain deficiency; that whether the conveyances were made with fraudulent intent or not, they were voluntary, without consideration, and left Yocom insufficient property to pay his debts and that therefore the effect was a fraud on complainants.

There is nothing in the record to prove that the conveyances were made with actual intent to defraud creditors. On August 13, 1919, appellants purchased this 160-acre farm for $19,000. On July 10, 1920, they traded the farm to Lytle Daniels for $16,300, taking in payment a purchase money mortgage for $11,300 and a 40-acre tract of land. On October 15, 1920, Daniels sold the land to Yocom for a consideration named in the deed of $25,600, subject to the mortgage of $11,300 which Yocom assumed and agreed to pay. He paid $1,300 off on principal and at the time of the conveyanees to the children had paid all interest on the indebtedness as it fell due. There is no fact proven which shows or tends to show any actual fraud. “Relationship is merely a circumstance that may excite suspicion but will not of itself amount to proof of fraud.” Ayers Nat. Bank v. Barber, 287 Ill. 182.

The important question to be determined is whether the financial condition of Yocom was such as to justify the making of the conveyances to his children of the premises in question. It is conceded that Yocom, after making the deeds to the children,' retained property of small value. Counsel for appellants contend that it was not of sufficient value to pay the funeral expenses of the decedent Yocom, but the sworn answer of the widow states that such claims have been fully paid. It is clear therefore that Yocom was not indebted otherwise than on the real estate mortgage. The oral testimony was confined to proof on the value of the 160-acre farm on June 16, 1926. Ten witnesses for appellants placed the value at from $25 to $50 per acre with an average valuation of about $6,000. Six witnesses for appellees fixed the value at. from $50 to $75 per acre with an average valuation of about $10,500 for the farm.

Appellants seek to apply the principal of law that a voluntary conveyance is fraudulent as to existing creditors though the grantor retains property apparently sufficient to satisfy his indebtedness if it results that in fact it is not adequate. In each one of the cases supporting this principal the grantor was heavily indebted at the time the conveyance was made. In Murrie v. Carter, 222 Ill. App. 447, the grantor was shown to be insolvent at the time he conveyed the real estate to his daughter without consideration. In Kennard v. Curran, 239 Ill. 122, the husband was largely and heavily indebted at the time he conveyed the property to his wife. The same situation obtained in Marmon v. Harwood, 124 Ill. 104, where the parent was heavily indebted to pre-existing creditors at the time she executed a voluntary conveyance to children. In this case the deeds were given in June, 1926, and the deficiency judgment was obtained in May, 1929. Yocom was not otherwise indebted. The testimony is about equally balanced as to the value of the land conveyed; the appellants purchased at the foreclosure sale for $4,900, leaving a deficiency of $7,533.60, which was large enough to at least challenge the motives of the appellants. Leaving out the question of whether or not there was a good and valuable consideration passing between the grantees' and the parent Yocom we believe the chancellor was warranted in finding that the complainants had failed to establish by proof the material allegations of their amended bill of complaint and that the equities were with the defendants. The decree of the circuit court of Jersey county is therefore affirmed.

Affirmed.


text:
    Charles P. Colby, Defendant in Error, v. Great American Casualty Company, Plaintiff in Error.
    Gen. No. 8,745.

      Opinion filed October 13, 1933.
    E. R. Elliott and John G. Friedmeyer, for plaintiff in error.
    Frank L. Trutter and Gillespie, Burke & Gillespie, for defendant in error.
   Mr. Justice Fulton

delivered the opinion of the court.

Suit was brought in the circuit court of Sangamon county by defendant in error to recover upon a policy of accident and health insurance issued to him by the plaintiff in error. The policy required Doctor Colby, the defendant in error, to pay a semiannual premium of $140 and further provided for the payment to him of a weekly indemnity of $100 should he become totally disabled by illness or accident of the classes specified in the policy, with a further indemnity of half that amount after cessation of the total disability and during the continuance of partial disability.

Standard statutory provisions to conform to the requirements of the Illinois statute respecting accident and health policies were contained in the policy.

Plaintiff in error contends that Doctor Colby failed to allege in his pleadings or to prove at the trial that he had given notice to the insurer within 10 days from the commencement of his illness or disability and that he commenced the present action eight days after furnishing an affidavit which constituted his affirmative proofs of loss instead of waiting the 60 days prescribed by statute; also that Doctor Colby is precluded from bringing this suit because of a former adjudication under this same policy.

The declaration was in the usual form for assumpsit action on an insurance policy, one count being for damages claimed on account of partial disability and the second count claiming damages on account of total disability. Plaintiff in error filed the general issue and special pleas to which replications were filed raising the issues as above set forth. Defendant in error insists that all proper notice was given to plaintiff in error prior to the first trial and that the denial of liability and an attempted cancellation of the policy on the part of plaintiff in error, prior to the institution of the first suit, constituted a waiver of any statutory requirement regarding notice or waiting the 60 days to begin suit.

The case was tried before the court without a jury, and after evidence was taken plaintiff in error tendered certain written propositions of law to the court which were rejected and refused by the court, whereupon the court entered judgment for the full amount of plaintiff’s claim, being $3,285.70. The amount of the judgment, if any should be allowed, is not in controversy.

The policy was dated November 13, 1926. The first suit on this same policy was instituted on February 24, 1928, claiming disability from May 3, 1927, to the date of suit. On April 27,1929, judgment for $3,363.71 was entered in that suit and on appeal the judgment was affirmed in this court and later fully paid and satisfied. The present suit was instituted on April 20, 1929, claiming damages for total disability from May 3, 1927 to June 5, 1928, less all payments theretofore made and partial disability from June 6, 1928, to February 11, 1929.

The witness George H. Braasch, vice president of plaintiff in error, on cross-examination testified that they had denied liability on the claim of Doctor Colby prior to the institution of the first suit. In Cory v. Woodmen Accident Co., 253 Ill. App. 20, this court said: “It is well settled that a denial of liability dispenses with the necessity of filing proofs of death.” The testimony of the witness and the action of plaintiff in error since the institution of the first suit show a positive denial of liability on this policy, and constitute a waiver of the requirement of the statute respecting notice of the illness and the awaiting of the 60-day period after submitting proofs of loss before bringing suit.

