text:
    W. L. Kinsman, Administrator of the Estate of Guy Zarring, Deceased, Appellant, v. Victor Peterson and Gordon Peterson, Appellees.
    Gen. No. 9,176.

      Heard in this court at the February term, 1937.
    Opinion filed April 14, 1937.
    Rehearing denied June 21, 1937.
    Malo & Bell, of Watseka, and Schneider & Schneider, of Paxton, for appellant.
    Roscoe C. South, of Watseka, for appellees.
   Mr. Justice Wolfe

delivered the opinion of the court.

W. L. Kinsman, as administrator of the estate of Guy Zarring, deceased, brought suit in the circuit court of Iroquois county, against the defendants, Victor Peterson and Gordon Peterson, to recover damages for the alleged wrongful death of plaintiff intestate, caused by an automobile accident which occurred on January 15, 1935.

The amended complaint consists of seven counts, alleging that on the 15th of January, 1935, Victor Peterson was the owner and in possession of an automobile ; that Gordon Peterson, his son, was then and there driving said automobile at the request and direction of, and about the business of his father, Victor Peterson; that Zarring, as he drove along on the public highway, was lawfully on said highway, and that he exercised due care and diligence for his own safety; that Gordon Peterson so carelessly and negligently managed and drove said automobile, that he ran against and upon said Guy Zarring, and then and there killed him.

The first count charges general negligence. The other counts charge negligence, running at too great a speed, not having the automobile equipped with good and efficient brakes, and driving at a greater rate of speed than was reasonable and proper — having regard for the traffic, etc. They ask damage in the sum of $10,000.

The defendants, in their answer, admit the death of Guy Zarring, but deny the averments of any and all negligence charged in each of the counts in the complaint.

Victor Peterson filed a special plea denying that Gordon Peterson was driving the car at his request or direction,, or about his father’s business, and denied that Gordon Peterson was a servant or agent of the defendant, Victor Peterson, at the time and place in question, as averred in the complaint.

Trial was had before a jury, which found the issues for the defendants, and after the usual motion, the court entered judgment on the verdict, and it is from this judgment that the case is brought to this court for review.

Mr. Zarring was driving north between Paxton and Loda, Illinois, on route Vo. 45, on January 15, 1935. He was driving a horse attached to a wagon, about five o’clock, p. m. Frank Hitchens, who was living at Loda, Illinois, was driving his automobile northward at the time, and collided with the wagon of Zarring. Zarring was knocked out of his wagon by the impact of Hitchens’ car. Hitchens got out of his car and went to where Zarring was lying on the road. At this time Laurence Thilmony and his sister Theresa Thilmony were driving from the north toward, the place of the accident and stopped on the west side of the road, and they got out onto the road where Zarring was lying. There was some discussion as to where Mr. Zarring should be taken. Just as they were about to remove Mr. Zarring from the road, a car driven by Gordon Peterson came from the south. Mr. Thilmony and Mr. Hitchens jumped out of the way of the Peterson car, and the car ran over Mr. Zarring and'crushed him so that he died immediately. There is no evidence as to the rate of speed that Peterson was driving as he approached the scene of the accident.

The evidence shows that Gordon Peterson was driving his father’s car on the night in question; that he is a son of Victor Peterson; that he was taking his sister and two other girls to a show in Paxton; that Gordon Peterson had asked his father for the use of the car to take the girls to the show. After a motion for a new trial had been filed, an additional motion was filed, alleging that Gordon Peterson was a minor, and that the court could not proceed under the law without first appointing’ a guardian ad litem. A guardian ad litem was. appointed at the request of the plaintiff’s attorney, but the motion for a new trial was overruled. The appellant insists that the verdict of the jury is manifestly against the weight of the evidence, but as the verdict must be reversed and remanded for other reasons, we do not attempt to say whether the verdict is, or is not, against the manifest weight of the evidence.

The appellant alleges that all of the instructions that the court gave in behalf of the defendant are erroneous; therefore, the judgment should be reversed. The appellee insists that the appellant is not in a position to raise these questions as the instructions are not set forth in the brief and argument. It would be much more convenient for a court of review if these instructions were in the brief and argument, so that we could follow the arguments of the attorneys when they are discussing a particular instruction, without having to turn to the abstract to see what the instruction is. The appellant has not argued the point in what manner some of the instructions are erroneous. The court will only consider those instructions that have been specifically criticised. It will be observed that quite a number of the defendants’ instructions are on the theory that both of the defendants must be proven guilty of negligence before the plaintiff is entitled to recover. This is not the law. The plaintiff does not charge that Victor Peterson was guilty of any negligence, but was the owner of the car, and that the son was operating it as the agent and servant, and therefore, he should be held liable for the accident of said agent. ' If the jury would follow these instructions, they could not help but find a verdict in favor of both defendants. The appellee claims that the error, if any, is cured by other instructions. We cannot agree to this contention. The mere giving of a form of verdict finding each of the defendants guilty or not guilty would not cure this defect. We think that defendants’ instruction No. 5 was erroneous, as it assumes facts that should be left to the jury to decide. Whether the driver of the defendant’s automobile was confronted with sudden danger, or apparent sudden danger, were questions of fact for the jury to decide.

It is not necessary to discuss the effect of the failure to call the court’s attention during the trial of the case, that Gordon Peterson was a minor, and that he had no guardian ad litem. The guardian ad litem has been appointed for the said Gordon Peterson and the same error would not occur in the second trial of the case. The evidence is not contradicted,that Victor Peterson was the owner of the automobile that caused the injury to Guy Zarring; that he gave his permission to his son, Gordon Peterson, to use the car and take his sister and two other young ladies to see the show. There is' no evidence whatsoever, in the record, that Gordon Peterson was the agent or servant of his father, Victor Peterson, at the time of the accident in question. Since the decision of the case of White v. Seitz, 342 Ill. 266, “the family purpose doctrine” has not been recognized in this State. In order to hold Victor Peterson liable, the burden of proof was upon the plaintiff to prove that at the time of the accident in question, Gordon Peterson was acting as servant or agent of Ms father. This' he failed to do; therefore, there was no evidence in the record to hold the defendant, Victor Peterson, liable for the injuries complained of in this suit, and the judgment of the trial court will be affirmed as to Victor Peterson, and the judgment as to Gordon Peterson is hereby reversed, and the case remanded to the circuit court of Iroquois county.

Affirmed as to Victor Peterson, and reversed and remanded as to Gordon Peterson.


source: Caselaw Access Project

author: Mr. Justice McSurely

license: Public Domain

text:
    John A. Ouska et al., Appellees, v. Gustaf Pearson et al., Appellants.
    Gen. No. 39,398.

      Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 14, 1937.
    Rehearing denied June 28, 1937.
    Robertson, Crowe & Spence, Owens & Owens and John E. Erickson, all of Chicago, for appellants; Clyde C. Fisher, of Chicago, of counsel.
    Brown, Fox & Blumberg, of Chicago, for appellees; Jacob Logan Fox, Lionel A. Mincer and Jacob T. Pincus, all of Chicago, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiffs alleged that defendants had in writing guaranteed payment of an issue of bonds aggregating $32,500, secured by trust deed, and as holders of an unpaid portion of these bonds sought to recover from defendants on this instrument. Upon trial they had a directed verdict, and judgment was entered against each of ilie defendants for $27,368.77. This appeal follows.

Upon trial plaintiffs introduced in evidence the document upon which suit is brought. Defendants claimed that it was uncertain and ambiguous in its terms and sought to introduce parol testimony explaining the circumstances giving rise to the document and the purpose of its execution by defendants. Objections to any explanatory evidence were sustained and the directed verdict and judgment followed.

Does the document come within the rule that where an instrument is clear and unambiguous in its terms it must be construed according to the language used, without any extrinsic evidence? (Williams v. Fletcher, 129 Ill. 356.) Or is the instrument ambiguous and of doubtful meaning, permitting the court to take into consideration all the facts and circumstances surrounding the parties at the time it was signed! (Peoria Savings, Loan & Trust Co. v. Elder, 165 Ill. 55.)

The amended statement of claim alleges that on or about January 10,1928, Grace F. Rickoff and Clarence M. Rickoff, being about to become indebted in the principal sum- of $32,500, executed their 83 bonds aggregating this amount and maturing at varying dates; that on or about June 26,1928, the Rickoffs and the defendants herein requested the Capital Mortgage Corporation to pay the Rickoffs the amount of $32,500, accepting the bonds as security, in consideration of which the defendants on that date executed and delivered the document, the subject matter of this suit.

