text:
    James Chaplin v. Highway Commissioners of the Township of Wheatland.

      Highways — Drains—Proceedings under Sec. 8, Chap. 121, R. S.— Various Objections — Parties—Validity of Statute — Waiver of Objection— Prescription.

    1. In proceedings under Sec. 8, Chap. 121, A S., it is not necessary to seek the consent of the owner of land through which the proposed ditch is to be cut where he has shown himself by his acts to be opposed to the same.
    2. The adjudication of the justice and jury as to the necessity of the drain and the damage done is final.
    8. The statute allows proceedings to be instituted and carried on for the purpose of carrying off the water from a highway without reference to whether there is a slough or pond therein.
    4. Where the center of a road is coincident with a town line, and one town has charge of the same by allotment, it may maintain proceedings under the statute in the names of both towns, at least until objection is made by the commissioners of the other town, a private party having no right to object.
    5. In the case presented the evidence does not show that the proceedings were solely for the benefit of third persons.
    6. An objection to the validity of a statute is .waived by an appeal to this - court.
    [Opinion filed May 28, 1888.]

      Appeal from the Circuit Court of Will County.
    Messrs. E. Meses and D. Gilmore, for appellant.
    The commissioners of Wheatland had no authority to take any steps toward the digging, cleaning or opening of the ditch, on or across the land of Chaplin unless acting in conjunction with the commissioners of the town of Plainfield at a regular called meeting of both boards for such purpose and first determined, on by a majority of each separate board of commissioners, and then by a majority of the members of both boards acting as one body. The Comrs. of Highways of the Town of Deer Park v. The Wrought Iron Bridge Co., 3 Ill. App. 570; Sec. 26, Road and Bridge Act; Clanse 4, Sec. 40, Township Organization Act; McManus v. McDonald, 107 Ill. 95; Mack v. Tracy et al., 41 Ill. 377.
    Highway commissioners can not grant the right to private parties to ditch on highways, nor bind the public to furnish drainage for the land of private individuals. Johnson v. Rea, 12 Ill. App. 331.
    , The water must be discharged into a natural watercourse or channel. Peck v. Herrington, 109 Ill. 611; Wagner v. Chaney, 19 Ill. App. 546.
    ] There was no pond or slough on the highway at the point where the commissioners proposed to drain, consequently there was no necessity for a ditch being dug by the said commissioners on the land of Chaplin. The People ex rel. v. Board of Supervisors of Vermillion County, 47 Ill. 256.
    Messrs. A. F. Mather and A. O. Marshall, for appellee.
   Lacey, J.

This was a bill in equity for inj unction to restrain the appellees from opening a drain on his lands which they were threatening to do. It shows that appellant was the owner of an eighty acre tract of land in the town of Plainfield in Will county, the long way of it being east and west; that there was a public highway on the north line of it; that one Davis owned the eighty-acre tract lying north of his and adjoining it on its north line, and that one Schaffer owned an eighty-acre tract adjoining and immediately north of Davis’ tract; that the two latter tracts were in the town of Wheatland in said county; that the road, which is four rods wide, was one-half on appellant’s and one-half on Davis’ tract. The bill alleges that Schaffer and Davis had extended a tile drain through their land to the highway about forty-four rods west of his northeast corner, and had extended it through the highway to his line; that they had opened a ditch through his land to let their water flow off from the tile drain they had laid, which discharged water in great quantities and overflowed his land, and that he had filled up such drain with brush, etc., making a so-called dam under and near his fence adjoining the highwaj’- which had not been since disturbed. Avers that Schaffer and Davis had no right to drain their water across his land, but should, if they drain the same to said highway, continue the drain east along the north side of the highway to an outlet; that he wTas willing to have the extra water taken across his land if the same was done according to the provisions of the “ Drainage Act ” of this State, and pay his portion of the expense of constructing a tile drain, and that he had so notified Davis and- Schaffer. The bill further charges that on the 20th of June, 1885, the highway commissioners of Wheat-land commenced proceedings before A. B. Cotton, as justice of the jjeace of said township, for the alleged purpose of having the damages assessed, which he might sustain by reason of digging, opening and cleaning a ditch or drain by the commissioners of highways of the town of Wheatland on or across the north half of the northeast quarter of said Sec. 4 (being the land of appellant), to commence at a point upon the east and west highway — upon the town line between the towns of Wheatland and Plainfield at or about forty-four rods and fifteen links west from the north corner of said Sec. 4, running thence south of southeast nine rods and fifteen links; thence gradually to the south of the southwest nineteen rods, and for greater certainty described as follows: “And be upon the same ground occupied by the ditch or drain now upon said land — said ditch or drain to be twenty-eight and two-fifths rods in length, three feet wide and eighteen inches deep iron surface of land. The suit was brought in the name of the highway commissioners of the two towns for the use of the town of Wheatland. (It appears that the portion of the highway had been allotted under the statute to the latter named town and it had complete control over it.) It was further shown that the cause was tried before the justice and a jury of twelve men, and resulted, after having been defendéd by appellant, in the jury granting the right to dig the ditch and awarding to appellant $12 damages. Quite a number of objections are taken by appellant to the proceedings to condemn the said right of way, to wit: (1) Ho attempt was made by the towns to obtain the consent of appellant to the opening of the drain, and no such attempt was shown at the trial. (2) There was no necessity for the drain, because there was no pond or slough on the highway at the point where the drain stands. (3) That said proceedings were commenced and judgment obtained through fraud and misrepresentation of the commissioners. (4) The commissioners of Wheatland did not obtain the consent of the commissioners of Plainfield to commence proceedings. (5) There was no pond of water in the limits.of the town of Wheatland at the point to be drained-(6) The town of Wheatland had no power under the statute to entet the lands in the adjoining town of Plainfield. (7) Ho ditch by prescription or grant prior to spring of 1884. (8) The proceedings before the justice and the proposed drain are solely for the benefit of Davis and Schaffer and not for public benefit. (9) The place of commencement is not accurately described in the summons, neither is the termination, and the said terminal point is nine feet and two inches east of the alleged ditch or drain now open upon said land as stated in the summons. (10) The ditch if dug would be of great injury to appellant’s land, for which the jury did not award damages. (11) The statute under which the proceedings are instituted is unconstitutional. The bill avers that all the above points before the justice of the peace were ignored and disregarded by the justice and jury although most strenuously contended for by the counsel for appellant; that the appellant took an appeal to the Circuit Court which was dismissed on motion of plaintiff’s attorney or petitioner. The bill was answered, and upon trial on bill, answer, replication and proofs, the court found the equities in favor of appellees, and dissolved the injunction and dismissed the bill at complainant’s costs, from which decree this appeal is taken, and this court asked to reverse the same. The condemnation proceedings were had under Sec. 8, Chap. 121, It. S., or the act entitled, u Roads, Highways and Bridges,” act of 1883, page 136, Sec. 8, Session Laws. The section reads as follows: The commissioners of highways of the several towns are hereby axtthorized to enter upon any land adjacent to any highway in their town for the purpose of opening any ditch, drain, necessary sluice or watercourse, whenever it shall be necessary to open a watercourse from any highway to any watercourses, and to dig open and clean ditches upon said land for the purpose of carrying off the water from said highways or to drain any sloughs or pond on said'highway: Provided,, that unless the owner of such land, or his agent, shall first consent to the cutting of such ditches, the commissioners shall apply to any justice of the peace in the county in which such road is situated, for a summons directed to any constable of said county, etc., * * * for the purpose of having the damages assessed which such owner may sustain by reason of thq digging or opening such ditches or drains. * * * On the return of such summons, venire shall be issued for a jury of twelve persons who shall be summoned and whose competency shall be determined as in other cases in the trial of civil actions before justices of the peace; which jury shall assess such damages and render a verdict therefor which shall be final and conclusive of the amount of damages sustained by such persons, and the amount so awarded shall be paid before the commissioners of highways shall be warranted and empowered to enter such lands and dig, open and clean such drains, ditches, and watercourses, as aforesaid, for the purpose con templated in this act; and the commissioners of highways are further authorized to use and employ the road and bridge money of their town for such purpose, etc.