It is clear that the defendant in error was limited in his first suit to the amount of indemnity which had accrued at the time the action was instituted, and that the amount of recovery in the instant case was based-upon disability for the period subsequent to the beginning of the first suit.

Defendant in error was not obliged to wait until the termination of his disability, both total and partial, before bringing suit, and having brought his cause of action in February, 1928, for the amount accrued on that date, was not foreclosed from bringing another suit for-damages falling due after that date. The authorities cited by plaintiff in error are cases in which the grounds for recovery might have been but were not presented; but in this case there was'no opportunity for the defendant in error to present the grounds for recovery relied on in this case in the former suit. It is true that here the two suits were between the same parties and under the same policy, but they were not for the same causes of action, and hence the former suit is no bar to the present action. Marshall v. Grosse Clothing Co., 184 Ill. 421.

We believe the circuit court was correct in refusing to hold the propositions of law submitted by the plaintiff in error and that the judgment of that court should be affirmed.

Affirmed.


text:
    Dora E. White, Appellee, v. The Penn Mutual Life Insurance Company of Philadelphia, Appellant.
    Gen. No. 8,762.
    Opinion filed October 13, 1933.
    Dobbins & Dobbins, for appellant.
    Little & Finfrock, for appellee.
   Mr. Justice Fulton

delivered the opinion of the court.

This suit was brought on a life insurance policy issued by appellant, which provided for the payment of $2,000 in addition to the face amount of the' policy where the death resulted “solely from bodily injuries effected directly and exclusively by external, violent and accidental means.” This5double indemnity provision is the only part of the policy in question in this suit. The trial was had before the court without a jury, resulting in a finding for appellee and a judgment in her favor for the sum of $2,000, from which judgment appellant appeals.

The facts in the case are not seriously in dispute. On August 17, 1931, one Aaron Bray, his girl friend, Dolores Norris, and another young man, drove up to the Prehn’s Confectionery in Champaign, and signaled for curb service. Prehn’s is located on the southeast corner of Green and Sixth streets. There is a door at the northwest corner right at the street intersection and another on the west side of the building about 20 feet south from the corner. A man named Krabbe came out of Prehn’s and began talking with the occupants of Bray’s car. Bray and Krabbe quarreled over some remark the latter directed to Miss Norris. When Krabbe left, Bray began walking up and down the street on the west side of Prehn’s building. The waiter, John O’Byrne, came out with the drinks and stayed beside the car waiting to be paid. About this time the insured, Robert H. White, came out of the west door and met Bray on the sidewalk. Bray testifies that White came up from the rear and grabbed him by the arm, jerked him around, looked at him for a second, and said to him “Where do you want it?” or “How do you want it?”; that White w^ts standing in front of Bray with his fist clenched; that Bray gave White a shove away from him and that White fell backwards striking his head on the sidewalk or the pavement, and died as a result thereof. He was corroborated in the greater part by Miss Norris. The waiter, O’Byrne, testified that Bray met White just about opposite the car beside which O’Byrne was standing; that the two appeared as friends talking; that White extended his hand toward Bray as if he wanted to shake hands; that he could not hear what was said but saw the two talking together; that he turned toward Miss Norris to hand her a glass of water and while his back was turned he heard a thud, turned around and saw White falling backwards on the sidewalk and saw Bray drawing his hands back.

Appellant contends that the greater weight of the evidence shows that deceased came to his death as the result of an altercation with Bray brought on by his own conduct, and for that reason his death did not result directly and exclusively from accidental means. In this we do not concur. In the case of Higgins v. Midland Casualty Co., 281 Ill. 431, our Supreme Court said: “The proper and true test, in all instances of voluntary action is that defined in the Barry case (131 U. S. 121). If in the act which precedes the injury, though an intentional act, something unforeseen, unexpected and unusual occurs which produces the "injury, it is accidentally caused.” Prehn v. Metropolitan Life Ins. Co., 267 Ill. App. 190. The two Illinois cases relied upon by appellant present a different situation. In Hutton v. States Accident Ins. Co., 267 Ill. 267, the plaintiff and one Huddleston had had some trouble earlier in the day. In the evening Hutton went into a restaurant and saw Huddleston sitting at a counter, walked up behind him and without a word, struck Huddleston on the head with his fist, intending to knock him down and out. Huddleston arose and Hutton struck him again. Then Huddleston knocked Hutton, the insured, down, breaking his leg. The court there held that the injury received was the natural and probable result of his voluntary act in making the assault upon Huddleston.

In the other case, Cory v. Woodmen Accident Co., 333 Ill. 175, the deceased was the aggressor in a fight and made advances towards his adversary after the latter had warned him that he would be shot if he did not keep away. The court there held that with the warning Cory had, any man with ordinary intelligence could have reasonably foreseen and expected the results and that the shooting could not be held to be due to an accidental cause.

In the instant case there was no assault, no loud or serious threatening language, no real altercation, and no reason to foresee the serious results that followed. The court had the opportunity to see the witnesses, to observe their demeanor and to judge their impartiality or interest in the outcome of the suit, and we believe he was warranted from the testimony in "finding the issues for the appellée, and that the deceased came to his death through external, violent and accidental means. The other errors assigned by appellant are not argued in the briefs, and there being no substantial error in the record, the judgment of the circuit court is affirmed.

Affirmed.


author: Mr. Presiding Justice Matchett McSurely, J.,

text:
    Paysoff Tinkoff, etc., Appellant, v. David Wyland et al., Appellees.
    Gen. No. 36,513.

      McSurely, J., dissenting.
    Opinion filed November 6, 1933.
    Rehearing denied and opinion modified November 20, 1933.
    Paysoff Tinkoff and Arthur Goldblatt, for appellant; Edward Goldblatt, of counsel.
    Markheim & Allie, for appellees; Harry Markheim and A. R. Miller, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

This is an appeal by complainant from a decree which denied his motion for a temporary injunction, sustained the demurrer to the bill and dismissed it for want of equity, and the question to be decided is whether the bill states a cause of action for equitable relief.

