text:
    L. M. Davison, As Successor Trustee, Appellee, v. Peter D. Krejci et al. Universal Acceptance Corporation, Appellant.
    Gen. No. 41,260.

      Opinion filed December 23, 1940.
    Ela, Grover & March, of Chicago, for appellant; Lyle H. Eossiter, of Chicago, of counsel.
    Gustav E. Beerly, of Chicago, for appellee; Johh F. Diffenderffer, Jr., of Chicago, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

In an action brought by the successor trustee to foreclose a trust deed given to secure an issue of bonds, a decree was entered finding there was due to complainant for its own use $1,745, which was a first lien on the premises; that there was due to holders of coupon No. 6, $1,040.18, which was a second lien, and to holders of bonds Nos. 3 to- 48, $35,857.27, which was a third lien. The decree also found there was due to the Universal Acceptance Corporation $7,700, secured by a junior trust deed which was subordinate to the liens of the trust deed foreclosed.

The decree directed in case payment should not be made within three days, the master should sell the premises after advertising as required by law. The master advertised the sale for June 20,1939. Maurice J. Costello bid the sum of $2,000, which was the highest and best bid. The amount was sufficient to satisfy the first lien, pay the second lien holders a little more than 13 cents on the dollar, leaving a deficiency of $905.42, and leaving nothing to apply on the bonds upon which, at the time of the report, $36,133.18 was due. There was, of course, nothing to apply on the indebtedness secured by the junior trust deed, the lien of which had been found subordinate. The amount due, at the time of the report, to the Universal Acceptance Corporation amounted to $12,296.86.

The master so reported but did not file the report of sale until July 11, when on petition of the Corporation he was ordered to do so instanter. On July 13, the successor trustee filed objections to the report. On January 26,1940, the chancellor sustained these objections and ordered that the premises be readvertised and resold by the master within 90 days. On February 19, 1940, the Corporation gave notice of appeal from the orders of July 18, 1939, and from the order of January 26, 1940. It asks this court to order confirmation of the master’s report of sale of July 11, 1939, to overrule complainant’s objections thereto and reverse the order of January 26, 1940, or reverse and remand the cause with directions to the circuit court to enter substantially similar orders.

It is contended by the Corporation in the first place that judicial sales, even before approval thereof by the court, cannot be set aside in the absence of a showing of inadequacy of price. To this proposition defendant cites Chicago City Bank & Trust Co. v. Johnson, 293 Ill. App. 564; Rader v. Bussey, 313 Ill. 226, 231; Glanz v. Taken, 293 Ill. App. 74. In City Nat. Bank & Trust Co. v. O'Keefe, 294 Ill. App. 56, this court pointed out the lack of uniformity in the decisions prior to Straus v. Anderson, 366 Ill. 426; Levy v. Broadway-Carmen Bldg. Corp., 366 Ill. 279, and First Nat. Bank of Chicago v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409. These cases recognize a distinction between executed and unexecuted sales and hold that in the cases where the sales are unexecuted the court may in its discretion refuse to approve a sale merely because of inadequate price. The cases of Chicago City Bank & Trust Co. v. Johnson and Rader v. Bussey, involved the setting aside of executed sales and, therefore, are distinguishable on that ground. In Glanz v. Taken, the court considered an unexecuted sale but the opinion indicates that the decisions of the Supreme Court classifying sales with reference to whether they were executed or unexecuted were not given consideration by the court. We hold the rule to be that upon unexecuted sales (that is, where the sale as reported by the master has not been confirmed by the court), mere inadequacy of price may in the discretion of the court justify the entry of an order refusing to confirm the sale.

The Corporation does not contend this is not the rule but urges that there must be a showing of inadequacy of price and seems to contend that this can only appear from the taking of evidence. This is not necessarily true. In the instant ease there were many things in the record from which the court might in its discretion and without taking evidence draw the inference that the price was inadequate. In the first place, the master was offered a price three times as high as that offered when the master- sold. It is difficult to conceive of much better proof of inadequacy of price.' In the second place, the record shows that the trust deed foreclosed secured an indebtedness of $24,000; that $35,857.27 was due to the bondholders on account of this indebtedness, and that the premises were sold for a price which wonld not leave anything whatever to apply on this indebtedness. We are quite at a loss to understand how further opinion evidence as to the market value of the premises could have given to the court more accurate information. The cases are all to the effect that it is the duty of the trustee to secure the highest possible bid in order that the debt may be satisfied as far as possible.

