author: Mr. Justice McSurely

text:
    Marie Ann Brevet (Now Marie Ann Custard), Appellant, v. Henri Brevet, Appellee.
    Gen. No. 42,180.
    Heard in the first division of this court for the first district at the April term, 1942.
    Opinion filed November 30, 1942.
    Rehearing denied December 14, 1942.
    Edgar J. Cook, of Chicago, for appellant.
    Lord, Bissell & Kadyk, of Chicago, for appellee; L. Duncan Lloyd, of Chicago, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Defendant, Henri Brevet, filed a petition asking the court to enforce its decree of divorce respecting settlement of property rights between the parties. Plaintiff moved to dismiss the petition, which motion was denied; she elected to abide by her motion and an order was entered granting the relief prayed for, and from this she appeals.

The decree of divorce entered December 21, 1940, found that the parties had made a property settlement as shown by a written agreement, made a part of the decree. The agreement, among other things, provided that each of the parties should have, independently of the claim of the other party, all real property belonging to him or her and now in his or her possession, or .which may thereafter belong to him or her. Plaintiff also released her husband and his estate of any and all claims. Also it was agreed that each party should, upon request, execute to the other any instrument that the other party may reasonably require for the purpose of giving full force and effect to the provisions of the agreement.

The petition, filed by defendant on September 18, 1941, referred to the decree of divorce theretofore entered and the property agreement; asserted that prior to the time plaintiff had filed her complaint for divorce the petitioner had entered into a contract for the purchase of. certain real estate in the village of G-olf, Cook county, Illinois; that the purchase price of this was $18,700; that petitioner made all payments, both of principal and interest as they fell due under the terms of the contract, making total payments of $4,400 — the balance of the purchase price to be paid at the rate of $100 a month; that plaintiff at no time, either before or after the decree of divorce, paid or offered to pay any part of the purchase price of the real estate; that when the settlement agreement was made, petitioner, the defendant, was in possession of the real estate and plaintiff was not in possession of any part of it; that in the discussions between plaintiff and her counsel prior to entering into the agreement plaintiff stated she had no interest in this real estate and did not want any part of it. The petition also recited the agreement whereby plaintiff became bound to deliver to the petitioner any instruments required under the terms of the agreement; that although requested to execute a quitclaim to the real estate, she has refused to do so and asserts that she claims an interest in the premises. The petition asked the court to find that plaintiff had no interest in the premises or in the contract for its purchase; that she may be adjudged guilty of contempt for her refusal to comply with the terms of the decree theretofore entered; that she be ordered to deliver to the petitioner an appropriate instrument conveying to the petitioner ’ all her apparent interest in the premises, and upon her failure so to do a master in chancery be designated by the court to execute such an instrument. There was also a request that the petitioner be awarded all his costs and expenses incurred in the proceeding.

The court, after denying plaintiff’s motion that the petition be dismissed and granting the petitioner the relief he sought, appointed a master in chancery to execute an instrument of conveyance of the real estate in the event of the refusal of plaintiff to execute and deliver such an instrument. It was also ordered that defendant recover from plaintiff his costs, taxed in the sum of $200.

Plaintiff appealing first argues that the superior court had no jurisdiction of the subject matter of the petition; that the court in such cases does not exercise general equity powers but merely those powers vested in it by the Divorce Act. Section 17 of the Divorce Act (Ill. Rev. Stat., ch. 40, par. 18 [Jones ll. Stats. Ann. 109.185]) provides that when a divorce is granted and it apears that either party holds property equitably belonging to the other, the court may compel conveyance thereof be made to the party entitled to the same; also section 6, which provides that the process, practice and proceedings under the Divorce Act shall lie the same as in other civil cases except as otherwise provided. In Welty v. Welty, 195 Ill. 335, the court in speaking of these statutory provisions held that they gave the chancery court power to enforce the terms of its decree.

The court had jurisdiction on November 21, 1941, when the order appealed from was entered, to enforce its decree entered December 21, 1940. Cases cited by plaintiff, which hold that a decree of divorce becomes final after the term, or 30 days after its entry, have to do with the power of the court to modify or alter the terms of a decree after the expiration of the term time. Petitioner in this case did not ask for any modification of the terms of the divorce decree but merely asked that the terms of that decree be enforced. See Totten v. Totten, 299 Ill. 43, where it was held that a court of equity possesses power to control the manner of the execution of its decrees. See also Bobowski v. Bobowski, 242 Ill. 524, 529, 530; Cohen v. Cohen, 291 Ill. App. 39, 49; Oglesby v. Pearce, 68 Ill. 220. In Tegtmeyer v. Tegtmeyer, 292 Ill. App. 434, 443, this court said that if a court of chancery had no power to enforce its decrees “obviously the court would he rendered impotent and we would have neither law nor order but everyone could do as he or she pleased. Of course, such a situation cannot be countenanced by the courts for a moment.” Many other cases are to the same effect.

As above stated, the agreement between the parties settling their property rights was made a part of the divorce decree and thereby became merged in it. In Adler v. Adler, 373 Ill. 361, 369, it was held that when such an agreement is incorporated in the decree of divorce it becomes merged in the decree. To the same effect are Maginnis v. Maginnis, 323 Ill. 113, 118; Herrick v. Herrick, 319 Ill. 146. See also Schaeppi v. Bartholomae, 217 Ill. 105, 111.

The facts stated in the petition clearly entitled petitioner to a conveyance of the real estate described. By the motion to strike the petition plaintiff admitted that she had made no contribution to the purchase of the real estate; that all payments were made by the defendant, who was in possession of the property. It was therefore only equitable that the court should decree that the defendant should have this property independent of any alleged claim of plaintiff. Much the same question was presented in Gilbert v. Gilbert, 305 Ill. 216, 222, where it was held that if the wife or husband has property acquired solely in his or her own right and to which the other had not contributed, the court may determine that such party so contributing and in possession is entitled to the property. In Shipman v. Shipman, 360 Ill. 635, it was held that the chancellor was empowered in a divorce proceeding, whenever it appears that either party holds title to real estate equitably belonging to the other, to compel conveyance to such party.

When they were discussing the terms of settlement plaintiff disclaimed any interest in the real estate, saying that she preferred cash in settlement. The decree makes ample cash provisions for the support and maintenance of plaintiff. The court had jurisdiction of the petition and the order is in accord with the general principles of equity, and it is affirmed.

Affirmed.

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


source: Caselaw Access Project

author: Mr. Justice O’Connor

license: Public Domain

text:
    Armin F. Hillmer et al., Appellants, v. Harry W. Bishop, Appellee.
    Gen. No. 42,096.
    Heard in the first division of this court for the first district at the February term, 1942.
    Opinion filed November 30, 1942.
    Rehearing denied December 14, 1942.
    Leonard & Leonard and Owens & Owens, all of Chicago, for appellants; Gordon McLeish Leonard, Ernest E. Freeman, Jr. and George Edward Leonard, Jr., all of Chicago, of counsel.
    Frederick W. Turner, Jr. and Jerome F. Dixon, both of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

The Chicago Bank of Commerce was being liquidated by the Auditor of Public Accounts and creditors of the bank brought a representative suit against the former and final stockholders of the hank to enforce the constitutional liability of the stockholders. When the case reached the'Supreme Court it held the maximum liability of the stockholders was $100 per share “but it was enforceable at $100 per share to the extent of debts accruing before February 7, 1931; as to debts accruing after that date it was enforceable at a maximum of $50 per share.” Hillmer v. Chicago Bank of Commerce, 375 Ill. 266. Before this decision was rendered and during the pendency of the suit against the stockholders, Harry W. Bishop, a stockholder, was contesting the amount of his liability. July 15, 1938, a decree was entered approving the master’s report and fixing Bishop’s liability at $14,200. September 12, 1938, as a result of negotiations between the parties, an order was entered whereby the receiver was authorized to accept $10,450 in full settlement of Bishop’s liability, $1,100 of which was to be paid “upon the entry of an order” and $275 to be paid the “first day of each month thereafter for 34 successive months until the full sum of $10,450 has been paid.” The receiver was directed to receive the money and discharge Bishop’s liability. Afterward Bishop made payments and April 2, 1941, tendered $50 to the receiver, which would bring the total amount paid by him to $7,200, claiming this was the full amount he was required to pay, namely $50 a share for 144 shares of stock, in accordance with the opinion of the Supreme Court handed down December 16, 1940, in which a rehearing was denied February 5, 1941. The tender was refused and April 4, Bishop filed his petition in the case, setting up the facts and praying that an order be entered modifying the order or decree theretofore entered, in which his liability was fixed at $10,450; that his liability be fixed at $7,200, and the receiver be authorized, upon the payment of the $50, to execute a release in full satisfaction. An answer was filed by plaintiffs to the petition, setting up the compromise entered into between the parties and approved by the court, fixing Bishop’s liability at $10,450. The receiver also filed his answer denying that Bishop was entitled to relief, the matter was referred to a master in chancery who found that in the negotiations for compromise carried on by Bishop, one of the attorneys for plaintiffs was of opinion that his liability should be limited to $50 per share, or a total of $7,200, and not $100 a share, as claimed by plaintiffs. That afterward Bishop’s contention was sustained on an appeal taken by certain other shareholders, by the Supreme Court (375 Ill. 266) and the master recommended that the prayer of the petition be allowed. July 1, 1941, the court entered an order in accordance with the recommendations of the master, and plaintiffs prosecute this appeal.