The averments in substance are that complainant is a licensed attorney at law and certified public accountant; that he specializes in federal tax matters in which he is authorized to practice; that April 1, 19:29, he employed defendant Wyland, who is an expert accountant.

A written contract between the parties was executed November 6, 1929, which provided that either party might terminate the contract by giving two weeks’ written notice, or it might be immediately terminated for cause by complainant. There was a further agreement that during the term of employment and for two years after its termination defendant Wyland should not directly or indirectly solicit any claims that might come to his knowledge by reason of his employment, “it being specifically understood that the Rights of Solicitation, Representation arid Prosecution of any of the Claims of the said Clients of Paysoff Tinkoff & Co., Actual or Prospective, shall be restricted, not only to those Cases which were pending in the Offices of Paysoff Tinkoff & Co., at the termination of your employment with Paysoff Tinkoff & Co., but also to any Claims that may arise within the said period of Two (2) Tears subsequent to the termination of your Employment with said Paysoff Tinkoff & Co. with any of the Clients, Actual or Prospective, of Paysoff Tinkoff & Co. at the time of the termination of your employment with Paysoff Tinkoff & Co. ”

Defendant Wyland entered upon his employment and was given access to the confidential files of complainant and obtained an intimate knowledge of the business. The other defendants were at this time clients of complainant, and Wyland in the course of his employment obtained knowledge of claims pending in their behalf.

The bill avers that Wyland was the main accountant "of complainant and was trusted with all the matters and things connected with the business of these clients and was a confidential agent and employee; that he was taken into all conferences on these matters with complainant and other conferees and fully trusted in every manner as a close friend and confidant, whereby, it is alleged, a fiduciary relationship existed between complainant and Wyland on these matters, as well as on the business of complainant in general; that Wyland thereby owed to complainant by virtue of this fiduciary relation, as well as by reason of the written contract, a duty “to faithfully perform the services as such trusted agent and employee and to discharge his duties in behalf of your Orator faithfully as required by such fiduciary relation, as well as said written contract.”

The bill also avers that December 13, 1932, and for several days prior thereto, defendant John Griffiths had been negotiating with complainant directly and through Wyland as such confidential agent, for complainant to take charge of a large amount of work for the John Griffiths & Son Co. and also for John Griffiths and for the continuance of the services of complainant on the matters then pending for these clients; that complainant in conference with Wyland considered the necessary usual and reasonable fees for services desired by these clients; that an estimate of the same was made amounting to $73,000; that complainant confiding in Wyland authorized him to negotiate with John Griffiths for the purpose of closing contracts for said work, and that Wyland on December 13th went to the office of Griffiths and violating the confidence reposed in him and disregarding his fiduciary relationship and his obligations under the contract, entered into negotiation with John Griffiths and George W. Griffiths for and in behalf of himself individually to do and perform this work for them, instead of securing the same for complainant, and without any knowledge on the part of complainant of his intention so to do until Wyland returned to the office of complainant and informed him that he (complainant) would not get any more business from these clients, and that Wyland had accepted employment from them to perform these services. Complainant immediately called Wyland’s attention to the written contract, to the fiduciary relationship, etc., and that notwithstanding, Wyland persisted in his conduct in disregard of the contract and the relationship, and on December 14, 1932, entered upon the work of said business as an employee of the .clients and continues therein in violation of complainant’s rights.

The bill avers that there is no other person or persons sufficiently familiar with the business of these clients except Wyland and complainant to take charge of the work and perform the same within the time ■when it would be necessary to have it done; that the clients are in immediate need of services upon their income taxes for the year 1932; that John Griffiths Investment Trust is also in need of immediate services before the- officials of the treasury department that require the knowledge and experience of the business possessed only by complainant and Wyland; that complainant is unjustly, inequitably and wrongfully deprived of this work for these various clients, for which he would receive compensation of $60,000; that he and other employees had for two months preceding December 14, 1932, worked upon these matters at an expense of more than $1,000 in anticipation of contracts to do the work.

The bill also avers that while defendant Wyland professed the utmost loyalty and advised complainant in his negotiations with the said clients and, in particular, advised him to insist on larger compensation and not to agree to the terms desired by the clients, -this advice was not given by Wyland in good faith but was given for the purpose of deceiving complainant and of preventing him from making satisfactory terms with the clients, so that Wyland could take advantage of the same and thereby secure the employment for himself as well as the compensation therefor and deprive complainant of the same; that to that end he requested that he be permitted to talk with John Griffiths and George W. Griffiths and advised complainant against any other person being present during the conversation, in order that he might negotiate with the clients in his own behalf and against the interests of complainant; that complainant fully confiding in Wyland, for the reasons set forth, consented that the negotiations be conducted by Wyland for complainant and without any other person present representing complainant; that complainant was deceived and misled by Wyland, in that Wyland concealed his dissatisfaction as an employee and agent of complainant; that Wyland owed the duty to complainant to divulge to complainant his dissatisfaction and the fact that he was seeking other employment for several months prior to December 13, 1932; that if complainant had known of this dissatisfaction he would not have trusted these important negotiations to Wyland, and that all these things were concealed by Wyland for the purpose of deceiving complainant; that Wyland knew that complainant had performed services for John Griffiths to cause and maintain an equal distribution of his estate in favor of his daughters and against the financial interest of George W. Griffiths; that George W. Griffiths on account of these facts was opposed to complainant’s receiving the work and having compensation therefor, “and that by knowing said facts, said David Wyland was enabled to take advantage of the same in connection with the said George W. Griffiths in obtaining said work and to use said George W. Griffiths in effecting the consent of his father, the said John Griffiths, to the employment of said Defendant, David Wyland, by said clients, instead of your orator.”

The bill avers that Wyland and the other defendants conspired together to injure the business of complainant and to deprive him of gains and profits contrary to the fiduciary relationship and the terms of the written contract; that the other defendants are now utilizing the services of Wyland and are employing him solely because of said knowledge and information, which these defendants well knew when they employed Wyland that they had no right to receive.

The contract is attached to the bill and made a part of it. The bill prayed for an injunction and for other relief.

