text:
    Michalina Szeszycki, Appellant, v. Joseph Buczko and Mary Buczko, Also Known as Joseph Bucko and Mary Bucko, Appellees.
    Gen. No. 39,785.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    John F. O’Toole and Mitchell Kilanowski, both of Chicago, for appellant; Mitchell Kilahowski, of counsel.

      Francis Heisler, of Chicago, for appellees.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a decree entered by the court in plaintiff’s action to foreclose a trust deed securing the payment of a principal note for $1,700, dated July 17, 1930, which trust deed and principal note were executed by the defendants, Julia Bucko and Joseph Bucko, Stella Szeszycki and Joseph Szeszycld.

Plaintiff alleges that the trust deed was given to secure a certain other note for $2,000, executed by the same parties, which note and interest coupons attached thereto were paid shortly after the execution thereof; that the trust deed conveying the real estate described therein to Anton G-lowski, trustee, and securing the payment of the notes in question was recorded on July 17, 1930 in the office of the recorder of deeds of Cook county, and that a default occurred in the payment of the principal and interest note for $1,700 and of the taxes against said premises.

It appears from the facts that Teofil Szeszycki and Michalina Szeszycki, the plaintiff, on July 17, 1930, were the owners of the premises here involved; that at that time they desired to dispose of the premises, and accordingly agreed to sell the real estate to their son and daughter and their respective spouses, Julia Bucko and Joseph Bucko, her husband, and Joseph Szeszycld and Stella Szeszycki, his wife, for the principal sum of $5,000.

At that time the daughter, Julia Bucko and Joseph Bucko, her husband, paid in cash $800 and the son, Joseph Szeszycki and his wife Stella Szeszycki, paid $500 in cash. The $800 was received by the plaintiff, Michalina Szeszycki, and the $500 was received by Teofil Szeszycki. In payment of the balance due, the son and daughter and their respective spouses, executed a trust deed, conveying the property therein described to secure one principal note for $2,000 and another principal note for $1,700, due on or before five years after date, with interest at the rate of 3 per cent per annum, payable semiannually, which instalments of interest were evidenced by ten interest coupons, attached to each of the notes, and this trust deed was placed of record by filing in the recorder’s office of Cook county. The principal note No. 1 for $2,000 and the interest coupons thereto attached were delivered to Teofil Szeszycki, and principal note No. 2 for $1,700 and the interest coupons thereto attached were delivered to the plaintiff Michalina Szeszycki.

That shortly after the transaction was completed the plaintiff, Michalina Szeszycki, left for Europe and did not return until some time in the year 1932 or 1933; that at the time the plaintiff was in Europe in 1930, the son and daughter and their respective spouses were unable to agree and accordingly, Joseph Szeszycki and Stella Szeszycki, his wife, the owners of an undivided one-half interest, negotiated with Joseph Bucko and Mary Bucko, his wife, also known as the Bucko, Srs., cross plaintiffs herein, to purchase their undivided one-half interest for the sum of $2,700, out of which sum, principal note No. 1 for $2,000 was to be paid, and on or about January 3, 1931, the transaction was closed by the payment of $2,600 by the cross plaintiffs, Joseph Bucko and Mary Bucko, his wife, the sum of $100 having been previously paid, to Joseph Szeszycki and Stella Szeszycki, and they thereupon conveyed their undivided one-half interest to the cross plaintiffs, and that the principal note for $2,000 and the interest coupons thereto attached were paid to Teofil Szeszycki, who was then the legal owner and holder of the same, and said notes were marked paid and canceled and were surrendered to the cross plaintiffs.

That default had occurred in payment of interest coupons Nos. 1 to 10, and of principal note No. 2 for $1,700, and accordingly the plaintiff filed a bill to foreclose.

That foreclosure proceedings were referred to a master in chancery, and that upon the filing of his report and objections thereto, the objections were overruled and allowed to stand as exceptions. The exceptions being overruled, the court entered a decree finding that the representations made by Teofil Szeszycld to Julia Bucko and Joseph Bucko, her husband that by the payment of the note which he held and which was described in the trust deed on the property in question they were purchasing an undivided one-half interest free and clear of the lien of the trust deed sought to be foreclosed are not binding upon the plaintiff in this action.

The court further found that there is no merit in the contention that upon the payment by either Joseph Bucko, Julia Bucko, or Joseph Szeszycki and Stella Szeszycki, his wife, they would become entitled to an undivided one-half interest in the property, free and clear of the lien of the trust deed as to the undivided one-half interest owned by the above named parties, for the reason that the principal notes, as well as the interest coupons pertaining to each of said notes, were executed by all of said parties, namely, Joseph Bucko, Julia Bucko, Joseph Szeszycld and Stella Szeszycki, his wife.

In this proceeding the plaintiff is seeking to foreclose the trust deed securing payment of the $1,700 note executed by Joseph Szeszycki and Stella Szeszycki, his wife, and Joseph Bucko and Julia Bucko, his wife, who at that time also joined in the execution and delivery of the trust deed which is the subject of this foreclosure proceeding.

As far as we have been able to ascertain from this record, there is nothing which would tend to show that the plaintiff in this action misled the defendants and the cross plaintiffs. Only because of a default in the payment of the amount secured by the trust deed is she seeking to exercise her right under the terms thereof to foreclose for the purpose of obtaining payment of the amount due. The cross plaintiffs offer the defense that they purchased the property from Joseph Szeszycki and Stella Szeszycki and paid the amount due upon the note for $2,000 held by Teofil Szeszycki, and they are now seeldng to have the cancellation of the notes set aside by the court, in order that they may join with the plaintiff in a foreclosure proceeding; that a decree may be entered therein finding that the amount paid for the $2,000 note is due these cross plaintiffs and that the foreclosure decree is for the purpose of a sale of the property in question to secure payment of the $1,700 note due the plaintiff, and the $2,000 note that the cross plaintiffs contend was paid when they, as they claim, purchased the property.

Even if the plaintiff knew that there was a negotiation between the Buckos and Teofil Szeszycki regarding the purchase of the $2,000 note owned by Teofil Szeszycki, under the circumstances it would seem to the court that the Buckos, who purchased the note upon the alleged representation that they would have the undivided one-half interest free and clear of lien, did not exercise such prudence in the transaction as would protect them from liability in a proceeding of the character now before us.

The expression of the Supreme Court in the case of Hawke v. Snydaker, 86 Ill. 197, is applicable to the facts in this record, from which it appears that the Buckos purchased from the mortgagor property subject to a mortgage. The court upon a like question said:

“The right of a purchaser from the mortgagor of a part of a property under mortgage, who has paid for his part of the property, to have all the parts of the property left in the mortgagor at the time of his purchase sold first, before subjecting his property to sale to satisfy the mortgage, is a superior right as against the mortgagor, but it is a subordinate right as against the mortgagee, and is subject to the superior right of the mortgagee to collect his money in the way that is most to the interest of the mortgagee. The purchaser from the mortgagor can hold the mortgagee to account only where the mortgagee has wantonly, or in unjust indifference to the known equitable rights of such a purchaser, impaired such right by his act, when no reasonable consideration of the interests of the mortgagee required the act to be done which is complained of. ’ ’

The plaintiff is seeking to foreclose the trust deed only to secure payment of the amount due, as we have already indicated. There were no representations made, nor were the Buckos misled by anything the plaintiff has stated. Their action for contribution would lie only when they were required to pay the full amount of the mortgage in order to protect their interests, and this would apply only to the mortgagor.

The question of subrogation was passed upon by the Supreme Court in the case entitled Simpson v. Gardiner, 97 Ill. 237, wherein the court held that where two persons purchased a tract of land, receiving a deed therefor, not in severalty, but to them in common, gave their joint notes for the unpaid purchase money, secured by their joint mortgage on the entire tract, and one of them died, so that the other was compelled to pay the whole amount of the notes and interest to.save his own share in the land, the party so paying off the incumbrance was entitled to contribution, and to be subrogated to the rights of the mortgagee, and to enforce the lien of the mortgage as to the money paid above his own proper share.

So in this action if the defendants Joseph and Mary Bucko were required to pay the full amount provided for in the trust deed, then they would be in a position to apply for and entitled to a contribution from the other joint owners. In this case such steps were not taken, but the defendants rely upon the representation of the former owner of the note that the undivided one-half interest which was transferred to the Buckos would be free and clear of the mortgagor’s claim for the amount paid by the Buckos.

The court in its decree ordered that the master to whom the cause was referred was to retain out of the proceeds of the sale $287.50 taxed as fees of the master and pay the officers of the court their costs, and out of the remainder pay to the plaintiff the amount found to be due her in the sum of $2,498.04, together with interest on the amount of $2,178.99 at 5 per cent from November 20, 1936, and to the defendants and cross plaintiffs, Joseph Bucko, Sr. and Mary Bucko, the amount of $2,721.29 with interest on the sum of $2,563.29 at 5 per cent per annum from November 20, 1936, and if the remainder be not sufficient to pay said amount and interest due to the plaintiff and the defendants and cross plaintiffs, that the master apply the remainder to the extent to which it may reach in satisfaction thereof, the payments to be made to said plaintiff and said defendants and cross plaintiffs in the ratio by the decree found to be due to the plaintiff and to the defendants and cross plaintiffs.