From the proceedings carried to a final conclusion before a justice, there is no appeal. The decision of the justice and jury is fina1, provided that the justice obtains jurisdiction of the person of the owner of the land, and the subject-matter of the right of way to be condemned. The legislature taking into account the great necessity there was to the public to have the highways of the State made dry and passable, determined by the passage of this statute to make the proceedings to obtain an outlet to drain water from roads summary, and the decision before the justice final. The proceeding in this instance is drawn into question collaterally — -hence every intendment must be in favor of the validity of the condemnation of the right of way for the ditch. The burden of proof is on the appellant to show that the justice had no jurisdiction. The appellant has failed to make out any valid objection to the validity of the condemnation proceedings before the justice raised in his 1st, 2d and 3d points. The evidence clearly shows that the appellant would not give his consent to have the drain opened when applied to by one of the commissioners, and besides that lie has resisted the opening of the drain at every step of the proceeding, and is still resisting on every - ground he can raise. It appears any formal request on the part of the commissioners as an official body, to appellant, to abow the opening of the drain, would have been useless. We think there was necessity for the drain after the appellant had filled up the old ditch, and that whether the tile named had been put in by Schaffer and Davis or not. Besides, we think the adjudication of the justice and jury on that point was final. We see no evidence sufficient to show that the proceedings were instituted and carried on fraudulently, though that point is not insisted on in appellant’s brief.' Equally groundless are the points raised by appellant in Nos. 4, 5 and 6. As to No. 5, the statute allows the proceedings to be instituted and carried on for the purpose of carrying off the water from the highway, whether there is a slough or pond in the highway or not.

The suit was commenced and carried on in the name of the commissioners of highways of the towns of Wheatland and Plainfield, and the consent of Plainfield under the circumstances will he presumed. This particular road being on the town line, was under the jurisdiction of the commissioners of Wheatland by allotment, and presumably the commissioners of Plainfield gave their consent to the use of its name to the other commissioners, to carry on such proceedings in its name necessary to properly improve the road, which the commissioners of highways of Wheatland had undertaken to do by request of the commissioners of the other town and by agreement, and as the point is only technical at best, the appellant can not object if the commissioners of highways of Plainfield do not. Again, under a proper and fair construction of the statute, we are of the opinion that the Wheatland commissioners might carry on the proceedings in their own name. The highway was on the town line, and the commissioners of highways of Wheatland had control of this road by allotment under the statute, and we think it no more than a fair construction of the statute to regard the highway as being “in their town,” for the purpose of the condemnation proceedings. It was a portion of the road over which the commissioners of Wheatland had jurisdiction; and if the center of the road was coincident with the town line, which we suppose it was, at least half of the highway was actually and physically in Wheatland town.

Points 7, 8 and 9 are not well taken. It is not necessary, as contended in point 7, that there should be any ditch by prescription if the condemnation proceedings were regular, which, as hereafter will be seen, they were. As to 8, we can not hold that the appellant has shown that the condemnation proceedings were solely for the benefit of Davis and Schaffer. We think that the evidence shows that the highway needed some kind of a ditch at the point where the condemnation was made, though probably the ditch that had existed for some time on appellant’s land, at or near the route of the one condemned, would have been sufficient but for its having been closed up by the latter. And the ditch not being permanently established by prescription gave appellant the right to fill it up and compelled the appellees to open it by legal proceedings. The opening of the ditch was for the public benefit. The place of commencement and termination are set out with sufficient accuracy in the summons issued by the justice. The point of commencement is to all intents accurate, but it is claimed that the termination is lacking nine feet and two inches of meeting an outlet called the “old washout” — hence the argument is, the pro ¡rosed drain does not connect with “a, natural watercourse” as the statute requires. If the contemplated drain connected with the “washout,” then it is conceded the proceedings would comply with the statute in that respect. We think that the evidence shows that the proposed drain sufficiently connects with the old “washout,” so called, or with a drain only a few feet from it, which would render the drain sufficient in its connections. The surveyor who ran the line for the new ditch, shows by his profile that it connects, and such was the intention, and we think the appellant has failed to show that it does not connect.

In the 10th and 11th objections the appellant claims that the digging of the proposed drain would greatly damage the appellant’s land, for which the jury did not award damages, and that the act of the legislature allowing the condemnation of such right of way for such drains is unconstitutional, and the statute void.

In answer to the first of the last named objections we need only say that the statute makes the verdict of the jury as to such damages “final and conclusive of the amount of damages sustained by such person,” etc." The jury in this case gave the appellant $12 damages which the commissioners were ready to pay.

As to the constitutional point we onty have to say that the appellant, by bringing his case to this court, waived that point. We have no power under the statute to pass upon it. If the appellant had desired to have that point ¡massed upon he should have taken his appeal to the Supreme Court. Hot having done so and not having made any motion here to dismiss his appeal for want of jurisdiction in this court, we must regard that point as waived by him. The statute provides that “appeals and writs of error shall lie from the final orders, judgments and decrees of the Circuit and City Courts, and from the Superior Court of Cook County directly to the Supreme Court in all criminal cases and in cases involving a franchise or freehold, or the validity of a statute ” and by the terms of the same section withholds the right of appeal to the Appellate Court in cases involving the “ validity of a statute.” See “ Appellate Courts,” Session Laws, 1887,. Sec. 8, page 15(>. The validity of Sec. 8 of the above road and bridge law is what appellant questions in his argument here on account of uneonstitutionality. As above said we regard the point as waived by the appeal in this court. " ■

The decree of the court below is therefore affirmed.

Decree affirmed.


source: Caselaw Access Project

author: Lacey, J.

license: Public Domain

text:
    C. W. Gould et al. v. John Warne et al.

      Action on Bond — Sales—Excessive Judgment.

      1. What will, or will not, amount to a sale, is a matter of fact to be determined from the evidence, and depends upon the intention of the parties to the transaction.
    2. In an action on a bond to secure the patrons of a cheese factory, it is held: That the bondsmen are only liable on account of dividends and not in cases, if any, where direct sales of the milk were made; and that the judgment is erroneous because for a larger sum than is justified by the breaches assigned in the declaration.
    [Opinion filed May 28, 1888.]
    Appeal from the Circuit Court of Kane County; the Hon. Isaac Gr. Wilson, Judge, presiding.
    Messrs. Botsfobd & Wayne and Shebwood & Jones, for appellants.
    A surety can not be bound beyond the express and literal condition of his undertaking. He has a right to stand upon the very terms of his contract. Miller v. Stewart, 9 Wheat. 680; Field v. Rawlings, 1 Gilm. 581.
    Any agreement between the principal and his creditors, by which the terms of a bond are changed without the assent of the sureties, releases the sureties from liability. Cunningham v. Wrenn, 23 Ill. 64; Burt v. McFadden, 58 Ill. 479 ; Dodgson v. Henderson, 113 Ill. 360.
    The measure of the liability of sureties is fixed by the terms of the instrument they sign, and such undertaking can not be enlarged or varied by judicial construction. Their undertaking will be construed as the words used are ordinarily understood. Mix v. Singleton, 86 Ill. 194; Phillip v. Singer Mfg. Co., 88 Ill. 305; People v. Tompkins, 74 Ill. 482; Burgett v. Paxton, 15 Ill. App. 380.
    A surety is not held beyond the precise words of his undertaking, and in case of doubt as to his liability, the doubt is generally, if not necessarily, solved in his favor. Stull v. Hance, 62 Ill. 52; Adams v. People, 12 Ill. App. 380.
    Messrs. Charles Wheaton and W. R. S. Hunter, for appellee.
    A parol agreement to vary a contract under seal will not discharge the surety on a sealed instrument. Chapman v. McGrew, 20 Ill. page 101; Chidester et al. v. S. & I. S. E. R. W. Co., 59 Ill. 87.
    An obligation by an instrument under seal can not be discharged by parol. Davy v. Prendergast, 5 B. & A. 187; Bulteel v. Jarroad, 8 Price, 467; Trent navigation Co. v. Harley, 10 East, 34.
    Where two or more persons enter into a contract of a continuing nature, one of them can not, by his own act, discharge himself from liability and put an end to the contract, without the consent of the other, unless there is an express power of defeasance reserved to him. 1 Addison on Cont., Sec. 361.
   Lacey, J.