Plaintiffs’ theory of the case, as stated by their counsel is “that the final consent decree rendered September 12, 1938, was made upon full disclosure of all relevant facts; that said decree had become final not only because it had been entered as a consent decree but also by lapse of time; that the validity of said decree had been recognized by defendant Bishop by his making certain payments thereunder; that said consent decree was supported by ample consideration in that plaintiffs forgave part of their claim against Bishop; that the court was without jurisdiction to disturb said decree.” Counsel .contend that the mistake as to the amount of Bishop’s liability was a mistake of law, and in such case, the law does not warrant a rescission of what has been done, and in support of this, cite Stover v. Mitchell, 45 Ill. 213, where the court said: “It has long been a settled principle that a voluntary compromise or settlement of doubtful and conflicting claims will not be set aside or disturbed in the courts, merely because the parties may have acted under a mistake as to the law.” A further contention is that the court lacked jurisdiction to vacate the decree of September 12, 1938.

On the other side, counsel for Bishop admit the law as contended for by plaintiffs. They say that “While it is the general rule that a mistake of law is not available to disaffirm a contract, an exception exists in case of a contract made with a court officer which is bottomed upon a mistake of law. In such a case disaffirmance may be obtained.” As to Point 2, counsel for Bishop say: “While an ordinary consent decree cannot be attacked in the same proceeding in which it was rendered, such doctrine cannot be extended to a proceeding of this kind where the court allows disaffirmance of one of its own contracts in which the consideration has failed.”

In Sando v. Smith, 237 Ill. App. 570, in considering the rule that money paid with full knowledge of all the facts but under a misapprehension as to the legal rights, could not be recovered, it was held that such rule was not applicable where the payments were made to an officer of the court, such as a receiver, a trustee in bankruptcy or an administrator or an executor. Mr. Justice Thomson, in delivering the opinion of the court said: “But, in our opinion, this rule that money paid with full knowledge of all the facts and under a misapprehension as to legal rights may not be recovered back is not applicable to the payments made to an officer of the court,. such as a receiver or a trustee in bankruptcy or the administrator or executor of an estate,” and in support of this the opinion cites Ex parte James, 9 Ch. App. 609; Ex parte Simmonds, 16 Q. B. Div. 308; Gillig v. Grant, 23 App. Div. 596, 49 N. Y. S. 78, and quoted from the Lord Justice, from the case first mentioned, in deciding that the creditor could recover the money back from the trustee; “the Lord Justice said: ‘The court, then, finding he (the trustee) has in his hands money which in equity belongs to someone else, ought to set an example to the world by paying it to the person really entitled to it. In my opinion the court of bankruptcy ought to be honest as other people. ’ The foregoing decision was followed in Ex parte Simmonds, 16 Q. B. Div. 308, where Lord Esher said that, although the court will in general permit an individual litigant to do a ‘shabby thing,’ — namely, to retain money thus acquired, — it will not allow its own officer to do so. In that decision Lord Esher continued: ‘It will direct its officer to do that which any right-minded man would do, viz., not to take advantage of the mistake of law. This rule is not confined to the court of bankruptcy. If money had, by mistake of law, come into the hands of an officer of a court of common law, the court would order him to repay it as soon as the mistake was discovered.’ ” And we quoted with approval from the Gillig case, decided by the Appellate Division of the Supreme Court of New York, which approved the law as announced in the two English cases, using this language: “The doctrine of these eases commends itself to both reason and justice.” We there quoted further with approval from the New York court: “It would be a reproach upon the administration of justice should the court, when the question is squarely before it, hesitate to admonish its officer to desist from further efforts to augment his trust estate at the expense of one who is clearly entitled to the money which that officer holds.”

We agree with, and adhere to what we said in the Sando case. Moreover, Bishop is not seeking to have any money returned to him and there is no contention that under the law as announced by the Supreme Court (375 Ill. 266) he was not liable for more than $7,200.

The order of the superior court of Cook county appealed from is affirmed.

Order affirmed.

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


text:
    Otto Kerner, Attorney General (George F. Barrett, Attorney General), Appellant, v. Carl D. Kinsey and First National Bank of Chicago et al., Appellees.
    Gen. No. 42,117.
    Heard in the first division of this court for the first district at the February term, 1942.
    Opinion filed November 30, 1942.
    George F. Barrett, pro se; Albert E. Hallett, Assistant Attorney General, of counsel.
    Thomas Hart Fisher, of Chicago, for certain other appellant; Norman Crawford, of Chicago, of counsel.
    Amberg, Livingston, Kearns & Dahlin, of Chicago, for certain appellee; Frank L. Paul and Ralph J. Mohan, both of Chicago, of counsel.
    Ernest Schein, of Chicago, for certain other appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

By this appeal George F. Barrett, the present Attorney General of the State of Illinois, and Rudolph Ganz, as Successor Trustee, seek to reverse a decree entered by the circuit court of Cook county June 30, 1941, dismissing the complaint,' as amended, as to The First National Bank of Chicago and other defendants for want of equity.

The record discloses that October 3, 1933, Otto Kerner, the then Attorney General of the State, filed his complaint in equity, against the college and Kinsey, in which it was alleged that Charles H. Ditson, deceased, late of New York City, in his lifetime was possessed of large wealth and.desired to give to the public an opportunity to obtain education and instruction in music; that on December 3, 1927, he executed his will by which he bequeathed to 8 institutions, $100,000 each, one of which was the Chicago Musical College, a corporation. Paragraph 9 of the will is as follows: “(9) I direct and appoint that the sum of One Hundred Thousand Dollars ($100,000) shall he paid to the Chicago Musical College, to be used in establishing a fund, the income of which shall he used for any one or more of the purposes herein mentioned as shall be in the judgment of the officers of said College of the greatest benefit musically to said College, to-wit: in establishing and maintaining a chair or chairs of music or musical history or musical aesthetics, or in establishing and maintaining scholarships or fellowships in music, or in giving public performances of the musical compositions of talented students and graduates of said College, and if preferred of other musical composers.

“Such fund to be known as the Oliver Ditson Endowment, and any chair or scholarship- or fellowship which is established to hear his name; but nothing herein shall prevent said Chicago Musical College from investing the money as part of its general fund and applying a proportionate part of the income of its general fund to the purposes of this bequest.”

It is further alleged that Charles H. Ditson died May 14, 1929, and that his will was admitted to probate by the surrogate court of New York and that the executors of his estate “duly paid during the year 1931 the sum of One Hundred Thousand Dollars ($100,000) in cash to Chicago Musical College, an Illinois corporation, pursuant to . . . subparagraph (9) of said will; that said Chicago Musical College, . . . is a corporation for profit organized and existing” under the laws of Illinois and having its principal place of business at 64 East Van Burén street, Chicago; that at the time of payment of the $100,000 to the Musical College and at all times since, defendant Carl D. Kinsey has been the president of the college 1 ‘ and legal or equitable owner of all of the capital stock of said corporation”; that all of the stock certificates are in Kinsey’s name except directors’ qualifying shares and those have been endorsed in blank and delivered to Kinsey. That the $100,000 “constitutes a public charity or trust fund,” and is subject to the laws of Illinois and that the Chicago Musical College and its officers and directors were, by the terms- of Ditson’s will, charged with the duty of administering the fund pursuant to the statutes of this State for the purposes mentioned in Ditson’s will. That upon receipt of the trust fund Kinsey, as president of the college,- caused announcements of the creation of such fund to be made in publications of the college to the public generally; that afterward, during 1931 and 1932, the college held examinations amongst its students who were receiving musical education for the purpose of selecting those entitled to receive scholarships and fellowships in music; that the income from the trust fund had been insufficient to pay for the scholarships and fellowships; that the college had purported to award scholarships for the school year of 1933-1934 but that they cannot be paid for from the income of the trust fund for the reason that Kinsey had personally handled and administered the fund; that in the early part of 1931, the college, through Kinsey as president, undertook to make improvements on real estate owned by the college, consisting of the land and building at 64 East Van Bnren street, by remodeling the theater in the building; that most of the remodeling was done prior to the receipt by the college of the $100,000 and that about $70,000 of the fund was so unlawfully applied by the college, contrary to the terms of Ditson’s will and the statutes of Illinois; that upon the remodeling of the theater it was leased to a company which commenced the operation of the theater but that such operation was “disastrous financially” and the lessee thereafter became wholly insolvent, surrendered possession of the theater to the college and defaulted in its obligation to pay rent to the college. That April 14, 1932, which was more than 6 months after the improvement of the theater was completed, Kinsey, as president of the college, presented a resolution of a special meeting of the Board of Directors, which was approved by a majority of them, which resolution purported to confirm the action of Kinsey in investing the $100,000 in remodeling the theater. The resolution continued: “which investment, in accordance with the bequest, provides a permanent fund thru the income from the theatre for scholarships to worthy and talented students in years to come. At the present time the theatre is rented for $1600 monthly and this rental provides a good profit for scholarships on the investment of $100,000, in the theatre and building.” And it was further alleged on information and belief that at the time the resolution was passed, the lessee of the theater had wholly failed and was insolvent. That approximately $70,000 of the fund invested in the remodeling was yielding no substantial income.