As we have indicated before, the plaintiff was not responsible for the unfortunate position in which the defendants and cross plaintiffs found themselves in making payment of the $2,000 note and interest to TeoffiL Szeszycki. They had knowledge and were chargeable with the fact that the note was a joint note secured by the trust deed which was a lien upon the property in question, and that the plaintiff was entitled to enforce her legal rights in the manner in which she did to accomplish this purpose, but the court in its decree, notwithstanding the note purchased from Teofil Szeszycki had been canceled, permitted the defendants and the cross plaintiffs, in effect, to join with the plaintiff in seeking to enforce their lien upon the property in question. It would seem under the law, by reason of the fact that the mortgage note had been paid and canceled, the lien had merged in the title, which is now in the hands of the Buckos, by purchase, as described in the decree.

For the reasons stated the decree is reversed and the cause remanded for such further proceedings as may be consistent with the views expressed in this opinion.

Reversed and remanded.

Denis E. Sullivan and Hall, JJ., concur.


source: Caselaw Access Project

author: Mr. Presiding Justice Hebel

license: Public Domain

text:
    A. B. Gochenour, Appellee, v. Simon Griever and Mayo Friedberg, Appellants.
    Gen. No. 39,797.

      Opinion filed May 11, 1938.
    Sonnenschein, Berkson, Lautmann, Levinson & Morse, of Chicago, for appellants; Jesse H. Brown, of Chicago, of counsel.
    Shulman, Shulman & Abrams, of Chicago, for appellee ; Meyer Abrams, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the defendants from a judgment entered in the circuit court for $3,848.52, based upon an action filed in that court by the plaintiff.

The action is based in part upon a stipulation of facts in which it appears that the plaintiff is the legal holder and owner of the bonds described in the complaint; that the defendant, Simon Griever, filed his petition in bankruptcy, and that the defendant did not know and could not learn the names of any of the officers and several owners and holders of any of the bonds of the issue or series described in the complaint; that an order of discharge was entered; that the defendant, Mayo Friedberg, filed his petition in bankruptcy, and that he did not know and could not ascertain the names of any of the owners and holders of any of said bonds, and that an order of discharge was entered.

From the facts in the record it appears that on June 15,1927, these defendants executed and delivered their gold bonds Nos. M-51 to M-55 each being for $1,000 and aggregating $6,000, payable to the order of bearer with interest at 6 per cent per annum as evidenced by interest coupons attached thereto, all a part of a series of bonds in the aggregate amount of $180,000 secured by a trust deed executed by the defendants to the Central Trust Company of Illinois. The trustee pursuant to a provision of the trust deed declared the principal of all outstanding bonds to be due and payable. A foreclosure proceeding was filed in the superior court of Cook county, Illinois, and a decree entered finding that there was due to the plaintiff here from the defendants $7,759.90 together with interest thereon at 5 per cent per annum from March 5, 1936. Subsequently a sale was held pursuant to the terms of the foreclosure decree and upon distribution of the proceeds thereof there remained a balance due to the plaintiff here on September 23, 1936, of $3,734.38 plus interest amounting to $124.14, making a total due to the plaintiff of $3,848.52. In June, 1932, before any default occurred, the defendant Simon Griever, filed his petition in bankruptcy in the District Court of the United States for the Northern District of Illinois, Eastern Division, and since, as stipulated, the defendant Simon Griever, did not and could not learn the names of any of the officers and several owners and holders of any of the bonds of the issue or series described in the complaint, he therefore set forth and described said bondholders in schedule A (2) as follows :

“Unknown owners of all of the indebted and outstanding bonds and interest coupons attached thereto described in and secured by the first trust deed conveying property at N. E. corner Austin and Fulton streets, Chicago, Illinois.........................$163,000.”

On July 1, 1932, a certificate of publication was filed in said cause, and on October 10, 1932, an order of discharge was entered therein. On May 10, 1929, the defendant Mayo Friedberg, filed his petition in bankruptcy in the District Court of the United States for the Northern District of Illinois, Eastern Division. As stipulated, said defendant did not know and could not ascertain the names of any of the various and several owners and holders of any of said bonds, and he therefore set forth and described said bondholders in schedule A (2) in said petition as follows:

“Holders of notes secured by trust deed on property at the N. E. corner at Austin and Fulton street, (First mortgage on property)...................$180,000. ’ ’

On June 22, 1929, a certificate of publication was filed in said proceeding and on October 22, 1930, an order of discharge was entered therein, and it is from the judgment entered upon the stipulation of facts that this appeal is being prosecuted by the defendants.

The defendants contend that the issue in this case is whether the discharge which they obtained in their respective bankruptcy proceedings barred plaintiff’s claim. Defendant Griever scheduled as creditors the unknown owners of all of the unpaid and outstanding bonds and interest coupons attached thereto described in and secured by the first trust deed. Defendant Friedberg scheduled as creditors holders of notes secured by the trust deed on the property at the northeast corner of Austin and Fulton streets. It is upon this description of creditors in the petition for relief in bankruptcy that the sufficiency of description is questioned.

Plaintiff’s answer to the contention of these defendants is that they concede that the sole question is whether or not the two schedules operated as a discharge in bankruptcy; that the defendants did not comply with the Bankruptcy Act by properly describing the creditors in their schedules filed in their petitions in bankruptcy, and the plaintiff quotes the general rule of law that a discharge does not release the bankrupt from debts-which have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt unless the creditor had notice or actual knowledge of the proceedings in bankruptcy. (Citing Corpus Juris, p. 403).

In the instant case it is admitted upon stipulation of the parties that the defendants “did not know and could not learn the names of any of the various and several owners and holders of any of the bonds of the issue or series described in the complaint.” Under the authorities of the appeal courts of Illinois the burden of proof rests upon the plaintiff to show that his claim did not come within the terms of the discharge in bankruptcy. In Van Norman v. Young, 228 Ill. 425, upon this question the court said:

“The court instructed the jury that the burden of proof was upon the plaintiffs in error to show that their debt from defendant in error was not barred by his discharge in bankruptcy. The authorities upon the question as to where rests the burden of proof in such case are not in entire harmony. We think, however, the better rule is that a discharge in bankruptcy is presumed to cover all the debts of the bankrupt, and that the introduction in evidence by the bankrupt, when sued, of a certified copy of the order of discharge, or other proof of his discharge in bankruptcy, is prima facie a bar to the claim sued on, and that the burden of proof is upon the plaintiff to show that the claim sued on is not within the terms of the bankrupt’s discharge. (Collier on Bankruptcy, p. 174; Brandenburg on Bankruptcy, sec. 433.) In Sherwood v. Mitchell, 4 Denio, 435, it is said: ‘ The discharge is presumptive evidence of all the facts asserted in it, and is conclusive until overthrown bv evidence of some fraud which by the act avoids it. Debts arising out of a violation of an official or private trust are not affected by it unless the creditor chooses to prove the demand under the bankruptcy. The discharge, it is true, is general in its terms, and prima facie is a discharge of the bankrupt from all his debts. But the creditor may, notwithstanding show that his debt is of the excepted class. The onus, however, is on him, and if he fails to make the proof the debt will be taken to be one of an ordinary character. ’ ’ ’

To a like import is the case of Vandervoort v. Flaherty, 257 Ill. App. 480, and Alling v. Straka, 118 Ill. App. 184.

It is contended by the defendants and it was stipulated that the defendants did not know and were unable to ascertain the names of the owners and holders of the bonds, which obviously included the plaintiff. The plaintiff failed to sustain the burden of proof as required. In addition, there is no showing that there were any assets in the bankruptcy estate and that the plaintiff was injured by not having proved his claim. From the stipulation it is apparent that there was no fraud, and the good faith of the defendants is not questioned.

The plaintiff points to the fact that the debt of the bond issue, as well as the name of the maker, was not described, nor was the name of the trustee set forth in the schedule, and thereby the schedule failed to give the names of the creditors so as to give to them and to the trustee full, accurate and early information as to the condition of the estate, as required by the Bankruptcy Act.

This fact is disputed by these defendants, and they point to the case of Fitkin v. Century Oil Co., 16 F. (2d) 22, wherein the court said:

‘ ‘ The mortgage by its terms in no way confers upon the appellee rights, other than those usual, to enforce payment of the notes, in the event of default, out of the security held by it as trustee. The appellee was not a creditor of the LaPorte corporation, nor did it become assignee, by reason of the terms of the mortgage or otherwise, or attorney in fact for the owners or holders of the outstanding notes, with respect to anything except the mortgaged property. The notes are payable to the bearer thereof, or, if the notes be registered, to the registered holder thereof on the due date.
“ . . .It thus appears that the trustee, in representing the note holders and enforcing their rights as such trustee, is restricted to the rights conferred under this indenture ‘with reference to the mortgaged property.’ The purpose of this clause was to permit the foreclosure of the lien held by the trustee for the benefit of the note holders in the event of default, or to take such other action as may be necessary to make valid the lien granted upon the securities and the property transferred to the appellee as security for the payment of the notes.”

