text:
    In the Matter of the Estate of John Warden, Deceased, E. C. Churchill, Executor, Appellant, v. Earl Pelling, Intervening Petitioner, and Long View State Bank, Appellees.
    Gen. No. 9,137.

      Opinion filed January 24, 1939.
    Rehearing denied April 4, 1939.
    Schaefer & Dolan, of Champaign, for appellant.
    Dobbins, Dobbins & Thomas, of Champaign, for certain appellee.
   Mr. Justice Fulton

delivered the opinion of the court.

E. C. Churchill as executor of the estate of John Warden, deceased, filed a petition in the county court of Champaign county, Illinois, asking for the issuance of a citation against the Long View State Bank to show cause why it should not turn over two notes of $750, each in its custody to the executor of the John Warden estate. When the matter came on for a hearing in the county court, M. H. Keefe, president of the Long View State Bank appeared in person, and Earl Felling, the appellee and intervening petitioner herein entered his appearance and claimed the notes in question by attorneys. The cause was heard before the court without a jury and the county court held that the notes were the property of Earl Belling and dismissed the petition for citation. The executor appealed to the circuit court of Champaign county where the matter was again tried by the court without a jury. The circuit court also found that Earl Felling was the owner of the notes in question, dismissed the petition for citation and entered judgment thereon. From this judgment the said executor prosecutes an appeal to this court.

The facts are not in dispute and revolve mainly around the testimony of M. H. Keefe, the president of the Long View State Bank. The evidence discloses that John Warden during his life time was a patron of the Long View State Bank, and a friend of M. H. Keefe, its president. On October 13, 1931, Warden wanted to loan the sum of $1,500 to James and Edwin Carlton, but for some reason one of the Carltons did not wish to deal directly with Warden. Therefore, the bank loaned the sum of $750 to each of the Carlton boys and took their notes, dated October 16, 1931, and within a few days thereafter indorsed the notes to John Warden. Warden then took the notes and placed them in his private lock box in the vault of the bank where they remained until the first part of July, 1933. On or about that time Warden had a conversation with Keefe during the course of which he told Keefe he wanted those notes to go to one of his nephews Earl Felling and asked how he could do it. He said he wanted to draw the interest during his lifetime and at his death they were to be the property of Earl Felling. Keefe replied as follows, “I told him that I thought if he indorsed them to Earl Felling that would be sufficient, and that is what he did, and left the notes in the charge of the bank for the purpose of holding them and collecting the interest from time to time, and the notes always remained in the bank.” The notes were indorsed on the back as follows: “Pay to the order of Earl Felling, John Warden. ’ ’ The notes were removed from the private deposit box of Warden at the time of this indorsement, and Warden then handed the notes to Keefe to place them in a different box in the vault of the bank where similar notes were kept for safe keeping. Warden continued to maintain his private deposit box in the bank where he kept his own papers up to the time of his death.

After this transaction occurred interest was collected on both notes on various occasions and either paid to Mr. Warden in cash or credited to his account in the bank. Both notes were due and payable on October 16, 1933. The last interest payment made on the James Carlton note was January 6, 1936, and on the Edwin Carlton note on October 24, 1935. Warden never had any conversation with Keefe or any one in the bank with regard to payment of the notes. The notes were still in the safety deposit box in the custody of the bank on July 31,1936, the date of John Warden’s death. Keefe testified that he never saw Earl Pelling prior to Mr. Warden’s death and never had any communication from him or anyone else for him except what John Warden had said to him. The evidence does not show that Earl Pelling knew anything about the notes prior to the death of John Warden. The sole and controlling question in the case is, “Was there a sufficient delivery of the notes in question to pass title to the Intervening Petitioner, Earl Pelling?”

The appellant concedes that John Warden intended that the notes in controversy should go to Earl Pelling but urges and insists that there was no sufficient delivery to pass the title. We are inclined to believe that the record in this case sustains the contention of the appellant. It is our judgment that in order to show a completed gift it was necessary to show .that Keefe was either an agent of or trustee for Pelling. We can find nothing in the evidence which warrants that assumption. In the case of Streeper v. Myers, 132 Ohio 322, 7 N. E. (2d) 554, the court stated as follows: “Where a delivery is thus made to a third person the question whether the gift was thereby completed without actual delivery to the donee depends entirely upon whether the person to whom the property is delivered receives it as the donors’ agent or as trustee for the donee.” In the case of Barnum v. Reed, 136 Ill. 388, the court said:

“The rule is well settled that a court of equity will not aid or perfect a defective gift. If legally made by a transfer of the title to the Trustee, it will be upheld. In other words, a court of equity cannot render the transaction perfect, so as to constitute a valid gift, which the donor has left imperfect, and cannot convert an imperfect or incomplete gift into a declaration of trust on account of such imperfection.”

In this case John Warden told Keefe he wanted his nephew Earl Felling to have the notes and asked Keefe how he could do it. Keefe told Warden that he thought if he indorsed them to Felling that would be sufficient. Nothing was said about delivery and no instructions were given Keefe or any other party to deliver said notes upon the death of John Warden. The rules of law require that the act constituting the transaction must be consummated and must be established by clear and convincing proof. There should be no uncertainty as to either the intent or the delivery. In the absence of any delivery to Felling or anyone for him it would be just as reasonable to argue that Keefe was merely the agent for Warden and that the latter could recall the notes and change his mind about the delivery at any time as it is to conclude that the indorsement of the notes gave Keefe or any other party the right to deliver the notes to Felling upon the death of Warden. We cannot see how the testimony in this case makes Keefe either an agent or trustee for Felling.

In the case of Martin v. Martin, relied upon by appellee, 170 Ill. 18, there was an absolute delivery to the donee. This was evidenced by the placing of securities in the donee’s own safety deposit box, by letters from the donor, by declarations of the donor and other documentary and oral proof. There was no reservation of an interest nor any dominion or control reserved by the donor. If we construe the testimony of Keefe that Warden wanted to draw the interest during his lifetime and at his death the notes were to become the property of Earl Felling, it was an attempt to make a testamentary disposition without complying with the statutory requirements providing for the proper execution of the last will and testament.

In the case of Barnum v. Reed, supra, the court further said: “If the gift does not take effect as an executed and completed transfer to the donee, either legal or equitable, during the life of the donor, it is a testamentary disposition, good only when made by a valid will. That is, the act or acts constituting the transaction must be consummated, and not remain incomplete or rest in mere intention — and this is the rule whether the gift is by delivery, only, or by the creation of a trust. ’ ’

While it is apparent from the testimony that Warden stated that he wanted the notes to be the property of Earl Felling at his death, the mere fact that he left them at the bank after making the indorsement without any kind of instructions whatsoever is in our judgment no evidence of delivery.

Since the intervening petitioner failed to prove the essentials necessary to a complete delivery and for the reasons stated in this opinion the judgment of the circuit court is reversed, and judgment is entered in this court in favor of the appellant.

Reversed.


source: Caselaw Access Project

author: Mr. Justice Fulton

license: Public Domain

text:
    James D. Baird, Administrator of the Estate of Mary A. C. Black, Deceased, Appellant, v. The Mutual Life Insurance Company of New York, Appellee.
    Gen. No. 9,163.
    Opinion filed January 24, 1939.
    Rehearing denied April 4, 1939.
    Scofield, Bell & Berry, of Carthage, for appellant.
    Louis W. Dawson, of New York, Winston, Strawn & Shaw, of Chicago, Miller, Elliott & Westervelt, of Peoria, for appellee; George T. Evans, of Chicago, and Eugene R. Johnson, of Peoria, of counsel.
   Mr. Justice Fulton

delivered the opinion of the court.

This suit was brought by James D. Baird, administrator of the estate of Mary A. C. Black, deceased, appellant, against The Mutual Life Insurance Company of New York, a corporation, Appellee, to recover the apportionment part of an annual payment alleged to be due on an annuity contract from November 1, 1933 to August 22,1934, at which time Mrs. Black died. The case was tried before the court without a jury and judgment was entered by the court in favor of the appellee.

The annuity contract provided, that in consideration of the surrender of a certain insurance contract terminated by the death of James Black, the insured, and husband of Mary A. C. Black, the company, being the appellee, promised to pay to Mary A. C. Black, or to her executors or administrators, the sum of $841.15, on the date of the contract, and a like amount on each succeeding anniversary of such date until 20 such annual payments amounting to $16,823, shall have been duly paid, and that if at the completion of said 20 payments the beneficiary was still living, the company would continue such annual payments, but of the amount of $978.05, throughout her remaining lifetime. It was provided that after the first 20 payments shall have been made, the company should be furnished with satisfactory evidence that the beneficiary was alive, and that no further payment should be made until such evidence should be received, and that upon the death of the benfieciary at any time thereafter the contract should cease and determine and no further payments should be made.