This was a suit on a voluntary bond given by the appellants Gould & Hugg as jorincipals, and by the other appellants, D. F. and D. H. Barclay, as sureties, to appellee, as trustees of the patrons of the Blackberry Cheese Factory. The bond is in the penal sum of §3,000, conditioned “ that if the above bounden Gould & Hugg, their heirs, etc., shall well and truly pay or cause to be paid unto the said patrons of the Blackberry Cheese Factory, or their heirs, etc., the just and full sums of the monthly dividends declared by the said Gould & Hugg to their Blackberry patrons for milk delivered thereat, and shown by their books to be said patrons’ due, then this obligation to be void and of no effect.” Dated April 24,1882. The suit was brought for the use of some twenty-eight of the patrons of the factory named in the declaration as usees. The declaration shows that the factory was continued to be operated by Gould & Hugg till March 20, 1885, and that “the said usees” were patrons of the said factory and delivered to it milk during the months of January, February and March, 1885, in large quantities, etc., and that said Gould & Hugg declared them dividends thereon, to wit, (setting out the several amounts claimed to be due to the said usees.) which had not been paid. The defense set up was that as to the usees the factory was not conducted on the dividend plan, which was that the butter was to be made from the milk and sold by-Gould & Hugg, after deducting apuñee, four cents pier pound, for butter, for manufacturing and selling; the balance was divided among the several patrons pro rata according to the quantity of the milk furnished by each. That the amount found to be due each patron was called a dividend, which was paid monthly by said Gould & Hugg; that the said usees for the three months above named entered into a different arrangement with Gould & Hugg in regard to the compensation for their milk, and contracted with them for an absolute sale of their milk to them for a certain sum to be paid by them irrespective of what their milk would actually produce and that the amounts claimed in the declaration are not amounts due for any dividends for milk so delivered to said Gould & Hugg, to be manufactured on the dividend plan, but was sold to them for a stipulated sum. The cause was tried by the court without a jury and the court found for the appellees for the penalty of the bond and §1,847.19 damages, being the amount dne on dividends, so called, to a large number of patrons.

Upon the evidence it is claimed by appellants that Gould & Hugg did not continue for the said months of January, February and March, 1885, on the dividend plan, but agreed to pay the same price that was paid to like patrons at a certain factory at La Fox and that this was virtually an absolute sale of the milk to Gould & Hugg.

It is also complained that the court erred in refusing the 2d and 3d propositions of law asked by appellants to be held as the law governing the case. We think the court did not err in refusing the propositions. What will or will not amount to a sale is a matter of fact to be determined from the evidence and it depends on the intention of the parties to the transaction whether it will amount to a sale or not. Callaghan et al. v. Meyers, 89 Ill. 566; Moses Straus et al. v. Minzesheimer, 78 Ill. 492; Hunt v. Eldridge, 5 Ill. App. 529. What is a sale is a matter of fact to be deducted from the evidence. At best, if true, the propositions were conclusions of fact. So far as the court found for the appellees we think the evidence justified the finding that there was no sale. It appears that most, if not all, the patrons for whose claims the judgment was rendered only requested the proprietors (Gould & Hugg) to make as good dividends as at La Fox, and that the proprietors agreed to do so if they could and if they could not they would notify the patrons. Many of the patrons did not know of any such arrangement and none of them knew that their dividends would amount to more than actual receipts. By the bond the securities were to pay the dividends that the principals declared on their books, and unless there was fraud in the rendering of the books participated in by the patrons to be affected, the securities are bound by the entries of the dividends. But it is plain th%t where a sale was made of the milk, as several patrons did, the bondsmen would not be liable for the amounts due such patrons on account of such sales. Another point is made by appellants that too large a judgment has been rendered with reference to the breaches assigned in the declaration. Upon examination we find this objection well taken. Several of the usees whose names appear in the declaration and for whose amounts breaches were assigned, failed to recover. A number of patrons for whose claims no breaches were assigned in the declaration were allowed their amounts in the estimate of damages. This appears plainly from the list of patrons furnished us by counsel for appellees in his brief, with the amounts due each, and whose amounts were, no doubt, estimated in making -up the damages, the whole corresponding exactly with the amount of the damages assessed by the court. By comparison of the names with the usees named in the declaration it is found many of them are not named in it and breaches for their amounts not assigned.

For this error the judgment of the court will have to be reversed. The judgment is therefore reversed and the cause remanded to the court below.

Reversed and remanded.


author: Bakek, J.

text:
    Squire Taylor et al. v. Solen F. Warren et al., Co-partners.
    / Sales — Express and Implied Warranties — Fraud—Instructions.
    1. An instruction having no basis in the evidence is erroneous.
    2. Where the instructions given ignore the real issues involved in (he case this court will reverse.
    [Opinion filed May 28, 1888.]
    Appeal from the County Court of De Kalb County; the Hon. Charles A. Bishop, Judge, presiding.
    Messrs. I. V. Randall and Carnes & Denton, for appellants.
    Messrs. D. W. Baxter and Stephens & Crocker, for appolices.
   Bakek, J.

This was assumpsit by S. F. Warren & Co. against appellants for the recovery of $500, alleged to have been agreed upon between the parties as the-price of a one-half interest in a skating rink building, with the skates and other appurtenances, located on a leased lot in the city of De Kalb. The general issue and a special plea were filed, and issues formed on both of them. The special plea was not a plea of fraud and circumvention, as seems to have been supposed in the court below. It did not even allege that the vendors knew, either that there were incumbrances on the building, or that there were not one hundred pairs of skates in the rink-The plea was a somewhat informal, but, perhaps, a substantially good plea, setting up the breach of the warranty in an executory contract for the purchase and sale of personal property, and subsequent rescission of such contract by the vendees on account of such breach of warranty. Doane v. Dunham, 65 Ill. 512. Beebe v. Swartwout, 3 Gilm. 162, 184; Voorhees v. Earl, 2 Hill, 288; Street v. Blay, 2 Barn. & Adol. 456.

In the case at bar, verdict and judgment in the trial court were in favor of S. F. Warren & Co., appellees.

There are several controversies of fact involved in the suit and at the trial there was sharp conflict in the testimony. The contention of the plaintiffs w7as that an unconditional sale of the property in question was made to the defendants for $500, to he paid by the joint note of defendants due January 1, 1886; that a bill of sale for the moiety of the skating rink property and an assignment of the lease were to be executed and delivered, and that said papers were, in fact, made and tendered, hut that defendants refused to receive them or give a note for the consideration money. They also claimed that defendants examined the property and took possession of and operated the rink for several nights, hut finding that the city authorities would not permit them to run it without paying a license tax therefor, and that the business was not so remunerative as they had expected, they refused to carry out their contract.

The contention of the defendants was that the bargain made was conditional; that appellees represented there were a certain number of skates; that the property was free from any license tax against it, and made other representations in res] eo to the condition of the building; and that it was expressly agreed that if the property was not as represented, then it should be no trade; and that the property was .not as represented. They also claimed it was not understood, in the event of a trade, that they should give their joint note for §500, but that it was the agreement appellant Morrell should pay his part of the purchase money in cash, and appellant Taylor his part by note. They also claimed they did not examine the rink, as testified to by Heff, and did not take possession of or run the rink, but that appellant Morrell was merely there on two evenings assisting one Wadsworth, and that Wadsworth was in charge and control of the rink on behalf of appellees, and received all the money taken in, and that the same was paid over to and accepted by appellees-

There was evidence in the case tending to prove express warranties on the part of the vendors, but no evidence whatever on which to base any theory of an implied warranty. The case was also wholly barren of testimony proving or tending to prove any fraud and circumvention on the part of the vendors.

The issues of fact involved in the suit were not fairly submitted to the jury by the instructions of the court. Six instructions were given at the instance of appellees, and not one of them had any proper bearing upon the questions of fact presented by the testimony, but they were all calculated to mystify and mislead the jury. Instructions to a jury should be based upon the evidence in the case on trial. The statement of even correct propositions of law will have the effect to work a wrong and injury if such propositions have no application to the facts which the testimony proves or tends to prove. Here, the instructions given ignored the real issues^ and called and confined the attention of the jury to issues not involved in the case. The first, second and fifth of these instructions were well enough as statements of abstract principles of law bearing upon an issue of fraud; and the third and fourth were correct statements of certain rules of law applicable where an implied warranty is claimed. But no supposed case of either fraud or of an implied warranty was either alleged in the pleadings or suggested by the evidence. Shackelton v. Lawrence, 65 Ill. 175.

The sixth and last instruction for apqoellees was, perhaps, especially vicious. It was as follows :

“If the jury believe from the evidence that the plaintiff, J. 0. Neff, stated to the defendants at the time of sale that there were ninety-five pairs of skates in the rink, honestly believing such statement to be true, then such statement does not constitute a fraud, and affords no ground for avoiding such sale.”

This was equivalent to directing the jury that, notwithstanding they might find from the weight of the evidence that the contract of sale was executory merely, and that the vendors made warranties which were broken before the contract was performed by either party, or might find that the contract was only a conditional executory contract of sale and the condition failed, yet the vendees would in law be bound to pay the agreed consideration.

The six instructions under consideration were, when applied to the evidence before the jury, all palpably erroneous. From the record there is no assurance that the jury considered and passed upon the real questions presented in the case.

The judgment is reversed and the cause remanded.

Reversed and remanded


author: Mr. Presiding Justice Eldredge

text:
    F. W. McRoberts, Receiver of First National Bank of Nebo, and First National Bank of Nebo, Defendants in Error, v. G. A. Minier et al., Plaintiffs in Error.
    Gen. No. 8,655.