The plaintiff argues that while a “naked” trustee may not file a claim for the bondholders in bankruptcy, the rule is different when the trustee is active and where the debt is payable to the trustee, and points to certain provisions of the trust deed.

One of the articles of the trust deed called to the attention of the court is article VII, which provided that upon default in the payment of principal or interest the trustee had the right to declare the whole bond issue due, and the trustee had the right to waive default.

Section 5 of the trust deed authorized the trustee upon default to proceed to protect and enforce its rights and the rights of all bondholders in this indenture by proceedings at law or in equity, whether for the specific performance of any covenants or agreement herein contained or in aid of the execution of any power herein granted.

Section 10 vested the exclusive right of action in the trustee.

In the consideration of these provisions, the court has in mind that under section 10 of article VII the exclusive right of action under the trust deed alone is vested in the trustee. In the case of Oswianza v. Wengler & Mandell, 358 Ill. 302, the Supreme Court held that such a provision does not affect the right of a bondholder to sue at law upon his bond.

There is nothing called to our attention which would authorize the trustee to file a claim in bankruptcy; that right is solely vested in the holders of the bonds. In United States Trust Co. v. Gordon, 216 Fed. 929, the court said: “The bondholders were clearly creditors of the bankrupt, and under section 57 of the Bankrupt Act (Act July 1, 1898, c. 541, 30 Stat. 560 (U. S. Comp. St. 1901, p. 3443) had the right to prove their claims as such, unless the mortgage has given the trustee a superior right. The mere fact that the trustee holds the legal title to the security, does not necessarily make it, in equity, a creditor with respect to the debt itself.” This statement' of the court that only the trustee holds the legal title to the security, does not in effect make the trustee a creditor.

Plaintiff states it is true that in the Fitkin case (16 F. (2d) 22), it was held that a trustee may not file a claim in bankruptcy. However, the case was distinguished in Seaboard National Bank v. Rogers Milk Products Co., 21 F. (2d) 414, and in In re United Cigar Stores Co., 68 F. (2d) 895. It was squarely held that a trustee under a bond issue is entitled to file a claim, and the fact that the bondholders themselves are creditors does not prevent the trustee from filing a claim, and the effect of the filing of the claim by the bondholders merely reduces the amount of the claim of the trustee. In pointing to the decision in the Fitkin case the court said:

“That, in such a situation the promisee could not prove a claim in bankruptcy was all that we decided in Fitkin v. Century Oil Co., 16 F. (2d) 22, where the mortgagor’s covenant with the trustee mortgagee was only to pay the bondholders; payment to them was not payment to him. However, in the case at bar the covenant was to pay the trustee itself, and its damages for the amount payable. It is true that it was to hold the money in trust, but if that were a defense in the case of any contract made with a trustee, the cestui que trust alone could recover substantial damages. That has never been the law. . . . Therefore the case is one in which both the trustee and the bondholders have rights of action; the principal promised to pay each.”

The defendants, however, call our attention to what was further said in the Seaboard National Bank case as having a material bearing upon the question of the right of the trustee to file a claim for the bondholders. The court said:

“It is urged that the mortgage trustee has not such an interest as entitles him to maintain this appeal, and that Fitkin v. Century Oil Co., 16 F. (2d) (C. C. A. 2), so decides. That case held that the trustee was not a creditor, and could not prove the claims of mortgage bondholders who had not appeared for themselves. There the property had not been sold free of liens; the trustee was insisting upon the validity of the mortgage, and was attempting to prove a claim as creditor in order to protect bondholders in case there should be a deficiency after the security was realized. It was held merely that he was not a creditor. Brant, etc., Co. v. Palmer, 262 F. 370 (C. C. A. 8); In re U. S. Leatheroid Co., 285 F. 884 (D. C. Mass.). Compare Lane v. Equitable Trust Co., 262 F. 918 (C. C. A. 8). Here the trustee is not claiming as a creditor. He is asserting Ms lien upon the fund, claiming that he holds such lien in trust to secure all valid bonds, just as before the sale he held the mortgage lien upon the land. The distinction between asserting rights to his lien and claiming as a creditor is recognized by dictum in Mackay v. Macon Coal Co., 178 F. 881, 884 (C. C. A. 8). Doubtless the court may in its discretion distribute the fund directly to the bondholders, instead of turning it over to the mortgage trustee for distribution. United States Trust Co. v. Gordon, 216 F. 929 (C. C. A. 6); In re Chambersburg Silk Mfg. Co. (D. C.) 190 F. 411 (M. D. Pa.). But we see no reason why the trustee, when distribution is threatened, in utter disregard of the rights of bondholders, may not assert his lien to protect their rights. Neither the FitMn Case nor any other authority which has come to our attention is adverse to this view.”

While we have not discussed all the authorities cited, it is apparent, as we have already stated, that the defendants acted entirely in good faith in the preparation of their bankruptcy schedules. According to the stipulation of the parties the defendants did not know and were unable to learn the names of the individual bondholders, and therefore scheduled them as unknown. The mortgage trustee was not a creditor within the meaning of the Bankruptcy Act, nor was he authorized to file a claim under the terms of the mortgage. The discharge in bankruptcy procured by the defendants barred the present action, and the judgment of the circuit court is therefore reversed.

Judgment reversed.

Denis E. Sullivan and Hall, JJ., concur.


text:
    Ben Ruzgis, Appellant, v. Guy A. Richardson et al., Trading as Chicago Surface Lines, Appellees.
    Gen. No. 39,841.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    Wright & Kamin, Ross Lee Laird and Thomas W. Winton, all of Chicago, for appellant; Alfred Kamin, of counsel.

      Frank L. Kriete, Warner H. Robinson and Arthur J. Donovan, all of Chicago, for appellees; John R. Guilliams, of Chicago, of counsel.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a judgment entered by the court for the defendants notwithstanding the verdict of the jury for the plaintiff.

Plaintiff’s action was one to recover damages for personal injuries sustained when he was struck by a street car operated by the defendants who are the receivers of the various associated companies which operate under the name and style of Chicago Surface Lines. Upon the trial the jury returned a verdict for the plaintiff, assessing damages at $10,000. Notwithstanding this verdict, the court, as we have stated, entered a judgment for the defendants.

No question was raised as to the sufficiency of the pleadings, and from the facts offered in behalf of the parties, it is evident that on May 7, 1934, at 6:45 a. m. the plaintiff left his home at 5841 south Peoria street in Chicago to go to his place of employment at 4.4th street and Ashland avenue. He boarded a westbound 59th street car at 59th and Peoria. He received a transfer upon payment of his fare and rode to Ashland avenue, about one mile west of Peoria. He alighted from the front end of the 59th street car, walked south on the east crosswalk on Ashland avenue until he reached the curb on the southeast corner. Being favored by the stop light located at that place, he then turned west and walked to the south crosswalk at 59th street. There was a street car standing in the northbound tracks on Ashland avenue as plaintiff came up to the tracks. The plaintiff came up to about 2 to 2% feet from the car and then turned to his left and walked south directly in line with the safety island located on Ashland avenue on the east side of Ashland avenue street car tracks. Ashland avenue runs north and south at 59th street, and is about 70 feet wide. 59th street runs east and west and is about 40 feet wide. Street car tracks are located on each street and operate in both directions. About 10 feet south of the south building line of 59th street, there is a switch point or movable rail in the northbound rails of Ashland avenue. This was operated by a switch hook which was inserted to move the switch point and thereby enable a car to turn northwest into the westbound tracks of 59th street. On Ashland avenue is a raised cement loading platform or safety island, adjacent to the northbound tracks, with its western edge about 2% feet from the east rail of the northbound track. The safety island is 4% feet wide and 75 feet long. The north end of the island is 29 feet 7 inches from the south building line of 59th street. The normal overhang of the street car involved on a straight track is 22% inches on the body and 15% inches on the front and rear bumpers. According to the testimony of the defendants’ engineer, a car taking the curve from Ashland avenue into 59th street would have an overhang of 2 feet 8 inches when the rear right-hand corner would reach the north end of the safety island. The overhang increases as the car moves around the switch tracks and 10 feet north of the north end of the island would be 3 feet 3 inches. The overhang enters the line of the safety island about 6 feet north of the island. The maximum overhang of the right rear end is 4 feet 9 inches, which occurs when the rear end is about a foot south of the south building line of 59th ' street. The car involved in the accident was about 49 feet long.

From the east rail of the northbound tracks to the east curbstone is 27 feet 10 inches. The sidewalk on the south side of 59th street is 13 feet 7 inches from the curb to the building line. There are traffic control “stop and go” lights at the intersection.

After the plaintiff came up near the east rail of the northbound tracks, he turned left and walked directly south in line with the safety island. This was the path usually traveled by people approaching the safety island to board northbound street cars. The automobile traffic was then heavy on Ashland avenue. A northbound Ashland avenue street car was approaching on the track directly behind the car involved in the accident.