It was further alleged that in June or July, 1933, the college purported to convey the title to the real estate at 64 East Van Burén, to defendant the Northwestern Mutual Life Insurance Company, the holder of a first mortgage on the real estate, in consideration of the cancellation by the insurance company of the existing mortgage executed by the college, and the release of Kinsey, who had personally endorsed the note. That if the entire trust fund of $100,000 had been invested, as it was purported to be by the resolution of the Board of Directors of the college, above referred to, the purported conveyance of the real estate to the insurance company constituted a complete destruction of the Ditson endowment fund unless the property so conveyed be returned to the college by the insurance company. It was further alleged upon information and belief that the college purported to have made other unauthorized and unlawful investments of the trust fund; that the funds were used to pay off losses and obligations of the college and for current operating expenses and no proper books were kept; that the college during 1931 and afterward, “and now is” the owner of first mortgages and bonds secured by trust deeds on Illinois real estate of the face value of $120,000; that about September 22, 1933, Kinsey, as president of the college, presented a resolution to the Board of Directors which was signed by them, setting up that the trust fund of $100,000 was then invested in first mortgage bonds secured on Illinois real estate; that substantially all of the mortgages and bonds were in default and in the hands of an attorney for the college for adjustment and foreclosure; that the legal title to certain of the real estate securing the bonds and mortgages, had been conveyed to Kinsey individually and that the total market value of the bonds and mortgages was less than $30,000; that the investment was unlawful and unauthorized; that the college had no general endowment or trust fund since the receipt by jt of the $100,000; that it was the duty of the officers and directors of the college to keep the trust fund separate and apart from the other properties belonging to the college, to be known as “Oliver Ditson Endowment”; that the fund had not been properly administered by the college or Kinsey and that various persons, firms and corporations had received the funds knowing that they constituted a part of the trust fund and knowing that ‘ such payments were unauthorized and unlawful.” That the funds were mingled with other funds of the college and disbursed to creditors of the college and were lost or in danger of being lost and destroyed. That a budget had been prepared for the school in 1933-1934 but that there were no assets or properties in the trust fund to pay for the scholarships and as a result the public would be deprived of the benefits, of the fund.

It was further alleged that all of the funds improperly and unlawfully invested by the college or Kinsey, as president, should be repaid to the trust fund and the prayer was that the college and Kinsey, who were made defendants, be required to answer and to account; that the college and Kinsey, as president, be removed as trustee of the fund and a successor appointed by the court; and that all persons who had received any portion of the fund with knowledge that it constituted a trust fund, be compelled to refund, and that pending the hearing, the college and Kinsey be restrained and enjoined from investing, paying or transferring any part of the funds or any part of the assets or property into which the funds may have been invested.

October 18, 1933, 15 days after the complaint was filed, on motion of complainant, an order was entered giving leave to file an amendment to the complaint instanter and that the demurrer theretofore filed to the original bill stand to the complaint as. amended. On the same day the amendment was filed, in which it was alleged on information and belief that the college and Kinsey, as president, had conveyed and delivered to the Northwestern Mutual Life Insurance Company, the First National Bank of Chicago and others, certain properties, cash and securities belonging to and constituting a part of the trust fund without other than nominal consideration, and that these corporations and the other persons named should be required to make discovery of such property; that the college and Kinsey were insolvent, unwilling and unable to re-establish the fund and that unless the property received by the insurance company, the bank and others, was returned, the fund would be irreparably impaired; that pending the hearing of the cause, the insurance company, the bank and the other parties be restrained and enjoined from expending, paying or transferring any of the properties, cash or securities now held by them and the insurance company. The bank and the other parties were made additional parties defendant.

The bank filed its answer setting up that Kinsey had a checking account in the bank showing a balance of $1,536.72, and that the college had a checking account standing in its name, the balance of which “has changed from time to time in accordance with an order entered by this Honorable Court on the 27th of October, A. D. 1933.” That the accounts evidence the customary debtor and creditor relationship between the bank and its debtors; that it had no knowledge that any part of the funds were trust funds or constituted any part of the Oliver Ditson Endowment Fund.

December 21, 1933, a consent decree was entered. On the last page of the decree, below the signature of the chancellor appears: “This decree is hereby consented to.” Then follow the signatures of the Attorney G-eneral and his assistants and four firms of attorneys representing four defendants. Over the signature of counsel for the bank appears the following: “Decree consented to only as it pertains to the First National Bank of Chgo.”

From the decree it appears that the Chicago Musical College had changed its name to “C. D. K., Inc.” The facts of the Ditson will and the bequest of $100,000 to the Musical College then follow, and the payment of the legacy to the college by the executors of Ditson’s estate. That the college had receipted to the trustees for the $100,000 which the court found constituted “a public charity or trust fund, the administration of which was and is subject to the laws of the State of Illinois”; and that it was the duty of the college and its officers and directors to administer the fund pursuant to the statute’s for the uses set forth in the will. Then follow findings substantially in accordance with the allegations of the complaint and a further finding that after the name of the Chicago Musical College had been changed to C. D. K., Inc., a new corporate entity was organized November 22, 1933, and incorporated under the laws of the State under the name of Chicago Musical College, whose object and purposes were the same as the old college and that it was now under new management; that the assets, which included real estate bonds and mortgages, which were transferred by the old college to the new college, had greatly depreciated in value. That the bonds and mortgages had a face value of $172,600 and that the new college was assignee of the entire assets of the old college and desired to reestablish the Ditson Endowment Fund, and that simultaneously with the entry of the decree, had conveyed and transferred the bonds and mortgages to Rudolph G-anz, who was appointed successor trustee to liquidate the securities and administer the fund in accordance with the terms of the Ditson will, providing that any amount in excess of $100,000 realized by Ganz, the successor trustee, be paid by him to the new college. A schedule of the bonds and mortgages was attached showing a par value of $172,600.

It was further adjudged that the decree was entered “without prejudice to any of the parties hereto, . . . -and particularly that this decree shall not, in any manner whatever, lessen or alter the liability or obligation, legal or e.quitable, or impair any defense, present or prospective, of any defendant in this cause as the same may be hereafter otherwise determined,” provided that the disposition of the real estate mortgages and bonds of the par value of $172,600 should be final; it being the intention of the parties that Ganz, as successor trustee, should receive assets or property of the value of $100,000, but in no event more than that sum.

It was further decreed that the successor trustee should at least quarterly, pay to the new college the net income derived from the bonds and mortgages and that the college should use the moneys so received in accordance with the Ditson will. It was further decreed that the restraining order theretofore entered be dissolved; “that First National Bank of Chicago, ... is hereby authorized ... to pay ... to Kinsey each and all of the funds now on deposit to his individual credit” and the bank was “authorized and empowered to pay” to the new college,.all funds on deposit with the bank. ' The court reserved jurisdiction to carry out the terms of the decree.

On the same day, December 21,1933, a supplemental decree was entered by consent of all parties, in which it was decreed that nothing contained in the decree should be deemed determinative of any issue raised by the complaint as amended, and the answer of the insurance company, except as to the real estate bonds and mortgages of $172,600 face value.

About a year after the entry of the decree, Ganz, the successor trustee, filed his answer to the bill of .complaint, as amended, as did the new college, and October 18, 1940, Kinsey filed his answer. About 6 months thereafter, April 18, 1941, an order was entered on motion of the Attorney General striking portions of Kinsey’s answer by which he sought to readjudicate whether the Ditson bequest was a public, charitable trust. On the same day an order was entered referring all issues “raised by the amended complaint and the answers thereto (but not the issues raised by the counterclaim and the answers thereto) ” to a master in chancery to take the evidence and make up his report with his conclusions of law and of fact.

June 25,1941, the master made his report which was filed 2 days later, in which he recites that on June 9th, certain of the parties were present or represented by counsel. (The bank does not appear to have been represented.) That he took the evidence which consisted of the testimony of one witness, Bussell A. Elmquist, and certain documents. The master found that the old college was incorporated under the laws of Illinois in 1877, with a capital stock of $6,000, which was increased from time to time and in April, 1915, it was increased to $100,000; that it operated continuously until 1933, its principal place of business being 64 East Van Burén street, Chicago. Then follow a number of findings similar to the allegations of the complaint as above mentioned. That May 12, 1931, H. Hobart Porter and Boston Safe Deposit Company, as executors of the estate of Charles H. Ditson, drew a check for $100,000 on The Atlantic National Bank of Boston, payable to the order of “Chicago Musical College” and forwarded it, together with a “legacy receipt, release and waiver'of citation” to the college, in which the old college acknowledged receipt of the $100,000 from the executors of the Ditson estate. The receipt was signed “Chicago Musical College, By Carl Kinsey, President.” Kinsey endorsed the check as follows: “Pay to Carl Kinsey or order Chicago Musical College Carl Kinsey President Carl Kinsey” and deposited it May 23, 1931, in the First National Bank, which at that time opened a personal checking account in the name of Carl D. Kinsey.