This document describes the defendants as the contractors or subcontractors in connection with an apartment building constructed upon a certain lot (apparently the lot owned by the Rickoffs upon which they sought the loan to be secured by the trust deed). The document recites that the defendants “do hereby jointly and severally guarantee the mortgage executed by way of trust deed signed, executed and delivered under date of January 10, 1928, by Grace F. Rickoff and Clarence M. Rickoff to Chicago Title & Trust Company, trustee, and of all of the bonds secured by the said trust deed, the delivery of which trust deed and bonds was made by said Grace F. and Clarence M. Rickoff to Capital Mortgage Corporation, with whom said Grace F. and Clarence M. Rickoff applied for a real estate mortgage loan in the sum of Thirty-two Thousand, Five Hundred ($32,500.00) Dollars, and application for which is in the files of said Capital Mortgage Corporation.” The document further recites that it is for the benefit of the Capital Mortgage Corporation and of all persons who may be purchasers of any of the bonds secured by the trust deed; the defendants jointly and severally agreed to save harmless the Mortgage Corporation or its assigns “from all claims, demands, actions or causes of action of every nature and description arising out of or on account of work done upon or materials furnished for ... or upon the building ... or improvements erected upon the real estate described.” (Then follows the legal description.) The defendants warranted that there were no claims for mechanics’ liens on account of labor or material furnished upon the property, and that if any should be made the defendants agreed to protect the mortgage corporation or its assigns on account of any such claims.

The purpose of the document is stated as follows:

‘ ‘ This agreement is executed by the undersigned for the purpose of inducing Capital Mortgage Corporation to disburse moneys under the aforesaid mortgage, and for the purpose of inducing Capital Mortgage Corporation to make such disbursements the recipients of most of said proceeds under said loan being the undersigned contractors, and this agreement is executed in consideration thereof, especially by virtue of entanglements which arose in connection with the said real estate subsequent to the application for said real estate loan having been made to said Capital Mortgage Corporation by the said Grace F. and Clarence M. Back-off. . . . ” This was signed by all the defendants.

Plaintiffs say this document is an unambiguous and clear guaranty by defendants of the payment of the bonds mentioned therein. Considered alone the document raises several questions. Did defendants intend to guarantee the payment of the mortgage indebtedness, and if so why did they not express this definitely? In cases like Continental Ill. Nat. Bank & Trust Co. v. Cardwell, 287 Ill. App. 227, cited by plaintiff, the defendant in express terms guaranteed the payment of the indebtedness. The guaranty in the instant document does not contain in definite language any agreement to pay. It guarantees the mortgage and the bonds secured by the trust deed. The document was drawn by the mortgage corporation, and if it was intended to guarantee payment, why did the document leave this open to question?

Moreover, the signers of the document were persons who had contributed labor and material in erecting a building upon the lot conveyed by mortgage and manifestly executed this instrument for the purpose of receiving payment therefor. If to accomplish this they obligated themselves to pay the entire mortgage indebtedness, they would be worse off than if they had made no move to receive payment for they would have obligated themselves for a larger amount than was due them for labor and material.

It is also reasonable to assume that the respective amounts due severally to each of the defendants would be greatly less than the amount of the mortgage indebtedness. In fact, it is stated that the defendants received payments in amounts running from $1,000 to one to something* over $9,000 to another. It is unthinkable that a subcontractor would obligate himself to pay $32,500 in order to obtain payment of $1,000 due him. These considerations and others raise serious questions as to the intention of the signers of the document.

The document contains a suggestion as to this in reciting that it is executed for the purpose of enabling the contractors to receive payments, and “especially by virtue of entanglements which arose in connection with the said real estate subsequent to the application for said real estate loan. . . . ” What were the “ entanglements” which called for the execution of the document ?

Considering the document, then, as a whole, and not as expressing an agreement in any single provision or word, we hold that the contract, literally construed, would be unusual, inequitable, and such as reasonable men would not likely enter into. Pressed Steel Car Co. v. Eastern Ry. Co., etc., 121 Fed. 609. The document cries for an explanation. This explanation was furnished in the offer of proof made by defendants and excluded by the court.

Briefly stated, the defendants offered to prove that Clarence Kickoff owned the property in question and made arrangement with certain of defendants, as contractors, to erect a building thereon; not receiving payment, the work was suspended; the following January, 1928, a number of the defendants met with Kickoff and were shown by him a letter from the Capital Mortgage Corporation stating that there would be sufficient money to pay the contractors; the work was then resumed. No payments being made, the contractors subsequently were told by Kickoff that the mortgage corporation refused to pay the money on the loan as they had discovered that there was a prior mortgage of $7,500 on the land and that it was necessary to take care of this before the loan of $32,500 could be consummated and the contractors receive their pay. Defendants were told by Mr. Kahn, president of the mortgage corporation, that it was necessary for all the contractors who had worked- on the building to do something to get the $7,500 land mortgage out of the way, and that they must also release their liens on the building before any money would be paid out on the loan.

Later they were told that there would not be enough money from the loan to pay all the contractors in full and that each must waive a certain portion of the amount of his claim, and that they must sign an agreement to waive all lien claims and also to remove the $7,500 prior land mortgage. Defendants met at the office of the mortgage corporation and were shown by Mr. Kahn the typewritten agreement in question, which they were told they must sign before any money would be paid on their claims, and the document was explained to the contractors hy Mr. Kahn, as above stated. Nothing was said about the contractors agreeing to guarantee the payment of the principal and interest of the $32,500 loan.

Defendants offered to prove that at this and other meetings no mention was made of the contractors guaranteeing the payment of this mortgage. They sought to introduce in evidence a letter written by Mr. Kahn tending to confirm this.

Defendants also offered to show that the contractors borrowed from the North Town State Bank sufficient money to pay off this $7,500 land mortgage. After this was paid and all the contractors had signed the document in question the mortgage corporation paid the contractors lesser amounts than were actually due them — as we have said, ranging from $1,000 to $9,315. These payments were accepted in full settlement of their claims.

All the evidence offered by defendants should have been admitted. It explained the doubtful and unusual provisions of the instrument and tended strongly to show that the contractors signing it intended only to guarantee that the mortgage loan of $32,500 was a first lien, this having been accomplished by the payment of the prior land mortgage of $7,500. It also tended strongly to prove that the only purpose of the contractors in doing this and waiving their lien claims and the execution of the document to this effect was to enable the contractors to receive payments out of the $32,500 for labor and material furnished in the construction of the building.

Defendants’ counsel questions the right of plaintiffs to bring suit without complying with section 22 of the Civil Practice Act, Ill. State Bar Stats. 1935, ch. 110, ¶ 150; Jones Ill. Stats. Ann. 104.022, which requires that an assignee of a non-negotiable chose in action set forth on oath how and when he acquired title, to which plaintiffs made the sufficient answer that they are not suing as assignees but as bondholders and beneficiaries under the instrument sued on.

Plaintiffs also assert the right to have a separate judgment entered against each of the several defendants as provided for in rule 28 of the municipal court.

We are of the opinion the jury should be permitted to consider all the facts and circumstances surrounding the transaction and that the exclusion of the evidence offered in defense is reversible error. The judgment is therefore reversed and the cause remanded.

Reversed and remanded.

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


author: Mr. Justice O’Connor

text:
    Margaret Taugner, Appellant, v. George Kidd, Appellee.
    Gen. No. 39,429.
    Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 14, 1937.
    Keener & Keener and Benjamin Bass, all of Chicago, for appellant.

      Ross & Berchem, of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff brought suit against defendant to recover $400 claimed as a death beriefit due her from defendant union of which her husband had been a member. The facts were stipulated; the court found in favor of defendant; judgment was entered accordingly and plaintiff appeals.

The stipulated facts are that Andrew Taugner became a member of the defendant Truck Drivers and Chauffeurs Union Local 705 in 1923, and continued to be a member until the time of his death, December 25, 1935. He paid his monthly dues of $3 a month from the time he became a member until December 31, 1935, which was about six days after his death. Defendant refused to pay the death benefit of $400, contending that Taugner was not in continuous good standing in the union for three months prior to his death, as the by-laws of the union required. Section 25 of the bylaws provides: “Dues of the Union shall not be less than $3.00 per month, payable on or before the first' day of each mpnth.” And the stipulated facts show that from March, 1930, Taugner did not promptly pay his dues on the first of each month but was often two and three months late, but had never been suspended. October 10, 1935, he paid his August, September and October dues, and on November 27th paid his Novem.ber and December dues for the balance of the year; and as stated he died on December 25, 1935.

In their brief counsel for the union say that the stipulated facts show that Taugner was not in continuous good standing for three months prior to his death. They state their position to be, “Since ‘good standing’ implies prompt payment of dues on or before the first of the month, and since the Stipulated Facts show that October dues were not paid until October 10th (Taugner having died less than three months thereafter), it follows that Taugner was not in continuous good standing for the three months immediately preceding his death, and that, therefore, no death benefit is payable. ’ ’

The pertinent parts of the by-laws provide, “All members who are three months in arrears for dues shall stand suspended and deprived of all rights and 'privileges of membership but can be reinstated upon payment of amount of dues. Any member failing to be reinstated during the-fourth month shall pay a reinstatement fee of $5.00 in addition to the amount due. ...

“A member must be in continuous good standing-three months prior to sickness or death, before a benefit can be paid.

“The first three months after becoming a member, . . . no benefit will be paid; thereafter the benefits will be from three to the end of six months, $100.00 ; after six months to the end of twelve months, $200.00; thereafter, $400.00.

“A death benefit will be paid providing the member was in good standing.