The car which struck the plaintiff was standing still as he was waiting south toward the safety island. When the plaintiff arrived at a point about 7 feet from the north end of the island the traffic light changed and the first car started up suddenly without warning or signal and started to go around the curve at a very rapid rate of speed. As soon as the plaintiff ascertained that the street car was turning he endeavored to get out of the way of the overhang by turning to his left. The right rear end of the street car struck his left hip, and he was injured. The street car which struck the plaintiff was operated by one man who served as motorman and conductor. There is evidence that at the time of the accident this street car was empty, except that the operator stated he had one passenger. It appears from the testimony of the plaintiff that he had never seen a street car turn left from Ash-land avenue into 59th street, and the witnesses seemed to agree that the majority of street cars northbound on Ashland before reaching 59th street continued north across 59th street to various destinations.

The evidence offered by the defendants tends to establish that the car which struck the plaintiff was intended for service on 59th street to be run from Central Park avenue on the west — about 2% miles west of Ashland — to Blackstone avenue on the east— about 3y% miles east of Ashland. The street car had been in a barn at Ashland avenue and 69th street, and in order to get into service on 59th street, came north on Ashland to 59th street, continued west to Central Park avenue and then remained in service going east and west on 59th street until the end of its run.

The plaintiff at the time of the trial was 54 years of age, and had lived on Peoria street in Chicago within a block of 59th street for 12 years. He had been employed at 44th street and Ashland avenue for two years previous to the time of the accident, and transferred at 59th street and Ashland avenue every morning in going to work, and also every evening in returning from work. The plaintiff testified that the curved tracks between Ashland and the tracks on 59th street had been there during all of the two years; that he knew they were street car tracks, and must have been used to run street cars on; that he had been living in Chicago for a good many years and that he had seen street cars turn curves running on tracks like this curve on 59th street and Ashland avenue, and that when they turn in that manner the end swings out.

At the close of the plaintiff’s case, as well as at the close of all the evidence, the defendants made a motion for a directed verdict, which the court took under advisement. After the verdict was returned for the plaintiff and damages assessed at $10;000, the defendants filed a motion for a judgment notwithstanding the verdict, and in the alternative, a motion for a new trial. This motion for a judgment, as we have already indicated, was allowed.

In considering this motion it is a rule of law that the trial court is not to consider the credibility of the witnesses, nór the weight of the evidence; that his ruling is to be upon the theory that the evidence most favorable to the plaintiff, together with all.reasonable inferences, fails to make out a prima facie case, and upon that theory the court will be justified in entering a judgment for the defendants notwithstanding the verdict of the jury.

Upon the issues involved in this appeal, plaintiff contends that the issues are limited to the consideration of the following question: “Was there evidence at the trial which, construed most favorably in favor of the plaintiff with all reasonable inferences and intendments to be drawn therefrom, would justify a verdict in his favor?” Or stated conversely: “Was there a total failure by the plaintiff to prove one or more necessary elements of his case ? ’ ’

While the defendants agree that it has been established beyond question that upon a motion for judgment notwithstanding the verdict the court is not to weigh the evidence, nor take into consideration the credibility of the witnesses, but must consider the evidence in the light most favorable to the plaintiff, they contend that this does not mean only the testimony of the plaintiff and his witnesses may be considered, or that mere extracts from the evidence on certain facts may be considered, but that it means that all of the evidence on all of the essential facts taken strongly in favor of the plaintiff as the record will fairly and reasonably permit, must be taken into consideration. Defendants further contend that if there is no conflict in the evidence concerning a certain fact, then such evidence is the evidence most favorable to the plaintiff on that fact; that many of the undisputed facts are considered in plaintiff’s brief as being established facts in this case, although they appear in the evidence offered by defendants; that there is no rule of law which is designed to permit or defeat a recovery in the face of undisputed facts, and cite in support of their contention the case of Nelson v. Stutz Chicago Factory Branch, 341 Ill. 387. The court in that case said:

“The defendant in error contends that proof that the plaintiff in error owned the car whose negligent operation caused the accident and the operator was the plaintiff in error’s servant constituted prima facie evidence that the car was being used in the plaintiff in error’s business and it was liable for the injury. It is further contended that the court cannot say, as a matter of law, that the prima facie case thus made has been overcome by testimony that the driver was without authority to drive the car, as it is a question for the jury to determine. The question of law presented to the court upon a motion at the close of all the evidence is whether, when all the evidence is considered, together with all reasonable inferences from it in its most favorable aspect to the party against whom the motion is directed, there is a total failure to prove a necessary element of his case. (Coal Creek Drainage District v. Sanitary District, 336 Ill. 11.) This precludes any examination of the weight of the evidence to determine its preponderance, but requires consideration of the evidence itself introduced on the trial and not merely the statements of the opinion of the Appellate Court as to what facts have been proved.
“. . . The contention of the defendant in error is that it is the province of the jury to weigh the testimony of the witnesses, to determine the credibility and weight of the evidence and give it their belief according to their judgment. In support of this contention she relies upon the case of Shannon v. Nightingale, 321 Ill. 168, in which it was said: ‘If the condition of the evidence at the close of the plaintiff’s case does not justify an instruction for a verdict in favor of the defendant, no evidence which the defendant may introduce will justify such instruction except uncontradicted evidence of an affirmative defense. Evidence contradictory of the plaintiff’s will not do it.’ This language was too unguarded and should be qualified, as should also the statement that ‘the question arising on this motion [to direct the verdict] is whether there is any evidence to sustain the plaintiff’s side of the issue.’ The question is whether there is evidence to sustain every element of the plaintiff’s case necessary to be proved to sustain the cause of action. The other language quoted should be modified by the substitution for the words ‘an affirmative defense’ of the words ‘ facts consistent with every fact which the evidence of the plaintiff tends to prove but showing affirmatively a complete defense. ’ ”

The question in this case is whether there were issues of fact which were properly submitted for consideration of the jury.

The defendants on appeal do not question the amount of plaintiff’s damages, but suggest that the questions to be determined are: (1) Was there a total failure to prove defendants’ negligence? (2) Was there a total failure to prove plaintiff’s exercise of due care and caution for his own safety?

The plaintiff calls our attention to the case of Feldman v. Chicago Rys. Co., 289 Ill. 25, upon the question of whether the plaintiff as a passenger was entitled to the highest degree of care of the defendants. It is clear from the evidence that the plaintiff was a passenger for hire and had a transfer issued by the defendants and was in the act of transferring to an Ashland avenue car traveling north. While the plaintiff cites the Feldman case as controlling, still he suggests that the relationship of carrier and passenger is not the sole determinant of defendants’ negligence, and even if the plaintiff were merely a pedestrian the negligence of defendants is manifest; that it is not prerequisite to a reversal of the judgment below that the plaintiff was a passenger of defendants.

The authority that a person remains a passenger when in the necessary act of making a transfer did not originate in the case of Feldman v. Chicago Rys. Co., 289 Ill. 25. Thus in Chicago City Ry. Co. v. Carroll, 206 Ill. 318, the court said: “It was sufficient that the undisputed evidence showed, or tended to show, that appellee did receive a transfer, and in consequence of that, and by virtue of it, was a passenger on both lines of appellant while making a continuous journey to his destination. ’ ’

One of the cases cited by the defendants upon this exact question is Griswold v. Chicago Railways Co., 339 Ill. 94, wherein the court said:

“It is contended by defendants that plaintiff was not a passenger at the time of her injury, as she intended to do a little shopping at a fruit store near the northwest corner of Seventy-ninth and Halsted streets before using her transfer on her journey south. She had a transfer to be used going south, and the obligation of defendants to use due care for their passengers did not end the moment plaintiff stepped from the car. It was defendants’ duty to furnish a safe place for passengers to alight and to exercise proper care for their safety immediately thereafter. (Chicago Terminal Transfer Railroad Co. v. Schmelling, 197 Ill. 619; Pennsylvania Co. v. McCaffrey, 173 id. 169.) It should be remembered that when plaintiff alighted from the car on the west side there was a stream of automobile traffic between the safety zone near which she alighted and the west curb of Halsted street. It is argued that she might by stepping forward have avoided the maximum swing of the car outward in making the circle into Seventy-ninth street. That would be true provided it appeared she would not have moved into the line of the automobile traffic. All this was a question of fact for the jury. While the facts were different in Kelly v. Chicago City Railway Co., 283 Ill. 640, from this case, in principle the rule of liability in such cases as this is stated.”

The evidence established that the plaintiff was to become a passenger on the Ashland avenue car for the purpose of a continuous journey. It was necessary that the defendants furnish a safe place for passengers either to board or alight from the street car. The plaintiff was in the act of making a transfer when he started to walk toward the safety island on the east side of the Ashland avenue east tracks, and while he was in the act of walking south on Ashland avenue to reach the safety island, a street car of the defendants standing at that point, started to move and in moving turned the corner, and in doing so the overswing of the rear of the car struck the plaintiff and he was- injured.

The point is made that plaintiff could see the car, and that he certainly had knowledge that the car in making the turn would swing outward and thus come in contact with passengers trying to reach the safety island, unless they acted to prevent such contact.

These were all questions of fact for the jury, that is, whether the plaintiff was at the place indicated in this opinion; whether he was too close to the overhang when the car began to turn on 59th street, and the overhang struck him, and whether he exercised due care for his own safety at the time and under all the circumstances.