The cases also are all to the effect that a sale made by a master on foreclosure until the same is approved by the court is nothing more than an offer which may be approved or disapproved by the court. We hold that the court did not err under the circumstances here appearing in refusing to take oral opinion evidence on the inadequacy of price.

It is suggested by the Corporation that the successor trustee was negligent in not bidding at the sale, and it is said the court ought not to have relieved him of the effects of his negligence. It is not contended that the trust deed gave the trustee authority to bid at the sale, and in the absence of such a provision the Supreme Court has held he is without authority so to do. Chicago Title & Trust Co. v. Bamburg, 361 Ill. 291; Chicago Title & Trust Co. v. Robin, 361 Ill. 261; Straus v. Anderson, 366 Ill. 426.

The Corporation points out that under the statute it had a right of redemption, and that it is damaged by the sale at the higher price by the additional amount which it will be required to pay in order to redeem. All this is true, but the lien of the Corporation is inferior and subordinate to that of the owners of the indebtedness secured by the trust deed foreclosed. The Corporation presents a novel contention which, we think, has never been presented hitherto to the courts of this jurisdiction. The contention seems to be that a court may be obligated to accept a bid at a sale under foreclosure which will leave the debt of the principal debtor unpaid in order that the holder of a second lien may redeem for a smaller sum. We cannot approve.

The order will be affirmed.

Order affirmed.

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


source: Caselaw Access Project

author:
Mr. Justice Matohett
      Mr. Presiding Justice O’Connor

license: Public Domain

text:
    City National Bank and Trust Company of Chicago, Executor of Last Will and Testament of Dora Oberheide, Deceased, Appellee, v. Oberheide Coal Company et al., Appellants.
    Gen. No. 41,271.

      Opinion filed December 23, 1940.
    Lord, Bissell & ICadyk and Barry & Crowley, both of Chicago, for appellants; Cushman B. Bissell and Jerome J. Crowley, of counsel.
    D ’Ancona, Pelaum & Kohlsaat, of Chicago, for appellee ; D. H. Mann, of Chicago, of counsel.
   Mr. Justice Matohett

delivered the opinion of the court.

Defendants appeal from a judgment for $11,660.34, entered on the finding of the court in an action on a promissory note for $5,910, dated November 14, 1923, payable to the order of the “Estate of C. Oberheide,” five years after date, with interest at 6 per cent.

C. Oberheide died March 9, 1923. The defendant coal corporation owned and controlled by his widow, Dora, took over the business. His son, William, became the administrator of his estate. Three daughters, Sophia Knoeppel, Clara Blumenhagen and Dora Hohman, with two other sons, Christian H. and Fred, were his other heirs-at-law and next of kin. Dora Oberheide died testate January 5, 1937, at the age of 87 years. Plaintiff is her executor. This suit was begun May 19, 1938. The form of the execution of the note is “Obérheide Coal Co., C. H. Oberheide, Y. Pres., William Oberheide, Treas., Fred Oberheide, Secy.”

Two defenses are interposed (1) lack of title to the note in the executor (2) the payment in full of the note to Dora Oberheide in her lifetime.

Plaintiff has possession of the note and Dora Oberheide had possession of it. No indorsement appears on it. Section 8 (7) of the Negotiable Instruments Law (Ill. Rev. Stat. 1939, ch. 98, par. 28 (7) [Jones Ill. Stats. Ann. 89.028]) provides that an instrument payable to the estate of a deceased person shall be deemed payable to the order of the administrator or executor of his estate. William Oberheide was executor. Prima facie he is sued on an unindorsed note which is payable to his own order. Section 30 of the Negotiable Instruments Law provides that “if payable to order” an instrument “is negotiated by the endorsement of the holder completed by delivery.” This note is not indorsed by the payee or any other person. Section 49 of the Negotiable Instruments Law in substance provides a holder may transfer an instrument payable to his order for value without indorsing it. The Illinois cases hold that in an action by one other than the payee the complaint must allege an assignment or indorsement of the note “or some other fact to show plaintiff’s ownership.” Oulvey v. Converse, 326 Ill. 226. The complaint here does not allege “assignment” or “indorsement” or other like fact. A note may be transferred as a gift without indorsement or written assignment by the payee “if delivered to the donee by the payee with intent to transfer the title.” Rothwell v. Taylor, 303 Ill. 226. Brannan on Negotiable Instruments Law (6th ed.) p. 520, says a plaintiff in possession, but not payee, indorsee or bearer, to bring himself within the description of transferee under section 49 “must show that a holder transferred it to him for value.” The Supreme Court of Illinois holds that mere possession by such a holder “is not alone evidence of title, either legal or equitable, in the possessor” and “the burden of proof is on the possessor to prove his equitable title by showing the delivery to him with the intent to pass the title.” Collins v. Ogden, 323 Ill. 594; Elvin v. Wuchetich, 326 Ill. 285; Brannan's Negotiable Instruments Law (6th ed.) p. 519.