The contract was dated November 1, 1913, and the first payment of $841.15, paid to the beneficiary on that date. The evidence shows that the last payment was made on November 1,1933, that Mary A. O. Black died on August 22, 1934, and that James D. Baird, the appellant, was appointed administrator of her estate.

It is the appellant’s position that notwithstanding the fact that payment was made upon the date of the contract for the first year and on each 12-month period thereafter including the payment of $978.05, on November 1,1933, that he is entitled to recover the proportion of the annuity payment between the dates of November 1, 1933 and August 22, 1934, the date of death.

It was stipulated and agreed that the law of the State of New York is the proper law to be applied to the determination of the controversy in this case. The New York statute covering the subject of Apportionments of Rents, Annuities and Dividends or the part thereof applicable to this case provides that: All annuities made payable or becoming due, at fixed periods shall be apportioned so that in the event of the death of any person interested in the same, his representatives or assigns shall be entitled to a proportion of such annuity . . . according to the time which shall have elapsed from the commencement or last period of payment thereof. The statute further provides :

“This section shall not apply to any case in which it shall be expressly stipulated that no apportionment be made, or to any sums made payable in policies of insurance of any description.”

The appellant insists that from the language of the statute in question the right to apportionment relates to fixed periods under the instrument without reference to the question as to whether the first fixed period is, or is not, the date of the contract; that where the contract so specifies, as in the present case, the first fixed period is the date of the contract and the second fixed period is the first anniversary of that date. He contends that the right to apportionment is expressly stated to be according to the time which shall have elapsed from the commencement or last period of payment as the case may be, including the day of death of the person or the determination of his or her interest.

The position of the appellee is that where the payment is made in advance for a 12-month period and the beneficiary dies within that period no further payment can be required to be made.

While it is a general rule applying to the payment of annuities, that where the payment is not due until the end of a stated period of time the statute requires an additional payment for a proportionate part of the succeeding year, equal to the proportionate part of the year during which the beneficiary lived, we cannot be-live that such rule applies to the circumstances of this case. It appears to us that payment having been made on the date of the contract there was nothing further due until the 12-month period had elapsed and the annuity contract having provided that the company shall be furnished at every such date of payment with satisfactory evidence that the beneficiary was alive, coupled with a further provision that no further payment shall be made until such evidence shall have been received, and that upon the death of said beneficiary at any time thereafter, the contract shall cease and determine and no further payment shall be made, we are convinced that prepayment and such stipulations in the contract amount to an express stipulation that no apportionment be made. We believe that any other construction of the annuity contract and of the statute of the State of New York would be strained and unreasonable.

It is our conclusion that the trial court correctly entered judgment in favor of the defendant appellee and the same is therefore affirmed.

Affirmed.


author: Mr. Presiding Justice Scanlan

text:
    People of the State of Illinois, Plaintiff in Error, v. Joseph Finkelstein et al., Defendants. Joseph Finkelstein, Defendant in Error.
    Gen. No. 40,447.

      Opinion filed March 28, 1939.
    Rehearing denied April 20, 1939.

      Thomas J. Courtney, State’s Attorney, for plaintiff in error; Edward E. Wilson, John T. Gallagher, Blair L. Yarnes, Melvin S. Rembe, Robert E. Wright, and Thomas G. Bugan, Assistant State’s Attorneys, of counsel.
    Abraham L. Marovitz, Brodkin & Bieber, and Grenville Beardsley, all of Chicago, for defendant in error.
   Mr. Presiding Justice Scanlan

delivered the opinion of the court.

The People seek to reverse a judgment quashing the indictment in the instant cause as to Joseph Finkelstein, defendant in error. The indictment was returned against defendant in error, David Robbins, Ralph Shutan, Theodore Antman and State Auto Finance Corporation, a corporation. It contains a number of counts, and charges that defendants conspired with other persons to cheat and defraud the State of Illinois of a large amount of moneys “that were due and of any moneys that should in the future become due to said State . . . under the provisions of a certain Act [Retailers’ Occupation Tax Act, secs. 440-453, inclusive, ch. 120, Ill. Rev. Stat. 1937] ... by reason of retail sales of tangible personal property that had been made and that should be made in the future in said State ... by said . . . Finance Corp. ... that Finance Corporation sold a large amount of tangible personal property, to wit, automobiles, at retail, and was subject to the said Act, and that it was its duty to pay the Department of Finance three per cent of the gross cash receipts of such retail sales; that defendants were agents of said corporation, managed its business and affairs, the sale of its tangible personal property, and the collection of its cash, and that they caused to be made and signed on behalf of said corporation certain false, fraudulent and incorrect reports and tax returns purporting to be true and correct reports and tax returns in respect to the gross retail sales of tangible personal property made within the State by said corporation during certain respective calendar months, and also receipts from such sales during such months, as required by the provisions of said Act; that defendants unlawfully and fraudulently agreed with certain other persons to file with said Department on behalf of said corporation said false and fraudulent reports and tax returns and to cause said Finance Corporation to unlawfully and fraudulently fail to keep a record of all retail sales of tangible personal property made within the State by said corporation, together with invoices, bills of lading, sales records, copies of bills of sale and other pertinent papers and documents relating to said retail sales of tangible personal property, as required by the provisions of said Act, for the purpose of deceiving said Department and the State in respect to the amount of tax due and payable under the Act from said Finance Corporation to the State; and to unlawfully and fraudulently cause said corporation to fail to pay to said Department divers sums of money that were due and that should in the future become due to the State from said corporation as tax under said Act.

Defendant in error filed a written motion to quash the indictment upon the following grounds:

“1. The said indictment and each count thereof is insufficient to charge an offense.

“2. The defendant, Joseph Finkelstein, is immune from and not subject to prosecution for the matters, things and transactions charged and set out in the said indictment and in each and every count thereof for the reason that he, ... on January 24,1938, ... as the duly qualified and acting Vice President and agent of said State Auto Finance Corporation, a corporation, one of the defendants herein, then and there had in his custody and possession certain books and records of said . . . Corporation; that . . . he, ... in obedience to a subpoena duces tecum, duly issued out of the Department of Finance . . ., served upon him, duly appeared before the [said] Department . . . before one Harold Durchslag [Durschlag], duly designated by the Director of Finance of the State of Illinois to hear the matter, cause, proceeding and hearing to determine the amount of money due and owing the State of Illinois from . . . Finance Corporation as and for Retailers Occupational Tax, . . . which said subpoena duces tecum commanded him ... to appear and testify before the Department of Finance . . . , to bring with him and produce all books and records, Cash Receipts, General Ledger, Sales Journal, Sales Invoices, Inventory Records, Purchase Records, General Journal, Cancelled Checks, Petty Cash Record and Vouchers, and all other documents, letters and paper writings whatsoever, relating to sales of tangible personal property by the State Auto Finance Company;

“That in obedience to the command of said subpoena . . . [he] appeared as aforesaid, was sworn to testify as a witness and testified on said hearing, but objected to producing said books, records and papers on the ground that to be compelled so to do would violate the rights guaranteed him by the Constitution of this State; . . . [Here follows a statement as to certain proceedings before the said Durschlag, all of which appears later in a stipulation of facts.]

“That thereupon . . . [he], in obedience to said subpoena . . . , produced before and delivered to the Department of Finance ... on said hearing the following books and records of said . . . Finance Corporation; general ledger for the year 1936, from January to December, inclusive; record of the cash receipts from January 1936 to December 1936; cash disbursements from January 1936 to December 1936; sales journal from January 1936 to December 1936; general ledger from January to December 1936; inventory record for the same period; record of cash receipts from January 1937 to December 1937; cash disbursements from January 1937 to December 1937; sales journal for the year 1937; inventory record for 1937; general ledger for 1937, January to December; being all of the books and records of said State Auto Finance Corporation in . . . [his] possession. . . .