      Opinion filed January 16, 1933.
    Rehearing denied April 5, 1933.
    Frank A. Whiteside, L. T. Graham,- Noah Gullett, Hoopes & Pefferle and Gillespie, Burke & Gillespie, for plaintiffs in error.
    William and Barry Mumford, for defendants in error.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

The bill in this case was originally brought by the First National Bank of Nebo, Illinois, but after the bill was filed the bank went into the hands of a receiver who has been made a joint party complainant. The object of the bill, which has ■ been amended several times, was to enforce a stockholder’s liability for an alleged debt due the National Bank by the Minier State Bank of Nebo. The origin of this controversy grows out of the following agreement:

“This Agreement Made and entered into this February 5, A. D. 1925, by and between the First National Bank of Nebo, Illinois, by J. T. Harvey, William Franklin, F. J. Sitton, Neal Sutton, and J. W. Draper, its Board of Directors, of the first part, hereinafter called for brevity The National, and The Minier State Bank of Nebo, Illinois, by A. Wall, C. D. Borrowman, C. E. Swayne, J. H. Stark, Sr., and Gr. A. Minier, its Board of Directors hereinafter for brevity called The Minier Bank, Witnesseth :—

“That Whereas, on January 2, 1925, said Minier Bank voted by its stockholders to consolidate its interests with said The National providing satisfactory arrangements could be made; and

“Whereas, On January 13, 1925, The National by its stockholders voted to accept said offer; and

“Whereas, The National hereby agrees to assume all liabilities of the depositors of The Minier Bank upon the transfer of a like amount of assets of said Minier Bank assigning said like amount of assets to The National; and the assigning of said assets shall carry with the same the usual legal liabilities of all said stockholders of said Minier Bank; and

“Whereas, it is further agreed by The Minier Bank further to transfer and assign all its other assets as additional security to and of said first mentioned assets herein agreed to be assigned;

“Said The National hereby agrees as soon as the same can be legally done to issue to the stockholders of The Minier Bank Fifteen Thousand Dollars in stock of said The National; and said Minier Bank stockholders agree to purchase said amount of stock at the book value of the present stock of The National at the time of issuing the same;

“It is further agreed that said Minier Bank shall not in the future engage in the banicing business at Nebo, Illinois.

“Signed, sealed and delivered in duplicate each of which shall be taken and held as an original on said above date.

“The Minier Bank The First National Bank 'of Nebo of Nebo

A. Wall.........(Seal) F. J. Sitton.... (Seal)

C. E. Swayne.... (Seal) Wm. Franklin.. (Seal)

J. H. Starlc, Sr... (Seal) J. T. Harvey... (Seal)

C. D. Borrowman. (Seal) Neal Sutton.... (Seal)

G-. A. Minier.....(Seal) J. W. Draper... (Seal) ”

Prior to the execution of the above agreement, at a meeting held January 2, 1925, which was the annual meeting of the stockholders of the State Bank, a motion was made and carried to the effect that if satisfactory arrangements could be made, that bank consolidate with the National Bank of Nebo on such a basis and under such terms as might be later determined by the boards of directors of both banks. On January 6, 1925, the directors of the National Bank adopted a resolution “relative to the consolidation” of the State Bank with the National Bank as follows:

“Whereas: On the 2nd day of January, A. D. 1925, the shareholders of the Minier State Bank of Nebo at their Annual meeting held on said day, voted to liquidate said Bank and to consolidate its interests with the First National Bank of Nebo:

“Therefore be it resolved, that this Association assume the Liabilities of The Minier State Bank of Nebo, to its depositors, on the transfer of an equivalent amount of assets and for the purchase of assets representing shareholders’ interests, to enable shareholders with the proceeds, to pay for stock to be issued to them by reason of said consolidation: All assets transferred, both to secure liabilities of Depositors and assets purchased shall consist of only such notes and securities as are acceptable to the Board of Directors of this Association.”

At a meeting of the directors of the State Bank January 29, 1925, the following resolution was adopted:

“Therefore be it resolved that this Board of Directors accept the proposition made by The Board of Directors of the First National Bank of Nebo and hereby authorize A. Wall, President and Louie Melton, Cashier of this Bank to assign the cash and assets of this bank to The First National Bank for the purpose of consolidating the said banks on a basis of 150 shares of The First National Bank at one hundred and fifty dollars per share being issued to shareholders of the Minier State Bank as their interest may appear on records of said bank. ’ ’

Pursuant to the above resolutions the agreement hereinabove set out was executed by the two banks and their directors and on February 17, 1925, the cash and assets of the State Bank thought sufficient to secure the National Bank for the payment of all liabilities of the depositors of the State Bank were turned over to the National Bank. The total depositor liabilities of the State Bank was about $120,000. At this time the State Bank had about $25,000 in cash which they turned over to the National Bank and also turned over to the latter notes of the face value of $95,000 and other securities making a total of about $120,000 in compliance with the contract. When these notes and securities were turned over to the National Bank they were indorsed by the State Bank without any restriction or qualification. After this transfer of assets, notes and other securities had been made to the National Bank, the State Bank had still in its possession about $40,000 of other notes which, under the contract, it had agreed to transfer and assign as additional security to the National Bank. The State Bank ceased doing business February 17, 1925. The National Bank proceeded to collect such notes and securities in due course which had been assigned to it as could be collected at maturity. Some of these notes were not paid at maturity and when this occurred they were renewed and made payable to the State Bank, indorsed by that Bank as the original notes had been indorsed and delivered to the National Bank. The State Bank in the meantime attempted to collect as much as possible of the $40,000 represented by the notes which it had retained after the assignment of its other assets to the National Bank. As these notes were collected the proceeds thereof were deposited in. the name of the State Bank in a checking account in the National Bank. In the meantime the National Bank increased its capital stock by $15,000 and this additional stock, of the book value of $150 a share, was sold to such stockholders of the State Bank as cared to purchase it. The consideration for this stock was partly paid by A. Wall, president of the State Bank, on behalf of the stockholders thereof, out of the moneys received by the State Bank from the sale of its notes and other properties and which had been deposited by the State Bank in its checking account in the National Bank. About $15,000 had been received by the State Bank in this way. The total value of this additional stock of the National Bank was $22,500 and the additional $7,500 necessary to pay for the stock was collected from the stockholders of the State Bank personally who were buying stock in the National Bank though not all of the stockholders of the State Bank took stock in the National Bank. This stock, when paid for, was turned over to the president of the State Bank and distributed by him to such stockholders .of the State Bank as became purchasers thereof.

Whenever any of the notes which had been assigned to the National Bank became in default, the State Bank took them over from the National Bank and paid for them out of its account in the National Bank and the State Bank continued to pay off these defaulted notes as long as they had any money to do it with in compliance with their contract to turn over all its other assets as additional security. One of the notes held by the State Bank called the Schufelt note was defaulted. The State Bank paid the National Bank the amount due on the note, took a deed from Schufelt conveying to itself certain land embraced in a mortgage securing the note, held the land for a short time and then deeded it to a purchaser, said deed being .executed in the name of the State Bank by Arch Wall, president. The State Bank also entered suits in its own name in the circuit and county courts and before justices of the peace, held stockholders’ meetings and also directors’ meetings and continually carried a checking account in the National Bank and had such a deposit therein when this bill was filed. The particular notes for which the National Bank is seeking payment from the stockholders of the State Bank in this suit were all renewal notes executed by the makers thereof, payable to the State Bank, indorsed by that bank without restriction and delivered to the National Bank. These notes represented the same indebtedness which was due to the State Bank at the time the original notes had been indorsed over by it to the National Bank.

The chancellor entered a decree against the State Bank as an indorser and against the stockholders of said bank up to the par value of the stock held by them at the time said notes were given, finding that each of the five renewal notes was past due and owing from the State Bank to the National Bank on the State Bank’s indorsement of said notes and that the said several amounts represented by the respective notes are also due from the stockholders of the State Bank to the extent of the par value of their respective stock holdings.

Plaintiffs in error contend that the chancellor erred ' in rendering said decree because there was a consolidation of the State Bank with the National Bank thereby indicating clearly the intent of all the parties concerned that the indorsement made upon the original notes should be merely for the purpose of transferring title thereto to the consolidated bank; that there was given no authority, implied or otherwise, to the officers of the State Bank to bind it by indorsement upon the original notes, or the renewal notes thereafter given; and, that even though the indorsement upon the original notes should be held valid and to have been made in pursuance of due authority, the original notes were paid by the execution of new notes to the National Bank which made all subsequent indorsements by the State Bank, accommodation indorsements, which the State Bank had no authority under the law to make, and which its officers were without power to execute.