The evidence further shows that June 22,1931, Kinsey opened an account in the bank in the name of the old college. July 2, following, Kinsey mingled his own funds with the $100,000 by making deposits in the personal account and withdrawing moneys for his personal expenses. On that date the account totalled $103,145.58. Thereafter the balance declined until the account was closed October 6, 1933. January 9, 1932, the old college borrowed $35,000 from The First National Bank and gave its note for that amount, payable to the bank 90 days after date, with interest at 5 per cent per annum. January 25, Kinsey withdrew $80,000 from his initial account in the bank, leaving a balance of $1,345.94. On the same day he deposited $80,000 in the account of the old college in the bank. April 8, the old college gave its renewal note to the bank for $35,000, due 90 days after date. April 13, Kinsey withdrew $80,000 from the Chicago Musical College account and was given a certificate of deposit which was payable to him, personally. July 7, the old college again renewed its note for $35,000, due 62 days after date. July 29, Kinsey reported that the certificate of deposit was lost or destroyed and wanted a duplicate issued. The bank demanded a bond for $80,000, but later this demand was withdrawn and a. duplicate certificate of deposit was issued and referred to the bank’s law department. Kinsey, personally, endorsed the certificate in blank. The bank applied $35,000 of the $80,000 represented by the certificate of deposit issued in payment of the note of the college held by it, and Kinsey withdrew the remaining $45,000. Kinsey afterward used the $45,000 for his personal expenses. October 6,1933, the personal account and the old college account were closed by Kinsey.

The master found the facts as above stated, and further found that Kinsey, in accordance with the decree of December 21, 1933, had turned over the bonds and mortgages to G-anz, and that the mortgages, bonds and other properties so turned over, had been fully liquidated, and the fair, cash market value of them was $65,000. The master’s conclusions were that Kinsey had applied $65,000 of the trust fund to his own use and had made restitution to Ganz, as successor trustee, and that having made such restitution, Kinsey was entitled to have satisfied fully all of his liability and obligation to the trust fund.

“ The master further found in his conclusions that $35,000 of the trust fund was applied by the bank in payment of the note of the old college for that sum; that “the Master does not by this finding intend to pass on the question of the right and the legality of The First National Bank of Chicago to make this application,” and recommended that that question be reserved for future determination by the court. He further recommended that the suit be dismissed for want of equity as to the other defendants.

Objections to the'report were filed by the bank but the master did not pass upon them, certifying that “Because of certain emergencies suggested to the Master, the Master has not passed on the foregoing objections.” Other objections were filed by Kinsey, by Ganz, as successor trustee, and by the Attorney General, but none of them were passed upon by the master because of “certain emergencies suggested.”

Two days after the report was made it was filed, June 27, 1941, and on that day the chancellor entered an order giving leave to file the report, the objections to stand as exceptions. Three days afterward, viz., June 30,1941, the chancellor entered a decree in which it was recited that the matter came on to be heard upon the pleadings, and the court, having examined the master’s report, found that the finding’s and conclusions of the master were true and correct; that the proceedings had been prosecuted by the Attorney General in good faith; that he was entitled to a decree finding that Kinsey had applied to his own use $65,000 of the trust fund and that he had made restitution to Ganz, as successor trustee, in accordance with the decree of December 21, 1933. And having made restitution to Ganz of assets and properties equivalent in value “to all moneys received and expended by him [Kinsey] for his own use and benefit is entitled to the decree of this Court satisfying fully all liability and obligation on his part” to the trust fund. The court further found that the complaint, as amended, should be dismissed as to defendant, the First National Bank of Chicago, and as to the other defendants, for want of equity.

It is from this decree that the Attorney General appeals, contending that the decree should be reversed and the cause remanded with instructions “to enter judgment for $35,000, plus interest thereon at the rate of 5% per annum from July 29, 1932, against Carl D. Kinsey and The First National Banking Corporation, a national bank corporation in favor of Rudolph Ganz, as successor trustee of the Oliver Ditson Endowment, a public charitable trust.” In support of this contention it is argued that the evidence undisputably shows “(a) that trust funds to the extent of $35,000 were misapplied by The First National Bank of Chicago and Carl D. Kinsey acting jointly for uses and purposes obviously not proper” under the terms of the Ditson will and the statutes of Illinois, and “(b) because The First National Bank of Chicago was placed upon inquiry as to the misappropriation of said sum of $35,000 from said trust fund by the following facts: (1) The form of the check for $100,000 and the widespread announcement generally in Chicago and elsewhere of the bequest under the Ditson will and the creation of the Oliver Ditson Endowment: (2) the endorsements on the $100,000 check; (3) the mingling of the proceeds of said check constituting trust funds with the personal funds in the personal account of Carl D. Kinsey; (4) the switching of trust funds from the account of Carl D. Kinsey to the account of Chicago Musical College; (5) the subsequent withdrawal of $80,000 of trust funds from the Chicago Musical College account in the form of a certificate of deposit.” We think none of these contentions can be sustained. The check sent by the executors of the Ditson estate, which we have above described, was payable to the Chicago Musical College. It was endorsed by the Chicago Musical College by Kinsey, its president, to the order of Carl Kinsey and deposited by him. These endorsements, on their face, were entirely proper and the deposit was received by the bank as that of Kinsey (in the absence of any notice to the bank that they were trust funds,) and there is no evidence that any announcement, made by the college of the bequest, was brought to the attention of the bank. Nor, so far as we are advised, was there any evidence in the record that the bank was advised or had any knowledge that the money was a trust fund until after it applied the $35,000 in payment of the note executed by the old college and for which the old college received that sum from the bank. There is no suggestion that this was not a bona fide loan made by the bank. In these circumstances we think the bank is in no way liable. Massachusetts Bonding & Insurance Co. v. Standard Trust & Savings Bank, 334 Ill. 494; Mann v. Hahn, 292 Ill. App. 220.

In the Massachusetts Bonding Company case, in stating the rule of law on which a bank is held liable ' where trust funds or the like are being wrongfully applied, the Supreme Court said (p. 502): “The settled rule is, that if a depositor seeks to pay his own debt to the bank by an appropriation of the funds to his credit in a fiduciary capacity, the bank is affected with knowledge of the unlawful character of the appropriation and will be compelled to refund. . . . The reason for the rule is that the bank has knowledge that the check is in payment of the trustee’s private debt. The bank officials may be said to have knowledge of the character of a transaction when a reasonably intelligent person would have such knowledge. ” Continuing the court said (pp„ 503-4): “The depository has a right to presume that the trustee will make legal use of the funds, (State Nat. Bank v. Reilly, [124 Ill. 464]) but where the transaction itself indicates that the use is a personal one the depository should no longer indulge such presumption as to that transaction,” and that (p. 506) “A bank may properly make payments on checks properly drawn unless the bank has some notice of an adverse claim or that the same are improperly drawn or in payment of the receiver’s personal indebtedness, otherwise there would be no safety for a bank receiving deposits of trust funds to be paid out on a checking account. The enforcement of the rule insisted upon by defendant in error would make it practically impossible for fiduciaries to find a bank which would handle trust business of such character. . . . There is no evidence in the record to charge plaintiff in error with notice that any of the checks last listed [the 4th group] were drawn in payment of Joyner’s personal obligations or for his own use. The law does not require a bank, under such facts, to assume the hazard of correctly reading in each check the purpose of the drawer, or, being ignorant of the purpose, to dishonor the check. ... It is not claimed that plaintiff in error had any interest in or derived any benefit from said checks.” And it was held that the bank was not liable for the checks mentioned in the group.

In the instant case the bank derived benefit of $35,000, but, as stated, there is no evidence that would put the bank on notice that the funds were trust funds.

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

Decree affirmed.

Hatchett, P. J., and HcSurely, J., concur.


text:
    Professional Service Corporation, Appellee, v. Wallace J. Johnson et al., Appellants.
    Gen. No. 42,191.
    Heard in the first division of this court for the first district at the April term, 1942.
    Opinion filed November 30, 1942.
    Raymond F. Hayes, of Chicago, for appellants; J. Glenn Shehee and John A. Quigley, both of Chicago, of counsel.
    Bernard J. Brown, of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff corporation, which was engaged in collecting accounts, filed its complaint in equity against defendants, who were engaged in the same business, to enjoin and restrain them from soliciting and making-collections from plaintiff’s customers. Defendants filed their answer and the cause was referred to a master in chancery to take the evidence and make up his report together with his findings and recommendations. The master took the evidence, made up his report and recommended that the complaint be dismissed for want of equity. Objections were filed to the report which were overruled and they were ordered to stand as exceptions. Certain of the exceptions were sustained, others overruled and a decree entered enjoining the defendants “from in any manner soliciting, securing or obtaining collection business from such persons, firms, partnerships or corporations who were the -active clients of the plaintiff during the year ending July 14, 1941, and from soliciting or urging the employes of the plaintiff to leave the plaintiff’s employ, and from in any way interfering with or disturbing the business of the plaintiff.” Defendants appeal.

The record discloses that plaintiff, the Professional Service Corporation located at 188"W. Randolph street, Chicago, was incorporated in 1926 under the laws of Illinois and since that time has been engaged in the business of making collections for business, industrial and professional concerns and that for the purpose of obtaining accounts for collection it maintains a force of solicitors and collectors. Sometimes as many as 35 persons were employed. The solicitors would call from time to time on hospitals, loan associations, physicians, dentists and grocery concerns and similar types of business whose unpaid accounts were solicited for the purpose of collection and for such services plaintiff would charge approximately 50 per cent of the amounts collected.