‘ ‘ That said records and documents, and each of them, disclose facts which would tend to prove material allegations of the indictment herein and would be links in a chain of evidence to establish the guilt of this defendant thereunder, and tend to and do incriminate this defendant;

“That the transactions, matters and things set out and charged in the said indictment herein, and in each and every count thereof, were and are the identical matters, transactions and things concerning which said Joseph Finkelstein, a natural person, in obedience to a subpoena, produced evidence before . . . Harold Durchslag, an employee of said Department, on January 24, 1938;

“That by reason of the premises and by virtue of the Statute in such case made and provided, this defendant ... is immune from prosecution for and cannot be subjected to any criminal penalty for or on account of any of the matters, things and transactions set out in said indictment herein, and in each count thereof.

“Wherefore, the defendant . . . prays that the indictment herein, and each count thereof, may be quashed, and that he may be hence dismissed and discharged. ”

The affidavit filed in support of the motion supports the facts set forth in the motion. No counter-affidavits were filed by plaintiff. Thereafter defendant in error filed a special plea of immunity as to Mm, which sets up that plaintiff was barred and precluded from prosecuting the indictment as to him. It contains, in substance, the same averments as are set up in the motion to quash. Plaintiff filed a replication to the special plea, which avers “that they should not be precluded by anything in said plea alleged from further prosecuting this indictment because they say that all of the books and records produced by . . . Finkelstein were the books and records of the State Auto Finance Corporation, a corporation; and that no part of the testimony given by . . . Finkelstein before Harold Durchslag and the Department of Finance . . . related to any facts concerning which said defendant might under the Constitution and law claim immumty from testifying and that in the giving of testimony before . . . Durchslag and Department of Finance the said defendant testified to no facts except Ms name, address, official connection with said State Auto Finance Corporation and the identification of the books and records produced by him. ...”

The bill of exceptions recites that the cause came on for hearing before the trial court upon the motion to quash the indictment and the affidavit in support of it; that the State’s attorney called the attention of the court to the fact that the motion to quash the indictment had not been passed upon although a special plea of immunity and a replication to the same had been filed, and stated that he was of the opiMon that he would ask leave of the court to withdraw the replication to the special plea and move the court to strike the plea in order that the motion to quash might be considered, but after a colloquy between the court and the State’s attorney it was concluded that the practical effect would be the same whether the court passed upon the motion to quash or the special plea.

The parties then stipulated that in the hearing before Durschlag the following occurred:

“Mr. Durschlag: Let the record show that Mr. Finkelstein is appearing here today in response to a subpoena duces tecum, whereby he is requested to produce all books and records, cash receipts, general ledger, sales journal, sales invoices, inventory records, purchase records, general journal, cancelled checks, petty cash record and vouchers, and all other documents, letters and paper writings whatsoever, relating to sales of tangible personal property by the State Auto Finance Company.

“Joseph Finkelstein pursuant to a subpoena duces tecum, was called as a witness, and having been first duly sworn, was examined and testified as follows :

‘ ‘ Direct Examination by Mr. Durschlag :

“Q. State your name, please. A. Joe Finkelstein.

“Q. What is your business or occupation? A. Automobile business.

“Q. Used or new automobiles? A. Some new, some used.

“Q. What kind of.agency do you have? A. I have no agency; we just buy new cars and sell them.

“Q. Where is your business located? A. 3939 Washington Boulevard.

“Q. Who is the owner and operator of that business ?

“A. That is a corporation.

“Q. What is the name of the corporation? A. State Auto Finance.

‘‘ Q. What is your capacity in that corporation?

“A. Vice President.

“Q. Are you thoroughly familiar with the conduct and function of that business? A. Yes, sir.

“Q. And when did this business, State Auto Finance Company, begin its operations?

u

“A. To the best of my ability, it began two years ago.

“Mr. Malkin : When did you become a corporation? A. I don’t know.

“Mr. Durschlag: Was it in the year 1936 or 1935? A. ’35,1 guess.

“Q. Do you, in response to this subpoena duces tecum, have any books and records to produce concerning the operations of the State Auto Finance Company, from the period of the inception of the business, to the present time? A. Yes, sir.

“Q. May I have those, please? A. We have a bunch of them.

‘ ‘ Q. Will you kindly produce them, I don’t see them.

“Mr. Malkin : The books are over there.

“Mr. Finkelstein: I refuse to answer any questions relative to the evidence contained in those books because any answers that I may give may tend to incriminate me, and I therefore claim immunity as guaranteed by the State of Illinois.

“Mr. Durschlag: Mr. Finkelstein, the Department can not give effect to your claim for immunity because it provides in Section 9 of the Retailers ’ Occupation Tax Act, that no person shall be excused from testifying or from producing any books, papers, records or memoranda in any investigation or upon any hearing, when ordered to do so by the Department or any officer or employee thereof, upon the ground that the testimony or evidence, documentary or otherwise, may tend to incriminate him or subject him to a criminal penalty, but no person shall be prosecuted or subjected to any criminal penalty for, or on account of, any transaction made or thing concerning which he may testify or produce evidence, documentary or otherwise, before the Department or an officer or employee therof.

“Mb. Malkin : That is what Mr. Finkelstein says, that he is producing those hooks and records under a subpoena issued by the Department. He personally has been subpoenaed, and he has been told not to testify with reference to those records on the grounds that any evidence he may give may tend to incriminate him.

“Mb. Dubschlag: However, Section 9 of the Retailers’ Occupation Tax Act provides for immunity from criminal prosecution as a result of any evidence pursuant to any evidence in response to a subpoena.

“Mb. Malkin : This hearing is based upon Section 9.

“Mb. Dubschlag: This hearing is not based upon Section 9. This present ruling with respect to exemption is based upon Section 9, and therefore we cannot give effect to his claim for immunity since there is no possibility of incrimination because of the provisions of Section 9.

“Mb. Malkin: You contend, therefore, that there can’t be any criminal prosecution by virtue of his testifying here?

“Mb. Dubschlag: There could not be.

“Mb. Malkin : That was my understanding. I think by virtue of the last part of Section 9 that any testimony he may give contained in those records, if they tend to incriminate him, he will be immune to prosecution by the State of Illinois, by virtue thereof. My idea is this: If you and I think the same way, I will be glad to let him testify.

“Mb. Dubschlag: I think the provisions of Section 9 are clear. You may proceed in this matter.

“Mb. Malkin: Would you want this considered as a continued matter and let Mr. Perry examine all the books, bring Mr. Finkelstein back again to testify as to what he wants to know?

“Mb. Dubschlag: Let the record show in response to this subpoena, the following books and records were produced. ’ ’

(Here followed the further proceedings before the trial court.)

“[Mr. Wright, assistant State’s attorney:] That was the extent of the testimony and all the testimony given by Mr. Finkelstein at the hearing. I think we may further stipulate that State Auto Finance Corporation is a corporation, and that Mr. Finkelstein was an officer and Vice President of that corporation. Is that right?

“Mr. Marovitz [attorney for Finkelstein]: That is right.

“Mr. Wright: It is so stipulated.

“Mr. Marovitz : And that pursuant to subpoena, the books were tendered to the Department of Finance, and they were taken by them.

“Mr. Wright: Yes, they got quite a number of the books of the corporation.

“The Court: Those are the books you referred to, books, records, cash receipts, general ledger, as you described?

“Mr. Wright: I don’t know just what they were, but they were produced by Finkelstein in response to this subpoena, as a matter of fact, produced by him as Vice President.

“Mr. Marovitz: As a matter of fact, the books demanded in the subpoena were given to the Department of Finance, and they were audited by the Department.

“Mr. Wright: I can’t agree to that, your Honor. I am informed that is correct, but I don’t know personally, I do not think it is material for this hearing.

“Mr. Marovitz: They are in the possession of the State’s Attorney now.” (No response by the State’s Attorney.)

Written arguments of counsel were submitted to the trial court and the matter was taken under advisement. Thereafter the court held that the motion to quash should be sustained because the defendant was entitled to immunity under section 9, ‘ ‘ and that the record indicates here the evidence obtained at that time was used in procuring this indictment.”

• Section 8 of the Retailers’ Occupation Tax Act (sec. 447, ch. 120, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 119.460]) provides : “For the purpose of ascertaining the correctness of any return, or for the purpose of determining the amount of tax due from any person engaged in the business of selling tangible personal property at retail, the department or any officer or employee of the department designated, in writing, by the director thereof, may hold investigations and hearings concerning any matters covered by this Act and may examine any books, papers, records or memoranda bearing upon the sales of tangible personal property of any such person and may require the attendance of such person or any officer or employee of such person, or of any person having knowledge of such sales, and may take testimony and require proof for its information. In the conduct of any investigation or hearing, neither the department nor any officer or employee thereof shall be bound by the technical rules of evidence and no informality in any proceeding, or in the manner of taking testimony, shall invalidate any order, decision, rule or regulation made or approved or confirmed by the department. The department or any officer or employee thereof shall have power to administer oaths to such persons.”