The cases in which this question is considered all seem to agree that whether a person is a passenger or about to become a passenger for the purpose of continuing his journey, he is entitled to a safe place from which to board the car. In the instant case the safety island in question was certainly there for the use of pedestrians, as well as for passengers making a transfer, and they had the right to assume, unless warned, that cars in turning at the point indicated would not by the overhang of the car strike and injure them.

We believe the court in the instant case was fully justified in submitting the evidence to the jury, but erred in entering judgment for the defendants notwithstanding the verdict of the jury for the plaintiff for $10,000.

For the reasons stated we are of the opinion that the court erred in entering judgment notwithstanding the verdict of the jury, the judgment is reversed and judgment entered in this court on the verdict of the jury in the sum of $10,000 for the plaintiff.

Judgment reversed and judgment here for the plaintiff for $10,000.

Denis E. Sullivan and Hall, JJ., concur.


text:
    Wilbur F. Kellogg, Appellee, v. Katherine N. Kellogg, Appellant.
    Gen. No. 40,027.
    Opinion filed May 11, 1938.
    J. Colburn Hamilton, of Chicago, for appellant; David A. Canel, of Chicago, and Daniel F. Kemp, of counsel.

      Roland J. Klingler, of Chicago, for appellee.
   Mr. Presiding Justice Hebel

delivered the opinion of the court.

This is an interlocutory appeal from an order entered in the circuit court of Cook county restraining the defendant from prosecuting an action in the municipal court of Chicago to enforce a judgment for alimony entered by the United States District Court for the District of Columbia, and further, the denial of defendant’s motion to vacate the restraining order, by failure of the court to act within seven days from its presentation. This restraining order was entered without bond and without notice to the defendant, except notice to the attorney who filed her suit in the municipal court.

The order for a temporary injunction is based upon a petition filed by the plaintiff seven years after the entry of a decree for divorce in the circuit court of Cook county, Illinois. The petition alleged that the defendant, notwithstanding the entry of a decree of divorce by the circuit court of Cook county, proceeded with an action for divorce instituted by her in the District Court of Columbia, and obtained a decree of divorce with an order for permanent alimony. The petition further alleged that the plaintiff pleaded as a defense in the district court the decree entered by the circuit court of Cook county. It is also alleged that the defendant had instituted an action in the municipal court of Chicago upon the judgment entered by the District of Columbia court and unless restrained would enforce such judgment; that the court of the District of Columbia did not have jurisdiction of the parties or of the subject matter. The motion to vacate alleged that the defendant had filed a petition for divorce in the District of Columbia on September 16, 1930, which was filed prior to the filing by the plaintiff of his divorce bill in the circuit court of Cook county, Illinois; that the plaintiff appeared generally in the Distritit of Columbia, filed his answer, and pleaded the entry of the decree of the circuit court as a defense; that thereafter, on hearing, the District of Columbia court entered the divorce decree and the alimony judgment complained of.

From the undisputed facts it appears that the defendant is a resident of the District of Columbia, and until September 1, 1929, Wilbur F. Kellogg, the plaintiff in this action, also resided in the District of Columbia; that the parties were married and lived together in the District of Columbia until March, 1928. On September 16, 1930, Katherine N. Kellogg, the defendant, filed a petition for divorce from the plaintiff in the Supreme Court of the District of Columbia (now known as The United States District Court for the District of Columbia), charging adultery. On September 26, 1930, Wilbur F. Kellogg, the plaintiff, filed a bill of complaint in the circuit court of Cook county for a divorce from the defendant, charging desertion. The defendant in this action was served by publication and never appeared in the circuit court of Cook county, Illinois. On December 1, 1930, a decree of divorce was entered in the circuit court, reserving* provisions for the control, custody, education and allowance for the support of the minor children of the parties. Wilbur F. Kellogg, on September 9, 1931, filed an answer in the District of Columbia proceedings, denying that he and the corespondent were residents of the District of Columbia, admitting* that the plaintiff in this action and the defendant were married, had two children, and lived together until March, 1928, denying that the parties separated because of his fault, denying the acts of adultery alleged, alleging* that he had contributed to the maintenance of the defendant and their children and was unable to pay more than $75 a month for their maintenance, and alleging as a special defense the decree of the circuit court of Cook county entered on December 1, 1930.

An interlocutory decree was entered on November 24, 1933, by the District of Columbia court, reciting that counsel for both parties had been heard and that the plaintiff • and corespondent had been served with process, finding that the allegations in the bill of complaint were established and cause for the' dissolution of the bonds of matrimony between the plaintiff and the defendant had been proved, awarding the custody of the minor children to the defendant, ordering the plaintiff to pay $100 a month as permanent alimony, and to pay to the defendant $615 as the amount of arrears due her under the order of the court. On March 12, 1934, a final decree of divorce a vinculo matrimonii was entered by the District of Columbia court, dissolving the bonds of matrimony between the plaintiff and the defendant upon the expiration of the time allowed for taking an appeal. On April 23, 1937, a judgment was entered by the United States District Court for the District of Columbia, ordering- that Wilbur F. Kellogg pay to his former wife the sum of $2,740, being the amount of arrears of alimony due her under previous orders of court up to and including February 28, 1937, and that she have judgment for that amount with execution thereon as at law.

In May, 1937, a suit was filed by the defendant, Katherine N. Kellog*g, in the municipal court of Chicago, based upon the judgment of the United States District Court for the District of Columbia entered therein on April 23, 1937, and on June 1, 1937, a general appearance was filed in the municipal court of Chicago on behalf of Wilbur F. Kellogg, the -plaintiff in this action. Thereafter on December 31, 1937, he filed a petition in the circuit court of Cook county — in the same case in which his decree for divorce was entered — wherein he prayed that the court consider the questions of control, custody, education and allowance for the support of the minor children and after due notice enter proper order in accordance with the facts, and pending such hearing the court entered the order restraining the defendant, her attorneys and agents, from prosecuting the case instituted by the defendant in the municipal court of Chicago.

The court entered the restraining order, using this language:

“. . . ; that the respondent, her attorneys and agents be restrained from prosecuting her action in the Municipal Court of Chicago, being case No. 27778957, and from prosecuting any other proceedings, to enforce any orders or decree of the United States District Court for the District of Columbia, equity Case No. 51878, all until further order of this court, that for good cause shown in the petition petitioner is excused from giving bond.”

The language of the court is broad and the order therefore would prevent the defendant from pursuing any right that she may have by reason of the entry of the decree in the United States District Court mentioned above.

In our opinion this order is entirely too broad, and from a reading of the petition filed for the purpose of this temporary restraining order there is nothing* in the petition to indicate that the plaintiff would be deprived of any defense he may have against the prosecution of the suit now pending* in the municipal court of Chicago; and further, it is to be noted that the order provides “that for good cause shown in the petition petitioner is excused from giving* bond.” The statute on Injunctions, ch. 69, sec. 9, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 109.357], provides:

“In all other cases, before an injunction shall issue, the plaintiff shall give bond in such penalty, and upon such condition and with such security as may be required by the court, judge or master granting or ordering the injunction: Provided, bond need not be required when, for good cause shown, the court, judge or master is of opinion that the injunction ought to be granted without bond.”

As appears from the order itself, the part of the order providing “that for good cause shown in the petition petitioner is excused from giving bond,” does not comply with the statutory provision just quoted. The petition itself and the amendment thereto do not state any facts from which it would appear there was justification for that part of the order directing that the petitioner be excused from giving bond.

In Peck v. Peck, 214 Ill. App. 41, the court, on the question of granting an injunction without bond, said:

“Again, the injunction was granted without bond and no reason for waiving the requirement of the statute that a bond should be exacted is found in the order, nor does any reason for dispensing with a bond appear in the supplemental bill or by any affidavit supporting the same.” To the same effect is the case of Redfield v. Lorimer-Lundquist Co., 174 Ill. App. 547.

For the reasons stated the temporary injunction order is reversed.

Injunctional order reversed.

Denis E. Sullivan and Hall, JJ., concur.


author: Mr. Justice Hall

text:
    In re Estate of Hyman Holsman, Deceased, Joseph P. Grady et al., Appellants, v. Nellye Holsman and Continental Illinois National Bank and Trust Company, Appellees.
    Gen. No. 39,738.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    Russell, Murphy & Pearson, of Chicago, for appellants ; Walter Wm. Pearson and John B. Riley, both of Chicago, of counsel.
    James Rosenthal and Sidney Levy, both of Chicago, for appellees.
   Mr. Justice Hall

delivered the opinion of the court.