“A member owing the month’s dues previous to his sickness shall be debarred from all benefits.”

And it is further stipulated that if defendant union is liable, $400 is payable to plaintiff.

Counsel for defendant say that Taugner throughout the years he was a member of the union paid his dues late; that for this reason he continued to be a member of the union but “not a member entitled to receive benefits ... he retained his membership, but not benefit standing,” and in support of this the cases of Wall v. Brotherhood of Painters, 165 Ill. App. 59, and Stehlik v. Milwaukee Typographical Union, 169 Wis. 65, were cited and relied upon.

In the-Wall case Julia Wall, widow of Henry Wall, who had been for many years a member of the union, brought suit to recover benefits claimed to be due her on account of his membership in the union. He died May 7, 1909. Plaintiff had a judgment in her favor which was reversed. The court referred to the constitution of the union and said (pp. 60-61): “Section 93 of the constitution gives the wife of a full beneficial member at his death a benefit of $250 on a membership of between seven and ten years, ‘provided the member has not been indebted for an amount equal to 3 months dues, but has been in continuous good standing during the period immediately preceding* his death. ’ ” ,In that case the dues were payable on the first Wednesday of each month. The December dues were not paid until the following March 3rd. The January and February dues were paid March 31 and the March dues April 21, but the record showed no payment of a reinstatement fee. The court said (p. 61): “March 3, 1909, when the payment for March was due, the dues for the three preceding months had not been paid. The 46th section of the constitution provides: ‘Any member indebted for 3 months ’ dues shall stand suspended, a vote of the L. U. not being required to suspend him. ’ ’ ’ And continuing (p. 62): “There is nothing in the record to show that it was intended by accepting the payments to waive the requirements of section 46 of the constitution, which provides: ‘A suspended member shall not again be placed in benefits until 6 months from the date of settling in full all arrearages.’ . . . Such reinstatement, by section 46, precluded him from benefits for the period of 6 months thereafter, within which time he died.” We think it is clear that this case is not in point. There is no provision in the by-laws of defendant union that is at all similar to section 46 of the constitution in the Wall case. That section provided that a member who was indebted for three months dues was ipso facto suspended, and it further provided that a suspended member should not again be entitled to receive benefits until six months after he was reinstated. The by-law of the union in the case before us provides that all members who are three months in arrears for dues shall stand suspended but can be reinstated upon payment of amount of dues. And there is no provision that after his reinstatement he shall not be entitled to benefits for a period of six months, as was the situation in the Wall case.

In the Stehlik case (169 Wis. 65) suit was brought by the administratrix of a deceased member of a typographical union to recover a death benefit payable only in case the member was in “good standing,” and this was so only when his dues for the current month were paid. At the time of his death he was two months in arrears and it was held that no recovery could be had. It is clear that the facts are not similar to the facts in the instant case. Here the dues were paid for the entire month of December, 1935, and the member died the 25th of that month.

There is no provision in the by-laws of defendant union that provides that a member of the union may continue to be such and no one be entitled to the sick or death benefits payable; obviously, we ought not to read such a provision into the by-laws. Dugan v. International Ass’n of Bridge and Structural Iron Workers, 202 Ill. App. 308. In passing on the by-laws of the defendant in that case we said they should be “liberally construed [in favor of a claimant] and in case of an attempt by a society to declare a forfeiture will be most strictly construed.” Coverdale v. Royal Arcanum, 193 Ill. 91. A section of the by-laws which we have above quoted provides: “A death benefit will be paid providing the member was in good standing.” It will be noted that the only qualification is that a member be in good standing.

Another by-law provides that “A member must be in continuous good standing three months prior to sickness or death, before a benefit can be paid.” We think this means that a member must belong to the union for three' months before a sick or death benefit is payable, or, if he has been suspended and reinstated he must continuously be in good standing for three months after such reinstatement. This appears from a by-law which follows the one last quoted; it provides, “The first three months after becoming a member, either by paying initiation, transfer card or returning on withdrawal card, no benefit will be paid. ’ ’

Substantially the same contentions made in the instant case were advanced in Olszewski v. Fitchie, 287 Ill. 452, and it was held that the widow of a deceased member of the Milk Wag*on Driver’s Union was entitled to a death benefit. We agree with what was said in that opinion and with the result reached. We hold that plaintiff, the widow of the deceased union member, was entitled to recover $400 as death benefit.

The judgment of the superior court of Cook county is reversed and judgment will be entered in this court in plaintiff’s favor and against the defendant for $400.

Judgment■ rever sed,and judgment for plaintiff in this court.

Matchett, P. J., and McSurely, J., concur.


text:
    Benedict K. Goodman, Appellee, v. Theodore Heinen et al., Appellants.
    Gen. No. 39,441.
    Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 14, 1937.
    Rehearing denied and additional opinion filed June 29, 1937.
    Rathje, Hinckley, Barnard, Kulp & Tucker, of Chicago, for appellants; Francis E. Hinckley and Charles Herbert Miller, of Chicago, of counsel.
    McKinney, Folonie & Grear, of Chicago, for appellee; Hayes McKinney, of counsel:
   Mr. Justice O’Connor

delivered the opinion of the court.

Benedict K. Coodman filed his bill to foreclose the lien of a trust deed securing an indebtedness on which there was a balance due of $86,000. Two days thereaftef, on motion of complainant, a receiver was appointed. Twenty-nine days afterward some of the defendants appealed to this court, where the order was reversed. Goodman v. Heinen, 255 Ill. App. 395. Upon his appointment the receiver entered upon the discharge of his duties and collected the rents until the order was reversed, at which time he had $2,040.77 remaining in his hands. He filed his account and deposited the money with the clerk of the court, as ordered by the chancellor. The trust deed which Goodman sought to foreclose was a second lien on the premises. At the time the bill was filed the first mortgage of $125,000 was overdue. There was a third mortgage lien securing* an indebtedness of $6,500.

January 2,1930, the day the order appointing the receiver was reversed, a second receiver was appointed in a suit brought to foreclose the first mortgage and the first receiver surrendered the property to him. July 14, 1933, Goodman filed his petition praying that the $2,040.77 be turned over to him to apply on the amount due him. Some of the defendants, who claimed to represent the owner of the equity, filed their answer praying that the money be awarded to them. There was a hearing before the chancellor, considerable evidence was introduced on both sides, a decree was entered awarding the money to Goodman, and some of the defendants prosecute this appeal.

The record discloses that a decree was entered in the suit foreclosing the trust deed which was a first lien on the premises, in which it was found there was due the complainant in that case more than $156,000 and that there was due Goodman $93,860.43. The property was afterward sold, pursuant to the decree, for $135,000. The sale was approved and a deficiency decree entered in favor of complainant in that suit for $26,379.02.

On the hearing of the issue raised by Goodman’s petition and defendants’ answer, considerable evidence was introduced as to what took place prior to and at the time of the appointment of the receiver, the evidence on behalf of Goodman being to the effect that the appointment of the receiver was consented to by defendants: while defendants’ evidence tended to show that under the facts Goodman was entitled to have a receiver appointed, but that they did not consent to it. The chancellor made no specific finding on this point but, as stated, awarded the money in the hands of the clerk to Goodman.

Counsel for Goodman contend that the conduct of defendants’ counsel at the time of the appointment of the receiver was such that it would be inequitable to award the fund in question to defendants because “It would clearly violate the rule against giving any advantage to one who does not come into equity with clean hands”; the evidence shows that defendants’ counsel knew that no valid objection could be made to the appointment of a receiver; that he examined the draft of the order prepared by counsel for complainant for the appointment of the receiver and knew that it was technically defective under a recent decision of the Appellate Court, in which case defendants’ counsel represented one of the parties, but that he failed to call attention to such defects and thereby misled the court into entering the order which was not technically in proper form.

On the other side, counsel for defendants say that at the time of the appointment of the receiver their counsel ‘ disregarded no duty and violated no obligátion to the Court or to opposing counsel by anything that he did or failed to do at the time. ’ ’ And counsel contend that since the order appointing the receiver was reversed, and “since the property was taken from the possession of Edward M. Bertha & Company, which was lawfully collecting the rents . . . the property must go back to the place whence it came, and the income accrued in the meantime belongs to the persons or corporation who would have had it if the improper order had not been entered, namely, Edward M. Bertha & Company. ’ ’

We think it unnecessary to pass on the question of ethics involved because we are of opinion that the fund in question was properly awarded to Goodman. The order appointing the receiver was reversed by the third division of this court for the reason that, “There was neither proof nor findings which justified the waiver of a complainant’s bond,” and that “The order of appointment provided compensation for him on a commission basis, after sale, whether there was a deficiency or not. This affords an additional reason for holding the order to be erroneous.”

The trust deed provided that after a breach by the grantors of any of the covenants the trustee might take possession of the premises. Further, the grantors waived all right to the possession and income from the premises pending foreclosure and until the period of redemption from any sale had expired; that a receiver might be appointed without notice; that as further and additional security the grantors assigned all rents, issues and profits arising out of the premises to the trustee, and authorized him to collect the rents, bring forcible detainer, re-rent the premises or any portion thereof on such terms as the trustee might deem proper, and apply the proceeds to any expenses the trustee might incur, and to the payment of the principal indebtedness secured by the trust deed, rendering the overplus, if any, to the grantors when the indebtedness was paid in full.