Defendant Johnson was employed by plaintiff in 1935 and from time to time was promoted and in June, 1941, he was employed as general manager and received a salary of $3,600 per year. He had full and complete charge of the business and enjoyed the complete confidence of Spencer J. Shaw who testified-: “I own the Professional Service Corporation. At the present time I am President and Treasurer.” Defendant McCoubrey was employed by plaintiff in 1935 and in June, 1941, was “Collection Manager” receiving a salary of $2,300 a year. He also was familiar with plaintiff’s business. The other defendants, Phillips and Peters, were also trusted employees of plaintiff but for a shorter period of time.

There was no agreement between any one of the four defendants and plaintiff that they would not go into a competing business for a period of time after they ceased to be employed by plaintiff. June 10,1941, and probably for some time before that date, Shaw, the president and owner of the stock of plaintiff, became suspicious that Johnson was going to leave and set up a competitive business and on that date he accused Johnson of this but Johnson denied it. However Shaw did not believe Johnson and discharged him at that time. Shortly thereafter, Johnson rented space on La Salle street and June 23, he obtained a charter for defendant, the Financial Service Corporation and set up a new collection organization. A short time thereafter, McCoubrey, Phillips and Peters also joined the new corporation.

The day after Johnson was discharged, Shaw accused defendant McCoubrey of planning to go into the collection business with Johnson which McCoubrey denied. At that time Shaw demoted McCoubrey, and three or four weeks thereafter he resigned and as stated, went with the new company and acted as its secretary.

There is no evidence that Johnson or the other defendants, at any time, prepared a list of plaintiff’s customers or took any such list with them when the new corporation was formed, or afterward. There is ■further evidence to the effect that after the new cor- ■ poration was formed and had set up a competing business, it solicited some of the plaintiff’s customers and other persons and concerns.

Plaintiff’s position, as stated by its counsel, is that “because of the nature of the business of the plaintiff and the confidential relationship between plaintiff and its employees, the names of plaintiff’s clients constitute a trade secret, entitled to the protection of a court of equity.” That “The individual defendants were employees coming within the classification of fiduciaries, who are under obligation though not expressed, yet always implied, not to use the names of plaintiff’s customers for their own advantage and to the damage of the plaintiff” and that the evidence shows that “the individual defendants, while in the employ of the plaintiff, entered into an agreement among themselves to join in organizing a collection business and to exploit the plaintiff’s clients for their own use and advantage and to the irreparable injury of the plaintiff.”

We think the evidence is to the effect that some time before Johnson was discharged he was contemplating setting up a collection agency of his own and talked to some of plaintiff’s employees on this subject. But under the law we are of opinion that defendants cannot be enjoined from organizing and carrying on a rival collection agency, nor can they be enjoined from soliciting plaintiff’s customers. American Cleaners & Dyers v. Foreman, 252 Ill. App. 122; Woolley’s Laundry, Inc. v. Silva, 304 Mass. 383, 126 A. L. R. 758.

In the Foreman case we considered this question, discussed the conflicting authorities at considerable length and we there reached the conclusion that in the absence of an express contract, equity would not enjoin an employee, after the termination of his employment, from soliciting business from the customers of his former employer where no list of names was taken and no fraud committed. We adhered to this holding in Messenger Publishing Co. v. Mokstad, 257 Ill. App. 161; Tinkoff v. Wyland, 272 Ill. App. 280, and this was followed by another division of this court in Capitol Dairy Co. v. Meyer, 293 Ill. App. 632 (Abst.).

In the Woolley’s Laundry case, 304 Mass. 383, the court considered the many authorities on the question add reached the conclusion that a proprietor of a laundry who furnished a “route man” with a list of the names and addresses of the employer’s customers was not entitled to have the “route man” enjoined from soliciting and accepting business from those customers for his own account after he had left the employment without taking away the list except by memory. The court there said (386): “There is no finding that the defendant made any misrepresentations to any of the customers or that, in soliciting them, he made use of any list that had been furnished to him. In fact, at the argument it was agreed that the defendant took no list away with him beyond what he carried in his head.

1 ‘ The question to be decided is whether the defendant is wrongfully making use of information in part originally acquired through lists furnished by his former employer but now apparently no longer needed by the defendant, inasmuch as he carries the names in his memory. If no lists were involved, we are of the opinion that the plaintiff could not prevail,” citing a number of Massachusetts cases. In that case the court further said that the route men were furnished by the laundry company with the names and addresses of their customers “ ‘in the expectation, not expressed to said “route” man, including the defendant, that they . . . would not disclose or use the same for their personal gain except as such employees.’ . . . Sometime in 1938 the plaintiff’s president and manager, because of an apprehension that the defendant contemplated engaging in the laundry business on his own account, requested him to execute and deliver to the plaintiff a written contract defining his duties as an employee and informed him that it would be necessary for him to execute and deliver such a contract if he wished to remain as an employee.” Defendant refused, and left the employer and told the employer he was going into the laundry business for himself. In that case, in discussing the authorities, the court quoted from Club Aluminum Co. v. Young, 263 Mass. 223: “ ‘The use of the information thus obtained [confidentially] amounted ... to a breach of duty.. The use of trade or business secrets gained through employment may properly be made the subject of restrictive agreements. In this class fall also agreements not to use lists of customers and not to entice old customers away by any form of solicitation. Knowledge confidentially gained in the course of employment may be made the subject of restrictive agreement and acts in derogation of such a contract will be restrained. But an employer cannot by contract prevent his employee from using the skill and intelligence acquired or increased and improved through experience or through instruction received in the course of the employment. ’ In the absence of an express contract containing restrictive covenants as to the use of lists of customers,' the employer, if he seeks to enjoin an employee from making use of the information contained in such lists, must, of necessity, resort to the allegation, as in the case at bar, that an implied term of contract of employment has been violated, or that there has been a breach in respect of the duty owed by the employee to the employer.

“In the case at bar was the information that was furnished to the defendant by the plaintiff by way of the names and addresses of its customers confidential? The authorities do not appear to be in accord on this question. It has been held that, where a laundry driver is given a list of customers on his route and while so employed acquires knowledge of and access to all of these customers, he cannot be enjoined after leaving his employment from utilizing his knowledge and soliciting' the patronage of the customers. Such a list was held not to be a trade secret, ’ ’ citing in support of this, cases from Maryland, Washington, Arkansas, New Jersey Equity, New York, Michigan, South Dakota and the Foreman case, above cited. The court then discusses authorities holding to the contrary from Rhode Island, California, Kansas, and New York and concluded by holding a route man could not be enjoined, after he had severed his employment, from soliciting customers of his former employer.

There is no substantial difference between the facts in the Foreman and Woolley’s Laundry cases and the facts in the case at bar.

For the reasons stated, the decree of the circuit court of Cook county is reversed and the cause remanded with directions to enter a decree dismissing the suit for want of equity.

Reversed and remanded with directions.

Hatchett, P. J., and HcSurely, J., concur.


text:
    People of the State of Illinois, Appellee, v. Home Real Estate Improvement Corporation et al., School District No. 88 et al., Appellants.
    Gen. No. 42,366.
    Heard in the first division of this court for the first district at the December term, 1942.
    Opinion filed December 2, 1942.

      Thomas Tighe and Charles Liebman, both of Chicago, for appellants; Thomas Tighe, Charles Liebman and Alice M. Bright, all of Chicago, of counsel.
    Thomas J. Courtney, State’s Attorney, for apellee; Marshall V. Kearney, Jacob Shamberg and Neal J. McAuliffe, Assistant State’s Attorneys, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

The People of the State of Illinois, by Thomas J. Courtney, State’s Attorney of Cook county, brought suit to foreclose for failure to pay general taxes on 12 parcels of real estate. A decree was entered and the property sold. The Trustees of Schools of Township 39, School List. No. 88, and Township High School District No. 209 sought to intervene and to have the sale disapproved. The court denied their motions and they appealed to the Supreme Court. Upon consideration, the cause was transferred to this court.

The Supreme Court in its opinion transferring the case (The People v. Real Estate Imp. Corp., 379 Ill. 536), said: “Taxes were unpaid on part or all of the property for the years 1929 to 1939, inclusive, in the amount of $28,675.22, of which $16,647.08 was principal and $12,038.14 was interest and penalties. A decree foreclosing the tax lien was entered October 30, 1941. November 25, 1941, a sale was had under that decree and one Henry Aldeen bid in the property for the amount of $12,000. A report of sale was made and the sale approved by the court January 13, 1942.” The School District and the High School, the court said, would get a part of the proceeds of the sale, and further said: “After the sale was had, appellants asked leave to file written objections to the confirmation of the sale on the ground the amount of the bid was inadequate. They admitted that they could not produce a higher bidder at another sale and stated that they had no funds and could not purchase it themselves. The judge denied the motion and held that appellants were not interested parties to the proceedings, that they were beneficiaries only of the proceeds of the sale when and if there should be any; and that the State’s Attorney represented the people of the State of Illinois, in whom the law vests the right of foreclosure. . . .