It is contended by defendants in error that the transaction between the two banks was one of liquidation and not consolidation and that the State Bank retained its corporate existence ánd identity; that the State Bank and its stockholders are estopped from denying their liability because the State Bank retained its corporate identity, exercised corporate functions, and received benefits under a contract with the National Bank which was wholly executed by the latter, on the faith of their corporate responsibility for their debts; and, that as the State Bank was defaulted in this case and the bill taken as confessed against it, therefore, the stockholders are estopped from denying their liability because their liability is based upon the liability of the State Bank.

It is very vigorously urged by counsel for plaintiffs in error that the written agreement entered into between the two banks was one of consolidation and that the banks were in fact consolidated. Corporations as such only have such powers as are granted to them by the sovereign power and their right to consolidate, if any, is derived solely from the sovereignty which has the power to grant their organization as corporations. Chicago Title & Trust Co. v. Doyle, 259 Ill. 489; American Loan & Trust Co. v. Minnesota & Northwestern R. Co., 157 Ill. 641; Morris v. Interstate Iron & Steel Co., 257 Ill. App. 613. The Banking Act of this State, Cahill’s St. ch. 16a, grants to State banks the right to consolidate with each other and also with a national bank upon complying with certain conditions. National banks, however, are created by federal laws enacted by congress. The Federal Banking Act grants the power for two or more national banking associations located within the same county, city, town or village, with the approval of the comptroller of the currency, to consolidate into one association under certain enumerated conditions, but it gives no power or right to a national bank to consolidate with a State bank and if such power is withheld, it is regarded as a prohibition against the exercise of such power. American Loan & Trust Co. v. Minnesota & Northwestern R. Co., supra. It follows, therefore, that no consolidation in the sense that that word is construed in regard to corporations, between the National Bank and the State Bank was possible. It is clear, however, that the parties in their negotiations leading up to the agreement in question and in the agreement itself, inadvisedly used the words “consolidate” and “consolidation.” In the agreement the National Bank agrees to assume all the liabilities of the depositors of the State Bank upon the transfer of a like amount of the assets of the State Bank to the National Bank and the assigning of said assets shall carry with the same the usual, legal liabilities of all the stockholders of the State Bank. It also provides for the transfer of additional security to the National Bank by the State Bank and provides further that the State Bank shall not in the future engage in the banking business at Nebo. All of these provisions of the agreement are inconsistent with the idea that it was intended to be one of consolidation. Parties to a contract or agreement cannot change the character of a transaction by giving it a name inconsistent with the terms of the agreement itself. The effect of a consolidation of two or more corporations is the dissolution of the constituent companies. They cease to exist as legal entities. A new corporation comes into existence having all the property, rights, powers and franchises, and subject to all the duties and obligations of the constituent companies. Southern Illinois Gas Co. v. Commerce Commission, 311 Ill. 299; Ohio & M. Ry. Co. v. People, 123 Ill. 467; People v. Louisville & N. R. Co., 120 Ill. 48; Chicago Title & Trust Co. v. Doyle, supra; Scheidel Coil Co. v. Rose, 242 Ill. 484; Hiles v. C. A. Hiles & Co., 120 Ill. App. 617; Morris v. Interstate Iron & Steel Co., supra. Of course there can be no pretense that any new corporation was created. The proof also shows beyond dispute that the State Bank retained its identity and exercised many of its corporate functions for six years after this purported consolidation. It retained a large part of its assets, collected the same, took renewal notes, brought suits at law in the different courts in the State, took title to real estate in its own name and sold the same in its own name, indorsed notes payable to it in its own name, kept a checking account in its own name and continued to do all the things necessary in winding up its affairs as a bank in its own name. In the case of Southern Illinois Gas Co. v. Commerce Com., supra, it was held:

“The effect of the consolidation of two or more corporations is to dissolve the original corporations and create a new one, and the new corporation thus organized is required to pay fees for its organization as a new corporation. (Scheidel Coil Co. v. Rose, 242 Ill. 484.) The appellant argues that the creation of the new corporation was for the purpose of purchasing the three old corporations and continuing the public service. A consolidation is not a purchase but is referred to in the statute as a merger. It has, perhaps, some of the qualities of a purchase, but it is a union of the rights and obligations of the original corporations which go out of existence and for which the single new corporation is substituted. It succeeds to all the property, rights, privileges,’ immunities, powers and franchises and every other interest which had belonged to the merging or consolidating corporations, or to any or either of them, as provided in section 70 of the Corporation Act. Also, by the next section all debts, liabilities and duties of the respective corporations upon the merger or consolidation attach to the single new corporation, and may be enforced against it to the extent as if such debts, liabilities and duties had been incurred or contracted by it.”

Counsel for plaintiffs in error rely largely upon the case of Chicago, S. F. & C. Ry. Co. v. Ashling, 160 Ill. 373. In commenting upon the Ashling case the Supreme Court in the case of Barnes v. American Brake-Beam Co., 238 Ill. 582, said:

“The decision in Chicago, Santa Fe and California Railway Co. v. Ashling, 160 Ill. 373, is not applicable to the facts of this case and does not tend to sustain the decree. In that case the Santa Fe company assumed the payment of the bonded indebtedness of the St. Louis company and issued its stock dollar for dollar in exchange for stock of the St. Louis company, leaving that company without property, corporate rights or franchises of any kind and without stockholders. There was not even the skeleton of a corporation left and one company was merged and incorporated in the other.”

It is apparent that the facts in the case at bar are not similar or even analogous to those found in the Ashling case. There was not and could not have been a consolidation of the State and National Banks, nor does the agreement between them imply any sale of the assets of the State Bank to the National Bank. Our construction of this agreement is that it was one of liquidation whereby the National Bank took over certain assets of the State Bank for the purpose of paying the latter’s liabilities to its depositors and reserving the usual, legal liabilities of the stockholders of the State Bank impressed thereon by the Constitution. The National Bank assumed no liabilities of the State Bank except those due the depositors thereof. Under this agreement any surplus of assets above what was necessary to pay the depositors of the State Bank would unquestionably inure to the benefit of the stockholders of that bank. The proofs show that the stockholders of the State Bank collected out of the assets of that bank, which under the contract it was agreed should be collateral security for the original assets assigned to the National Bank, the sum of $15,000 with which some of the stockholders of the State Bank purchased stock of the National Bank and the others took their shares in cash. If this $15,000 had been applied to the depositors’ accounts there would have been no stockholders’ liability and the stockholders of the State Bank, having used this money for their own benefit, cannot thus evade their liability.

It is further contended that the president of the State Bank had no authority to indorse the name thereof upon the notes assigned to the National Bank. The weight of authority is to the contrary. In the case of Green v. Ashland Sixty-Third State Bank, 346 Ill. 174, the court held:

“The president of a corporation, by virtue of his office, is the business head of the corporation, and as a general rule any contract pertaining to corporate affairs within its general powers will, when executed by the president and in the absence of proof to the contrary, be presumed to have been executed by authority of the corporation as one of the powers incident to his office. (Bloom v. Vehon Co., 341 Ill. 200.) The public is not bound to inquire into the special instructions which the officers or servants of a bank may have received as to the manner in which they shall discharge their duties.”

To the same effect are the following: Bank of Minneapolis v. Griffin, 168 Ill. 314; Corn Belt Bank of Bloomington v. Forman, 264 Ill. App. 589.

It is further urged by plaintiffs in error that the indorsements of the State Bank upon the notes in question were mere accommodation indorsements for the purpose of passing the title of the notes to the National Bank and therefore created no liability upon the part of the indorsing State Bank as such indorser. The indorsement of a promissory note by a State Bank without restriction carries with it the same legal obligations as that of any other indorser of a note. An indorsement may be made with limitations restricting the responsibility of the indorser or it may be made without recourse. If there was any understanding between the banks that the indorsements of the securities of the State Bank by the State Bank' were limited for any particular purpose it would have been a very simple matter to have so made the indorsements in conformity therewith. Banks which deal almost exclusively in negotiable instruments certainly should be presumed to know the law in regard to the legal obligations of indorsers of commercial paper. The law applies the same to banks as it does to individuals and no such presumption can be indulged in favor of a bank as an indorser of commercial paper.

The other alleged errors which have been presented are not necessary to be discussed because they are disposed of by what we have said in the above opinion. The decree of the circuit court is affirmed.

Affirmed.


text:
    B. F. Johnson and Morris Logue, Appellants, v. John Weir et al., Appellees.
    Gen. No. 8,666.

      Opinion filed January 16, 1933.
    Rehearing denied April 5, 1933.
    Duane Gaines, G. F. Bennett and S. M. Scholpield, for appellants.
    Lewman & Carter, for appellees.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

This is an appeal from a decree sustaining a demurrer to a creditor’s bill filed by appellants and dismissing the same for want of equity.