These material facts plaintiff did not aver in its amended complaint nor upon the trial offer evidence tending to prove. Plaintiff relies on a statement made in the answer of defendants to the original complaint to the effect that the note and interest “were paid in full to Dora Oberheide, who was the legal owner and holder thereof.” Plaintiff cites Bartlow v. Chicago, B. & Q. R. Co., 243 Ill. 332, and Blakeslee v. Blakeslee, 265 Ill. 48. After this answer was filed plaintiff asked, obtained leave and filed an amended complaint to which defendants filed another answer. The cause went to trial on the issues as thus made up on the amended pleadings. Defendants say the original answer was by inadvertence; that by filing new pleadings the old pleadings were abandoned, and since the old answer was not put in evidence it is not now before the court. An improvident admission made in a pleading either at law or in chancery may be withdrawn. Decatur Coal Co. v. Clokey, 332 Ill. 253. The better rule would seem to be that an abandoned pleading should be offered in evidence by the party wishing to have it considered an admission. Maher v. Bull, 39 Ill. 531; Savanna & York Drain Dist. Com'rs v. DeLa Vergne, 298 Ill. 480; IV Wigmore on Evidence, § 1067, p. 61.

Plaintiff’s original complaint as to the above point was inconsistent with the amended complaint. In the first it was alleged that Dora Oberheide obtained title to the note from the estate of C. Oberheide, while the amended complaint said she took title from the makers of the note. Plaintiff says the defense of payment through an account stated and the defense of lack of title are mutually exclusive. Theoretically this is not true. As a matter of fact, as we see this record the defense of lack of title would prevail in the absence of the evidence introduced, which shows this note was included in an account stated by defendants and Dora Oberheide, and subsequently paid in full to her as agreed. In the absence of this testimony there is no credible evidence tending to show title in the executor.

The evidence shows without dispute that March 7, 1928, the makers of the note met with Mrs. Oberheide, her daughter Mrs. Knoeppel, her attorney, Mr. Mann, and another director, Mr. Mattingly, who was elected a director at the request of Mrs. Oberheide as was Mr. Mann, her attorney. It was at a meeting of the board of directors of the corporation held just after a stockholders ’ meeting. Mrs. Oberheide at that time ceased to be a director, officer or employee of the corporation, and did not so serve it thereafter during her lifetime. She owned all the stock of the corporation which she contracted to put in trust. Mr. Mann, who drew the trust agreement, and Mr. Mattingly became directors at her request and in order to carry out her plans. Mr. Mann says that he and Mattingly were “dummy” directors. Mr. Shanahan, the bookkeeper, was present at this meeting by request. William Oberheide was elected president of the corporation. Up to that time Mrs. Oberheide had served as president, at first on a salary of $50 per week and afterwards of $100 per week.