At the time the bill was filed $86,000 of principal was due and unpaid. The indebtedness secured by the first mortgage on the property, $125,000, was also overdue. The property was sold pursuant to a decree entered foreclosing the first mortgage lien. The sale was approved by the court and after applying the proceeds of the sale there was a deficiency of more than $26,000 still due and owing under the first mortgage. The decree in that suit found there was more than $93,000 due Goodman, and unless he is awarded the fund in question he will be unable to realize anything. In these circumstances it would be highly inequitable to award the $2,040.77 to the owner of the equity of redemption or to his agent.

Moreover, under the express terms of the trust deed the rents were assigned to the trustee as additional security for the payment of the indebtedness. The trust deed also provided that upon default by the grantors or their assigns, the trustee might enter into possession of the premises, collect the rents and take charge of the property, and that it was not necessary that the trustee go into court to enforce these provisions. After default the fee title to the premises was in the trustee and the trustee could then take possession of the property. The trustee’s title was a base or determinable fee and it could retain possession until the debt was paid. Wolkenstein v. Slonim, 270 Ill. App. 473, affirmed 355 Ill. 306. Clearly then the rents collected belonged to Goodman. In any view of the case, we think the rents were properly awarded to Goodman. The order appointing the receiver was reversed because the court held it did not comply with the provisions of ch. 22, par. 55, Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 106.19. The court also held “the order to be erroneous.”

To sustain their contention counsel for defendants rely chiefly on the cases of Ruprecht v. Muhlke, 225 Ill. 188, and Haugan v. Thorgersen, 270 Ill. App. 128.

In the Ruprecht case a bill was filed to foreclose a mortgage. The holder of a junior incumbrance was made a party defendant; he answered. A decree of sale was entered and the premises sold for sufficient to satisfy the amount due complainant. Afterward defendant, who owned the junior incumbrance, filed a petition, and pursuant to the prayer thereof a receiver was appointed. An appeal was taken from that order to this court inhere it was reversed. Ruprecht v. Henrici, 113 Ill. App. 398. The court there said (p. 401): “That a defendant cannot have affirmative relief on such an answer as that of appellee, and that to obtain such relief he must file a cross-bill, are propositions too well settled to admit of controversy. . . .

“If, either for want of jurisdiction or for want of the necessary pleading on which to base ultimate relief, such relief cannot be granted, a receiver cannot properly be appointed.” And continuing* the court said (p. 403): “Appellee’s counsel contends that the petition for a receiver was sufficient to warrant the appointment, which might be true had appellee filed a cross-bill for the foreclosure of his trust deed, with proper averments, which, if proved, would be a basis for an ultimate decree in his favor; but a mere interlocutory petition for a receiver cannot be regarded as a substitute for a cross-bill.” After the reversal by the Appellate Court of the order appointing a receiver, the owner of the junior mortgage filed a bill and asked for a receiver to collect the rents. The cotirt appointed a receiver and the rents collected by the receiver were awarded to the holder of the junior incumbrance. The decree was affirmed by this court. Ruprecht v. Henrid, 116 Ill. App. 583. Afterward a writ of error was sued out of the Supreme Court, where the decree was reversed in part, the court holding that the rents collected by the receiver appointed on the answer of the junior incumbrancer should have been awarded to the owner of the equity of redemption. The court there said (Ruprecht v. Muhlke, 225 Ill. 188, p. 193): “The receiver, under an order of court, obtained possession of the premises from- the plaintiff in error, and upon his appointment being set aside and vacated we see no reason why the possession of the premises should not have been restored to the plaintiff in error, and the rents, issués and profits arising* from the premises collected by the receiver, less the receiver’s legitimate expenses during the period intervening between his appointment and the annulment thereof, turned over by the receiver to the plaintiff in error. Had the possession of said premises not been taken from the plaintiff in error by - the receiver under the order of the court she would have received said rents, issues and profits, and as it subsequently appeared the receiver was improperly appointed and he was removed, we do not think the defendant in error can avail himself of such appointment to deprive the plaintiff in error of the use of said premises during the time said receiver was improperly in possession of said premises, but think that the receiver during that period must be held to have retained possession of said premises for the use and benefit of the plaintiff in error.” The court there further said that if it be conceded that the junior trust deed created a lien on the rents, (p. 194) “we think that lien could only be enforced, as against the plaintiff in error, who was in possession of the premises, . . . through a receiver, and as the receiver caused to be appointed by the defendant in error was improperly appointed, the defendant in error cannot, by reason of such illegal appointment, avail himself of such receivership to enforce against the plaintiff in error, who had been illegally deprived of the possession of said premises, said lien.” In that case it was held that a receiver was illegally appointed on the answer of the junior incumbrancer and that under our procedure this could not be done — that a cross-bill should have been filed. It does not appear that the provisions of the trust deed in that case were similar to the provision in the trust deed before us. In the instant case this court held (255 Ill. App. 395) that the order appointing a receiver was erroneous because no sufficient reason was shown in the order appointing the receiver for dispensing with the giving of a bond by the complainant, and that the order provided for compensation to the receiver on a commission basis, whether: there was a deficiency or not. The order here was merely erroneous and not illegal and void.

In Central Trust Co. v. McGurn, 257 Ill. App. 45, we had occasion to pass on the validity of the appointment of a receiver in a foreclosure suit and what should appear from the record to dispense with the filing of a bond by complainant, pursuant to ch. 22, par. 55, Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 106.19. We there reviewed the authorities and held that ‘ ‘ the whole record may be examined to determine whether a bond should be required of the complainant, and that it is not necessary that the order appointing the receiver contain the facts which, in the opinion of the court, excuse the giving of the bond.” That holding was concurred in by the nine justices of this court, and included the three justices who decided Goodman v. Heinen, 255 Ill. App. 395. In that case we further held that although the order appointing the receiver might have been defective, we would not reverse it because the verified bill set up sufficient facts to excuse the giving of the bond by the complainant to the adverse parties; and that it would be an idle ceremony to reverse the order so that a more proper one might be entered, which we refused to do. We there said (p. 56): “It would therefore be an idle ceremony to reverse the order, which we will not do. Wather v. Kersten, 115 Ill. App. 130.”

In the Walker case it was held that where a receiver was appointed in .a foreclosure suit, the complainant should, in the absence of a special'showing, be required to give bond to the adverse party, but that a failurfe to require such bond was not reversibly erroneous where the appointment of the receiver was proper:

In the Haugan case (270 Ill. App. 128) a receiver was appointed in a foreclosure suit and an appeal was taken to this court where the order was reversed. (263 Ill. App. 656.) The complainant then filed a petition in the foreclosure suit for the appointment of a second receiver and such appointment was made. In the interim the first receiver collected rents, and the court ordered the first receiver to turn over the money collected by him to the owner of the property. An appeal was taken to this court where the order was affirmed. In the opinion filed (263 Ill. App. 656) the court said, “The trust deed pledges the rents, issues and profits from the premises as security for the indebtedness, and provides that upon the filing of any bill for the purpose of foreclosing sáid trust deed, complainant shall be entitled as of right to the appointment of a receiver of the mortgaged property.” Whether the trust deed in that case contained provisions similar to those in the trust deed in the case before us does not appear, and the question whether the trustee was entitled, under the terms of the trust deed, to take possession of the rents, issues and profits without suit, was in no way considered. Here the trust deed assigned the rents and authorized the trustee, upon default, to take possession of the property. Moreover, in the instant case the evidence shows that no objection was made to the appointment of a receiver and that the only objection raised on appeal was that the order appointing the receiver was not in proper form.

In Freeman on Judgments (5th ed., sec. 1171, p. 2426), it is said restitution will not be ordered where one obtains money under a judgment afterward reversed, when in equity and good conscience he is entitled to retain the money so obtained. See also In re DeTamble, 88 F. (2d) 893. So, in the instant case, the record discloses that Goodman is equitably entitled to the money in question. His debt of more' than $93,000 is wholly unpaid and therefore the fund ought not to be returned to the owners of the equity, who still owe Goodman that amount.

We are further of opinion that the decree should be affirmed because the apparent owner of the equity is the Edward M. Bertha Realty Trust, and it does not make a claim to the fund; but the defendants contend the fund ought to be turned over to Edward M. Bertha & Company, a corporation, which was the agent of the building, collecting the rents and managing the property. We think this contention cannot be sustained. In no circumstances could the collecting agent be entitled to the fund.

The decree of the circuit court of Cook county is affirmed.

Decree affirmed.

Hatchett, P. J., and McSurely, J., concur.

Additional Opinion on Petition for Rehearing.