This is an appeal from an order of the circuit court of Cook county, dismissing the claim of Joseph P. Grady and others against the estate of Hyman Hols-man, deceased. The claim is for the sum of $1,000, and is based upon the amount of the claimed liability of the decedent as a bank stockholder. The matter was heard in the circuit court on appeal from the probate court, where the claim had been dismissed. A hearing was had on the claim filed, a motion to dismiss, together with a stipulation of facts, which recites, in substance, that a bill in chancery was filed on June 20, 1932, in the superior court of Cook county by Joseph P. Grady and others against the Devon Trust and Savings Bank and the stockholders of that bank as defendants, seeking to enforce the constitutional liability of the defendants, the stockholders of the bank; that among the defendants named in the bill was Hyman Holsman, the decedent against whose estate this claim is filed; that Hyman Holsman, in the chancery case, was served with summons on July 6, 1932, entered his appearance on July 7, 1932, and filed an answer on July 20, 1932 ; that on August 27, 1932, while the proceeding in the superior court was pending, Hyman Holsman died, and that his death was suggested of record, but that the executors of his estate were not made parties defendant, were not served with summons, and that they filed no appearance in the cause; also that subsequently, a final decree was entered in the cause in the superior court, but that no judgment was sought or entered against the executors of the estate of Hyman Holsman. The claim in the probate court was filed on October 23,1934. *

Attached to and made a part of the stipulation of facts filed in the probate court, is a copy of an injunction order entered in the superior court on July 30, 1932, in the cause then pending in that court. Among other things, this document contains the following recital:

“This matter coming on to be heard upon petition of Joseph Grady, John Sweeney and A. J. Boland, complainants, for an order enjoining and restraining each and every creditor of said Devon Trust & Savings Bank, excepting complainants herein, from commencing, instituting or prosecuting any suit at law or proceeding in equity against any stockholder or stockholders of said bank to enforce the stockholders’ liability thereof.” After certain jurisdictional findings were made by the superior court to the effect that the suit was brought to enforce the liability imposed by the constitution of the State, that the suit was brought in a representative capacity by complainants in behalf of themselves and all other creditors of the Devon Trust and Savings Bank, and that for the protection of the creditors, it would be desirable that all creditors, except the complainants therein, be enjoined from instituting other proceedings, and that inasmuch as the number of creditors of the bank is upwards of 10,000, it would prejudice the rights of complainants and other creditors if notice was required, the judgment order entered in the superior court proceeds as follows: “That a writ of injunction issue in the above entitled causes as prayed in said verified petition filed herein, and that each and every creditor of said Devon Trust and Savings Bank, their solicitors, attorneys, ag’ents and servants and each of them (excepting however the complainants herein) be and they are hereby enjoined and restrained from instituting or prosecuting’ any suits or actions of any kind, in law or in equity, against the said Devon Trust and Savings Bank, or any of its stockholders, seeking to recover from said stockholders, separately or jointly, the amount of or any part of the amount of the liability of said bank to any creditor thereof accruing while any of said stockholders held or owned shares of stock in said bank. ’ ’

The statement of claim filed in the probate court is as follows:

“Devon Trust & Savings Bank
“Closed June 18, 1932
“Super-added liability of Estate of Hyman Holsman, deceased.
“To Creditors of Devon Trust and Savings Bank (Payable to Logan L. Mullins, Receiver in Consolidated Cause No. 561664 in the Superior Court of Cook County, Illinois).
“By virtue of the ownership by said Hyman Holsman of shares of stock in said bank, as follows:
“No. of shares Period Held Accrual of Unsatisfied liability Liability of Est. of Hyman Holsman
10 May 5,1931 to June 18,1932 $572,783.49 $1,000
“Total Liability of Estate of Hyman Holsman......................... $1,000
“ [Affidavit of claim attached to statement and filed in the Probate Court on October 23, 1934, as follows:] “Walter Wm. Pearson, being’ first duly sworn, on oath deposes and says that he is the duly authorized agent in this behalf of Joseph P. Grady, also known as Jos. P. Grady, J. S. Neeson, Maurice E. Roche, also known as M. E. Roche, Leo Halperin, W. R. Grogan Jr., S. Labar, Samuel Wenzelberg, also known as S. Wenzelberg, and Francis L. Gorman, also known as Dr. F. L. Gorman, complainants in consolidated cause No. 561665 brought for the benefit of all of the creditors of the Devon Trust and Savings Bank, an Illinois Banking Corporation, against all of the stockholders thereof to enforce the liabilities of said stockholders to the creditors of said bank, and says that the annexed dial™ against the Estate of Hyman Holsman, Deceased, is just and unpaid, after allowing for all just credits, and that the creditors of Devon Trust & Savings Bank have no other claim against said estate.”

The motion to dismiss the claim recites among other things that it is not shown in the claim filed in the probate court that the claimants, Joseph P. Grady and the ' others mentioned, were creditors at the time when the decedent, in his lifetime, was the owner of 10 shares of stock from May 5, 1931, to June 18, 1932, of the Devon Trust and Savings Bank, to whom such deceased was liable for superadded liability as a stockholder, as provided by law; that the claim does not show who the creditors of the Devon Trust and Savings Bank were, and the amount of the indebtedness as to each such creditor of said bank existing during the period from May 5, 1931, to June 18, 1932, and whose claims have not thereafter been paid. This motion to dismiss further sets forth the decree mentioned in the stipulation of facts as an additional ground for dismissal.

Claimants contend that it was not necessary, as a matter of pleading, to show in the claim that the nominal or representative creditors in whose name the claim was filed, were creditors during the particular period during which the deceased held stock in the bank; that it was not necessary to show in the claim the names of all the creditors of the bank and the amount of indebtedness to each of such creditors during the time the deceased held stock therein; that the probate court originally, and the circuit court subsequently on the appeal therefrom, should have gone into the merits of the claim, heard the evidence, and should have applied .equitable principles in arriving at its judgment.

The theory of the respondents as stated in the brief, is that it was essential to allege in the claim that the named claimants were creditors of the bank at the time the deceased held stock; that it was also necessary to allege the names and amounts due to the creditors of the bank during the period the deceased held his stock, and that the probate court could not entertain a claim where the named claimants represented themselves and all others in the same class. Also, that at the time the claim was filed, the equity suit was pending on behalf of all the creditors against all of the stockholders including the deceased, whose death was suggested in the equity suit and to which his executors were not made parties defendant nor substituted as legal representatives of the deceased; that by virtue of the writ of injunction issued in said equity suit, claimants were enjoined from bringing a separate action against the defendant Holsman, and against his estate; that the claimants herein, by their agent, allege that they are complainants in the bill in equity brought for the benefit of all of the creditors of the Devon Trust & Savings Bank against all of the stockholders thereof, to enforce the liabilities of said stockholders to the creditors of said bank, that as such, they have no standing in a court of law, nor does the claim show who the creditors were, nor the amount of the indebtedness to such creditors during the time that the deceased held his stock, which creditors would be the only parties who could assert their claim against the deceased as stockholder, if they had a right to sue at law.

The decretal order entered in the injunction suit, in addition to the matters stipulated, and after a recitation to the effect that Joseph P. Grady, John Sweeney and A. J. Boland are petitioners for an order enjoining and restraining each and every creditor of the Devon Trust and Savings Bank, except the complainants in said suit, from commencing, instituting or prosecuting any suit at law or proceeding* in equity against any stockholder or stockholders of said bank to enforce the stockholders’ liability thereof, upon the verified petition filed in the complaint, contains the following:

“That it is for the best interests of and for the protection of all the creditors of said Devon Trust and Savings Bank that an order should be entered herein enjoining and restraining each and every creditor of said bank, excepting complainants herein from instituting or prosecuting any suit at law or proceedings in equity against any one or more of the stockholders of said bank seeking to recover therein from said stockholders separately or jointly any part or all of the liability imposed upon such stockholder by the Constitution of this State.
“That inasmuch as the above cause is a representative suit, brought by complainants in behalf of themselves and of all other creditors of said bank, the rights of all other creditors will be fully protected in this suit, and said other creditors will gain the same relief in this cause as by filing and prosecuting other suits, whereas other suits will tend to confuse and harass the stockholders and put said stockholders to needless expense, and the added expense of such other suits will reduce the amount available to the creditors of said bank; and the court is of the opinion that good cause has been shown and that this injunction ought to be granted without requiring a bond to be given by the complainants herein, and such bond should be excused.”

It is to be noted that the defendant does not deny liability for the amount alleged to be due. However, as stated, defendant insists that where a representative proceeding in equity to enforce bank stockholders’ superadded liability has been instituted, individual creditors may not institute a proceeding at law against a stockholder of the bank involved; that the probate court has no jurisdiction to proceed in a case of an equitable character as though a bill in chancery has been filed, and that the legal representative of the deceased should have been made party defendant in the equity suit upon the defendant’s death. If the last proceeding suggested should have been followed and a decree had been entered against the defendant here, it would necessarily have ordered that any amount found to be due should be paid in the due course of administration of the estate. As to the point made that the probate court has no jurisdiction, we call attention to the case of Trego v. Estate of Cunningham, 267 Ill. 367. In that case, a claimant in the probate court alleged the insolvency of the principal maker of a promissory note, together with the insolvency of certain of the sureties, and asked for a contribution of one third of the amounts of the notes from the estate. In passing upon the question as to the character of the action and as to the jurisdiction of the probate court, the Supreme Court said: “That [the claim filed] was an appeal to the equitable powers of the probate court, and that court, although without general chancery jurisdiction, has equitable jurisdiction in the settlement and allowance of claims. To avoid delay, expense and embarrassment in the settlement of estates by requiring a resort, in the first place, to a court of equity, it will proceed in a case of an equitable character as though a bill in chancery has been filed, and will hear the evidence, investigate the claim and apply equitable rules in determining the judgment. (Moore v. Rogers, 19 Ill. 347; Dixon v. Buell, 21 id. 203; Howard v. Slagle, 52 id. 336; Wadsworth v. Connell, 104 id. 369; Thomson v. Black, 200 id. 465.) In such a case the court will act substantially as a court of equity, disregarding mere matters of form and looking to the substance to determine the equities of the parties. Section 60 of the Administration act provides for filing claims against estates, and that on objection to the claim the case shall be tried as 'other suits at law and either party may demand a jury of six or twelve men to try the issue. Evidently the General Assembly had in mind such claims as would give rise to an action at law which , should be tried as-other suits at law, and could not have intended that such proceedings as the settlement of accounts of deceased guardians, executors,' administrators or trustees, or rights enforceable in equity, although presented in the form of claims against estates, should be tried by jury. This suit was, in substance, a proceeding in chancery which might have been prosecuted in a court of chancery, where there would be no trial by a jury, and the probate court, when called upon to grant the same relief upon the same equitable principles, would properly adopt the same procedure.” See also Foreman State Trust & Savings Bank v. Tauber, 348 Ill. 280. Further, the case of Sanders v. Merchants State Bank, 349 Ill. 547, seems to hold that it would have been the legal duty of the claimants to file this claim in the probate court.