Mattingly testified minutes were made of this meeting and put on the books; that the indebtedness of the corporation to Dora Oberheide, as shown by the books, was agreed to be liquidated by payment of a certain amount per week. He was not able to recall the items but said he thought “it included whatever was owed her by the company.” Shanahan testified that, as requested about 10 days before, he made up a statement of the account of Dora Oberheide. He brought this statement made in longhand to the meeting and the general ledger of the defendant dompany. The witness said something was said to him by everyone present at the meeting. The statement was passed around and after looking at it everyone said it appeared to be all right. The three Oberheide sons, Mrs. Knoeppel, Mr. Mann and Mr. Mattingly said something. Shanahan says, “I told them it was taken from her account and how it was arrived at. I checked all the way back through the estate and through the notes payable and showed the amount that the books showed at that time. . . . I think Mrs. Knoeppel asked me one or two questions about the salary. How we arrived at it. I told her I checked back the books and payments that had been made and by checks to her, and arrived at the adjustment from that.” Shanahan also says that in making up the statement he had taken into account the three notes aggregating $15,910 appearing in the Notes Payable Account of the defendant corporation’s ledger, less debits. The statement in longhand was given to C. H. Oberheide. He testified he laid it aside for future reference and after repeated search has been unable to find it. Shanahan further testified in detail as to the items included in this statement. The balance due to Dora Oberheide, he said, consisted of the three notes less payments and items charged to Dora Oberheide’s account; payments she had made for some items, plus an adjustment for salary and an adjustment for an icebox. He says the statement showed the three notes aggregating $15,910, less credits. He pointed out the items on the ledger sheets which were produced at the meeting and which on the trial were introduced in evidence. The note sued on in this action was identified in the Notes Payable Account by an entry made November 17, 1923, in the account of estate of O. Oberheide, credit $5,910; also two other notes for $5,000 each were credited. Debits against these included the sum of $6,278.27 as of December 31, 1924, a debit of $1,000 as of November 12, and another $1,000 debit as of November 21, in the journal, a debit of $2,631.73 as of April 15, 1925', making total debits against the notes of $10,910 and leaving a balance of $5,000, which was transferred from the Notes Payable Account in the ledger to the open account of Dora Oberheide on March 31, 1927.

The indebtedness represented by the three notes was thus wiped out. The balance found to be due to Dora Oberheide on open account was $6,629.54, to which was added $1,250 balance unpaid on her salary accruing to March 6,1928, and an allowance of $312.45 on an adjustment for a refrigerator which Mrs. Oberheide had received from the company, making an entire sum due to her from the corporation of $8,191.99. Shanahan said all these items appeared on the statement.

Defendants were disqualified as witnesses generally under section 2 of the Evidence Act. Mr. Mann did not remember well. The testimony of Shanahan is corroborated by a resolution of the board of directors prepared by Mr. Mann. Mr. Mann says it is not exactly as he drew it. He, however, approved the resolution and admits he was not in the habit of doing so unless the resolution was correct. The resolution provided that this balance to Mrs. Oberheide should be paid at the rate of $100 per week. This was done. Checks for these payments were sent from March 7, 1928 to September 7,1929. Sophia Knoeppel indorsed the checks as attorney in fact for Dora Oberheide. Up to 1935, the corporation often advanced moneys at the request of Mrs. Oberheide. Mrs. Knoeppel for Mrs. Oberheide repeatedly sent Mrs. Oberheide’s check to reimburse the corporation for these payments. One of these checks was for the sum of $1,837.81. The mother died testate January 5, 1937. The defendant corporation filed a claim against her estate for $206.78, which was allowed, apparently without objection. The claim recited that the amount was due, less credits and offsets.

The first suggestion that Mrs. Oberheide was still holding the note came from Mrs. Knoeppel to C. H. Oberheide in 1932. He demanded its return, which was refused.

From this recital of the evidence it appears that the note sued on was included in the settlement made between Dora Oberheide and the corporation on March 7, 1928. It is urged the pages of the ledger were not admissible since the entries from which he testified were not made by Mr. Shanahan and he could not say he knew them to be true and correct when made. We shall not review authorities in detail. It was certainly proper to use the ledger for the purpose of refreshing the memory of the bookkeeper as to the statement submitted. We think, too, the evidence as to the agreement of the parties to use the ledger and base the settlement thereon made these documents admissible.

It is said the note was not due at the time the settlement was made, and Beebe v. Smith, 194 Ill. 624, is cited to the point that there is no presumption the note was included in the settlement.

The testimony of Shanahan, Mann and Mattingly, the payments made to Dora Oberheide, the failure during her life to make any claim on this note, the failure to show any other basis for the sum found to be due to her at the meeting, compel the conclusion that this note was included in the settlement made and that the same has been paid in full.

The judgment will therefore be reversed with a finding of fact that plaintiff is the owner of the note but that it has been paid in full with interest, and, judgment will be entered for defendants here.

Reversed with finding of fact and judgment here.

McSurely, J., concurs.