Section 9 of the Act (sec. 448, ch. 120, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 119.461]) provides: “No person shall be excused from testifying or from producing any books, papers, records or memoranda in any investigation or upon any hearing, when ordered to do so by the department or any officer or employee thereof, upon the ground that the testimony or evidence, documentary or otherwise, may tend to incriminate him or subject him to a criminal penalty, but no person shall be prosecuted or subjected to any criminal penalty for, or on account of, any transaction made or thing concerning which he may testify or produce evidence, documentary or otherwise, before the department or an officer or employee thereof; provided, that such immunity shall extend only to a natural person who, in obedience to a subpoena, gives testimony under oath or produces evidence, documentary or otherwise, under oath. No person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying. ’ ’

Section 16 of the Act (sec. 449, ch. 126, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 119.462]) provides, inter alia: “Any Circuit Court of this State, or any judge thereof, either in term time or vacation, upon the application of the department or any officer or employee thereof may, in its or his discretion, compel the attendance of witnesses, the production of books, papers, records or memoranda and the giving of testimony before the department or any officer or employee thereof, by an attachment for contempt, or otherwise, in the same manner as production of evidence may be compelled before said court.”

The primary object of the aforesaid sections is to enable the State to secure the amount of tax actually due it from persons and corporations engaged in the business of selling tangible personal property at retail.

“Immunity statutes are liberally construed, to the end that one who has testified under them shall not be later subjected to punishment for crimes disclosed. (People v. Boyle, supra [312 Ill. 586]; People v. Sharp, 167 N. Y. 427.) ” (People v. Rockola, 346 Ill. 27, 39.) An immunity statute providing that a witness shall not be liable to criminal prosecution for any transaction concerning which he may be required to testify, must, to be valid, be coextensive with the protection afforded the witness by the constitution, as legislation cannot abridge the constitutional privilege. (People v. Boyle, supra.) Immunity statutes are enacted because of the difficulty in procuring evidence in certain kinds of cases. See People v. Rockola, supra, where the defendant was charged with bribing a custodian of lost property of the city of Chicago. As to the Retailers’ Occupation Tax Act it was recognized, apparently, by the legislature that there would be a very great number of “investigations and hearings” started by the State for the purpose of ascertaining the correctness of tax returns, and that if the Act was to be made effective it would be necessary to give the Department of Finance summary power to ascertain the correctness of any return and to determine the amount of tax actually due from any person or corporation engaged in the business of selling tangible personal property at retail. By section 8 the Department, or any officer or employee thereof, is given drastic power in the conduct of any investigation or hearing. The examiner is not bound by the technical rules of evidence, nor is he required to observe formality in the proceedings. It is a one-sided investigation in which the State takes testimony and requires proof “for its information.” It was undoubtedly recognized also by the legislature that in order to make the investigation an effective one it would be necessary to enact provisions to compel persons to produce books, papers, records or memoranda relating to the business under investigation and to testify in reference to the same, but that with such provisions in the Act it would still be difficult for the State to procure evidence unless the Act contained provisions that would afford a witness immunity protection coextensive with the protection afforded him by the constitution. Indeed, the compulsory provisions in section 9 would not be valid if it were not for the immunity provision in the section. It was for these reasons that the legislature incorporated in- section 9 the immunity provision. But while a witness is granted immunity “for, or on account of, any transaction made or thing concerning which he may testify or produce evidence, documentary or otherwise,” section 9 further provides that “no person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.”

Neither in the trial court nor here has defendant in error assigned any reason why the indictment was not sufficient upon its face, and the sole question for us to consider is, Was defendant in error, under the record, immune from prosecution.

Defendant in error argues that independently of section 9 of the Retailers’ Occupation Tax Act, “the officer of the Department of Finance, conducting an administrative hearing’ to ascertain the sales tax liability of State Auto Finance Corporation, and acting in a quasi-judicial capacity, promised defendant he would be immune from prosecution” if he produced the books and records called for by the subpoena duces tecum, and that the good faith and dignity of the State require that the promise be kept. While Durschlag, the employee of the Department of Finance, read section 9 to defendant in error and gave his interpretation of the same, he had no power to grant immunity to defendant in error. If there had been a trial of the instant cause and the State had offered the books and records of the Finance Corporation produced by defendant in error before Durschlag as evidence against defendant in error, upon apt objection a question might arise as to whether that evidence should be excluded, independently of section 9, upon the ground that it was obtained from defendant in error because of the nature of the statements made by Durschlag to him. (People v. Martorano, 359 Ill. 258.) However, no such question is before us for determination.

Plaintiff contends that the officers of a corporation have no constitutional privilege against producing corporate books and papers even though they may tend to incriminate them as individuals, and that therefore the immunity provision of section 9 has no application to defendant in error. A corporation acts only through its agents. The indictment charges, inter alia, that defendant in error conspired with other defendants to cause Finance Corporation to fail to keep a true record of all of the retail sales of tangible personal property made by said corporation and to cause said corporation to file with the Department of Finance false and fraudulent reports and tax returns of all of the retail sales of tangible personal property made by said corporation, thereby deceiving said Department and the State in respect to the amount of taxes due from said corporation to the State and payable to it under the provisions of the Act. Defendant in error’s motion to quash and his affidavit in support of the same set up the various books, records and documents of the Finance Corporation produced by him at the hearing and delivered by him to Durschlag, and the motion and affidavit aver: “That the said records and documents, and each of them, disclose facts which would tend to prove material allegations of the indictment herein and would be links in a chain of evidence to establish the guilt of this defendant thereunder, and tend to and do incriminate this defendant; that the transactions, matters and things set out and charged in the said indictment herein, and in each and every count thereof, were and are the identical matters, transactions and things concerning which said Joseph Finkelstein, a natural person, in obedience to a subpoena, produced evidence before said Department of Finance of the State of Illinois and before Harold Durchslag, an employee of said Department, on January 24, 1938.” The aforesaid averments were not answered in any pleading of plaintiff, nor did it offer any evidence in rebuttal of the same, although the parties stipulated as to certain facts. When the trial court assumed that the evidence was used before the grand jury the assistant State’s attorney did not question the correctness of the assumption. The indictment charges that one of the unlawful objects of the alleged conspiracy was to fail to keep and cause to be kept on behalf of the Finance Corporation a “record of all retail sales of tangible personal property made within the said State of Illinois by. the said State Auto Finance Corp.,” and it is plain, from a number of charges in the indictment, that the books, records, etc., of Finance Corporation were presented to the grand jury. Moreover, the proceedings before Durschlag' were continued to allow the auditor for the Department of Finance (Perry) to examine the books and it was agreed that after the examination had been completed defendant in error might be called again to testify. Upon the hearing before the trial court it appeared that the auditor had examined the said books, records, etc., and the statement of counsel for defendant in error that the State’s attorney thereafter took possession of the books, records, etc., was not challenged by plaintiff. That the books, records, etc., formed the basis of the indictment against defendant in error is conclusively shown by the fact that it appears from the back of the indictment that the first witness called before that body was Auditor Perry. But in our opinion it is entirely immaterial what use, if any, plaintiff made of the books, records, etc., produced by defendant in error. Section 9 does not provide nor intend that the evidence, documentary or otherwise, given by a witness before the Department of Finance must be used before the grand jury before immunity can be claimed. It would defeat the very purpose of the immunity provision in section 9 if the State could prevent immunity by withholding the documentary evidence in the instant case from the grand jury. Nor does it matter whether or not the books, records, etc., tended to incriminate defendant in error. Nor is there any merit in the contention of plaintiff that defendant in error, as an officer of the Finance Corporation, had no constitutional privilege against producing’ the corporate books and papers even though they might tend to incriminate him as an individual and that therefore the immunity provision of section 9 had no application to defendant in error. Section 9 provides that “no person shall be prosecuted or subjected to any criminal penalty for, or on account of, any transaction made or thing concerning which he may testify . . . under oath.” The subject of the investigation in question was the amount of the tax due the State from the Finance Corporation, and it is undisputed that defendant in error produced documentary evidence concerning the same. In that state of the record the broad language of section 9 clearly grants him immunity. The authorities cited by plaintiff in support of the instant contention have, in our opinion, no application to the instant case, that is governed by section 9.