"We are of the opinion that the court was in error in refusing to give the claimants a hearing* on the issues made and in dismissing the claim. We are of the further opinion that the probate court has full jurisdiction and power to consider and pass upon the entire question. The judgment of the circuit court of Cook county is, therefore, reversed and remanded for a hearing.

Reversed and remanded.

Hebel, P. J., concurs.

Denis E. Sullivan, J., takes no part.


text:
    National Life Insurance Company, Appellant, v. Joseph Ulis et al., Appellees.
    Gen. No. 39,775.
    Opinion filed May 11, 1938.
    Rehearing denied May 26, 1938.
    George Gillette, Elmer M. Leesman, and Charles F. Grimes, all of Chicago, for appellant.
    Hershenson & Hershenson and James B. McKeon, both of Chicago, for appellees.
   Mr. Justice Hall

delivered the opinion of the court.

On January 31, 1933, the National Life Insurance Company, plaintiff, filed a bill to foreclose a trust deed to the Chicago Title & Trust Company, trustee, given to secure the payment of certain notes for the sum of $14,000, with interest. . The number of this document in the records of Cook county is 992839. The notes and trust deed were dated February 7,1928, and were executed by Joseph and Emily Ulis, his wife. Among the defendants named in the case are Frank H. Lang, trustee under a trust deed recorded as document No. 9331328, together with the unknown owners or holders of the notes which this latter trust deed was given to secure. Personal service was had npon Lang, trustee. The “unknown owners” were served by publication. This latter trust deed and the notes for which it was given as security, were also executed by Joseph and Emily Ulis, both the deed and notes are dated July 3, 1926, and the property involved is the same as that involved in the instant case. In the instant case, after all defendants had been defaulted, a decree of sale was entered, in which it was found that the trust deed of the National Life Insurance Company was a first lien on the mortgaged premises. A sale of the mortgaged property was had on May 27, 1933, and on June 3, 1933, the master who mhde the sale, made a report thereof, in which it is recited that the sale was made to the National Life Insurance Company. On April 26, 1934, Jennie I. Waterman, under sec. 50, par. 8 of the Civil Practice Act [Cahill’s Ill. St. 1933], filed a petition in the instant proceeding concerning the decree of the court entered therein. In this petition it is recited, inter alia, that the petitioner is the owner of a note for the sum of $19,300, executed by Joseph Ulis and Emily Ulis, dated July 3, 1926; that to secure such note and interest, Joseph and Emily Ulis, on July 3, 1926, executed a trust deed conveying- to Prank H. Lang, trustee, the same premises as are involved in this foreclosure proceeding, and that the mortgage being* foreclosed, is inferior to the mortgage described in her petition. The prayer in this petition is that the court enter an order setting aside, or altering, the decree of foreclosure entered in the instant case and for further relief. On April 9, 1935, the National Life Insurance Company filed an answer to this petition, in which it is recited, among other things, that the note for $19,300, herein-before referred to, purports to be secured by the mortgage trust deed dated July 3, 1926, as alleged, and further admits that Jennie I. Waterman was not made a party to the instant proceeding by name and was not served with a copy of the complaint, or by notice sent by mail, and that no copy of the decree entered therein was served upon her. It is further recited in this answer that on July 3, 1928, Harry S. and Jennie I. Waterman filed a complaint in the circuit court of Cook county in equity against Joseph and Emily Ulis, Chicago Title & Trust Company, a corporation, trustee, Frank II. Lang, trustee, Irvin Jacobs, trading as Irvin Jacobs So Company, and the unknown owner or owners of the note or notes secured by the trust deed to the Chicago Title & Trust Company, recorded as document No. 9929839; that in the said complaint it is alleged, among other things, that on July 23, 1926; the petitioner owned the premises in question, and that on July 3, 1926, Joseph and Emily Ulis purchased the same from the petitioners, and as part payment of the purchase price, gave the note of $19,300, dated July 3,1926, all of which was due and payable 10 years from its date, with interest at 6 per cent per annum; that the principal note provided that if any default be made in the payment of any instalments of principal or interest agreed to be paid, and if any portion thereof should remain due and unpaid for a period of 30 days after- the same should become due, it should, at the option of the legal holder of the note thereupon become due and payable immediately, without notice, and should be collectible at any time after such default, anything in the note or trust deed to the contrary notwithstanding ; that all of the covenants and conditions in this second mortgage trust deed, given to secure the payment of this note, were expressly made a part thereof, and that the note was indorsed in writing by Joseph and Emily Ulis and delivered to the Water-mans as a part of the purchase price of the premises involved here; that at the time of the filing of the bill in the circuit court, the Watermans were the owners and holders of the note and the interest due thereon, and that to secure the payment of that note, Joseph and Emily Ulis conveyed the premises to Frank H. Lang as trustee. It is further alleged in this answer that this latter trust deed contained the following provision :

“It is understood and agreed that when the remaining balance of the first mortgage now on the above described premises falls due on April 26, 1928, that the grantors herein will have the privilege of placing a new first mortgage on said premises for as large an amount as possible, or, that the owner of said second mortgage may procure said first mortgage, provided the rate of interest shall not exceed 6 per cent per annum, payable semi-annually and that the cost of procuring said mortgage shall not exceed 1 per cent per year for the length of time that said first mortgage shall run and that the duration of this first mortgage shall not exceed five years and that the second mortgage described herein will be subrogated to said first mortgage so to be placed on said property.
“It being expressly understood and agreed that any prepayments on said first mortgage so to be placed on said property, shall not exceed $1,000 per annum and that the proceeds of said new first- mortgage so to be placed on said property shall be used first to pay up the remaining* balance that may be then due on said first mortgage, according to its terms and conditions and that the balance of said money shall be paid to the then owner and holder of said second mortgage to reduce the principal indebtedness provided for therein and that said money so received shall be applied to the last payment or payments provided for in said second mortgage.
“It is further understood and agreed that in the event the grantors, herein pay any sums in excess of $100 per month, as above provided for, said excess sums so paid shall be applied on the last payment or payments provided for herein and that said monthly payment as herein provided shall continue to be made each and every month as herein provided.” In this answer of the National Life Insurance Company, it is further alleged that in the complaint filed by Harry S. and Jennie I. Waterman on July 3, 1928, the trust deed from Joseph and Emily Ulis to Frank H. Lang, trustee, provided, among other things, that in the event of a breach of any of the covenants or agreements therein contained, the whole of said indebtedness, including principal and all earned interest, at the option of the legal holder thereof, without notice, became immediately due and payable; that the complainants, Harry S. and Jennie I. Waterman, because of the breach of the covenants by the defendants therein, Joseph and Emily Ulis, “do hereby exercise their option and do hereby declare the whole unpaid balance of said note secured by the trust deed, to be now due and payable, according to the terms and provisions of the trust deed”; that in this complaint they prayed that the mortgage therein sought to be foreclosed in the instant proceeding be declared to be a junior mortgage to that of Harry S. and Jennie I. Waterman because of the fact that upon the release of the mortgage trust deed, for which the mortgage sought to be foreclosed was substituted, became a junior mortgage to that of Harry S. and Jennie I. Waterman hereinbefore referred to. Harry S. and Jennie I. Waterman filed a general replication to this answer, and after a hearing on the bill to foreclose, the answer of the National Life Insurance Company and the replication, the court entered a decretal order dismissing the complaint for want of equity. No appeal was taken from this decree.

At the time the Watermans acquired the real estate in question, it was subject to a first mortgage trust deed dated April 26,1923, given to secure an indebtedness of $18,000, bearing interest at the rate of 5% per cent per annum, and on July 3, 1926, the Water-mans conveyed the premises to Joseph and Emily Ulis, and the trust deed to Frank H. Lang, trustee, was given to secure a balance due by the Ulises to the Watermans. This last mentioned trust deed was then secondary and subject to the mortgage trust deed dated April 26, 1923. On January 13, 1928, through a broker, Joseph and Emily Ulis made application for a loan to refinance the loan which existed at the time the Watermans acquired the property, and on February 7, 1928, the Ulises executed the trust deed now in issue in the instant suit, to secure a loan for $15,000, which they procured, and the entire proceeds thereof were applied to the extinguishment of the indebtedness which existed at the time the Watermans acquired the property.