Mr. Presiding Justice O’Connor

specially concurring: I agree with what is said in the foregoing opinion but the pleadings on the question whether the note in suit was owned by Dora Oberheide is of no importance because the evidence offered by defendants is that they • paid Dora the note in full, in installments. Having paid the note to her, as their evidence shows, and as they contend in this court, they ought not now be permitted to stultify themselves and say the title to the note was not in Dora.

I go further than does the opinion of the court and say, although the point is not made, that there is no warrant for the judgment in the instant case against the three Oberheide sons. The note is not signed by them as individuals but as vice-president, treasurer and secretary, respectively, of the coal company. In these circumstances they are not individually liable. Section 20, ch. 98, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 89.040]. That section provides: “Sec. 20. Where the instrument contains, or a person adds to his signature, words indicating that he signs for or on hehalf of the principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized. ’ ’ (See Tampa Investment & Securities Co. v. Taylor, 272 Ill. App. 541.) Professor Brannan (Brannan’s Negotiable Instruments Law, 6th Ed., p. 298) in discussing § 20 above quoted says: ‘1 The plain language of this section, read with § 42, indicates that it was the intention of the draftsman and the commissioners to clear up the unnecessary and unpardonable confusion caused by the failure of some of the courts to exercise a little common sense and to recognize mercantile usage. Much of the difficulty found in this subject is purely manufactured and would not trouble a business man for a moment.”


author: Mr. Justice Matchett

text:
    People of the State of Illinois, Defendant in Error, v. Bob White, alias Floyd White, Plaintiff in Error.
    Gen. No. 41,325.
    Opinion filed December 23, 1940.
    Rehearing denied January 6, 1941.
    Ellis & Westbrooks and Barbara Watts Goodall, both of Chicago, for plaintiff in error; Richard E. Westbrooks, of counsel.
    Thomas J. Courtney, State’s Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher and Melvin S. Rembe, Assistant State’s Attorneys, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

November 7, 1939, White was arrested and tried under an information which charged him with the offense of obtaining money by means of false pretenses contrary to the statute (Ill. Rev. Stat. 1939, ch. 38, par. 253; Jones Ill. Stats. Ann. vol. 7, §96, p. 209). He was arraigned, entered a plea of not guilty and waived . trial by jury. The issues were submitted to the court. Defendant was found guilty in manner and form as charged in the information and was sentenced to the House of Correction.

March 11, 1940, defendant by his attorneys made a motion to expunge and vacate the judgment entered November 7, 1939, to quash the mittimus and discharge defendant for reasons stated- in the motion. The People made a motion to dismiss, and March. 22, 1940, the prayer of the petition was denied. Defendant brings the record here by writ of error.

It is urged that the information fails to charge a criminal offense as required by art. 2, § 9 of the Illinois Constitution in that it fails to specify acts so as to state the nature and cause of the accusation and is therefore void. The information, omitting the formal parts, charges defendant

“did then and there unlawfully and wilfully with intent to cheat and defraud by means of false pretenses, obtain from the said Herbert Cohen, money to-wit: Twenty-five ($25.00) dollars, lawful money of the United States, the property of the said Herbert Cohen, with intent then and there unlawfully, and wilfully to cheat and defraud the said Herbert Cohen, in violation of Par. 253, chapter 38, S. H. Eevd. Sts. of 1937,” etc.

The section of the statute under which the information was filed provides:

“Whoever, with intent to cheat or defraud another, designedly ... by any false pretense . . . obtains from any person any money, personal property or other valuable thing, shall be fined in any sum not exceeding $2,000, and imprisoned not exceeding one year, and shall be sentenced to restore the property so fraudulently obtained, if it can be restored.”

Section 6, Div. XI of the Criminal Code provides:

“Every indictment or accusation of the grand jury shall be deemed sufficiently technical and correct which states the offense in the terms and language of the statute creating the offense, or so plainly that the nature of the offense may be easily understood by the jury.”

Section 9, Div. XI of the code provides that all exceptions going merely to the form of the indictment should be taken before trial, and no motion in arrest of judgment or writ of error will be sustained unless it affects the real merits of the offense charged. The record in this case does not show either a motion to quash the information before trial or motion in arrest of judgment after it.