It is urged that the injunction was properly denied for the reason that the bill discloses that complainant came into court with unclean hands, in that he by his bill divulged confidential communications of his clients contrary to his professional duty, namely, communications concerning the desire of the elder Griffiths with reference to the manner in which his estate should be distributed. The rule of equity which forbids relief to him who is guilty of inequitable conduct applies only where the improper conduct concerns the very transaction of which complaint is made. Carpenters Union v. Citizens Committee, 333 Ill. 225; Messenger Publishing Co. v. Mokstad, 257 Ill. App. 161. We do not regard the information here disclosed as so closely connected with the controversy as to call for the application of the rule. Moreover, this defense, if it exists, would be properly raised by answer. The information divulged may have been with the consent of the clients for aught that appears from this record, and we think it is not necessary that such consent should be negatived by the bill. The decree cannot be sustained upon this theory.

In the second place, defendants urge that restrictive covenants in contracts of employment are distinguishable from such covenants in the sale of a business and that they are reluctantly enforced in equity. There is no doubt the distinction exists, as the cases cited and many other cases hold. Northwest Side Lumber Co. v. Layton, 239 Ill. App. 82; Atwood v. Lamont, 3 K. B. 571; Kaumagraph Co. v. Stampagraph Co., 188 N. Y. S. 678.

They argue further that the allegations of the bill fail to show a violation of the negative covenants contained in the contract, and say that even if such violation is conceded, complainant is not entitled to relief because the services of Wyland were neither unique nor extraordinary, citing Corpin v. Wheatley (1929), 227 App. Div. 212, 237 N. Y. S. 205. They say that Wyland was not disclosing any trade or business secrets, because the knowledge of an accountant is general knowledge and skill in accounting is not a trade secret and cannot be copyrighted, because complainant had no expectancy of business from the Griffiths, representing a property right which he is entitled to have protected by an injunction and because defendants other than Wyland had a right to end the relationship of attorney and client at any time they might wish either with or without cause. They say complainant can readily engage an equally capable substitute employee; that the effect of enforcing the contract by injunction would be harsh and oppressive, and that the only cases where equity will enjoin the breach of a negative covenant in a contract of employment are those where the employer was in direct and continuing competition with his former employee. Gilbert v. Wilmer, 168 N. Y. S. 1043, 1044.

All these propositions (as we read the case presented by the bill) may be conceded without destroying its equity. This court has held that in the absence of a restrictive covenant an injunction will not ordinarily issue at the suit of a former employer to restrain the employee from solicitation of business from customers of the employer, and we adhere to that rule for the reasons stated in American Cleaners & Dyers v. Foreman, 252 Ill. App. 122, notwithstanding respectable authority to the contrary. However, as we read the case made by this bill, the principle which controls creates an exception to this general rule. It is that while the relationships of employer and employee, principal and agent, attorney and client, master and servant, exist, the duties of the parties are reciprocal and fundamental and require of the employee, agent, attorney or servant the fundamental virtue of loyalty to the person whom he represents. The employee may. sever the relationship at will, but while it exists he may not without dishonor betray the interests of the one whom he represents. If the facts averred in this bill are true, defendant Wyland, while the relationship of employer and employee existed and while he at his own request was given exclusive charge of securing the renewal of these contracts, contrived intentionally to secure such renewal for himself to the exclusion of his employer for whom he was obligated to obtain them.

The general rule is as stated by this court in Rabinovich v. Reith, 120 Ill. App. 409, and is in harmony with the Restatement of the Law of Contracts, sections 379 and-380 (2). In 32 Corpus Juris, section 309, the exception is stated, as follows:

“The general rule has no application to a case involving the betrayal of a trust and confidence reposed in the employee by his employer by attempting to take away for his own benefit and in direct violation of his express contract his employer’s customers, knowledge of whom he had acquired in the course of the performance of his duty as ah employee.” The author cites Cahill v. Madison, 94 Ill. App. 216. It there appeared that Cahill employed Madison as a salesman of its teas, coffees and spices, and that after two years of service, during which he had charge of a sales route, Madison left the employment and engaged in business for himself. Cahill filed a bill praying that the court by injunction might enforce a covenant restricting Madison from engaging in business for himself for a period of one year after leaving the employ of Cahill. The chancellor dismissed the bill, but the decree was reversed by this court, the opinion stating that while as a general rule equity would not by injunction interfere to restrain the violation of a contract for personal services (citing Welty v. Jacobs, 171 Ill. 624, and other cases), such rule was not applicable to the circumstances there appearing; that it was not a question of enforcing a restrictive covenant of a contract but of a defendant betraying the trust and confidence reposed in him by his employer. The doctrine is sustained by other Illinois authorities (Fairman v. Bavin, 29 Ill. 75; Davis v. Hamlin, 108 Ill. 39); was approved by this court in Messenger Publishing Co. v. Mokstad, 257 Ill. App. 161; has been held applicable to a fire insurance agent in International Mut. Fire Ins. Co. v. Carrington, 241 Ill. App. 208; has been held by the English courts applicable to a lawyer’s clerk in Nicholls v. Stretton, 7 Beav. 42, and S. C. 10 Q. B. 346; Howard v. Woodward, 5 N. R. S. 8, 34 L. J. Ch. 47, 10 Jur. (N. S.) 1123, 11 L. T. 414, 13 W. R. 132; Mag v. O’Neill, 44 L. J. Ch. 660, and Lewis v. Durnford, 24 Times Law Reports, p. 64, and has been held applicable to an accountant in Racine v. Bender, 141 Wash. 606, 252 Pac. 115, and Scott v. Gillis, 197 N. C. 223, 148 S. E. 315, and is now held applicable to this case.

It has been urged that equity is without jurisdiction because the contract between the parties provides for liquidated damages in case of a breach of it.

The provision of the contract in this regard is as follows:

“ (8) It is also further understood that if the above, provision of the contract is violated, that the Amount of Two Thousand Five Hundred ($2,500.00) Dollars shall become due and payable to Paysoff Tinkoff & Co. as damages incurred, — said amount being considered as Liquidated Damages, and not as a Penalty, for said violation, due to the fact- of the difficulty in proving Actual Damages, — or the Actual Damages incurred, if the said Actual Damages are greáter than the Liquidated Damages of Two Thousand Five Hundred ($2,500.00) Dollars, aforementioned.” Defendants cite American Dental Co. v. Central Dental Laboratory Co., 256 Ill. App. 279, and Bartholomae & Roesing Brewing & Malting Co. v. Modzelewski, 269 Ill. 539.