Defendants have filed a petition for a rehearing and say that in the foregoing opinion we reached our conclusion upon the contemplation of certain broad fundamental equities that seem to inhere in the facts of the case”; that the opinion showed that we had searched the record to ascertain certain facts which had not been abstracted and therefore not discussed in the briefs, and that in so doing we ‘ ‘ overlooked one item which, if considered, would unavoidably compel a conclusion contrary to that reached by the Court.” And counsel say in this connection that we took from the decree entered in the suit foreclosing the first mortgage on the property, the fact that more than $156,000 was due the complainant in that case, which was a first lien on the property; that- $93,860.43 was due Goodman, the plaintiff in the instant case, which was a subordinate lien on the premises; that the property was sold for an amount insufficient to pay the first lien; that there was a deficiency decree in favor of complainant in that suit of $26,379.02, and that from these facts we concluded it would be “highly inequitable to award the $2,040.77 to the owner of the equity of redemption or to his agent.” And counsel further say that we overlooked an item in the foreclosure decree in which it was found that Edward M. Bertha & Company had a lien for $4,130.60 on the premises in question, which was superior to Goodman’s lien, and therefore the fund of $2,040.77 in question should have been awarded to Edward M. Bertha & Company and not to Goodman. We think this contention is the result of a misapprehension of the holding of this court.

We held that by the terms of the Goodman trust deed the rents were assigned and that Goodman by the appointment of a receiver had sequestered the rents involved here; that the undisputed facts showed that Goodman was entitled to have a receiver appointed, but that the order was reversed by the third division of this court because it was not in proper form.

We think it obvious that we did not award the fund in question to Goodman because he had a second or third lien on the premises but because he was entitled to and had the rents sequestered by the appointment of the receiver. If the fund had been awarded solely on the ground of “broad fundamental equities” then it would go to the complainant, who had a first lien, and not to defendants in the instant case, whose lien was subordinate to that of complainant in that case.

The petition for a rehearing is denied.

Petition denied.

Matchett, P. J., and McSurely, J., concur.


author: Mr. Presiding Justice O’Connor

text:
    T. H. Reiter, Appellant, v. Illinois National Casualty Company, et al, Appellees.
    Gen. No. 39,415.
    McSurelt, J., dissenting.

      Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 28, 1937.
    Rehearing denied July 10, 1937.
    John A. Brown, of Chicago, for appellant.
    Otto Kerner, Attorney General, John B. Harris and William C. Clausen, Assistant Attorneys General, H. C. Moore and L. W. Ensel, both of Springfield, for appellees.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

T. H. Reiter filed his complaint in chancery against the Illinois National Casualty Company, a corporation, Claude H. Barr, Arthur M. Fitzgerald, Ernest Palmer, and the Fidelity and Deposit Company of Maryland, a corporation, the gist of which is, as stated by counsel for defendants, that he was divested of his stock in' the Illinois National Casualty Company and its affiliates by Ernest Palmer, Director of Insurance of Illinois, as a result of a conspiracy entered into by Palmer, Barr and Fitzgerald, and that they have wrongfully, fraudulently and unlawfully converted the stock to their own use, and he prays that the stock be returned to him or that he be awarded damages for its conversion.

Each of the defendants entered a special and limited appearance and a written motion to dismiss the suit, “for want of jurisdiction and want of venue.” Barr, Fitzgerald and Palmer, as ground for their motion, set up (1) that each of them was served with summons in Sangamon county where they were at all times residents; (2) that the transaction out of which plaintiff’s alleged cause of action arose took place in Sangamon county and not in- Cook'county; (3) that the complaint failed to state any joint cause of action against the five defendants; (4) that it failed to state any cause of action against the Casualty Company or the Fidelity and Deposit Company; and (5) that the Casualty Company and the Fidelity Company were joined as defendants without “prohable cause and in good faith for the purpose of obtaining a judgment against either of them, but solely for the purpose of fixing venue against the individual defendants in Cook county rather than in Sangamon county.”

The Illinois National Casualty Company, as ground for its motion to dismiss, set up (1) that it was a “newly consolidated company, never was a resident of or had offices in Cook County.” and that it was served with process in Sangamon County; (2) that section 8 of the Civil Practice Act [Ill. State Bar Stats. 1935, ch. 110, ¶ 136; Jones Ill. Stats. Ann. 104.008], which provides that suits might be brought against insurance companies incorporated or doing business in Illinois, in any county where the plaintiff resided, did not apply to the instant case but only to suits upon insurance policies and that it was not a proper party to the suit because no cause of action was shown against it. The Fidelity and Deposit Company’s motion to dismiss was upon the ground that it was a nonresident of Illinois, and all of the other defendants were residents of Sangamon county and were served with summons in that county where plaintiff’s alleged cause of action arose, and that it was joined as a defendant for the sole purpose of fixing the venue in Cook county; that the complaint did not allege any cause of action against it, but the only allegations were that it was surety on Palmer’s official bond as Director of Insurance, and that the wrongful acts alleged against him were not his official acts.

The court sustained the motion of each defendant, dismissed the suit, and plaintiff appeals.

The complaint takes up more than 46 pages of the abstract and therefore is not in accordance with the provisions of section 33 of the Civil Practice Act, Ill. State Bar Stats. 1935, ch. 110, ¶ 161; Jones Ill. Stats. Ann. 104.033, which requires that all pleadings “shall contain a plain and concise statement of the pleader’s cause of action,” nor is it in accordance with the old rules of pleading which were substantially the same as required by section 33. Kelly v. Boettcher, 85 Fed. 55.

The allegations of the complaint, so far as it is necessary to state them here, are that plaintiff owned a majority of the stock of the Illinois National Casualty Company; that in December, 1932, Palmer, as Director of Insurance of Illinois, caused an audit of the company to be made, which audit was completed in January, 1933, and showed the company to be in good financial condition, having a surplus over and above its liabilities of $230,000; that in February, 1933, the Illinois National Casualty Company was preparing its annual report to be submitted to Palmer as Director of Insurance; that at that time Barr visited Chicago and discussed the matter of the financial statement with plaintiff and a Mr. Winzer (employed by the Casualty Company) who prepared such annual reports, and Barr stated that the financial statement should, if possible, show that the Casualty Company held some Liberty bonds; that this would indicate that the Casualty Company was in a liquid condition and able to pay its' claims, and in this way its agents could meet competition more readily; that on February 28, 1933, plaintiff at Winzer’s request called at the latter’s office where Winzer handed to plaintiff the annual financial statement in blank form to be signed by plaintiff, as president of the Casualty Company, saying that the report had to be filed with the insurance department by March 1, 1933; that thereupon plaintiff signed the blank form of statement, understanding and believing that the report would be properly completed: by Winzer; that plaintiff heard nothing further about-the matter until May 8th following, when an examiner of the insurance department called at the Casualty Company’s office in Chicago to examine the securities shown by the annual financial statement, and particularly .requested to see the $15,000 worth of United States Liberty bonds which the annual statement showed. Plaintiff expressed surprise and said that the Casualty Company never had any Liberty bonds, and referred the examiner to Winzer for an explanation; that the next day, May 9th, plaintiff received at Chicago a telegram from Palmer as Director of Insurance, directing plaintiff to appear on the next day at Palmer’s office in Springfield, and in compliance therewith plaintiff called on Palmer at Springfield, where a conference was held at which plaintiff, Barr, Fitzgerald and Palmer were present. Plaintiff was interrogated about the Liberty bonds and was then told by Palmer to produce $100,000 in cash or securities within two. days; that plaintiff protested the time was too short to raise such a large amount when the amount of Liberty bonds was only $15,000.

It is further alleged in the complaint that the Casualty Company and a number of its affiliates, in which plaintiff was also largely interested, would have to be reorganized; that the Casualty Company would have to be rehabilitated and stabilized, and that if plaintiff would assign and turn over to Palmer his stock in the Casualty Company and its affiliates until the rehabilitation or stabilization had been completed, then Palmer would return to plaintiff his property; that afterward plaintiff complied'with Palmer’s request and assigned his stock in the Casualty Company and its affiliates to Palmer in trust; that afterward there was a consolidation between the Casualty Company and the United States Underwriters Company and a new charter was issued by the Secretary of State to a new corporation known as the Illinois National Casualty Company (being the same name as the old company) on October 1, 1933.

It is further alleged that on May 13, 1933, to carry out an agreement made by plaintiff and Palmer at Springfield a few days prior, Barr and Palmer arrived in Chicago and went immediately to the office of the Casualty Company, and under Palmer’s direction divested plaintiff of his keys to the Chicago office of the Casualty Company and its affiliates, and afterward moved the furniture of the Casualty Company to an office occupied by Palmer in Chicago; that the National Casualty Company since the consolidation, as above stated, is continuing to conduct its business; that plaintiff has a number of times demanded the return of his property, which has been refused, and that Palmer has also refused him access to the records; and that he has at no time received any consideration for the property assigned by him to Palmer. There is the further allegation that Palmer, Barr and Fitzgerald unlawfully conspired to obtain plaintiff’s property from him and that the results, as above stated,'were brought about by such illegal conspiracy; that the “Casualty Company as allegedly reorganized, merged or consolidated after said date is still operating as an insurance company in the State of Illinois, and said Barr and said Fitzgerald are in control and possession of all the assets of said Casualty Company and its affiliates.”