But plaintiff contends that defendant in error “gave no testimony outside of his name and address, but merely produced the books of the corporation. . . . The record shows that defendant gave no evidence in respect to the books. He gave no evidence implicating himself.” (Italics ours.) As we have heretofore stated, the record shows conclusively that defendant in error produced documentary evidence which implicated him in fraud touching the tax return under investigation. We may add, however, that section 9 does not provide nor contemplate that the evidence given by a witness before the examiner must implicate him in fraud touching the return under investigation to entitle him to immunity.

There is no merit in plaintiff’s further contention that while defendant in error at the time of the hearing before Durschlag objected to being questioned as to the books, records, etc., he did not specifically object to producing the books, records, etc., and therefore he cannot claim immunity under section 9. When defendant in error appeared before the employee of the Department, in response to the subpoena duces tecum served upon him, testified and produced the books, records, etc., in question, the immunity provision of section 9 at once took effect. If a layman, unversed in the law and having no actual knowledge that there was such a statute as section 9, appears before the examiner holding an investigation under section 8 in response to a summons, gives evidence, oral or documentary, in the matter under investigation, the statute gives him immunity “for, or on account of, any transaction made or thing concerning which he may testify or produce evidence, documentary or otherwise. ”

The language of section 9 is so plain and unambiguous that it requires no judicial interpretation. Defendant in error, under the record, could not be prosecuted or subjected to any criminal penalty for, or on account of, any transaction made or thing concerning which he had testified or produced evidence, documentary or otherwise, before the employee of the Department of Finance.

The judgment of the criminal court of Cook county quashing the indictment against defendant in error is affirmed.

Judgment affirmed.

John J. Sullivan and Friend, JJ., concur.


author: Mr. Justice Friend

text:
    People of the State of Illinois ex rel. John Jaros et al., Appellants, v. Edmund K. Jarecki et al., Appellees.
    Gen. No. 40,242.
    Opinion filed March 28, 1939.
    Werner W. Schroeder aiid Thomas M. Zasadil, both of Chicago, for appellants.
    Thomas J. Courtney, State’s Attorney, and Manuel E. Cowen, Assistant State’s Attorney, for appellee Edmund K. Jarecki.
    Arthur A. Sullivan, of Chicago, for appellee Barnet Hodes.
    Cassius M. Doty and John F. Cashen, Jr., both of Chicago, for other appellees.
   Mr. Justice Friend

delivered the opinion of the court.

April 21, 1937, the relators, John Jaros, Joseph S. Krai, John C. Stoffel, Frank A. Kveton and James Sorna, filed a petition for a writ of mandamus to direct respondents to declare each of the relators to have been elected to the office of trustee of the town of Cicero at the municipal election held April 6, 1937. Respondents filed a joint and several answer to the petition, and relators moved to strike the answer as insufficient in law. This motion was overruled by the court, and the relators having elected to stand upon their motion the court found that they were not entitled to the relief prayed for, and accordingly dismissed the petition and entered judgment for respondents, from which relators have prosecuted this appeal.

The respondents are the County Judge of Cook county, the Corporation Counsel of Chicago and the members of the Board of Election Commissioners, who together constituted, ex officio, the canvassing board authorized and required by law to canvass the election returns of the municipal election of April 6, 1937, for the town of Cicero and to determine the results thereof with respect to the office of trustee. Joseph Danek received the highest number of votes for this office, and the five relators received, respectively, the second, third, fourth, fifth and sixth highest number of votes. Respondents declared Danek elected, but declined to declare each of the relators to be also elected. The sole question thus presented is whether or not respondents acted properly in declaring Danek to be the only person elected to the office of trustee and in refusing to also declare the five relators elected to that office.

The facts admitted by the record disclose that prior to the election of April 6, 1937, Danek was nominated as democratic candidate for trustee of the town of Cicero, and John Jaros was nominated as republican candidate for that office. Their names were certified by the Board of Election Commissioners and printed on the ballots prepared and furnished for use at that election as the candidates of their respective parties. Theirs were the only names printed on the ballot as prepared for use at that election. The other four relators, who received 5, 4, 3 and 2 votes, respectively, as against 14,403 votes for Danek and 7,390 votes for Jaros, were voted for by the method commonly known as “writing in” their names on the day of election on tfhe ballots cast for them. The Board of Election Commissioners had caused due notice of the election to be published and posted, as required by law and in accordance with the usual practice theretofore employed for giving notice for elections of like character in the town of Cicero.

Cicero is an incorporated town, existing under and by virtue of a special act of the general assembly, approved February 28, 1867, as amended by special act approved March 25,1869. The officers of the town, who exercise township functions, include among others a supervisor, assessor and collector. The legislative body, or town council of Cicero, from 1869 to the present time had been composed of seven persons. Three of the members of the council have always been the supervisor, assessor and collector. In addition to these three township officers, who serve as members of the town council, the council has included from 1869 to the present date four trustees whose membership is analogous to that of aldermen in cities, or trustees in other incorporated villages and towns. It is not urged that respondents failed or refused in any way to canvass the returns of the election, or properly to declare how many votes for the office of trustee were received by each candidate. The petition discloses that respondents canvassed the returns of the election from April 7 to April 12,1937, and on the latter date signed, sealed and certified an abstract of votes which showed specifically the number of votes for the office of trustee received by Danek and each of the five relators. It is not claimed that any candidate received either more or less votes than was certified by respondents in their abstract of votes. The principal issue underlying the controversy is whether the legal organization and composition of the town council of Cicero was changed, by an amendatory act of 1935, which amended an act of the general assembly passed in 1909. Consideration of this question requires an examination of the statutory provisions relating to the election and powers of trustees in villages and incorporated towns from 1867 to 1935, and particularly the act of 1909 and its 1935 and 1937 amendments.

As a municipal corporation the town of Cicero superseded the township of Cicero, which theretofore existed under the Township Organization Law, and exercised within the territory covered by the town all the powers and functions of a civil township, together with the municipal powers and functions usually belonging to incorporated cities and villages under the Cities and Villages Act of Illinois.

In 1909 the general assembly passed an act entitled “An Act concerning the election and powers of trustees in villages and incorporated towns organized and existing under special Acts,” which read: (Laws of 1909, p. 144; Cahill Ill. St. 1933, ch. 24, par. 1198, sec. 1, p. 644):

“That at the regular annual election, to be held in the year A. D. 1910, in each and every village and incorporated town organized and existing under any special Act for the incorporation of such village or town wherein it is provided that the members of the legislative body of such village or town shall be elected annually, there shall be elected by the qualified electors therein, in lieu of the legislative body now provided for by law, six trustees, who shall hold their office until their successors are elected and qualified. At the first meeting* of the board of trustees held after said election, the trustees elected shall be divided by lot into two classes; those of the first class shall continue in office for one year, and those of the second class for two years, from the date of the annual election for that municipal year, and annually thereafter there shall be elected three trustees, who shall hold their office for the term of two years and until their successors are elected and qualified; and said trustees in each village or incorporated town shall have the same powers and perform the same duties as are or may be given by law to the members of the present legislative body of such village or incorporated town and that have heretofore been given or may hereafter be given to trustees in villages organized under the general law; Provided, however, that nothing herein contained shall be so construed as to authorize said trustees in any such village or incorporated town to perform any act which the legislative body thereof is specifically prohibited from performing under the terms of the Act creating such village or incorporated town.”

It is conceded that the Act of 1909, which was in force for a period of 26 years, did not apply to the town of Cicero, and that during that entire period the town council of Cicero was organized and composed as provided in the special charter act of 1869, and not in conformity with the provisions of the Act of 1909. By House Bill 240 in the 59th General Assembly, approved June 29, 1935, the Act of 1909 was amended to read: (Ill. State Bar Stats. 1935, ch. 24, sec. 1, par. 1198, p. 765 [Jones Ill. Stats. Ann. 21.1044]):

“In each and every village and incorporated town organized and existing under any special Act for the incorporation of such village or town there shall be elected by the qualified electors therein, in lieu of the legislative body now provided for by law, six trustees, who shall hold their office until their successors are elected and qualified. At the first meeting of the board of trustees held after said election, the trustees elected shall be divided by lot into two classes and shall hold office for a term of the same length of time as is provided for the term of aldermen in cities, and said trustees in each village or incorporated town shall have the same powers and perform the same duties as are or may be given by law to the members of the present legislative body of such village or incorporated town and that have heretofore been given or may hereafter be given to trustees in villages organized under the general law; Provided, ho to ever, that nothing’ herein contained shall be so construed as to authorize said trustees in any such village or incorporated town to perform any act which the legislative body thereof is specifically prohibited from performing under the terms of the Act creating such village or incorporated town. ’ ’

Relators predicate their mandamus proceeding upon the claim that the 1935 amendment extended the Act of 1909 to include the town of Cicero, and, by implication, repealed the provisions of sec. 3 of the special Act of 1869, under which the town council of Cicero had been organized and composed, from 1869 to the date of this proceeding. The Act of 1909, as amended in 1935 was in force at the date of the election of April 6, 1937, and when this proceeding was instituted.