In 32 Corpus Juris, p. 196, secs. 301 and 302, it is pointed out that while some courts have held that a provision for liquidated damages prevents equity from granting an injunction, others have held to the contrary upon the theory that the provision should be regarded as additional security for the performance of the covenant and not as a substitute for performance. The true rule is stated to be: “If liquidated damages are provided for in case of a breach, and it appears that the intention was to give the party the alternative to perform or pay, or that the liquidated damages should be an exclusive remedy, the breach will not be enjoined; and it has been held that this is so, although defendant is insolvent. Nevertheless, the equitable jurisdiction of the court to enforce a negative covenant is not excluded merely by reason of the fact that in addition to the covenant the contract contains a stipulation for liquidated damages. It is a question of intent to be deduced from the whole instrument and the surrounding circumstances whether the provision for liquidated damages was intended to be an exclusive remedy.”

Defendants seem to contend that it is the rule in Illinois that equitable relief will be denied in every case where there is a provision for liquidated damages and rely on the cases above cited. In the Dental Co. case, 28 employers filed their bill against certain employees to secure the enforcement of a provision in a contract of employment that all controversies concerning labor unions should be determined by a two-thirds vote of the parties thereto. The contract provided that any party violating it should pay a specified sum as liquidated damages. One clause of the agreement recited that since liquidated damages might be inadequate, in addition thereto an injunction may issue without notice. It was conceded by complainants that this provision would not make it the duty of a court to grant an injunction unless it should appear that it was equitable to do so. The opinion cited the Bartholomae, etc., Co. case and held that upon the whole case an injunction ought not to be granted. It is apparent the provision as to liquidated damages was not deemed controlling. The Bartholomae, etc., Co. case has been criticized (see Illinois Law Bulletin, vol. 1, p. 117) as departing from the rules theretofore laid down in Lyman v. Gedney, 114 Ill. 388; Barrett v. Geisinger, 179 Ill. 240; Mikelaickzak v. Kruppa, 254 Ill. 209, and Davis v. Isenstein, 257 Ill. 260. These last named cases in substance hold that the mere presence in the contract of a provision for liquidated damages will not prevent equitable relief by way of injunction or specific performance unless the stipulation amounts to an option in the alternative of one of two things, namely, the performance of the acts or the payment of a certain amount of money in lieu thereof.

It would scarcely seem that the mere intention of the parties to a contract should control the jurisdiction of a court of chancery although it would be possible to reconcile the Brewery case with the other decisions of Illinois courts upon that theory. After all, it would seem that what the courts have really done in all these cases is to apply the broader rule laid down in Epstein v. Gluckin, 233 N. Y. 490: “What equity exacts today as a condition of relief is the assurance that the decree, if rendered, will operate without injustice or oppression either to plaintiff or to defendant. (Williston, supra; Stone, supra; Ames, Lectures on Legal History, p. 370; Lewis, Want of Mutuality in Specific Performance, 40 Am. Law Reg. [N. S.] 270, 382, 447, 507, 559; 42 id. 591.)”

Notwithstanding the provision in the contract for liquidated damages, we are of the opinion that the bill in this case demands an answer. The decree is therefore reversed and the cause remanded with directions that defendants answer.

Reversed and remanded with directions.

O’Connor, J., concurs.

McSurely, J.,

dissenting: In my opinion the decree dismissing the bill should be affirmed.


author: Mr. Presiding Justice Matchett

text:
    William W. Rice, Appellant, v. Samuel S. Bogart et al., Appellees.
    Gen. No. 36,712.

      Opinion filed November 6, 1933.
    Clarence A. Toolen, for appellant.
    Irwin N. Walker and Stuart B. Krohn, for certain appellees; Ota P. Lightfoot and Stuart B. Krohn, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

Plaintiff filed an amended statement of claim demanding the return of $2,000 paid by him to the Absopure Oil Company under a contract hereinafter described, together with $250 attorneys’ fees. The action was based on section 37 of the Illinois Securities Act, sometimes called the Blue Sky Law (see Cahill’s Ill. Rev. St. ch. 32, ¶ 290) being “An Act relating to the sale or other disposition of securities and providing penalties for the violation thereof and to repeal Acts in conflict therewith,” in force June 10, 1919.

Defendants are officers and directors of the company alleged to be liable under the statute, and Noggle is the agent through whom the transactions were negotiated. The amended statement of claim was stricken on motion of defendants, and plaintiff electing to stand by his amended claim, judgment was entered against him, which he seeks to reverse by this appeal. The briefs present two questions for our decision.

The first concerns the question of jurisdiction. Defendants contend that the judgment was proper for the reason that the municipal court was wholly without jurisdiction to try an action of this kind. This question was not raised in the trial court but is urged here. The point requires a construction of section 2 of the Municipal Court Act, Cahill’s St. ch. 37, ¶ 390 (Smith-Hurd Ill. Rev. St. 1933, ch. 37, sec. 357, p. 959). Defendants point out that actions 'involving (as here) more than $1,000 are limited by that section to three classes: (1) contracts express or implied; (2) for the recovery of personal property; and (3) for damages for conversion of or injury to personal property. They say that this action does not come within any one of the three classes; that it is in fact a suit to recover a penalty, and, therefore, since the amount of the claim is for more than $1,000, the municipal court was wholly without jurisdiction to hear and determine the issues.

Defendants contend (rightly, as we think) that where the court is wholly without jurisdiction of the subject matter it cannot acquire jurisdiction, even by consent of the parties; that in such a case neither appeal nor writ of error will confer jurisdiction on the reviewing court, and that the question of whether the courts have jurisdiction of the cause may in such case be raised for the first time in the reviewing court. People v. Industrial Sav. Bank, 275 Ill. 139.