There are many other allegations in the complaint which we think it unnecessary to refer to here.

Section 7 of the Civil Practice Act provides: “Except as otherwise provided in this Act, every civil action shall be commenced in the county where one or more defendants reside or in which the transaction or some part thereof occurred out of which the cause of action arose.” Ill. State Bar Stats. 1935, ch. 110, ¶ 135; Jones Ill. Stats. Ann. 104.007.

Section 8 of the same act provides: “Civil actions may be brought against any insurance company incorporated under the laws of this State or doing business in this State, in any county wherein the plaintiff . . . may reside.” Ill. State Bar Stats. 1935, ch. 110, ¶ 136; Jones Ill. Stats. Ann. 104.008.

Defendants contend that the venue is in Sangamon and not in Cook county, because Palmer, Barr, Fitzgerald and the reorganized new Illinois National Casualty Company were residents of Sangamon county and were served with process there by the sheriff of that county, and that neither the transaction alleged in the complaint nor any part of it occurred in Cook county. We think this contention cannot be sustained. The record discloses that the Casualty Company and the Fidelity Company were served with process by the sheriff of Sangamon county and also by the sheriff of Cook county, and no contention is made that the Fidelity Company was not properly served in Cook county, but the argument is that no cause of action is alleged against the Fidelity Company. It is true that no cause of action is alleged against the Fidelity Company, but we think it ivas a proper party. Payne v. Hook, 74 U. S. 425. Moreover, it is alleged in the complaint that the defendant, the Illinois National Casualty Company, after the alleged reorganization, merger or consolidation was still operating as an insurance company “in the State of Illinois.” That allegation obviously would include Cook county. Moreover, the sheriff of Cook county on April 28, 1936, which was long after the reorganization, certified that he served the Illinois National Casualty Company in Cook county. We are also of opinion that the allegations of the complaint sufficiently show that some part of the transaction occurred in Cook county. It is alleged that the Casualty Company, prior to the consolidation or reorganization, was conducting its business in Cook county; that Palmer, as Director of Insurance, audited its books in Cook county; that its annual financial statement was made in Cook county; that Palmer, as Director of Insurance, removed its furniture from its offices in Cook county and it is charged that these acts, together with those taking place in Sangamon county, were all parts of one unlawful conspiracy. In such case, section 7 of the Civil Practice Act fixed the venue in Cook county. And since it is alleged that the Casualty Company is continuing to do business in Illinois, and since plaintiff is a resident of Cook county, section 8 of the Civil Practice Act also fixes the venue in Cook county. And since plaintiff was seeking to have stock returned “or that he be awarded damages for its conversion,” we think it obvious that the Casualty Company was a necessary and proper defendant, for without it plaintiff could not obtain complete relief. Payne v. Hook, 74 U. S. 423.

We do not pass on the sufficiency of the complaint.

Two days before defendants’ brief was required, by the rules of this court, to be filed, they made a motion to strike plaintiff’s brief for scandal and impertinence —that it contained scandalous and scurrilous matter reflecting not alone on defendants but on high officials of this State. On account of the lateness of the filing of the motion the matter was reserved to the hearing. It is the duty of this court to keep its records clean and free from scandal and therefore the motion will be sustained and the brief stricken. Robinson v. Rogan, 247 Ill. App. 620, abstracted; Green v. Elbert, 137 U. S. 615; Royal Arcanum v. Green, 237 U. S. 531.

In the Royal Arcanum case the Chief Justice of the Supreme Court of the United States, in delivering the opinion of the court, said (p. 546): “Before making the order of reversal we regret that we must say something more. The printed argument for the defendant in error is so full of vituperative, unwarranted and impertinent expressions as to opposing counsel that we feel we cannot, having due regard to the respect we entertain for the profession, permit the brief to pass unrebuked or to remain upon our files and thus preserve the evidence of the forgetfulness by one of the members of this bar of his obvious duty. Indeed, we should have .noticed the matter at once when it came to our attention after the argument of the case had we not feared that by doing so delay in the examination of the case and possible detriment to the parties would result. Following the precedent established in Green v. Elbert, 137 U. S. 615, which we hope we may not again have occasion to apply, the brief of the defendant in error is ordered to be stricken from the files.” In the instant case the brief of counsel for plaintiff more flagrantly violates the law and rules of court than did the brief in that case. There the vituperative and impertinent expressions were as to opposing counsel, while in the instant case the scandalous and impertinent expressions reflect on high officials who are not parties to the suit.

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

Reversed and remanded.

Hatchett, J., concurs.

McSurely, J., dissenting: I concur in the order striking plaintiff’s brief but dissent from the conclusion reached, as in my opinion the proper venue is Sangamon county, not Cook county.


text:
    Jacob Cohen, Appellant, v. Millie Cohen and William Jacobs, Appellees.
    Gen. No. 39,436.

      Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 28, 1937.
    Rehearing denied July 10, 1937.
    Levy & Schmetterer, of Chicago, for appellant.
    Walter A. Rooney, of Chicago, for appellees.
   Mr. Justice McSurely

delivered the opinion of the court.

Petitioner, in a chancery proceeding instituted by him, was found to be in contempt of court for failure to obey a decree entered in the cause and was ordered committed to the jail of Cook county for six months, there to remain until he pay the sum of $844.85, and he appeals.

The proceedings are somewhat unusual and raise the question whether one can be imprisoned for contempt for refusing to obey an order entered in a proceeding to release dower brought under section 17, chapter 68, Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 64.17. This provides in substance that when the husband or wife is insane, and shall have been insane continuously for one year and therefore incapable of executing a deed relinquishing dower, a petition may be filed on the chancery side of the court in the county where the real estate to be affected is. situated, setting forth the facts, describing the real estate and asking for an order authorizing the applicant, or some other person, to. execute a deed of .conveyance and thereby relinquish his or her right of dower in the real estate.

Petitioner alleged that he was the owner of an undivided half in fee simple of certain real estate in Cook county, describing it, the other undivided half being owned by his brother, Louis B. Cohen; that as partners he and his brother had been for some years conducting a retail furniture business on the premises, and that they deemed it advisable to organize a corporation to take over the business of the partnership; that a corporation was organized named Cohen Brothers Furniture Company, and the capital stock was fully paid in; that the brothers desired to erect a new building on the property by procuring a loan on the premises; that it was necessary in. order to procure a loan that the corporation have clear title to the premises.

Petitioner stated that he was married and his wife’s name is Millie Cohen; that she has been insane for more than one year preceding the filing of the petition, to wit, 17 years; that she is incapable of executing and joining in the warranty deed made by petitioner and Louis B. Cohen and Sarah Cohen, his wife, conveying title to the real estate to the corporation; that it was necessary for petitioner’s wife to execute a warranty deed of the real estate so as to relinquish her dower and homestead rights' to the corporation; that the real estate was worth approximately $25,000, incumbered with a $10,000 first mortgage; that there were three children of the marriage, all living with petitioner, who is providing .for the support of defendant Millie Cohen, and stands ready to do equity in the premises.

The petition prayed for a decree authorizing some discreet and proper person to execute, acknowledge and deliver a warranty deed on behalf of petitioner’s wife and that a guardian ad litem be appointed for her.

The appearance by attorney of Millie Cohen was filed and a decree, consented to by both parties, was entered November 15, 1927. Apparently the decree was drawn up by the attorneys' for petitioner. It recites the substance of the petition and finds the facts as there stated. Master in chancery Isidore Brown was authorized to execute the deed of conveyance in the name of Millie Cohen.

Section 20, chapter 68, also provides, as one of the conditions of granting the decree, that the court shall require of the petitioner “such security for the protection of the interests and for the proper support of such insane person as the court shall deem satisfactory. . . . ” In pursuance of this the decree ordered the petitioner to deposit with the clerk of the court $7,000 worth of common stock of the furniture company, to be held by the clerk until the further order of the court. The decree also provided that should Millie Cohen predecease petitioner, the stock was to be returned to him, but should she survive petitioner, then the stock was to be turned over to a duly appointed and qualified conservator for her. The decree appointed William Jacobs, who is now a defendant, guardian of Millie Cohen.

This litigation centers around the next provision of the decree whereby it is ordered that petitioner, commencing December 1, 1927, and until the further order of the court, pay to Jacobs, the guardian, $150 a month for the support of Millie Cohen, as she is not living with petitioner. The court retained jurisdiction for the purpose of entering such orders as might be necessary in the case.

The shares of stock in the corporation were deposited with the clerk of the court and are still there. No question is raised as to this. The part of the decree requiring petitioner to pay an amount each month for the support and maintenance of Millie Cohen is questioned.

For a short time after the entry of the decree the petitioner made monthly payments to the guardian of his wife as required by the decree but subsequently became in default, and in November, 1933, the guardian filed a petition in the cause setting up that petitioner was in default in payment of the monthly instalments and alleged that petitioner wilfully and maliciously disregarded the decretal order in this respect; the petition prayed that he show cause why he should not be held in contempt of court.