The original bill was filed by appellant B. F. Johnson on October 8, 1930, and alleged that on May 8, 1930, he obtained a judgment against two of the defendants, John Weir and Meda Weir, in the sum of $5,951.67 and costs of suit; - that an execution was issued by virtue of said judgment on May 8, 1930, and returned unsatisfied; that upon information and belief John Weir has in his possession divers securities and evidences of indebtedness to him, and goods, wares and merchandise or other articles of personal property which belong to him or in which he has some beneficial interest, and that he has equitable interest and things of some nature and kind which might and ought to be applied to the payment of complainant’s judgment; that said John Weir is the owner of or in some manner beneficially interested in some real estate in this State and other States and had other personal assets which might be subject to the payment of said judgment, and that the other parties defendant have certain personal assets in their possession, the property of said John Weir, and that they should make full and complete discovery thereof, etc. It is further alleged in the bill that, said John Weir and Meda Weir fraudulently transferred and conveyed eight different parcels of real estate for the purpose of defrauding his creditors; that said conveyances were made without consideration when the said Weirs were insolvent and were made to certain near relatives, viz.: Fannie Weir, a sister-in-law; S. W. Weir, a brother of John Weir; Edgar Weir, a son of John Weir, Duane Colmey and Edward E. Bauer, sons-in-law of said John Weir and Meda Weir. The bill also contains the' usual allegations and prayer found in creditors’ bills.

John Weir ivas adjudged a bankrupt November 24, 1931, and on March 14, 1932, appellant, Morris Logue, as trustee in bankruptcy, filed a petition in the cause asking to be made a joint complainant with Johnson. This petition was allowed and the bill amended to show that the trustee was also a complainant. To this final bill as amended a demurrer was interposed by appellees which was both general and special. The grounds for the special demurrer are that the bill as amended shows that the complainant Johnson has no interest in the subject matter thereof and is not entitled to any relief prayed therein; that the bill is multifarious; that certain allegations are indefinite and uncertain, etc.

In regard to the first special cause for demurrer, counsel for appellees claim:

“It is the contention of the appellees that the institution of bankruptcy proceedings caused any and all rights to the property alleged to be transferred in fraud of creditors, to be transferred to the trustee in bankruptcy and that, therefore, Johnson is not a proper party complainant and that because of the bankruptcy, the defendant John Weir is not a proper party defendant, because no relief can be had against him, the trustee merely having a right to pursue any property that John Weir may have fraudulently transferred. ’ ’

We cannot see the force of this contention. The rule has always been, so far as we have been able to discover, that when a suit in a State court has been instituted four months prior to the commencement of bankruptcy proceedings to enforce a valid lien on the bankrupt’s property, the jurisdiction of such State court is not affected by the bankruptcy proceedings, and such court, having first obtained jurisdiction over the property subject to the lien, may proceed to final judgment and enforcement of the lien. The jurisdiction of the bankruptcy court does not supersede the jurisdiction of the State court in such case and the plaintiff or complainant cannot be compelled to seek the enforcement of the lien in the bankruptcy court. Metcalf Bros. & Co. v. Barker, 187 U. S. 165; Pickens v. Roy, 187 U. S. 177; In re Holloway, 93 Fed. 638; Heath v. Shaffer, 93 Fed. 647, and many others. In the case of Griffin v. Lenhart, 266 Fed. 671, it was said:

“Doubtless it might have been held with strong reason that the court of bankruptcy upon adjudication drew to itself for the purpose of administration all the assets and liabilities of the bankrupt of every form, giving, however, full effect to all liens lawfully acquired more than four months before the filing of the petition. But the Supreme Court, considering the reasons stronger for a different view, laid down the general rule that, where a state court has obtained complete jurisdiction by proceedings, either legal or equitable, instituted by creditors for the enforcement of their demands, and under which they have acquired liens upon the property more than four months before the filing of the petition, the state courts should proceed with the enforcement of the liens and a final disposition of the property and of the cause without interference from the bankruptcy court.”

In the ease of In re United Wireless Telegraph Co., 192 Fed. 238, it was held that a suit in a State court to set aside a conveyance of property then held by the defendant on the ground of fraud is essentially one in rem, and creates an equitable lien on the property, and, on the' bankruptcy of the defendant, the bankruptcy court, having no power to compel the complainant in such suit to submit his claim to its jurisdiction, has no power to enjoin the suit. In Virginia-Carolina Chemical Co. v. Rylee, 139 Ga. 669, it was held that an action to cancel certain deeds and to subject the land to liens, was unaffected by the debtor’s subsequent adjudication as a bankrupt more than four months after the liens were obtained.

We think this doctrine is too well established to warrant further discussion. The entry of the judgment and issuance of the execution in the case at bar perfected a lien upon whatever property the defendant Weir might have had and established complainant’s right to have the lands conveyed by Weir, if such conveyances were fraudulent. as against creditors, subjected to the lien of his judgment, and he, having filed his bill for this purpose more than four months prior to the institution of'the bankruptcy proceedings, is not affected by the bankruptcy act.

Nor do we think it was improper for the trustee in bankruptcy to be made a party complainant. The bankruptcy act specifically provides that the trustee shall be deemed vested with all the rights, remedies and powers of a judgment creditor holding an execution duly returned unsatisfied. This bill is brought for the benefit of all the creditors of the Weirs who might desire to join therein. The trustee stands in the position of such a creditor. If the complainant should be successful in the prosecution of his suit with the result that there should be a surplus over and above the amount necessary to satisfy his judgment, the trustee would be entitled to such surplus for the benefit of the other creditors of the bankrupt. It has been held in several cases that where the facts warrant it, the trustee will be permitted, or directed, to intervene in a foreclosure suit in a state court. Heath v. Shaffer, supra; In re Porter, 109 Fed. 111.

It is also contended that the bill is multifarious in that the respective defendants to whom it is alleged the different tracts of land were fraudulently conveyed might have separate and distinct defenses. It was held in Stephens v. Collison, 249 Ill. 225, that the mere fact two or more distinct matters are joined in a bill merely to prevent a needless multiplicity of suits, and which in nowise prejudice or inconvenience a defendant or cause him additional expense, does not render a bill in chancery multifarious, and it was held in King v. Rice, 285 Ill. 123: “Courts of equity allow great liberality in joining several matters in one bill when all the causes of action grow out of the same transaction, all the defendants are interested in the same rights and the relief against each is of the same general character. It is not essential that the parties each have an interest in all the matters involved in the suit, but it is sufficient if they each have an interest in some matter involved in the suit and are connected with the others. ’ ’

The bill in substance and effect alleges that the defendant Weir and the defendants to whom he conveyed the different tracts of land entered into a conspiracy to aid him in defrauding his creditors, and that such conveyances were mere shams and without considerations. We cannot see how any of these defendants would be prejudiced by being joined in the same bill.

In our opinion, the chancellor erred in sustaining the demurrer to this bill and the decree is reversed and the cause remanded with directions to overrule the demurrer thereto.

Reversed and remanded %oith directions.


text:
    Thomas E. Cavanagh, Appellant, v. James Weir Elliott, Appellee.
    Gen. No. 8,674.

      Opinion filed January 16, 1933.
    Rehearing denied April 5, 1933.
    Barnabas F. Sears, for appellant.

      Bellatti, Samuell & Moeiarty, for appellee.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

Appellant brought his action in trespass on the case for libel. • A demurrer was filed by appellee to the declaration and sustained thereto and appellant having elected to stand by his declaration, judgment was entered against him, to reverse which this appeal is prosecuted.

The declaration consists of one count and it is alleged therein that the plaintiff before and at the time of the committing by the defendant of the several grievances hereinafter mentioned, exercised and carried on and still does exercise and carry on the business of manager of the Jacksonville, Illinois, office of James E. Bennett and Company of Chicago, Illinois, a copartnership, in the business of commission merchants and has always conducted the same with punctuality, honesty and efficiency in dealing with .the customers of said James E. Bennett and Company as its Jacksonville manager and was deservedly held in high esteem by those with whom he had dealings in his trade and business as such manager, and was deservedly held in high esteem by his said employer, to the support and maintenance of himself and his family and great increase of his fortune. Yet the defendant well knowing the premises, but wickedly and mali-- • ciously intending to injure and destroy the good name, - reputation and credit of the plaintiff in his said employment and to bring him into disgrace among the said customers of his employer with whom he had such dealings as aforesaid, and to cause him to be re- ✓- garded as a person of no worth and unfit to carry on the duties of his said employment and to prejudice and injure the plaintiff wih his said employer and to cause him the loss of his employment, on the 11th day of February, 1932, in Jacksonville, Illinois, while the plaintiff was so employed as aforesaid, did wrongfully, falsely and maliciously write and publish a certain false, scandalous, malicious and defamatory libel of and concerning the plaintiff, and of and concerning his said business and employment in the form of an anonymous post card or circular, addressed to the said James E. Bennett and Company at Chicago, Illinois, which the defendant caused to be mailed through the United States mails to the said James E. Bennett and Company, which said anonymous post card or circular contained the following false, scandalous, malicious, defamatory and libelous matters, that is to .say:

“James E. Bennett & Co.