Defendants argue that an action based upon this Securities Act, Cahill’s St. ch. 32, ¶¶254 et seq., is substantially an action in debt rather than an action in assumpsit and cite People v. Dummer, 274 Ill. 637. The Dummer case does not, as we understand it, support this Contention. That case holds that taxes against property are enforced contributions independent of any agreement express or implied on the part of the owner of the property to pay same, and that there is no contract either express or implied that the taxpayer will make such payment; that the levy of the taxes does not create the relation of debtor and creditor as usually understood, but that by reason of statutory provisions an action either of debt or in assumpsit will lie for the collection for the same. The court there said that such a suit when brought was not an action on the contract express or implied, and that as the amount claimed exceeded $1,000, the municipal court was wholly without jurisdiction under the statute.

The opinion carefully distinguishes between a suit brought for the purpose of collecting taxes and one where a contract is implied by reason of a statutory provision and because of the acts of defendant with reference thereto. Harty Bros. v. Polakow, 237 Ill. 559 (on which plaintiff here relies) is cited. The opinion also points out that the term “implied contract” has been in our law applied to a class of obligations which are created by law without regard to the assent of the parties. Such contracts are described in the opinion as “constructive contracts,” and the supposed promises are said to be more or less fictitious, as they are said to be in Board of Highway Com’rs v. City of Bloomington, 253 Ill. 164, Ann. Cas. 1913 A 471. In Restatement of Law, vol. 1, sec. 5, these contracts are described as “quasi-contracts”; that is, obligations created by law for reasons of justice which were ordinarily enforced at common law in an action of assumpsit upon the theory that there was an implied promise that one would do what he ought to do. Such obligations at the time of the enactment of the Municipal Court Act, Cahill’s St. ch. 37, ¶389 et seq., were quite generally recognized in our law as contractual in nature, and we do not doubt that it was the intention of the legislature to confer jurisdiction upon the municipal court to try actions brought upon such quasi-contracts without limitation as to the amount claimed.

While this precise question has not been raised before in this court, so far as we are aware, we have hitherto taken jurisdiction to review judgments in similar cases. Jaffe v. Goldner, 251 Ill. App. 188, and Dobal v. Guardian Finance Corp., 251 Ill. App. 220. We now hold that the action is contractual in its nature and that the municipal court was not without jurisdiction by reason of the amount claimed.

In the second place it is argued by defendants that the statement does not state a cause of action for the reason that the instruments of writing described in the statement* are documents to which the provisions of the Securities Act, or Blue Sky Law as it is called, are not applicable.

The averments of the statement are in substance that Absopure Oil Co. is a corporation organized under the laws of the State of Illinois; that September 20, 1929, it “sold to the plaintiff a certain profit sharing or investment contract or security,” for which plaintiff paid to the company $1,000; that September 30, it sold to plaintiff “a certain other profit sharing or investment contract” for another $1,000; that “said profit sharing or investment contracts so sold to the plaintiff by said Absopure Oil Company, as aforesaid, were not securities known as securities in Class A, Class B or Class C under the terms and provisions of the Securities law of the State of Illinois, but, on the contrary thereof, were securities in Class D under the terms and provisions of said law, being speculative securities based on prospective income”; that defendants had not prior to the sale of the same complied with the terms and provisions of the Securities Law regulating the sale of this class of securities; that at the times of these respective sales defendant Charles H. Brunner was the president and director of the Absopure Co., Bogart vice president and director, L. E. Brunner secretary and treasurer, Blanchard and Peterson directors; and that R. W. Noggle was employed by the Oil Co. as solicitor, agent or broker “for the sale of said investment or profit sharing contracts ’ ’; that September 20, 1929, defendants, through Noggle, made a sale of “a certain investment or profit sharing contract, wherein and whereby the defendants pretended to sell to plaintiff five certain oil pumps numbered 152, 153, 154, 155 and 156, together with 500 gallons of lubricating oils suitable for use in automobiles and automotive machinery by the execution of a certain bill of sale signed by the said Absopure Oil Company by Charles H. Brunner, president, and at the same time and simultaneously with the execution and delivery of said bill of sale entered into a pretended service contract with the plaintiff,” whereby it was agreed that the company should have the complete possession of the pumps and exclusive right to use and operate the same for sale and distribution of the company’s oil; that these pumps should be installed at such place or places as the company might select, the company to maintain, service and supply said pumps with necessary oil and pay all permit fees, licenses, taxes, insurance premiums, and other necessary charges; that in the event of the loss of any pumps by theft, fire or storm while in the possession of the company under said agreement, the company would replace such pumps lost or destroyed with other pumps of a similar capacity without cost to plaintiff, and that on or before the 15th day of every month during the term of the contract, the company should set aside for payment to the owners of pumps installed and operated by the company a sum to be fixed by the company but not less than a sum equal to six cents per gallon on all oil sold through the owners’ pumps and all other pumps operated by the company under like agreements during the previous calendar month; that thereupon the company agreed to pay to plaintiff “as rental for the use of his pumps that proportion of said sum which the number of pumps owned by said plaintiff during said calendar month shall bear to the total number of pumps operated by the company under like agreements during said calendar month, which monthly payment the plaintiff agreed to accept in full satisfaction of the company’s obligations for rentals under said contract, the initial payment to be for the calendar month beginning next after the date of the contract, and that also on the 30th day of September, A. D. 1929, a similar bill of sale and service contract was purchased by the plaintiff from the defendant, the Absopure Oil Company, in which there was a pretended sale by said company to the plaintiff of five oil pumps numbered 168, 169, 170, 171 and 172, together with 500 gallons of lubricating oils, suitable for use in automobiles and automotive machinery, for which two sales above set forth the plaintiff paid to the defendant Absopure Oil Company, the sum of $2,000, as herein above set forth.”