It is the claim of the plaintiffs that inasmuch as the mortgage loan in question was used for the purpose of liquidating the indebtedness just referred to, that the plaintiff in this proceeding should have and has a first lien in subrogation to the lien of the mortgage which its money paid off, that the rights of plaintiff in this proceeding are not affected by the contract between the Ulises and the Watermans, that it was within its right to have made a loan of only a sufficient amount to pay off the original mortgage, that the rights of the Watermans were in no wise affected by plaintiff’s act in making a new loan and talcing' a new mortgage, that the refinancing provision in the agreement between the Watermans and the Ulises is so vague and uncertain as to be unenforceable, and that the question of priority of defendants’ mortgage over plaintiff’s mortgage was adjudicated and settled by the decree of the superior court herein referred to. It is the claim of Jennie I. Waterman that by reason of the fact that the plaintiff loaned only enough money to pay off the original first mortgage, she was prevented from enjoying the benefits of the refinancing contract entered into between her and the Ulises, that plaintiff had notice of her rights, and that therefore plaintiff does not come into equity with clean hands and should be denied the right to be subrogated to the lien of the first mortgage, and that the Ulises’ mortgage to the Watermans has priority over plaintiff’s mortgage. It is also claimed that the suit of the Watermans, which was dismissed for want of equity, was prematurely brought, in that there had been no default at that time and that none of their rights were there adjudicated.

The matter was referred to a master in chancery, who, after taking testimony, reported and found that the lien of Jennie I. Waterman was superior to that of plaintiff, and recommended that the decree of foreclosure heretofore entered, be set aside, that a new decree be entered in accordance with the findings of the master’s report, that the sale made in pursuance of the original decree, be set aside, and that a new sale be made in pursuance of a decree to be entered in accordance with the findings of the master. On July 16, 1937, the court entered a decree approving the master’s report finding that the lien of the Watermans was superior to that of the plaintiff in the instant case, and ordered that a sale of the property be made in satisfaction of such lien. It is from this decree that the appeal herein is being prosecuted.

In this proceeding the plaintiff introduced, and there was received in evidence, the entire record in the action brought by the Watermans on July 3, 1928, including the pleadings, process and decree, and it is to be noted that in that suit the Watermans set forth the identical provisions of the mortgage upon which they relied for priority over plaintiff’s mortgage trust deed in the instant case. It is also to be noted that in that suit the Watermans set forth the intentions of the parties, including* themselves and Joseph and Emily Ulis, with respect to the provisions of the mortgag*e given by the Ulises to the Watermans, regarding the obtaining of an additional loan, as hereinbefore set forth. It is also alleged that the Ulises had failed to comply with their agreement, and that because of the release of the original first mortgage, the Water-mans’ mortgage became a first mortgage and a prior lien on the premises.

In the decree appealed from, the court attempted to dispose of the plaintiff’s claim and held that the old matter was not adjudicated in the former decree by the following* statement: “A hearing* was had upon the issues made up on said bill of complaint and same ivas dismissed for want of equity. The records in this cause do not show that the evidence in that cause was preserved by a certificate of evidence nor that the decree in that cause found any specific facts proved on the hearing. It does not appear that the court in that cause passed upon the question of the priority of lien between the purchase money second mortgage trust deed held by the Watermans and the $14,000 trust deed held by National Life Insurance Company, which was made a party defendant to said suit.”

The whole basis of the Watermans’ claim in both proceeding’s is that they have a priority of lien over that of plaintiff. On the hearing before the master, there was some evidence offered and received as to remarks made by' the chancellor and as to colloquies between the parties upon the hearing in the first proceeding. This is all the evidence that was offered or received bearing on any of the questions here. The issue in the first case was made and the case was heard and decided on the pleadings, and, as stated, precisely the same issue was involved as is involved here. On this question, the Supreme Court in Harding v. Harding, 352 Ill. 417, said:

“The doctrine of res judicata is, that a cause of action finally determined between the parties on the merits, by a court of competent jurisdiction, cannot again be litigated by new proceedings before the same or any other tribunal, except as the judgment or decree may be brought before a court of appellate jurisdiction for review in the manner provided by law. A judgment or decree so rendered is a complete bar to any subsequent action on the same claim or cause of action, between the same parties or those in privity with them. The doctrine extends not only to the questions actually decided but to all grounds of recovery or defense which might have been presented. (Wright v. Griffey, 147 Ill. 496; Markley v. People, 171 id. 260; Terre Haute and Indianapolis Railroad Co. v. Peoria and Pekin Union Railway Co., 182 id. 501; Harvey v. Aurora and Geneva Railway Co., 186 id. 283; Godschalck v. Weber, 247 id. 269; People v. Harrison, 253 id. 625.) Where the former adjudication is relied on as an absolute bar to a subsequent action, it must be shown that the cause of action, the thing to be recovered and the parties are the same in both proceedings. The principle of res judicata applies, however, to cases where, although the cause of action is not the same, some fact or question has been determined and adjudicated in a former suit and the same fact or question is again put in issue in a subsequent suit between the same parties. In such cases the determination in the former suit of the fact or question, if properly presented and relied on, will be held conclusive on the parties in the later suit regardless of the identity of the cause of action, or the lack of it, in the two suits. When the second action between the same parties is upon a different cause of action, claim or demand, it is well settled that the judgment in the first suit operates as an estoppel only as to the point or question actually litigated and determined and not as to other matters which might have been litigated and determined. In such cases the inquiry must always be as to the point or question actually litigated and determined in the original action, the burden of proof is on him who invokes the estoppel, and extrinsic and parol evidence is admissible to prove that the precise question in the second case was raised and determined in the first. (City of Chicago v. Cameron, 120 Ill. 447; Wright v. Griffey, supra; Hanna v. Read, 102 Ill. 596; Sawyer v. Nelson, 160 id. 629; Young v. People, 171 id. 299; Stone v. Salisbury, 209 id. 56.)”

The case of Sattenstein v. Earl, 328 Ill. 148, is exactly in point. In that case, the Supreme Court said:

“When a demurrer is sustained to a bill in equity, an order entered by the court expresses the conclusion of the court. If the demurrer is sustained and goes to the right to relief it will be followed by a decree dismissing the bill for want of equity. If lack of equity appears from the facts stated, complainant is entitled to no relief. The decree follows, or may follow, immediately upon sustaining the demurrer, but if solicitor desires, he may, as in this case, be granted an extension of time to file an amended bill stating a case, if he can, invulnerable to demurrer. If he does not meet the terms upon which an amended bill is allowed to be filed, the interlocutory order that the demurrer be sustained will be followed by the final order dismissing the bill for want of equity, as in this case. The contention of counsel that the words ‘for want of equity’ in the decree are superfluous is a misapprehension of the rule applicable to this case. He might have asked the court to dismiss the bill without prejudice to his rights to file another bill, but
he did not, and cannot complain if the rule of equity pleading and procedure is applied to his case.
“It is said in the argument that ‘the plea of res judicata should not have been sustained because the court never passed upon the equities in the cause. ’ . . .
‘ ‘ The fact that the former decree was rendered upon demurrer to the bill does not impair it as a bar to the present action. In People v. Harrison, 253 Ill. 625, it was said: ‘It is true that a judgment, to be a bar, must have been rendered upon the merits. A judgment that a declaration is bad is not a bar to a declaration stating facts which do constitute a cause of action. It is, however, settled law that it makes no difference whether the facts upon which the court proceeded were proved by evidence upon issue joined or were admitted by way of demurrer to a pleading stating the facts. In either case the judgment rendered is equally available as an adjudication, and the facts so established cannot be again drawn in question between the same parties. A judgment upon a demurrer for defect in the pleadings will not bar another action for the same cause, but a decision upon the merits of a cause of action or defense upon demurrer will be a bar in a subsequent proceeding upon the same facts. Vanlandingham v. Ryan, 17 Ill. 25; Marie Church v. Trinity Church, 253 id. 21. ’ ”

Our conclusion is that the whole matter was adjudicated in the former decree, that the decree was final, that no appeal was taken from that decree, and that, therefore, there is no merit in petitioner’s claim here.

It has been suggested by the plaintiff in this proceeding that the court erred in giving petitioner’s (defendant’s) mortgage priority over complainant’s for the reason that plaintiff’s mortgage stood in place of the original first mortgage by right of subrogation. In view of our holding that defendant’s petition is barred by reason of the fact that the matter has already been adjudicated, we do not deem it necessary to pass upon this question. However, the cases of Tyrrell v. Ward, 102 Ill. 29, and Kaminskas v. Cepauskis, 293 Ill. App. 273, seem to support plaintiff’s contention in this regard.

The decree of the superior court of July 16, 1937 is reversed.

Reversed.

Hebel, P. J., and Denis E. Sullivan, J., concur.