“Appellants base their alleged right to receive notice and file objections on the claim that since they would receive part of the taxes when collected, they were beneficial owners. To support this claim, they rely on People v. Straus, 355 Ill. 640. In that case the county was the purchaser at the tax foreclosure sale and this court held that the delinquent taxpayer could not question its right to buy. It was said that the county bought and held the property as agent for the various taxing bodies.
“There is nothing in the Straus case which puts a duty on the county to bid at the foreclosure sale, nor is there any statement that a deficiency judgment should be obtained against the property owner. That case does not state that the various taxing bodies are proper parties plaintiff.
“The statute (Ill. Rev. Stat. 1941, chap. 120, par. 697 [Jones Ill. Stats. Ann. 119.713]) provides that the suit shall be brought in the name of the people of the State of Illinois and the State’s Attorney is the proper party to institute the suit.”

After the suit was pending in the Supreme Court and the briefs had all been filed, the opinion filed, and a rehearing denied, the Supreme Court, June 11, 1942, filed an opinion in The People v. Anderson, 380 Ill. 158, which involved a foreclosure for failure to pay general taxes and special assessments. A complaint was filed by the State’s Attorney. One of the contentions was that the Village of Lansing which had levied special assessments and issued bonds involved in the suit, had not properly performed its function as trustee for the bondholders and “that the sale price was so grossly inadequate as to be fraudulent,” and “To establish a market value [of the property] defendants introduced the testimony of two real estate experts. It is conceded the testimony of both these witnesses was based entirely on the immediate use of the vacant property for building purposes”; that the value they placed on the lots was many times more than the property sold for. The court continuing said: “Admittedly, at a sale of this sort the full market price cannot be procured unless some one really wants the land, but it is insisted the facts shown by the record establish that the prices at which the property was sold are so grossly inadequate as to shock the conscience, and that where the property is sold at such a low price, this fact alone is sufficient to require the chancellor to refuse to approve the sale. . . .

“The primary purpose of tax foreclosure proceedings is to clear up hopeless tax delinquency and to put the property again on a taxpaying basis. The statute is remedial. (People v. Straus, 355 Ill. 640.) It was never intended that the sale be required to be for the full amount of the lien foreclosed. (French v. Toman, 375 Ill. 389.)” The decree approving the sale was affirmed. The court said that the rule was firmly established that a chancellor possesses a broad discretion in approving or disapproving such a sale and that his discretion would not be disturbed unless there was a clear abuse of discretion. Amd continuing: “The requirements of the statute as to publication having been met in this instance, there being no evidence in the record of any fraud in conducting the sale herein or of any other irregularity in the sale, and the defendants having produced no evidence as to what price might be bid should a second sale be held or that any greater proceeds would be realized at such sale, it cannot be said that the chancellor abused his discretion in approving the sale.”

In the instant case there was no contention that all of the requirements of the law were not followed — the property was advertised, copies of the publication were sent to real estate men, banks and persons normally interested in bidding, and counsel for the schools, on the hearing before the court, said: “There was no physical stoppage to anybody making a bid. I raise no question of any of the formal technicalities herein about the sale.” We think the entire proceedings disclose the fact that the law was in all respects complied with; that the property was sold to the highest and best bidder for cash and, as said by the Supreme Court in the Anderson case, there is no showing “as to what price might be bid should a second sale be held or that any greater proceeds would be realized at such sale, it cannot be said that the chancellor abused his discretion in approving the sale.”

The orders of the circuit court of Cook county are affirmed.

Orders affirmed.

Hatchett, P. J., and HcSurely, J., concur.


author: Presiding Justice Sullivan.

text:
    Standard Asbestos Manufacturing Company, Appellant, v. E. W. Kaiser and A. G. Kaiser, Copartners, Trading as E. B. Kaiser Company, Appellees.
    Gen. No. 41,685.

      Heard- in second division, first district, this court at April term, 1941;
    opinion filed November 17, 1942;
    rehearing denied December 8, 1942.
    David H. Caplow and Bernard J. Brown, for appellant; Bernard J. Brown, of counsel;
    Jacob Levin and Arthur J. Goldberg, for appellees; Arthur J. Goldberg, of counsel.
   Opinion by

Presiding Justice Sullivan.

“Not to- be published, in

full.”


text:
    Bessie Simon, Appellant, v. Paula Balasic and Alfred Balasic, Appellees.
    Gen. No. 42,167.
    Heard in second division, first district, this court at February term, 1942;
    opinion filed November 17, 1942.
    Jacob Levy, for appellant; Edward MeTiernan, of counsel;
    Max M. and Samuel Grossman, for appellees; Sid Mogul, of counsel. .
   Opinion by

Presiding Justice Sullivan.

“Not to be published in full.”


text:
    Lillie Lindsey, Appellant, v. Goldblatt Brothers, Inc. et al., Appellees.
    Gen. No. 42,239.
    Heard in second division, first district, this court at April term, 1942;
    opinion filed November 17, 1942;
    rehearing- denied December 8, 1942.
    Robert D. Meliek and Julius Rieger, for appellant;
    Bernard Brown, for appellees; William A. Goldman and M. J. Getzov, of counsel.
   Opinion by

Presiding Justice Sullivan.

“Not to be published, in full.”


author: Justice Friend.

text:
    W. C. Tackett, Appellee, v. Arthur J. Rebmann and Adelaide C. Rebmann, Appellants.
    Gen. No. 41,986.
    Heard in second division, first district, this court at October term, 1941;
    opinion filed November 17, 1942.
    James E. Flanagan and John M. Mahoney, for appellants;
    Edward McTiernan, of counsel; Israel Dordek, for appellee.
   Opinion by

Justice Friend.

“Not to be published in full.”


text:
    Theodore O. Umbright, Appellee, v. Ludwik Czajkowski et al., Appellants.
    Gen. No. 42,033.
    Heard in second division, first district, this court at October term, 1941;
    opinion filed June 19, 1942;
    rehearing opinion filed November 17, 1942.
    Albert E. Lake, for. appellants;
    Howard E. DeLong, for appellee; E. C. F. Meier and Hyland j. Paullin, of counsel.
   Opinion by

Justice Friend.

“Not to be published in full.’’


text:
    Leonidas C. Kylavos, Appellant, v. Tom Polichrones and Floyd Limbos, Trading as Champlain Restaurant and Tap Room, et al., Appellees.
    Gen. No. 42,122.
    Heard in second division, first district, this court at February term, 1942;
    opinion filed November 17, 1942;
    rehearing denied December 8, 1942.
    Alfred M. Loeser and Peter S. Sarelas, for appellant; Leonard W. Koplin, of counsel;
    Ross, Berchem & Schwantes, for appellees.
   Opinion by

Justice Friend.

“Not to be published in full.”


text:
    Armin F. Hillmer, Appellant, v. Harley L. Clarke, Appellee. Chicago Bank of Commerce et al., Defendants.
    Gen. No. 42,194.
    Heard in second division, first district, this court at September term, 1941;
    opinion filed November 17, 1942.
    Leonard & Leonard, Owens & Owens, and John A. Russell, for appellant; Gordon McLeish Leonard, Edmund G. Pabst and George Edward Leonard, Jr., of counsel;
    Rosenberg, Stein & Rosenberg, for appellee; Merwin S. Rosenberg, of counsel.
   Opinion by

Justice Friend.

“Not to be published in full.”


text:
    In re Charles H. Albers, Receiver (B. H. Molner, Assignee) v. William D. Martin. Ridgeway State Bank of Chicago (B. H. Molner, Assignee), Appellee, v. William D. Martin, Appellant.
    Gen. No. 42,213.
    Heard in second division, first district, this court at April term, 1942;
    opinion filed November 17, 1942.
    Mareellus W. Meek and Laurence B. Jacobs, for appellant;
    Maurice Weissman, for appellee.
   Opinion by

Justice Friend.

“Not to be published in full.”


text:
    Anthony Cerami, Appellee, v. John M. Thomson, Appellant.
    Gen. No. 42,245.
    Heard in second division, first district, this court at April term, 1942;
    opinion filed November 17, 1942.
    Hoyne, O’Connor, Bubinkam & Melaniphy, for appellant; John C. Melaniphy, of counsel;
    Peter D. Giaehini, for appellee; Robert J. Gorman, of counsel.
   Opinion by

Justice Friend.

“Not to be published in full.”


author: Justice Scanlan.

text:
    Stella McFadden, Appellee, v. Rowena G. Crumb et al., Defendants. William A. Patton and A. Louise Patton, Cross Plaintiffs, v. Rowena G. Crumb et al., Cross Defendants. Rowena G. Crumb, Appellant.
    Gen. No. 41,680.
    Heard in second division, first district, this court at April term, 1941;
    opinion filed November 17, 1942;
    rehearing denied December 8, 1942.
    Paul J. Donovan, for appellant;
    Laurence Y. Meyering, for appellee.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    People of the State of Illinois ex rel. Erick Anderson et al., Appellees, v. City of Chicago et al., Appellants.
    Gen. No. 41,745.
    Heard in second division, first district, this court at June term, 1941;
    opinion filed November 17, 1942.
    Barnet Hodes, Corporation Counsel, for appellants;
    Joseph F. Gross-man, First Assistant Corporation Counsel, and J. Herzl Segal, Assistant Corporation Counsel, of counsel;
    James W. Breen, for appellees.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    Metropolitan Life Insurance Company, Appellee, v. Personal Home Mortgage Company, Appellant.
    Gen. No. 41,774.
    Heard in second division, first district, this court at June term, 1941;
    opinion filed November 17, 1942;
    rehearing denied December 8, 1942.
    Taylor, Miller, Busch & Boyden, for appellant; John S. Miller, of counsel;
    Hoyne, O’Connor, Rubinkam & Melaniphy, for appellee; Nathaniel Rubinkam, Leonard S. Schmitz and John C. Melaniphy, of counsel.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    Ella M. Bland, Appellant, v. Herbert J. Buchsbaum et al., Defendants. Herbert J. Buchsbaum, Appellee.
    Gen. No. 41,828.