It further appears from the pleadings that the first regular election for the office of trustee after the date when the 1935 amendment became effective, was held April 7, 1936. At that election only one person, Felix A. Zdrojewski, was elected to the office of trustee. He thereafter qualified and accepted such office and entered upon the duties thereof, and at the time of the filing of the petition herein was one of the members of the town council. No attempt was made in 1936 to apply to the town of Cicero the Act of 1909, as amended in 1935, and it is conceded that the election of 1936 was conducted, and the legislative powers of the town continued to be exercised after the election of April 7, 1936, in accordance with the original special charter as amended in 1869.. The election of April 6,1937, was the second regular election for the office of trustee held under the provisions of the special Act of 1869, after the effective date of the 1935 amendment to the Act of 1909.

Although respondents were evidently of the opinion that the Act of 1909, as amended in 1935, did not repeal the portion of sec. 3 of the special charter act of the town of Cicero, as contended by relators, and undoubtedly based their refusal to declare the five relators elected to the office of trustee, upon that ground, counsel for respondents call our attention to a subsequent amendment of the Act of 1909, some 16 days after this proceeding was instituted, and they argue that the provisions of the latest amendment specifically exclude any application of the Act of 1909 to the town of Cicero. The latest amendment was approved May 7, 1937, and reads: (Ill. Rev. Stat. 1937, ch. 24, par. 824, sec. 1, pp. 557, 558):

“In each and every village and incorporated town organized and existing under any special Act for the incorporation of such village or town which, prior to June 4,1909, pursuant to any such special Acts, elected annually members of the legislative body of such village or town, there shall be elected by the qualified electors therein, in lieu of the legislative body now provided for by law, six trustees, who shall hold their office until their successors are elected and qualified. At the first meeting of the board of trustees held after said election, the trustees elected shall be divided by lot into two classes and shall hold office for a term of the same length of time as is provided for the term of aldermen in cities : Provided, however, that if the electors of any such village or incorporated town by a referendum vote obtained prior to the effective date of this amendatory Act, and pursuant to the provisions of Article XI-A of ‘An Act to provide for the incorporation of cities and villages,’ approved April'10, 1872, as amended, shall have changed the terms of the elective officers of such village or incorporated town from four years to two years, the trustees elected in such village or incorporated town in the year 1936 shall hold their offices until the year 1938 and the year 1940, respectively, and there shall be elected in such village or incorporated town in the year 1938, three trustees who shall hold their offices for terms of one year each, and there shall be elected in such village or incorporated town in the year 1939, and in each year thereafter, three trustees who shall hold their offices for terms of two years each.

“Where a referendum vote has been obtained in any such village or incorporated town after the effective date of this amendatory Act, the electors of any such village or incorporated town may as the result of such referendum vote obtained pursuant to the provisions of said Article XI-A, change the terms of elective officers of such village or incorporated town from four years to two years; and at the next regular election for officers of such village or incorporated town, held after such referendum vote, there shall be elected three trustees who shall hold their offices for terms of one year each, and in the next succeeding year, and in each year thereafter, there shall be elected in such village or incorporated town, three trustees who shall hold their offices for terms of two years each. The trustees in each such village or incorporated town shall have the same powers and perform the same duties as are or may be given by law to the members of the present legislative body of such village or incorporated town and that have heretofore been given or may hereafter be given to trustees in villages organized under the general law: Provided, however, that nothing herein contained shall be so construed as to authorize such trustees in any such village or incorporated town to perform any act which the legislative body thereof is specifically prohibited from performing under the terms of the Act creating such village or incorporated town. And provided further, that nothing herein contained shall be so construed as to apply to or to change the election and powers of the members of the legislative body of any incorporated towns which have superseded civil townships.” (Italics ours.)

It is urged by respondents that the italicized portions of the foregoing amendment would render the issuance of a writ of mandamus, as prayed by relators, futile and contrary to law, and that by virtue of the amendment this proceeding now becomes a moot case. It seems to us that Cicero, as an incorporated town which superseded a pre-existing civil township, is by virtue of the amendment expressly excluded from the operation of the Act of 1909 as amended in 1937. This conclusion is supported by several Supreme Court decisions defining the status of Cicero under the earlier acts. In People ex rel. Deneen v. Martin, 178 Ill. 611, the court reviewed a quo warranto proceeding questioning the office of town clerk of the town of Cicero. After reviewing the history of this corporate body, under the special Act of 1867, as amended in 1869, the court said that the effect of the legislation was to confer on the new corporation created by the legislature, the powers possessed by the town of Cicero as a town under the township organization laws as an agency of the general State and county government, and those possessed by incorporated cities and villages as municipal corporations proper for the promotion of the local and private advantage and convenience of its inhabitants, and it was held that “the town of Cicero, as a town under township organization, was merged in the new corporation created by those enactments, and its existence as a corporate entity thereby terminated. The corporation thereafter existing, covering said territory, was the incorporated town of Cicero, chartered by said enactments.”

Later in Town of Cicero v. Chicago, 182 Ill. 301, the Supreme Court again considered the status of the town of Cicero, and approved its conclusion in People ex rel. Deneen v. Martin, supra, in the following* language:

“Our decision was, that these acts operated to terminate the legal existence of the town of Cicero under the Township Organization law, and that it ceased to exist as a corporate entity under that law. The corporation thereafter existing and exercising the local powers of government within the territory was the incorporated town of Cicero chartered by the said enactments. ’ ’

Under the italicized portions of the amendment of 1937, the Act of 1909, as amended, specifically declares that nothing in that act shall apply to the election or powers of the members of the legislative body of any such incorporated town which has superseded a civil township, and thereby the amendment destroyed all apparent application to the town of Cicero and specifically withdrew the Act of 1909 from any possible application to that town. In other words, it seems to have been the clear intention of the legislature that the class of villages and incorporated towns affected in 1937 should be neither broader nor narrower than the class included in the operation of the Act of 1909 as it was originally passed. Whether, as relators argue, the Act of 1909 as amended in 1935 extended or broadened that act so as to include the town of Cicero, the subsequent amendment in 1937 made the legislative intent clear and specific that the Act of 1909 should not apply to the town of Cicero. Under the well recognized rule of law the writ of mandamus will not be issued where by reason of changed circumstances such writ would be contrary to law and produce no beneficial result. (Jones v. Clark, 355 Ill. 527; People ex rel. Lawrence v. Village of Oak Park, 356 Ill. 154; People ex rel. McGurn v. Green, 356 Ill. 651.) And where by reason of changed circumstances an action has become moot since it was begun such action will be dismissed. (People ex rel. Lawrence v. Village of Oak Park, 356 Ill. 154; Wick v. Chicago Telephone Co., 277 Ill. 338; Jones v. Montague, 194 U. S. 147, 48 L. Ed. 913, 24 Sup. Ct. 611.

In view of the conclusion reached, we see no purpose in discussing the principal contention made by relators that the Act of 1909 as amended in 1935 repealed that portion of the charter of the town of Cicero providing for a legislative body and creating a new one consisting of six trustees. Whatever may have been the status of the town prior to 1937, it was definitely clarified by the amendment enacted in that year, and a writ of mandamus under the present state of the law could not properly issue. Therefore, the judgment of the superior court in denying relators ’ motion to strike respondent’s answer as insufficient in law should be affirmed. It is so ordered.

Judgment affirmed.

Scanlan, P. J., and John J. Sullivan, J., concur.


text:
    Walter C. Young, Appellant, v. Chicago & Illinois Midland Railway Company, Appellee.
    Gen. No. 40,286.

      Opinion filed March 28, 1939.
    Rehearing denied April 20, 1939.
    H. H. Patterson, of Chicago, for appellant; Edmund C. Maurer, of Chicago, of counsel.
    Walter M. Provine and Clark H. Miley, both of Tavlorville, for appellee; Isham, Lincoln & Beale and James P. Billie, both of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Walter C. Young brought suit in the superior court under the Federal Employers’ Liability Act against the Chicago & Illinois Midland Railway Company, to recover damages for injuries sustained by him while employed by and at work for defendant as a locomotive fireman. At the close of plaintiff’s case the court directed a verdict for defendant, holding that as a matter of law plaintiff and defendant were not at the time of the accident engaged in interstate commerce or in work so closely related thereto as to be substantially a part thereof. Plaintiff appeals from the judgment entered on the verdict.