The statement also avers that neither defendants nor any one of them at any time had possession of the pumps mentioned; that there was no intention of delivering the pumps to plaintiff, but that the sole inducement to plaintiff for the purchase of the pumps and the execution of the service contracts was the profit that was to be derived from the alleged service contract, and that the pretended bills of sale and the pretended service contracts taken together were in reality and effect a profit sharing investment or security, as defined in the Securities Law of the State of Illinois; that the pretended sales of these pumps and these service contracts were two of many such sales and transactions, said defendants having made such sales to other persons repeatedly and in .violation of and contrary to the terms and provisions of the statute in such case made and provided; that the defendants named authorized the sales with knowledge on the part of the directors and officers; that Blanchard and Peterson were then in the employ of Armour & Co., and that Blanchard, director of the corporation, had knowledge of these sales and personally induced several persons to purchase similar contracts and received a commission from Absopure Oil Co. on the transactions; that Blanchard-held out and represented that a contract had been made by and between the Absopure Oil Co. and Armour & Co., whereby Armour & Co. agreed to purchase large quantities of the oil to be sold by the Absopure Oil Co., and that the representations were part of the inducement that led the plaintiff to make the purchase aforesaid, and that each of the defendants knowingly performed some act or in some way furthered such sales; that plaintiff has elected and does thereby elect to declare these sales null and void, and that the same are null and void by virtue of the statute; that plaintiff has tendered to defendants and each of them the return of the said bills of sale and service contracts and offers to return them to defendants, or any one of them; that plaintiff demands of defendants the return of the said sum of $2,000, together with reasonable attorney’s fees to the amount of $250.

It is the contention of defendants that these contracts as set forth in the statement of claim are known as “service contracts” pure and simple; that they do not partake of the nature of an investment or profit sharing contract as defined- in the statute, and that these transactions were not infractions of section 2 of the Securities Act. Cahill’s Ill. Rev. St. 1931, ch. 32, ¶255.

Defendants contend that this is so because, they say, the agreements (contrary to the facts as we shall later see) are not secured by title to or interest in or any lien or charge upon the capital or any property or assets of the issuer thereof, as provided by the statute. Defendants say that the pumpholder looked entirely to his own pumps for his profits and return on his investments; that he had no interest whatever in the corporate assets of the defendant, Absopure Oil Co.; that he did not participate in the profits of the Absopure Oil Co.; that he had no interest of any kind in the corporation, nor did he expect any return from the profits realized by defendant corporation in its sale of oil, nor was his contract secured by a title to or interest in or any lien, or charge upon, the capital or any property or assets of the company. They also say that the company did not by the service contract promise, offer -or become obligated to the owner of the pump for any part of the company’s assets or the business profits; that the relation between the company and plaintiff created by the agreement was not that of the issuer and investor, but was merely that of employer and employee.

Defendants say that they have searched for authorities and have been unable to find any case where any court has ever defined a service contract as being a “security” within the meaning of the Securities Act. They admit that in some 'States like South Dakota the Securities Act expressly includes service contracts as coming within the term “security,” but they say that unless it is specifically covered by the statute no court has ever held that a service contract can come within the term “security.” In support of their contentions are cited Lewis v. Creasey Corp., 198 Ky. 409; Creasy Corp. v. Enz Bros. Co., 177 Wis. 49. The cases cited do not sustain the contention of defendants.

The Kentucky act provided in substance that every person who should “sell or negotiate for the sale of any contract, stock, bonds or other securities issued by him,” should be known as a domestic investment company, and the controversy between the parties in Lewis v. Creasey Corp., concerned whether the word “contract” should be limited in meaning to security contracts. It was argued by defendant in that case that the word “contract” as used in the statute meant more than is ordinarily understood as a security investment, and that the contract was broad enough to cover all classes of contracts which might be an instrumentality for the perpetration of fraud. The court said that from a consideration of the whole act it was apparent that the contract referred to in the statute was a “security contract” only that it was not the intention to supervise or regulate commercial contracts; that such universal guardianship was never intended; that the cases relied on, including Standard Home Co. v. Davis, 217 Fed. 904, and State v. Gopher Tire & Rubber Co., 146 Minn. 52, gave little if any light upon the question; that some of the statutes of other states expressly included “membership contracts,” and that in South Dakota the statute expressly mentioned “service contracts.” The Kentucky court also had before it the case of Creasy Corp. v. Enz Bros. Co., decided in Wisconsin, which construed the identical contract then before the court and held that it did not come within the purview of the law of Wisconsin. The Kentucky court conceded that perhaps a contract of that kind should be regulated and agreed that such regulation would be proper under the exercise of the police power, but thought the terms of the statute were not sufficiently comprehensive to include it. These cases are interesting but not persuasive.

Neither the Wisconsin nor the Kentucky statute was so comprehensive as the Illinois act, and these cases give little help upon the precise question we are here called upon to decide.

Defendants in their argument have set out the alleged bills of sale and the contracts in full, although, as plaintiff points out, these do not appear in the record. The record proper discloses only a statement of claim which was stricken apparently for the reason that in the opinion of the court it did not, as a matter of law, state a case.

Contrary to the statements of defendants heretofore cited, we hold the contracts with plaintiff conveyed an interest in property of the defendant company and are security contracts covered by the statute.

The transactions set forth in plaintiff’s statement and documents executed by the Absopure Oil Company disclose the sale to plaintiff of an interest in all of the company’s oil sold by the company through all the pumps operated by the company under like contracts. These purported to convey to plaintiff the right to have the company set aside out of the proceeds of such sales of oil a sum to be fixed by the company as plaintiff’s . share in the profits which should not be less than six cents a gallon. This conveyed an interest, namely, a right in property less than the title. 33 Corpus Juris 262.

Essentially the bills of sale, together with the contracts, reading the same as they are set up verbatim, seem to be the kind of instruments from the sale of which it was the intention of the legislature to protect the community. The investment was highly speculative in its nature, and while differing in many respects, was not altogether unlike that considered by the second division of this court in Prohaska v. Hemmer-Miller Development Co., 256 Ill. App. 331, where the provisions of the statute were held applicable.

We hold that the statement of claim set up a good cause of action under the statute and that the court erred in granting the motion of defendants to dismiss the suit. The judgment is therefore reversed and the' cause remanded for proceedings consistent with the views expressed in this opinion.

Reversed and remanded.