Petitioner Cohen filed what is called an amended and supplemental cross-petition in which he asserted that the $7,000 of stock deposited with the clerk of the court was for the support and maintenance of his wife, and that she can look only to this, as the provision of the decree providing that petitioner should pay monthly for her support, in so far as it attempted to fasten a personal liability on petitioner, punishable by contempt proceedings in case of default, is void.

The matter was referred to a master in chancery who took evidence and made his report, and on June 6, 1935, the court entered an order which found that the arrearages had been settled and that the amount of monthly payments to he made by petitioner be reduced to $100. No appeal was taken from that decree.

April 28, 1936, Jacobs, as guardian of Millie Cohen, filed another petition, asserting that petitioner was in default under the decree ordering him to pay $100 a month, and that it was necessary for the guardian to borrow money to support his ward. Again a rule was asked requiring petitioner Cohen to show cause why he should not be punished for contempt for failure to comply with the order of June 6,1935. To this he filed his answer, alleging that the decree was not under a bill for divorce or separate maintenance but only to bar dower of Millie Cohen, and that stock to protect her interest and as security for the dower has been deposited with the clerk of the court and is now in his possession.

The answer further asserted that the original petition, filed August 19,1927, was filed under a mistake of fact and law; that such proceedings were not necessary, as the property which was the subject matter of the petition was partnership property and .therefore not subject to any dower rights of the wife of either petitioner Jacob Cohen or Louis B. Cohen.

■The answer again asserted that the court had no power to fix any personal liability upon petitioner for the support of Millie :Cohen, as the shares of stock deposited with the clerk were security for this; that petitioner was unable to pay $100 a month for the support of his wife, as required by the order of June 6, 1935. The answer asked that this order for the payment of $100 be vacated. This was referred to a master who filed his report January 5, 1937, finding that the petitioner had admitted of record, and the evidence showed, that his financial condition was the same at the time of filing this report as it was oh June 6, 1935, when the decree was entered fixing, the monthly payments at $100; and since that decree has' never been modified it is still in full force and effect.

January 13, 1937, the chancellor, after hearing exceptions to the master’s report, found that there was due from petitioner for the support of defendant Millie Cohen $580; that the attorney for the guardian had earned solicitor’s fees in this matter amounting to $200, which should be taxed as costs to be paid by petitioner, and in addition the master’s fees and charges; the court' further found that no sufficient cause had been shown why these sums should not be paid, and that no showing has been made that petitioner is unable to pay them, but that he wilfully fails and refuses to obey the decree of the court. ■ Petitioner was found guilty of contempt and sentenced to imprisonment.

Petitioner appealing first says that he filed his petition under the mistaken idea that a dower or homestead right existed in his wife Millie which necessitated the proceedings brought by him; that as a fact the real property was partnership property belonging to the partnership of himself and his brother Louis; that under the Partnership Act, ch. 106a, ¶¶ 8 and 25 (e), Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 97.08, 97.25, the partner’s right in partnership property is not subject to dower. See also Wharf v. Wharf, 306 Ill. 79. Hence, petitioner argues, the court had no jurisdiction of the subject matter. To this defendants reply that there is no evidence in the record as to when the partnership of Cohen Brothers was formed; that so far as appears Millie Cohen had acquired an inchoate right of dower and homestead in the property prior to the formation - of the partnership. In the Wharf case cited- the partnership was formed for the specific purpose of purchasing real estate with partnership funds. The instant petition contains no allegation that the real estate in question was purchased or acquired by the partnership. Mechem on Partnership (2nd ed.), page 146, sec. 165, says that where land is owned by a husband and the wife has acquired an inchoate right of dower in it before the formation of the partnership her right is ordinarily unquestionable, citing Grissom v. Moore, 106 Ind. 296, Chase v. Angell, 148 Mich. 1, and Ratcliffe v. Mason, 92 Ky. 190, 195. In the last named case it is specifically held that when title is once vested in the husband the dower right of the wife cannot be defeated by subsequent appropriation of the land for partnership purposes. And .in Grissom v. Moore, supra, the court said the husband could not defeat the dower of his wife by any agreement to devote the land to the purposes of a partnership, “nor by any other agreement short of a conveyance in which she should join.” See also Bopp v. Fox, 63 Ill. 540, and Galbraith v. Tracy, 153 Ill. 54. The petition sworn to asserted that Millie Cohen had a dower interest in the real estate. The sole purpose of the petition was to effect a release and conveyance of this interest, without which no loan could have been procured. The petition made out a case for the exercise of the jurisdiction of the court.

In O’Brien v. People, 216 Ill. 354, it was held that ‘ ‘ Jurisdiction of the particular matter does not mean simple jurisdiction of the particular case . . . but jurisdiction of the class of cases to which the particular case belongs,” and does not depend upon the sufficiency of the pleadings nor the rightfulness of the decision. To the same effect are Figge v. Rowlen, 185 Ill. 234, 240, Woodward v. Ruel, 355 Ill. 163, 168, and Wilson Bros. v. Haege, 347 Ill. 140. Obviously the trial court had general jurisdiction and power to grant the relief prayed for in the petition filed under section 17, chapter 68.

As we have indicated, the prinicpal contention is as to the validity of that part of the decree which ordered the petitioner to pay a monthly sum for the support of his insane wife. Section 20 of the act, as above stated, requires the petitioner in such a proceeding, as one of the conditions of granting the relief sought, to present not only security for the protection of the interests of the insane person, but also security “for the proper support of such insane person as the court shall deem satisfactory, and may from time to time renew or change the same, or require additional security.”

The court upon hearing decreed that the petitioner deposit with the clerk shares of stock of the furniture company, and as additional security for the support of the insane person ordered that petitioner pay the sum of $150 monthly to her guardian, William Jacobs, appointed by the court. The record shows that petitioner gave his consent and approval to the entry of this decree. Clearly the statute authorized the court to require such security for the support of the insane person as the court should deem satisfactory. In the instant case the court deemed the questioned order to be necessary and the petitioner agreed to this. For a short time after the entry of the decree petitioner made payments monthly to his wife in full compliance with the decree and the record discloses that more than once petitioner admitted that the court had jurisdiction of the subject matter, as in his cross-petition filed November 28,1933, he alleges the attempt of the guardian of Millie Cohen to proceed against him in the municipal court of Chicago and alleges that the circuit court should dispose of this matter as it ‘ ‘ has complete jurisdiction to dispose of the entire subject matter.” Moreover, in the hearing before the master petitioner’s attorney admitted that the court was justified in ordering petitioner to make monthly payments. In Bergman v. Rhodes, 334 Ill. 137, 143, it was held that “A decree so entered by consent cannot be reviewed by appeal or writ of error. (Paine v. Doughty, 251 Ill. 396; Galway v. Galway, 231 id. 217.) It can only be set aside by an original bill in the nature of a bill of review. ’ ’

Petitioner asserts that the guardian must look only to the common stock deposited with the clerk, but no cases are cited to support this view nor even suggesting that the court had no power to enter the order for the monthly payments. We hold that this part of the order was valid and binding upon petitioner.

It is said that the evidence taken before the master in chancery, Samuel B. Epstein, shows that petitioner was unable to pay the $100 a month for the support of Millie Cohen; that his income was only $25 a week and he had no other property or source of income. The master and the chancellor took the position that as the order for payment of $100 a month was entered June 6, 1935, and petitioner did not appeal from this, and there was no change in his financial condition between the entry'of- that order and" the order of commitment entered January 13, 1937,' the order of June 6, 1935, was res adjudicata on the question of petitioner’s ability to pay.

It has been frequently held that a court may change such ah allowance only where the' circumstances have changed since the former order; that the court- after' a lapse of time has no power to reverse' or modify a decree for the payment of money upon the same facts that existed at' the time of the entry of the decree. Cole v. Cole, 142 Ill. 19 (23, 24);Pribyl v. Pribyl, 250 Ill. App. 349, and Helkelkia v. Sonzinski, 223 Ill. App. 30.

Moreover; the testimony of the petitioner-as to his financial condition might reasonably fail to impress the court. He said that one time he got a note for $6,000 evidencing a loan for this amount, but that he burned the note. He also destroyed another note of the same kind for $2,000. When -pressed to. reveal where he kept his money he said, he kept $2,000 of it in a cook stove. The court was not obliged to accept his statement as to his inability to. pay.