The sole question presented for review is whether the parties were engaged in interstate commerce at the time of the accident. The determination of this question requires a detailed review of the evidence adduced upon the hearing by plaintiff. The accident occurred January 30, 1937, at about 6:20 a. m. Plaintiff was an experienced locomotive fireman, and was then at work on engine 550, whose crew was engaged as a mine switcher. Its function was to fill the “empty hill,” (a name designating the mine storage track for empty coal cars)-at the mine with coal cars and gather up any other empty or loaded unbilled cars that the dispatcher wanted moved. His run took him from Taylorville to Humphrey, Illinois, and then back along the same route, and during the nine and one-half hours that this crew worked on the mine switcher, it traveled only a distance of about 20 miles. The accident occurred on the return trip. While proceeding from Humphrey, defendant’s road passed through a place known as Bulpitt, then through the town of Kincaid, near to which is located mine No. 7 of the Peabody Coal Company, then about three miles farther on through the town of Calloway, where the coal company’s mine No. 9 is located, then through Bando, about a mile beyond Calloway, and from Bando on to Taylorville, the end of the crew’s run.

When the train upon which plaintiff was at work left Humphrey on the return journey to Taylorville, it consisted of about 65 cars and a caboose. As it reached Bulpitt, one Stilwell, the brakeman on another train known as extra 601, told plaintiff and his crew to “head in” on No. 1 passing track at mine No. 7 and leave the greater part of the cars in the train on that track. After leaving Bulpitt, and as the train passed Kincaid, defendant’s operator there passed an order or message to plaintiff as to further work to be done by his crew. The train did not stop at Kincaid, the order having been passed to plaintiff by the operator through the use of a hoop or device employed in handling messages while a train is in motion. Plaintiff took the message into the cab of the engine, read and displayed it to the engineer and head brakeman, and then put it in his pocket. This occurred before the train reached the passing track at mine No. 7. The order thus transmitted to plaintiff read: “We want you at No. 9 not later than six thirty. Put your hoppers on the hill and take the no bills to Bando.” After receiving this written order the train continued on to the passing track at mine No. 7, where the caboose was detached from the rear of the' train and left standing on the main line track, and all the cars except six empty hoppers next to the engine were placed on the passing track in obedience to the order received from Stilwell at Bulpitt. The engine and the six empty hoppers then pulled from the passing track out on to the main line, to proceed as directed in the written order handed up by the operator at Kincaid. The engineer told plaintiff that water had to be taken on the engine at the standpipe, located about eleven car lengths beyond this passing track, there being no other facilities for taking water between that place and Taylorville, the end of the run. Accordingly, the engine was backed up and plaintiff got on top of the tank at the rear of the tender and train, consisting of an engine and six cars, moved down to the water plug and stopped. Plaintiff removed the lid from the tank, pulled the spout down over it, and stood upon the spout in order to hold it in the opening and proceeded to take water. "While in this position another crew, in charge of extra 601, brought the caboose that belonged on plaintiff’s train down from where it had been left, and without any warning to plaintiff coupled it onto the rear of the hopper cars attached to plaintiff’s engine with such force as to cause the engine and six cars to be moved forward some eight or ten feet. Plaintiff was knocked off the spout, which struck him in the chest and abdomen, and was severely injured. He was then assisted from the top of the tank into the cab of the engine, and did no more work in connection with that run.

At the time of the accident plaintiff and his crew were on their way to mine No. 9 at Calloway, in order to put the six empty hoppers “on the hill,” and to “take the ‘no bills’ to Bando.” Plaintiff testified that a no bill car is one ‘ ‘ that our crew would not have the billing on.” After the accident another fireman took plaintiff’s place, and the crew put the hoppers “on the hill” and took the no bill cars to Bando. The record discloses that there were 15 of these no bill cars. They were loaded with coal, and the waybills show that seven of them were later billed from the Peabody Coal mine No. 9 at Calloway to Hammond, Indiana, and left Calloway on the morning of the accident. Seven of them were at the same time billed to a destination in Illinois and one car was unaccounted for.

It is conceded by defendant that these cars were not billed at the time they left Calloway, but the billing was made up at Taylorville on information received from the Peabody Coal Company. Plaintiff testified that in all the years that he worked for defendant at no time had they received billing at Calloway on any cars there picked up.

After plaintiff’s crew left these 15 cars at Bando, at about 8:30 on the morning of the accident, some of defendant’s other crews picked them up at Bando the same day, took them to Cimic, Illinois, and they were from there taken by the Illinois Central Railroad to Matteson, Illinois, and on to Hammond, Indiana. These 15 are the no billed cars that plaintiff and his crew were on their way to get at the time of the accident.

Evidence was introduced to show that December 29, 1936, Peabody Coal Company received an order from the Chicago District Electric Generating Corporation of Hammond, Indiana, for a monthly shipment of coal to it from mine No. 9 each day during the month of January, 1937, including the day plaintiff was injured. The traffic manager of Peabody Coal Company, who testified to this effect, also said that the billing for this coal was not made out at mine No. 9, but in the coal company’s office at Taylorville, and that the coal company’s manifest- of billing showed that these cars of coal were billed from Calloway, Illinois, to Hammond, Indiana, January 30,1937, and that seven of them were moved from Calloway to Hammond on that day. In addition thereto 30 other cars were picked up by one of defendant’s train crews during that day at some other place on defendant’s road, for shipment to Hammond, Indiana, there having been 37 cars shipped to that same destination on that date. None of the 15 no bills handled by engine 550 and its crew that morning is claimed to have been interstate, excepting the seven which were, after the accident, afterward billed to Hammond, Indiana, at about 9:20 a. m. by the railroad company at the direction of the coal company. The evidence further discloses that these 15 cars were not picked up by any one crew, but were moved by two or more crews on the day in question. Substantially three hours intervened between the time of the accident and the actual billing of these cars.

It thus appears from the foregoing evidence that plaintiff and his crew received two orders prior to the accident. The first was transmitted to plaintiff at Bulpitt by Stilwell, of train No. 601, directing plaintiff’s crew to put most of the cars in their train on passing-track No. 1 at mine No. 7, located near Kincaid. The second order was received after leaving Bulpitt, and while passing through Kincaid, directing plaintiff and his crew to be at mine No. 9 no later than 6:30, put the empty hoppers on the hill and take the no bills to Bando. The first of these orders had been carried out by putting the cars on passing- track No. 1 at mine No. 7, and the crew then proceeded to carry out the second order. It is argued that in order to do this it was necessary that the engine tank be filled with water, and that plaintiff at the time he was injured was taking-water preparatory to putting the empty hoppers where they belonged, at mine No. 9, and also preparatory to taking the 15 loaded no bill cars on from mine No. 9 to Bando. The purpose in moving* these no bill cars from mine No. 9 to Bando was “to take them down there for the other crew to pick up.” The gravamen of plaintiff’s contention is that seven of these cars were, the moment they left mine No. 9, on their way to Hammond, Indiana; that they in fact left mine No. 9 on their way to a destination in another State and defendant collected freight for the entire interstate journey from Calloway to Hammond; that in order to proceed with this interstate work, as counsel says, it was necessary to fill the engine with water, and that plaintiff, while doing this preparatory work, was engaged in furtherance of interstate transportation; and plaintiff argues that even though these cars were not billed until about 9:30 a. m., or three hours after the accident, that fact is immaterial under the well established rule of law governing cases of this kind.

Apparently the parties are entirely in accord as to the principles of law governing this cause; the controversy arises over the application to the facts of the well established principles enunciated in cases brought under the Federal Employer’s Liability Act. The suit having been brought under the act, the burden was upon plaintiff to prove that he was engaged in interstate commerce at the time of the accident, or in work so closely related thereto as to be part thereof. (Lavigne v. Chicago, M., St. P. & P. R. Co., 287 Ill. App. 253; Osborne v. Gray, 241 U. S. 16, 60 L. Ed. 865, 36 Sup. Ct. 486.)