McSurely and O’Connor, JJ., concur.


text:
    Carmine Rocco, Plaintiff in Error, v. Chicago City Bank and Trust Company, Defendant in Error.
    Gen. No. 36,769.
    Opinion filed November 6, 1933.
    Louis Jaffe, for plaintiff in error.
    Rathje, Wesemann, Hinckley & Barnard, for defendant in error; Francis E. Hinckley, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

Complainant filed a bill to foreclose a trust deed by which certain described premises were conveyed to the defendant trust company to secure an indebtedness of $130,000 represented by 190 notes. She averred that she was the owner of three of these notes for $1,000 each; that the same were in default; and asked that she might be decreed to represent all the holders of the notes.

The trust deed provides that in case of default then the whole principal sum shall at once, at the option of the holder of said principal note, become immediately due and payable without notice, and that the legal holder of said principal note or the trustee for the benefit of the legal holder of said note shall have the right immediately to foreclose the trust deed. The trust deed described the principal note as one for $130,000.

The trust company appeared and filed a plea setting up that it was the trustee under the trust deed; that in the interest of all the holders of notes secured by the trust deed it had on January 23, 1932, prior to the begimiing of the present suit, filed a bill to foreclose the trust deed in the superior court of Cook county; that thereafter as trustee it went into possession of the premises and was then in possession of the same and in receipt of the rents for the benefit of all the holders of the notes. The plea, upon hearing, was sustained and the bill dismissed, and this decree we are asked to reverse.

Complainant says that she was not made a party to the suit begun by the trustee in the superior court ; that no defendant was served in that suit by summons or by publication, and that she was therefore entitled to start her suit and press it to a conclusion. She cites a number of cases: Norris v. Ile, 152 Ill. 190; Lyon v. Moore, 259 Ill. 23; Gage v. Chicago Title & Trust Co., 303 Ill. 569; Mack v. Liverpool & London & Globe Ins. Co., 329 Ill. 158.

The above cases all hold rightly that service of summons or entry of appearance is necessary in order that complainant in a bill of equity may acquire a Us pendens of the litigation, but that has nothing to do with any question arising on this record.

As a matter of fact, complainant as the owner of only part of the indebtedness could not maintain a suit to foreclose all of it. Seidel v. Holcomb, 249 Ill. App. 10. There is nothing in the record to sustain her statement that defendants in the suit in the superior court were not served with summons.

The plea which upon hearing would of course be taken as true, challenges the right of complainant to maintain her suit. The court held that this right was vested in the trustee and not in complainant, and the ruling was correct on this record. The decree is therefore affirmed.

Affirmed.

McSurely and O’Connor, JJ., concur.


text:
    In re Petition of Roman Teiszerski, Insolvent Debtor. James Carone, Appellee, v. Roman Teiszerski, Appellant.
    Gen. No. 36,827.

      Opinion filed November 6, 1933.
    Max C. Liss, for appellant.
    Butz, Hutchinson, Nutt, Lane & Murphy, for appellee ; Daniel F. Murphy, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

Appellant, Roman Teiszerski, having been taken into custody by the sheriff of Cook county upon a Ca. Sa. issued upon a judgment for $1,000 entered against him and in favor of James Car one in the superior court of Cook county, filed a petition for relief under the Insolvent Debtors’ Act (Cahill’s Ill. St. ch. 72, U 5, sec. 2). The creditor answered, and the court heard the evidence, made a finding that malice was the gist of the action in the superior court in which the judgment. was entered against petitioner, overruled motions for a new trial and in arrest of judgment and entered an order remanding petitioner to the custody of the sheriff of Cook county. To reverse that order petitioner prosecutes this appeal.

The third count of the declaration filed in the superior court charged that defendant maliciously, wantonly and with conscious indifference to the life, limb and safety of plaintiff, drove an automobile into, upon and against the automobile of plaintiff. Defendant filed a plea of not guilty. There was a motion to dismiss the third count, which was denied. The court heard the evidence and made a finding that malice was the gist of the action as hereinbefore stated.

In support of his appeal petitioner urges a single proposition. He says that it is the uniform law of Illinois that where there are a number of general negligence counts and one possible wanton and wilful count and one general verdict in automobile negligence cases, our courts have universally held that malice is not the gist of the action and that under the Insolvent Debtors’ Act the petitioner is rightfully discharged. In support of that proposition petitioner cites the well known cases of Levy v. Schikowski, 239 Ill. App. 447; Abbrassart v. Bouchard, 241 Ill. App. 484; Stoike v. Bonasera, 243 Ill. App. 281; Mantske v. Rhutassel, 248 Ill. App. 492; Scanlon v. Whalen, 249 Ill. App. 19.

The proposition does not correctly state the law, and the cases cited do not sustain it. On the contrary, it was held in Jernberg v. Mix, 199 Ill. 254 (and the courts have ever since consistently followed that decision), that where there are several counts in the declaration, some of which state a case of which malice is not the gist, • and others a case in which malice is the gist, such a record prima facie shows malice, and that the burden is cast upon petitioner to prove if he can that malice was not in fact the gist of the action in which judgment was rendered against him.

In this cáse petitioner, in conformity with that rule, undertook tq make such proof, and witnesses produced by the parties were heard on that issue. The trial court was of the opinion that the evidence in a legal sense proved malice, and we cannot say that the finding is against the weight of the evidence or hold that as a matter of law there was no malice.

The evidence submitted tended to show that at the time of the accident petitioner was driving a Packard automobile southwesterly on Archer avenue in Chicago near its intersection with the Belt Line railroad; that the automobile of respondent had come to a stop and was standing on Archer avenue at the east side of the Belt Line railroad tracks; that the gates in front of the railroad crossing were just coming down; that petitioner, driving his car at a speed of from 40 to 50 miles an hour, crashed into the rear of respondent’s car and thence through the gates, where his Packard car was struck by the engine of a passing train.

Petitioner and his companion riding with him give the usual low estimate as to the speed at which the Packard was going, but evidently realizing the futility of this evidence in view of the uncontradicted facts, -testified that the Packard was struck in the back by a third car and that this brought about the accident. This third car was not seen by any other witness.

While no'specific and particular malice appears so far as petitioner is concerned, the evidence tended very strongly to show general malice and a state of mind wholly indifferent to the rights of others and wholly regardless of property or life. This was sufficient to establish intentional wrongdoing, of which malice was the gist.

The order of the county court is affirmed.

Affirmed.

McSurely and O’Connor, JJ., concur.