      Heard in second division, first district, this' court at October term, 1941;
    opinion filed November 17, 1942.
    William H. Haynes, for appellant;
    Theodore Stone, for appellee; Walter H. Moses and Charles C. Kirk, of counsel.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    Stella Fellheimer, Appellee, v. Harold B. Wess et al., Defendants. Martin L. Straus et al., Appellants.
    Gen. No. 41,874.
    Heard in second division, first district, this court at October term, 1941;
    opinion filed November 17, 1942.
    Julius Kreeger and Wendell H. Shanner, for appellants; Julius Kreeger, Wendell H. Shanner, Allen Sinsheimer, Jr. and Elias Mayer, of counsel;
    Nelson, Slater & Boodell, for appellee; Brennan J. Slater, of counsel.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    Frank Kos, Minor, by Evelyn Kos, His Mother and Next Friend, Appellant, v. Frank Linden, Appellee.
    Gen. No. 41,989.
    Heard in second division, first district, this court at October term, 1941;
    opinion filed November 17, 1942.
    Irving N. Stenn and Krohn & MacDonald, for appellant; Stuart B. Krohn and Ian P. MacDonald, of counsel;
    John A. Bloomihgston, for appellee.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    People of the State of Illinois, Defendant in Error, v. Rosa Wedge, Plaintiff in Error.
    Gen. No. 42,141.
    Heard in second division, first district, this court at February term, 1942;
    opinion filed November 17, 1942;
    rehearing denied December 8, 1942.
    Jesse Marcus, for plaintiff in error;
    Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher and Melvin S. Rembe, Assistant State’s Attorneys, of counsel.
   Opinion by

Justice Scanlan.

“Not to be published in full.”


text:
    Dorothy E. Thorne, Appellee, v. Solve K. Thorne, Appellant.
    Gen. No. 42,269.
    Heard in second division, first district, this court at June term, 1942;
    opinion filed November 17, 1942.
    Coburn, McDonnell & Coburn, for appellant;
    Cohon So Goldstein, for appellee.
   Opinion by

Justice Scanlan.

“Not to be published in full”


author: Justice Stone.

text:
    James T. Walker, Appellee, v. Guy A. Thompson, Trustee, Appellant.
    Heard in this court at October term, 1942;
    opinion filed November 19, 1942.
    Whitnel, Browning, Listeman So Walker, for appellant; T. T. Bailey, of counsel;
    Mark D. Eagleton, McGlynn & McGlynn and Paul Farthing, for appellee.
   Opinion by

Justice Stone.

“Not to be published in full.”


author: Presiding Justice Matohett.

text:
    Joseph Lancy, Appellee, v. James Rosenberg, Appellant.
    Gen. No. 42,216.
    Heard in first division, first district, this court at April term, 1942;
    opinion filed November 30, 1942;
    rehearing denied December 14, 1942.
    Harold Levy, for appellant; Lawrence S. Jacobson, of counsel;
    John V. Clinnin, for appellee.
   Opinion by

Presiding Justice Matohett.

“Not to be published in full.”


author: Justice McSurely.

text:
    Anna Delach, Appellant, v. George A. Schuberth, Appellee.
    Gen. No. 42,128.
    Heard in first division, first district, this court at February term, 1942;
    opinion filed November 30, 1942.
    Louis G. Davidson, E. Anne Mazur and Ryan, Sinnott & Miller, for appellant;
    Thomas M. Morris, for appellee.
   Opinion by

Justice McSurely.

“Not to be published in full.”


text:
    Fred Hover, Trading as Fred Hover Company, Appellant and Cross Appellee, v. Colonial Premier Company, Appellee and Cross Appellant.
    Gen. No. 42,188.
    O’Connor, J., dissents.
    Heard in first division, first district, this court at December term, 1941;
    opinion filed November 30, 1942.
    David H. Caplow and Bernard J. Brown, for appellant;
    Brown, Fox and Blumberg, for appellee; Charles LeRoy Brown and Jacob Logan Fox, of counsel.
   Opinion by

Justice McSurely.

‘‘Not to be published in full.”


text:
    Russell S. Moore, Appellee, v. William L. Edmonds et al., Defendants. Appeal of William L. Edmonds et al., Appellants.
    Gen. No. 42,201.
    Heard in first division, first district, this court at April term, 1942;
    opinion filed November 30, 1942.
    Ekern, Meyers & Matthias, for appellants; Donald L. Thompson, William G. Chorn and Walter F. Dodd, of counsel;
    Gardner, Carton & Douglas, for appellee; Erwin W. Roemer, Charles T. Shanner and William L. Fay, of counsel.
   Opinion by

Justice McSurely.

“Not to be published in fulL”


author: Justice O’Connor.

text:
    Wilhelmina Wade, Appellant, v. Victory Mutual Life Insurance Company, Appellee.
    Gen. No. 42,150.
    Heard in first division, first district, this court at February term, 1942;
    opinion filed November 30, 1942.
    Nelson, Slater & Boodell, for appellant; Drennan J. Slater, of counsel;
    William H. Haynes, for appellee.
   Opinion by

Justice O’Connor.

“Not to be published in full.’’


text:
    Chicago Title and Trust Company, Successor Trustee, v. Yetta Gottschalk et al. Harry J. Paul, Appellee. Liberty National Bank of Chicago, Trustee, Appellant.
    Gen. No. 42,175.
    Heard in first division, first district, this court at April term, 1942;
    opinion filed November 30, 1942.
    Harry A. Biossat and Kargman & Kargman, for appellant;
    Harold L. Priess, for appellee; C. A. Caplow, of counsel.
   Opinion by

Justice O’Connor.

“Not to be published in full.”


author: Mr. Justice Dove

text:
    Bryant R. Selden, Appellant, v. City of Sterling, Illinois, et al., Appellees.
    Gen. No. 9,795.

      Heard in this court at the May term, 1942.
    Opinion filed September 17, 1942.
    Opinion subsequently modified and rehearing denied December 23, 1942.
    Robert W. Besse and Kennard J. Besse, both of Sterling, for appellant.
    J. J. Ludens, of Sterling, for appellees.
   Mr. Justice Dove

delivered the opinion of the court.

One of the rules of the public hospital of the City of Sterling is that no physician or surgeon shall perform a major operation in the hospital unless he is a member of the staff or has in attendance, prepared for assistance in the operation, one or more members of the staff of the hospital in addition to a proper anesthetist.

Appellant is a practicing physician and surgeon residing in the City of Sterling. He is a member of the associate staff of the hospital, but not a member of the staff. He brought a suit in the circuit court of White-side county against the city and the members of the board of directors of the hospital to enjoin them from enforcing the rule. Issue was joined, a hearing had and from a decree dismissing the complaint for want of equity this appeal has been prosecuted.

The hospital was established by the city under the provisions of the 1919 Act relating to the establishment and maintenance of public hospitals in cities of less than one hundred thousand inhabitants. (Ill. Rev. Stat. 1939, ch. 23, par. 165, et seq.) That statute was repealed and replaced by similar provisions in the Cities and Villages Act. (Ill. Rev. Stat. 1941, ch. 24, art. 44, sec. 44-1 et seq. [Jones Ill. Stats. Ann. 21.1879 et seq.].)