“Chicago, Ill.

“You know of course your Jacksonville Ill. Manager has a decided complex. It would be much cheaper for you to put him on a pension than to operate as you are doing.”

That in said post card or circular the words, “Jacksonville Ill. Manager” mean the plaintiff; the word “you” wherever it appears and the word “your” mean James E. Bennett and Company, the said employer of this plaintiff; and the word “him” means the plaintiff; and that by writing, publishing and sending the said anonymous post card or circular the defendant intended to and did charge the plaintiff as being unfit to carry on his said duties as the Jacksonville, Illinois, manager of the said James E. Bennett and Company.

And the said anonymous post card or circular was then received and read by the then officer or officers, agent or agents of the said James E. Bennett and Company as thereby published by the defendant to the said James E. Bennett and Company, by means whereof the plaintiff has been and is greatly injured in his said good name, reputation, credit and employment to the damage of the plaintiff, etc.

That, an employee has a cause of action against a third person who by threats, intimidation or other malicious acts causes his discharge from such employment is the settled law of this state. London Guaranty & Accident Co. v. Horn, 206 Ill. 493. It is contended by appellee that the words as laid in the declaration are not actionable in themselves and are not necessarily libelous per se, and the plaintiff must allege the defamatory character or meaning by apt and proper averment, or in other words, by proper innuendo. It may be conceded that charging a person with having a decided complex alone would not be libelous. The noun “complex” as here used undoubtedly means a certain mental bent, trend or condition which influences or controls the acts of a person. The following words, “It would be much cheaper for you to put him on a pension than to operate as you are doing,” can have but one meaning, that appellant as manager of the Jacksonville office of James E. Bennett and Company did not perform his duties in a manner for the best interests of that company. Words must be construed in the sense which persons of common and reasonable understanding would ascribe to them. In the case of Nelson v. Borchenius, 52 Ill. 236, the court held: “The words in this case, though not in themselves actionable, were, nevertheless, of such a character that, if spoken as averred, concerning the plaintiff in his trade as a merchant, they were actionable, without the averment of any other extrinsic circumstance to explain them than the fact that the plaintiff was such trader or merchant.” Where words spoken or written may not in and of themselves be actionable, yet if spoken or written of another person in regard to his business or employment may become libelous per se. In the case of Ben-Oliel v. Press Pub. Co., 251 N. Y. 250, the rule is announced: “Whatever* words have a tendency to hurt, or are calculated to prejudice, a man who seeks his livelihood by any trade or business are actionable. When proved to have been spoken in relation thereto, the action is supported; and unless the defendant shows a lawful excuse the plaintiff is entitled to recover without allegation or proof of special damage.” In the case of Clifford v. Cochrane, 10 Ill. App. 570, it was held:

“Were the words as set out in the declaration actionable without proof of special damages? That they are so, we entertain no doubt. It is a familiar principle that words not actionable in themselves may become so if spoken of one engaged in a particular calling or profession. The general rule in relation to the speaking of words of one in a particular calling may be stated as follows: any words spoken of such a person in-Ais'-offiee, trade, profession^-er-business, which tend to impa.ir.Ms credit,_ or charge him with fraud, or indirect dealings, or with incapacity, and that tend to injure him in his trade, profession, or business, are actionable, without proof of special damage. Starkie on Slander, 178 and notes; Townshend on Slander, 278 (3d Ed.); Ostram v. Calkins, 5 Wend. 263; Demarest v. Haring, 6 Cow. 76; Chaddock v. Briggs, 13 Mass. 247; Chipman v. Cook, 2 Tyler Vt. 456; McMillen v. Birch, 1 Binney, 178; Day v. Buller, 3 Wils. 59; Onslow v. Horne, Id. 177.” If words are written of another which are capable and reasonably susceptible of a defamatory meaMng as respects him in connection with Ms business they are actionable per se and need no allegations of innuendo. Hayes v. Mather, 15 Ill. App. 30; MacDonald v. Lord & Thomas, 27 Ill. App. 111; Barth v. Hanna, 158 Ill. App. 20; Gerald v. Inter Ocean Pub. Co., 90 Ill. App. 205; Marion v. Courier Pub. Co., 125 Ill. App. 349. The above rule is not confined to this state but is substantially universal. It is stated in Newell, Slander & Libel (4th ed.) 155, § 129, as follows: “Defamatory words falsely spoken or written of a person, which impute to him unfitness to perform the duties of an office or employment of profit, or the want of integrity in the discharge of the duties of such an office or employment, are actionable in themselves without proof of special damages; and so, too, are defamatory words falsely spoken of a party which prejudice such party in his or her profession or trade. Next to imputations which tend to deprive a man of his life or liberty, or to exclude him from the comforts of society, may be ranked those which affect him in his office, profession or means of livelihood. To enumerate the different decisions upon this subject would be tedious, and to reconcile them impossible; yet they seem to yield a general rule sufficiently simple and unembarrassed, namely, that words are actionable which directly tend to the prejudice of \ anyone in his office, profession, trade or employment.) So, if a person carry on a trade recognized by the law, or be engaged in any lawful employment however humble, an action lies for any words which prejudice him in the way of such trade or employment.” In somewhat different words the same rule is found in 36 O. J. 1180, § 69: “As a general rule words are actionable if they directly tend to the prej-/ udice or injury of anyone in his profession, trade, or business, whether the words are written or oral. Also, any language imputing want of integrity, a lack of due qualification, or a dereliction of duty to an officer or employee is actionable per se, whether it is spoken or written. It is not necessary that the words should contain an imputation upon plaintiff as an individual which would be actionable apart from the question of his business or profession. The ground of the action in such cases is that the party is disgraced or injured in his profession or trade or exposed to the hazard of losing his office, employment, or business in consequence of the defamatory words, and not that his general reputation in the community is affected by them. ’ ’

The words as alleged in the declaration in the case at bar can have no innocent construction but on their face seek to disparage appellant with his employer and in his employment and are actionable per se.

The judgment of the circuit court is reversed and the cause remanded with directions to overrule the demurrer to the declaration.

Reversed and remanded with directions.


text:
    Nora Stoutz, Appellee, v. Walter Nicoson, Appellant.
    Gen. No. 8,689.
    Opinion filed January 16, 1933.
    Rehearing denied April 5, 1933.
    F. T. Carson, for appellant; J. M. Mitchem, of counsel.

      Busch & Harrington, for appellee; Earl C. Harrington and C. E. Tate, of counsel.
   Mr. Presiding Justice Eldredge

delivered the opinion of the court.

Nora Stoutz, appellee, recovered a judgment in the sum of $700 in an action on the case against appellant, Walter Nicoson, in the circuit court of Champaign county for personal injuries received as a result of an automobile collision at the intersection of Walnut street and Columbia avenue in the City of Champaign. Walnut street runs north and south and is intersected at right angles by Columbia avenue running east and west. The accident happened between 9 and 9:30 o’clock on the evening of June 1, 1931. The original declaration consisted of one count in which it is charged that the collision occurred on account of the general negligence of appellant. In the first additional count it is averred that the place of accident was a closely built up residence portion of the City of Champaign and that appellant drove his car at an excessive rate of speed, of, to wit, 35 miles per hour. In the second additional count the same allegations arc averred as in the preceding count with the addition that appellant was driving on the left side of the street.

The evidence is very close and conflicting and, aside from that of the doctor who attended appellee after she was injured and the garage man who made the repairs upon the automobile in which she was riding, consisted solely of the testimony of the occupants of the two cars. Appellee, Nora Stoutz, together with her husband, Herman Stoutz, and Neva Elliott were riding in an automobile owned and driven by one Jonas Fry. The appellant, Walter Nicoson, was driving his own car and accompanying him therein were William McClinchey, John Dolan and Cleve Shrout. The car driven by appellant approached the crossing from the right while the car in'which appellee was riding approached it from the left. The evidence introduced by appellee tended to show that Fry, who was driving the automobile in which appellee was riding, when he was about 60 feet from the intersection, saw a car approaching from the south 250 feet south of the crossing, and that when he entered the intersection the other car was 75 to 100 feet away from his and he continued to drive until he was hit; that at the time of the impact his car was just leaving the intersection of the two streets and was proceeding at about 15 miles per hour. Fry further testified that when appellant’s car was 70 or 75 feet from the intersection it was traveling between 35 and 40 miles per hour. Each of the other witnesses for appellee testified substantially to the same facts.