Counsel for petitioner says that because the.proceeding was not brought- under a divorce statute or- under a statute providing for separate maintenance, the chancellor could not enter any order for- the support of the insane wife which could be enforced by a contempt commitment. Section 42 of the Chancery Act, Ill. State Bar Stats. 1935, ch. 22, ¶ 42; Jones Ill. Stats. Ann. 106.06, provides that the court may enforce its decrees-“by attachment against the person, by fine or imprisonment, or both, . . . and by the exercise of such other powers as pertain to courts of chancery, and-which may be necessary for the attainment of'justice.” See also section 47 of the same act, Ill, State Bar Stats; 1935, ch. 22, ¶ 47; Jones Ill. Stats. Ann. 106.10. Petitioner’s argument seems to assume that the power of a chancellor to commit for contempt in a divorce or separate maintenance proceeding is by virtue of some power granted by the special statute covering such proceedings. We find no such provision in the statute. The right to enforce its decrees is especially conferred upon the court where the rights of a wife to support are involved. As was held in Harding v. Harding, 144 Ill. 588, 597, citing Bishop on Marriage and Divorce, the right to enforce such decrees ‘ ‘ springs necessarily from the legal relation of the parties. . . . ” In Schmidt v. Cooper, 274 Ill. 243, 250, the court said: “The power to punish for contempt is inherent in every court of justice, and necessarily includes all acts calculated to impede, embarrass or obstruct the court in the due administration of justice, and the power is independent of statutory provisions.” See also Clark v. People, 1 Ill. 340, People v. Seymour, 272 Ill. 295, Leopold v. People, 140 Ill. 552, and Swedish-American Tel. Co. v. Fidelity & Casualty Co. of New York, 208 Ill. 562, 573. And in State of Illinois v. Froelich, 316 Ill. 77, 83, it was held that the power of courts to punish for contempt does not depend on constitutional or legislative grant, “but is inherent in all courts as necessary for self-protection and as an essential auxiliary to the administration of the law.” People v. Panchire, 311 Ill. 622; People v. Peters, 305 Ill. 223.

The court has the general power to enforce its orders even in an ordinary civil action. How- much more is there reasoh 'to uphold ‘'the authority’W the court to punish for cohtempt where the purpose of the order disobeyed is,to protect a. wife unable to exercise mental faculties. Insane persons have been from -time immemorial-the special consideration of the courts and the protecting arm has been extended in their behalf.' It would be most unjust to hold that a court could not compel a husband, able so to do, to provide means of support and maintenance to his insane wife.

The order appealed from is in accordance with the law, the evidence and every principle of equity, and is affirmed.

Affirmed.

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


text:
    Central Mutual Insurance Company of Chicago, Appellee, v. Saint Paul Mercury Indemnity Company of Saint Paul, Appellant.
    Gen. No. 39,460.

      Heard in the first division of this court for the first district at the April term, 1937.
    Opinion filed June 28, 1937.
    Lord, Lloyd & Bissell, of Chicago, for appellant; A. C. Wetterstorm and Gordon R. Close, both of Chicago, of counsel.
    Lloyd C. Whitman and Morton John Barnard, both of Chicago, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff brought suit to recover $15,000 deposited by it with defendant as cash collateral to two public liability bonds issued by defendant at the request of plaintiff; upon trial by the court judgment was entered against defendant for $15,000 and it appeals.

No witnesses were produced upon the trial and the case was tried upon the statements of respective counsel as to the undisputed facts and upon documents, letters and a written stipulation of facts.

Barnwell Bros. Inc. and the Brooks Transfer & Storage Co. were engaged in the trucking business in the State of Virginia; it was necessary for them, in order to operate, to deposit public liability bonds with the secretary of State; these concerns were customers of plaintiff, who was not licensed to write such bonds in Virginia. Defendant was licensed and at plaintiff’s request wrote the necessary bonds for each of these companies. The bonds, dated November 22, 1934, recited that the trucking company as principal and the defendant as surety were bound to pay all damages for injury to persons or property for which the trucking company might become legally liable, to the extent of $11,000 in each bond; for the purpose of indemnifying defendant in connection with the issuance of these bonds, plaintiff deposited with defendant $15,000 as collateral security.

October 12, 1935, defendant notified the Commonwealth of Virginia that 30 days from that date these bonds would be terminated; pursuant to this the bonds were termiiiated November 13th. November 22nd plaintiff wrote to the Chicago agent of defendant company with reference to the return of the $15,000 collateral, offering, if this were returned, to “indemnify or pay to the St. Paul Mercury Indemnity Company any and all losses which they may suffer and all costs in connection therewith, should they be called upon to pay or should they be held liable for any losses whatsoever in view of 'their having filed in the State of Virginia on our behalf.’’ December 2nd defendant’s agent reported to plaintiff that defendant had written that “we were not-in a position to return this collateral until we are furnished with evidence that there are no claims pending or..any circumstances existing which might result in. a claim under ¡these bonds, and . . . we certainly do not think we should be ásked to return what we have until such time as we are satisfied that our actual liability has terminated.” To this plaintiff replied on December 11th: “Please be advised that there are no outstanding claims on which you may be called upon to pay, nor any existing circumstances existing known to us which may result in a claim under these bonds. Therefore, we must insist upon the return of our collateral.” Defendant made no reply to this and the present suit, commenced April 2, 1936, followed.

It is asserted as a defense that under the terms of the written agreement between the parties herein, with reference to the deposit of the collateral, it is provided :

‘ ‘ That the Surety shall have the right in its discretion to retain said collateral, any substitutions therefor, and additions thereto or the proceeds of such collateral, substitutes and additions until the Surety shall have received satisfactory evidence of the termination of liability on account of executing or procuring the execution of obligations of Guaranty or Suretyship as hereinbefore referred to, . . . and when these conditions shall have been-fulfilled, the remainder of said collateral . . . shall be returned to the depositor upon surrender of this instrument.”

Defendant argues that plaintiff did not furnish, defendant satisfactory evidence of the termination of its liability. Both counsel cité a number of cases .in which the meaning of the word “satisfactory” has been construed. It is sufficient to say that .these cases 'held in substance that the word means adequate and 'sufficient to convince a reasonáblé person. The Avenger, 251 Fed. 19.

It is not necessary to rest our decision on any refined definition of this word for we are of the opinion that defendant, by refusing to inform plaintiff as to what evidence of nonliability would satisfy it, waived any right to require more than that already furnished it by plaintiff. Defendant made no reply to plaintiff’s letter offering to indemnify defendant for all loss it might suffer nor to plaintiff’s written assurance that there were no claims or circumstances existing which might give rise to any claims upon the bonds. Defendant in its brief in this court suggests that plaintiff should have furnished defendant with affidavits of the employees or officers of the trucking companies supporting plaintiff’s letter. This is evidently an afterthought. If this would have satisfied defendant why did it not so inform plaintiff when plaintiff was requesting the return of the collateral?

That defendant did not require any other evidence and did not refuse to return the collateral because of any insufficiency in the offers and statements by plaintiff is confirmed by the statements of counsel for defendant upon the trial; there they clearly took the position that defendant relied upon the Virginia statute of limitations and was unwilling to return the collateral until after the five-year period of limitation for bringing suits had expired. Defendant having claimed this right cannot now in this court take the position that the evidence offered by plaintiff as to the termination of its liability was not satisfactory to it.

It needs little or no argument to establish the conclusion that defendant cannot claim the right to retain the collateral throughout the period of the statutory limitation. There is no provision in the agreement between the parties touching the collateral which contemplates holding it for such a long period of time, and in the absence of any such agreement it would be unjust to permit this. By the same argument defendant could claim the right to retain the collateral for a further period of 21 years on the ground that a minor might have been injured and would have until he attained his majority to bring suit; and also there might be the possibility that an insane person was injured and would have a lifetime within which to make claims, if the Virginia law in these respects is the same as it is here. Defendant cannot go beyond the provisions of the contract with. plaintiff, which provides for the return of the collateral upon certain conditions which were shown by plaintiff to exist and to which defendant made no objections. We hold that this defense presented by defendant cannot be upheld.

Plaintiff also says that defendant agreed to keep its liability bonds in force for one year and that it terminated them on November 13, 1935, which was prior to the expiration of one year; hence, having thus breached its contract with plaintiff it is not entitled to retain the collateral.

There was no provision in the bonds that they should be in force for any specified term. Under such conditions it has been held that such agreements may be terminated at the will of either party. Joliet Bottling Co. v. Joliet Citizens’ Breiving Co., 254 Ill. 215, 219. Defendant argues that under this rule it had the right to terminate the bonds prior to the expiration of one year. Plaintiff replies that there was an agreement between the parties to keep them in force for one year; that this is evidenced by the premium paid, which was at the annual rate for such types of bonds. It would seem to follow that as plaintiff paid for one year’s indemnity it was entitled to receive it. In 32 Corpus Juris, sec. 277, p. 1165, it is said that a construction which gives insurance for a less period of time than that covered by the premium paid should not be adopted. See also Johnson v. American Cent. Life Ins. Co., 212 Mo. App. 290.

On the trial plaintiff introduced a copy from defendant’s records touching the bonds in which it is noted that they were effective from November 22, 1934, to November 22, 1935, a period of one year. Defendant argues that this was inadmissible as it is a mere memorandum, not signed on behalf of either plaintiff or defendant. Inspection of the document shows that it is on a printed form with defendant’s name at the top, and purports to be signed by the general agent of defendant in Chicago and also by the president of plaintiff company. The document was admissible and in connection with the premium paid tends to support plaintiff’s contention that defendant agreed to keep the bonds in force for one year after date, and that defendant has breached its contract in this respect.

We hold that defendant waived any production by plaintiff of additional evidence of nonliability of defendant on its bonds, and that it cannot retain the collateral until the statutory period of limitations for bringing suits in Virginia has expired and that the judgment is proper, and it is affirmed.

Affirmed.

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