The governing body of the hospital is a board of three directors, appointed by the mayor with the approval of the city council. The following provisions of the statute are pertinent:

Sec. 44-4. “Organization and duties of directors. . . . They shall adopt such by-laws, rules, and regulations for their own guidance and for the government of the hospital as may be expedient and not inconsistent with ordinances of the city. . . . The board in general shall carry out the spirit and intent of this article in establishing and maintaining or in purchasing and maintaining a public hospital.”
Sec. 44r-6. “Use of Hospital. Every hospital established or purchased under this article shall be maintained for the benefit of the inhabitants of the city in which it is established who are sick, injured or maimed. . . . The hospital shall always be subject to such reasonable rules and regulations as the hospital board may adopt in order to render the use of the hospital of the greatest benefit to the greatest number. The board máy exclude from the use of the hospital all inhabitants- and persons who wilfully violate those rules and regulations. The board may extend the privileges and use of the hospital to persons residing outside of the city but within this State, upon such terms and conditions as the board may prescribe by its rules and regulations. ’ ’
Sec. 44-8. “Rules and regulations. When such a hospital is so established or purchased, the physicians, nurses, attendants, patients, all persons approaching or coming within the limits of the hospital, and all furniture and other articles used or brought there shall be subject to such rules and regulations as the board of directors may prescribe.”
Sec. 4U-10 of the statute provides:
“Equal privileges to physicians. All physicians who are recognized as legal practitioners by the Department of Registration and Education shall have equal privileges in treating patients in such a hospital.”
Article 5 of the by-laws, rules and regulations adopted by the board of directors provides:
“The Staff of this Hospital shall consist of physicians and surgeons who are licensed to practice medicine in the State of Illinois and who have been organized as a medical legal staff of this Hospital, and have complied with all the rules and requirements in regard to obtaining membership on the Staff, according to the rules and regulations adopted by the Staff,” and an amendment thereto adopted by the board of directors is as follows:
“Resolved that additional- members of the Staff of the Sterling Public Hospital may be admitted by invitation after being recommended by the Executive Committee, and after having served two years as a member of the Associate Staff. The associate members shall be comprised of doctors practicing in the community and who have had their application on file for two years. The members of the Associate Staff to be voted on by the members of the General Staff after being recommended by the Executive Committee. V

The record discloses that appellant has been licensed as a physician in Illinois since 1927. He first practiced as a resident physician in a Chicago hospital for about two years, then at Rock City, Illinois, about five years, and in Pennsylvania for about two years, coming to Sterling on September 16,1935 and since that time has practiced there. He applied for membership to the hospital staff on October 10, 1935, and was admitted as a member of the associate staff on February 7,1938. His application for membership was accompanied by his written “Declaration,” reading in part:

“I further promise, so long as I avail myself of the privileges granted me by the Board of Trustees of the Public Hospital of the City of Sterling, that I will abide by the By-laws, Rules and Regulations at present governing the work of the Hospital or any such that may hereafter he adopted by the Trustees for such government, ’ ’ and his letter of appointment quoted the above-mentioned amendment to the by-laws and notified him he had been appointed thereunder.

The rule in controversy has been in effect ever since the organization of the hospital. Appellant testified that he has performed approximately one hundred twenty-five major operations at the hospital, and many minor operations, using as assistants members of the staff and physicians afterward known to him not to be members thereof.

On May 8, 1941, he sent a patient to the hospital for an appendectomy. He had engaged as an anesthetist a doctor from Eock Falls, and as his assistant a doctor whose office was in the same building as his own and who had been a licensed physician for two or three years. Being informed of the rule in controversy by the supervisor, he procured as his assistant Dr. Perry, whom he knew to be a member of the staff, and the operation was performed. Apparently in an effort to show that procuring a member of the staff as his assistant caused a delay, he testified that he and the patient arrived at the hospital at about 6:30 a.m. or within 30 minutes of that time, and that the operation began around ‘ ‘ eight or eight-thirty.” The surgical nurse who made the operating record testified the patient was admitted at 7:00 o’clock; that it took 20 minutes to sterilize appellant’s instruments; that the patient was taken to the operating room at 7:30 and came back therefrom at 8:45; that an appendectomy ordinarily takes from one half an hour to an hour and that there was no delay.

Appellant also testified that on another occasion he ordered one of his patients who was hemorrhaging to the hospital, and that she had a considerable loss of blood due to a delay in the arrival of a staff doctor who stopped on the way to take care of another patient, and that the services of the doctor he proposed to use in the appendectomy were available on this occasion. He did not testify that his patient suffered any injury by the delay, and it does not appear that the patient taken care of by the staff doctor who stopped on his way to the hospital was not an emergency case.

Appellant further testified that since the appendectomy operation he has complied with the rule as to procuring the attendance of a staff member. He testified he did not know the names of the members of the staff, and that he had asked the superintendent of the hospital and a member of the staff for the names of the persons on the staff and that they told him they did not know. The superintendent testified appellant had never asked her for such information. More than three weeks after he started this suit he wrote the superintendent calling attention to a recently posted bulletin in the operating department, “relative to certain consultations at present deemed advisable when patients are considering having major surgery,” and asking for the names of the doctors suitable for such consultation. The letter was unanswered by direction of the president of the board of directors. He also testified he asked Dr. Beard, a member of the staff, how to become a member thereof, but that Dr. Beard did not tell him, except to say the members were chosen at secret meetings and no record was kept. Appellant attended meetings of the staff six or eight times a year since he came to Sterling. The names of the members of the staff were kept in a book in the superintendent’s office, and were on the telephone book and in the telephone booth. The list has always been available to anybody and was there in May 1941. His testimony that he did not know how to become a member of the staff is contradicted by the fact that the amendment to the rules, giving him that information, was contained in his letter of appointment as a member of the associate staff.

Dr. Charles Gk Beard, one of the board of directors, testified that the hospital is a standard hospital, meeting the requirements of the American Medical Association, and has been such for over 10 years; that the rules adopted by it conform in substance to the rules of a standard hospital and that the rule in controversy is one of the rules of a standard hospital. He further testified that when a physician applies for membership on the staff, serves his probationary period of two years, and is appointed an associate member, he may after-wards be chosen a full member of the staff by invitation from the executive committee, composed of five members of the staff, provided his qualifications are such that the executive committee feels he is entitled to become such a member; that if the committee feels his work is good and his practice ethical he is invited; that the word “invited” is used to get away from the word “election” and that there is nothing secret about it; that the committee considers his qualifications as to his work with the other doctors and their observation of him, each member of the committee being a committee of one to see if the applicant should receive his vote; that there are 18 or 20 members of the staff; that the board of directors have nothing to do with it; that he advised appellant how to become a member of the staff; that appellant asked him why he could not become a member to which he replied that he preferred not to say anything more about it inasmuch as it was a personal matter and he did not wish to embarrass either of them. He further testified there is a hospital rule to the effect that in case of an abortion or a Caesarean section all physicians, including staff members, must call in another member of the staff.

The testimony does not tend to support the allegation in the complaint that appellant had demanded of the board of directors a list of the staff members or that they had refused to furnish him therewith; nor does it support his claim that the directors permit the staff to create a “little closed corporation” which refuses to co-operate with a physician who moves to Sterling, and creates a monopoly at the expense of patients desiring to use the hospital nor does it bear out the insinuation made that the staff sets itself up as a “star chamber.”

The claim of appellant that the rule in controversy is unlawful because there is no standard capable of ready determination so as to enable a physician to know when he is eligible for staff membership is without merit. The amendment to the by-laws and the testimony of Dr. Beard shows the standards are fixed and definite. The amendment provides for admission to membership on the associate staff by application and probation, and to membership on the staff upon invitation after being recommended by the executive committee. The recommendation of the executive committee is based on the observation of its several members of the applicant’s qualifications as to his work and his ethics, and if they are good he is invited to become a member of the staff. What other provision would be necessary to constitute any more definite standards is not suggested.

The rules adopted by the board of directors are those of standard hospitals. The rules governing admission to membership on the staff apply to all physicians alike, and tend to maintain a high degree of skill and integrity in the membership. It is obvious that rules must be adopted to protect patients in major operations from unethical or unskilled practitioners, even though they are licensed physicians. Anybody may be forced to undergo a major operation. The rule in controversy is fundamentally a provision for the public safety and the public welfare. It is in no sense for the personal benefit of the hospital or the board of directors, except in maintaining the standard of excellence and proficiency contemplated by the statute and required by the welfare of the public. It insures the attendance and, if required, the assistance of a practitioner of experience and ability in case the operating surgeon should meet with a condition to which he is not equal, so that nothing may be left undone for the benefit pf the patient. Section 44^10 was never intended to prohibit the board of directors of a public hospital from adopting rules that will accomplish that purpose. Its manifest object is only to prevent discrimination, of which there is no evidence in this case.

The decree of the circuit court dismissing the complaint for want of equity is affirmed.

Decree affirmed.

On Rehearing.

Counsel for appellant in their petition for rehearing states that there is not a scintilla of evidence in this record against the reputation or ability of appellant as a physician or surgeon, and that so far as he knows he may be excluded from staff membership of the Sterling Public Hospital because of social, religious or political reasons. Counsel also calls our attention to the fact that there is nothing in the rules of this hospital which provide that when a surgeon has attained a certain high degree of skill, based upon a given amount of experience that he shall then be recommended by the executive committee for membership upon the staff. This is true. It is not possible however, to prescribe by rule a standard of skill dependent upon experience. Skillfulness may be, but is not always, brought about by experience. A surgeon with only limited experience may be very skillful while one with many years of experience may be a bungler. Counsel also state that the court overlooked the case of Henderson v. City of Knoxville, a Tennessee case reported in 95 S. W. (2d) 97, 67 A. L. R. 652 and insists that that case establishes the principle that a duly licensed physician may not be excluded from practicing in a public hospital. What that case holds is that a duly licensed practitioner has a right to practice in the public hospitals of that State so long as he is not guilty of unprofessional or dishonorable conduct as declared by the legislature of that State and so long as he conforms to all the reasonable rules and regulations of such institutions. There is nothing said in that case that conflicts with our holding here. The rule of the public hospital of Sterling challenged by appellant is not, in our opinion, an unreasonable one. It applies alike to all physicians and cannot, upon the evidence found in this record, be' said to discriminate against appellant. The petition for rehearing will be denied.

Rehearing denied.