Appellant testified that when he was 75 feet from the intersection his car was not running over 18 or 20 miles per hour and the Fry car was 150 feet from the intersection going 35 miles per hour; that when the defendant was in the east side of the intersection with the bumper over the manhole in the center thereof, he stopped his car but that Fry came on without stopping, tried to swing around his car but hit the left front fender of appellant’s car. The other occupants of appellant’s car also testified substantially to the same facts.

During the cross-examination of appellee the following occurred:

Q. Mrs. Stoutz, where were you going that night? Plaintiff objects, not cross-examination.

A. Going to the ice plant.

Mr. Harrington : Just a moment, Mrs. Stoutz.

By the Court: Well, I will let you show as to ■whether she was going to go straight or turn at that street.

A. We was going east, to the ice plant.

Q. What ice plant? Plaintiff objects.

By the Court: Objection sustained. The question is, whether you were going straight ahead on that street or intending to turn either direction. Defendant excepts.

A. He was going straight.

Mr. Carson: Your objection to that is because it is not cross examination:

Mr. Harrington : Well, go ahead, it doesn’t make any difference.

Mr. Carson : I will make her my own witness for that purpose, now.

By the Court : All right, Mr. Carson makes her his own witness.

Q. What ice plant were you going to?

A. Sure Pure.

Q. And for what purpose? Defendant objects, it wouldn’t be competent.

By the Court (Out of hearing of the jury): Just a minute, Mr. Carson, what do you expect to show by the answer?

Mr. Carson: We expect to show this fellow was taking her over there to get ice for the Stoutz family.

Mr. Harrington: I don’t see that that would make any difference.

By the Court : On the proposition whether it was a common enterprise?

Mr. Carson: Yes, sir.

By the Court: So that this man was her agent—

Mr. Harrington: I don’t think it is admissible, even for that purpose.

By the Court : I will permit them to show that.

Q. The question, I believe, was for what purpose were you going there? Plaintiff objects. Objection overruled.

A. Going for ice.

Q. For whom? Plaintiff objects. Objection overruled.

A. Myself.

Q. That is all. -

. Subsequently on motion of counsel for appellee the court struck out of the record the above evidence and instructed the jury to disregard it.

If a person riding in an automobile is a guest passenger and exercises due care for his own safety, then the negligence of the driver of the car in which he is riding cannot be imputed to him, while, on the contrary, if the driver is acting as his agent or servant, then he is bound by his negligence. When a suit is brought to recover for injuries under such circumstances the relationship between the driver of the car and the person who was injured while riding therein becomes of primary and vital importance. Appellant had a right to prove that Fry was the agent of appellee and that in driving the car he was doing so at her request and for her benefit, and if such agency was proven, then the negligence of Fry, if any, would be imputed to her and she would have no right of recovery. By excluding this evidence and under the instructions of the court, the jury were precluded from passing upon the question of agency. The evidence for appellant tended to show that he was not negligent in driving his car and that he had the right of way over this intersection. In our opinion it was error to exclude the aforesaid evidence, and, on another trial, appellant should be permitted to prove the relationship of agency, if he can, between Fry and appellee, and the jury should be properly instructed in regard to that element.

The judgment of the circuit court is reversed and the cause remanded.

Reversed and remanded.


author: Mr. Justice Shurtlefp

text:
    Decatur Lumber and Manufacturing Company, Appellee, v. George L. Clark et al., Appellants.
    Gen. No. 8,638.
    Opinion filed January 16, 1933.
    Rehearing denied April 5, 1933.
    Whitley & Fitzgerald and Carl N. Weilepp, for. appellants.
    Henry H. Morey, for appellee.
   Mr. Justice Shurtlefp

delivered the opinion of the court.

This is an appeal from a decree of the circuit court of Macon county, decreeing that the appellee, the Decatur Lumber and Manufacturing Company, is entitled to a foreclosure of a mechanic’s lien against lot 81 of Kenwood, an addition to the City of Decatur, and finding that a sum of $800 paid by Cass F. Barger, the contractor building a house on said premises, and a payment of $2,200 under an assignment given to said contractor by the purchasers and assigned by him to the appellee, should not be credited upon the lumber bill furnished by appellee for the property in question.

The appellee was a dealer in lumber and building materials in Decatur for a number of years prior to 1929. Some time during’ the month of July, 1929, Cass F. Barger, who had been a building contractor in Decatur for several years, and who had done and was doing much business with the appellee on the purchase of material for various properties, made an agreement with the appellants Wilma Clark and George L. Clark, to purchase lot 81 of Kenwood, an addition to the City of Decatur, and erect a residence thereon for them in accordance -with certain plans agreed upon between them. Barger obtained an estimate’from the lumber company, appellee, and ordered the lumber and mill-work for the residence and started the erection of such residence about August 5, 1929. He thereafter made an application for a loan of $3,500 on the property to the appellant Peoples Saving's and Loan Association, and on September 17,1929, when the building was partially completed, consummated his loan. The Peoples .Savings and Loan Association, by its loan agent, obtained an affidavit from Barger that all of the bills for material and labor had been paid in full and that there were no liens or claims against the property.

On July 22,1929, Barger had entered into a written contract with the Clarks for the erection and sale of this property for the sum of $5,200. In part paymeni the Clarks agreed to assign to Barger $1,000 of their part of the estate of Mrs. Clark’s father when the same was settled, or if their part amounted to $3,000 to pay $2,000, and if it exceeded $3,200 to pay $2,200 when the estate was settled. Barger thereafter, in the latter part of September or the first of October, took this instrument to Clifford Jones, manager and treasurer of the appellee, and at Jones’ suggestion obtained another assignment from the Clarks, dated October 3, 1929, setting out in substance the manner of payment of the above sums and on October 7, 1929, assigned all his interest in this instrument to the Decatur Lumber and Manufacturing Company.

Cass F. Barger was an owner buying lots, improving them and selling them under contracts of purchase. He had so built not less than 14 houses in the City of Decatur in 1928 and 1929, and on .August 1, 1929, his open account with appellee for materials furnished was between $5,000 and $6,000 and the company was pressing him for payment. Barger made the payments to appellee and by his direction the same were applied to his general account. At that time no charges had been made upon appellee’s books for the material furnished for the Clark house.

There was considerable contention in the proofs as to whether Jones, the manager for appellee, knew the source of the funds and whether the Clarks expected the funds to be applied upon the material for the house built by Barger upon lot 81 of Kenwood addition.

Appellant contends, as the court held in Alexander Lumber Co. v. Aetna Co., 296 Ill. 500, that appellee is estopped from pressing this claim for lien. The court say on page 506: “A court of equity will not apply the general rule regarding application of payments, when, from all the surrounding circumstances, to do so would work an injustice. (Compound Lumber Co. v. Murphy, 169 Ill. 343.) To hold that there was no duty on defendant in error, under the facts in this case, to ascertain what payments were made to it from funds derived from this contract and apply the same accordingly, would be to place in its hands the power to collect its poor accounts with the contractor from funds paid on this contract and then compel the surety to pay for the material used in the construction of the building under the contract. Such a rule and such a contention is so inequitable and unfair as to shock the conscience of all fair-minded persons. . . .

“Crane Bros. Manf. Co. v. Keck, 35 Neb. 683, while recognizing the general rule that where the debtor fails to designate the debts on which his payments are ■ to be applied the creditor may do so, yet holds that there is an exception to this rule where the money was received by the debtor from a third party whose property would be liable for the debt in case the money was not applied upon the third party’s liability.”

In this case a number of equities could be elaborated upon. Appellant Peoples Savings and Loan Association was negligent in making its loan. It was aware that a building was being constructed upon the premises and was not completed, yet it relied upon Barger’s affidavit and turned over all the funds to Barger. In addition, to secure- its possible loss from appellee’s claim and preferred lien, the loan association thereafter took an assignment of building claims from Barger — contracts upon which Barger was working — to the amount in value of $4,118.61, according to the testimony of appellant’s witnesses, none of which has appellant offered in any manner to pro rate with appellee. Appellant loan association, by thus protecting its mortgage, also protects the Clarks. No equity should be granted to appellant loan association in a case where it is not willing to do equity. Appellee’s claim in this case by decree amounts to $1,062.42. We have read the testimony and examined the master’s report and from a full review of the case we are satisfied that equity and justice have been done by the decree.

The decree, therefore, of the circuit court of Macon county is affirmed.

Affirmed.