Plaintiff cites and discusses numerous decisions dealing with facts not unlike the circumstances of this case, and without entering into a lengthy analysis of the rules invoked, as to which counsel are in substantial agreement, it may be said generally that the actual determined character of the movement controls, and mere form, in the nature of actual interstate billing at the time of the accident, is not essential, where the interstate purpose exists on the part of the shipper or railroad company at that time. The decisions upon which plaintiff relies support his contention that even in the absence of actual billing at the time of the accident, the intention to move the shipment in interstate commerce is controlling, and that the predetermined character of the movement constitutes the essential element necessary to enable a party suing under the act to recover. The burden of proving the intention, however, rests upon the party suing, and in all the cases cited by plaintiff where recovery was allowed, the courts held that there was ample proof of the intention. The controversy between the parties in this proceeding arises over the question whether plaintiff adduced any evidence which, taken in its aspects most favorable to plaintiff, tended to show an intention on the part of the railroad company or shipper to forward these specific cars in interstate commerce.

Plaintiff relies to a large extent on the standing order for shipments of coal from mine No. 9 to Hammond, Indiana, and on the circumstance that 7 of these 15 cars were actually shipped to Hammond later on that date, although not billed until 3 hours after the accident. He fails to take into account however, that none of these 15 cars was shown to have been specifically designated for Hammond at the time he was injured, nor that on the same day some 30 other cars, in addition to 7 of the 15 cars in question, were picked up by one of defendant’s trains at some other place on the railroad and were also billed and shipped to Hammond, Indiana.

It appears from the undisputed evidence that plaintiff and his crew did not know whether or not any of the unbilled cars were or would become interstate cars prior to or at the time of the accident. Plaintiff’s counsel argues that this is immaterial, and defendant concedes that if they were actually interstate cars at the time of the accident, the mere fact that they were not billed and that plaintiff and the crew did not know whether they would be billed, is not the determining factor. The salient question of fact is whether these particular seven cars had been designated or intended for interstate shipment when the accident occurred. If they were, the mere fact that plaintiff and his crew did not know this fact, and that the cars had not actually been billed at the time, would not preclude a recovery. The inquiry, therefore, arises as to whether plaintiff adduced any evidence tending to prove that these seven cars had been designated or intended for interstate shipment at the time of the accident.

It is conceded that none of the 15 cars was billed at the time of the accident, nor at the time the remaining members of plaintiff’s crew moved them from No. 9 mine to Bando; also that plaintiff’s crew never received any billing on these cars; that after the accident the crew of engine 550 moved them from mine No. 9 to Bando; and that about 9:20 that morning the coal company telephoned the billing instructions from the mine to defendant’s office in Taylorville, where the actual billing was made out in the railroad office. From the waybills introduced in evidence it appears that 7 of these 15 cars were billed from Calloway to Hammond, Indiana, and on a rate that applied from Calloway, but the waybills do not show any actual movement of these cars to or from any place, nor do they indicate, as plaintiff argues, that they were part of an uninterrupted movement to another State. It cannot fairly be argued that the.movement from mine No. 9 to Bando was made under these waybills, because the waybills were not made out at the time the cars were moved; nor do the waybills indicate that they were intended to cover the movement from Bando back to Calloway later on that date.

The evidence clearly discloses that the seven cars moved to Bando had not, at the time of the accident, been billed to any particular destination, other than the storage yard at Bando, and we are unable to find any evidence in the record tending to show that they were designated or intended for interstate commerce prior to 9:20 a. m., when they were actually billed for Hammond, Indiana. Defendant’s agent at Taylorville, who was called as a witness on behalf of plaintiff, testified that the railroad company had no information as to where the cars loaded at No. 9 mine would go until such time as it received the billing over the telephone; that Hammond became the destination of these seven cars at 9:20 a. m., when the railroad company received the billing instructions from the mine; and that Hammond was not their destination prior to the time they were billed. H. E. Ledford, conductor in charge of engine No. 550, testified that the track at Bando was a storage track, and that the only determination he had on the no bills was Bando; that he had no record beyond that and simply took the cars over there to store them and left them on the storage track with other no bills loads which were stored there.

We have searched the record diligently for evidence from which it could be fairly inferred that some designation or intention existed at the time of the accident to bill or ship any of the 15 ears in interstate commerce, but the record discloses no such intention or designation. So far as we can determine, no one knew what particular cars, or even how many of them, were to be taken from No. 9 mine to Bando, nor is there any evidence that any specific cars on the storage track at Bando were at the time intended for shipment to Hammond, Indiana.

A similar situation existed in Foreman Trust & Savings Bank v. Grand Trunk Western Ry. Co., 242 Ill. App. 428, in which the court said (p. 436): “There is not a scintilla of evidence in the record showing that the movements of the car, first to the track and after-wards to the yards, were in connection with any interstate purpose. The plaintiff cannot establish her case by a guess. It may or may not have been that the movement of the car to the track and afterwards to the yards for repair was only the interruption of a general interstate movement; but if such is the case, this record is wholly devoid of any testimony tending to show that material fact. ’ ’

In Baldassarre v. Pennsylvania R. Co., 24 F. (2d) 201, the question arose as to whether particular cars had been designated for interstate commerce, and in discussing this question the court pointed out that at the time of the accident none of the cars had been weighed or billed, and said: “It is possible that their foreign destination was fixed in the mind of the shipper from the moment they left the mill track; and it is possible that, if the destination was thus fixed, the interstate trip had been begun, though this test would leave the railroad, before billing, ignorant as to the character of its traffic. ... At any rate, there is no evidence of any such prebilling fixation of character, and, if important at all, it was for plaintiff to show. ’ ’

In Chicago Junction Ry. Co. v. Industrial Board, 277 Ill. 512, plaintiff’s intestate was killed while assisting in the movement of 15 empty cars from the shops to the storage tracks. At that time there was no specific destination given or intended as to where any particular car would ultimately go, and when the conductor received his order to make this movement he did not have the numbers of any cars and did not know what the numbers were until he took them down as they were being moved. Later that day 10 of these cars were loaded and shipped outside the State, and in discussing the question whether the parties were engaged in interstate commerce, the court said (p. 515):

“It is the contention of plaintiff in error that inasmuch as ten of these fifteen cars, when they reached the loading platform, were loaded with meat to be shipped outside the State, they were part of an interstate movement from the time they were taken out of the car shops by the switching crew, and that the deceased was therefore engaged in inter-State commerce at the time of his injury. ... In this case no particular one or more of the fifteen cars were designed to be used to carry an inter-State shipment at the time the conductor of the switching crew was ordered to move them to the storage track. It was not until these cars were again moved to the loading platform . . . that it was determined that ten of them should be loaded for destinations outside the State and one to carry a shipment to a point within the State. The movement of the string of cars by the switching crew of which the deceased was a member was a local movement, and as none of these cars had at that time been selected to participate in an inter-State shipment the deceased was not engaged in inter-State commerce . . . .”

In Shauberger v. Erie R. Co., 25 F. (2d) 297, it was said at p. 298, with reference to a car which was intended to have been an interstate car: “At the time of the accident it was not yet billed. It was later that day billed to Buffalo, N. Y.; but there is no proof that at this time its destination was definitely fixed by the shipper, much less known to the railroad. Clearly, the handling of this car at this time was not interstate commerce. ’ ’

The foregoing cases and others cited in defendant’s brief are uniformly in accord in holding that where the prebilling fixation of the character of the shipment is important, it is incumbent on plaintiff to prove this essential element; and although the foreign destination of the shipment may have been fixed in the mind of the shipp'er or railroad company, plaintiff cannot establish his case by conjecture, but must adduce evidence of the fact before he can recover. For all that appears in evidence the Peabody Coal Company could have designated other cars for shipment, to Hammond, Indiana. There were many other loaded cars on the storage track that day, and it would have been possible for the coal company to have designated 37 other cars for Hammond, without including any of the 15 cars in question. It was not until the billing orders were subsequently made out that 7 of these cars were actually designated for the interstate journey, and until then no indication or designation of any particular car or cars existed so far as the record shows.

Since the material facts concerning plaintiff’s employment are not in controversy, it became a question of law for the court to determine whether plaintiff and defendant were at the time of the accident engaged in interstate commerce, or work so closely related thereto as to be substantially a part thereof. The court was of the opinion that plaintiff’s employment, as part of a crew on a mine switcher was of a purely local character, and after a careful examination of the evidence adduced by plaintiff, we concur in that conclusion. The judgment entered pursuant to a directed verdict should be affirmed and it is so ordered.

Judgment affirmed.

Scanlan, P. J., and John J. Sullivan, J., concur.