Plaintiff in error relies on People v. Robinson, 195 Ill. App. 641, 642, an abstracted opinion of this court, and as requested by him we have examined the full opinion. The opinion recognizes the rule that under § 6, Div. XI of the Criminal Code, an information is sufficient which states the offense in the language of the statute creating it, or so plainly that the nature of it may be easily understood by the jury. The opinion states that the information there omitted the word “designedly,” and there was therefore no sufficient averment of scienter by defendant. It was said that .no equivalent word or words were found in the information; that “unlawfully and fraudulently” could not be considered synonymous or equivalent, and reviewing a number of cases from other States, it was held the information was defective “in respect to its failure to allege defendant’s knowledge of the falsity of the representations.” A comparison of the language of the information here as compared with the statute shows, we hold, that the information is in the language of the statute or its equivalent and no essential is omitted therefrom. The information here charges that defendant acted unlawfully and wilfully “with intent to cheat and defraud.” We think this was the equivalent to a charge that defendant knew the pretenses made were false and also made designedly. The contention that the information does not charge an offense cannot be sustained.

Defendant also contends that the judgment is so • vague, indefinite and uncertain as to be invalid. The judgment of the court is:

“It is considered and adjudged by the Court that said defendant is guilty of the criminal offense of obtaining money by means of false pretenses with intent to cheat and defraud, . . . It is considered, ordered, and adjudged that said defendant because of said judgment of guilty, be and he is hereby sentenced to confinement at labor in said House of Correction of the City of Chicago in the County of Cook and State of Illinois, for the term of one (1) year from and after the delivery of the body of said defendant to the superintendent of said House of Correction. And the bailiff of this Court is hereby commanded to take the body of said defendant from the bar of this Court and deliver said body to the superintendent of said House of Correction, and the superintendent of said House of Correction is hereby commanded to receive the body of said defendant into his custody and confine said defendant at labor in said House of Correction in safe and secure custody for and during the said term as aforesaid, and that said defendant be thereafter discharged. ... It is ordered that the term of imprisonment now here imposed in this cause commence at the expiration of said one year $1.00 and costs imprisonment in said other case No. 1639853.”

The order that defendant shall serve for one year after the delivery of his body to the superintendent of the House of Correction is entirely inconsistent with the order that the term of imprisonment “now here imposed” commence at the expiration of said one year, and the reference to “said other case” makes the last clause unintelligible. In the case of People v. Combs, 304 Ill. App. 467, this court reversed a judgment, where the defendant had been found guilty as charged of contributing to the delinquency of a child, because the concluding paragraph of the judgment made uncertain the first part of it which, as here, directed the term of imprisonment should begin with delivery of the body of defendant to the superintendent of the House of Correction. The concluding paragraph there was:

“It is ordered that the term of imprisonment now here imposed in this cause commence at the expiration of imprisonment in Case 1589705.”

The court said:

“One has but to read the order to ascertain that it was quite impossible to determine when it was intended the sentence was to commence and when it was to terminate. If, as the order reads, ‘for the term of one year from and after the delivery of said defendant to the Superintendent of said House of Correction,’ and in the same order it provides that the term of imprisonment shall begin at some other time, it is very confusing and difficult to determine just what is meant. It is very obvious that any given term of imprisonment, such as for the period of one year, cannot commence on two different dates.”

In the instant case we think it is plain that the court by inadvertence imposed an inconsistent and unintelligible sentence. While the judgment is erroneous in this respect, it is not void on that account, as defendant alleged in his motion, which was evidently a proceeding under section 72 of the Civil Practice Act to have the judgment vacated and set aside. Because of the error pointed out the judgment must be reversed but the cause will be remanded in order that a proper sentence may be imposed instead of the one evidently entered by inadvertence. Johnson v. People, 83 Ill. 431; People v. Elliott, 272 Ill. 592.

Reversed and remanded with directions.

0 ’Connor, P. J., and McSurely, J., concur.


author: Mr. Justice Matchett Mr. Presiding Justice O’Connor

text:
    Commonwealth Building Corporation, Appellant, v. James A. Hirschfield, Appellee.
    Gen. No. 41,503.
    Opinion filed December 23, 1940.
    Rehearing denied January 6, 1941.

      SoNNENSCHEIN, BerKSON, LaUTMANN, LEVINSON & Morse, of Chicago, for appellant; I. E. Ferguson and Jesse H. Brown, both of Chicago, of counsel.
    . Soelke, Koehn & Loewy, of Chicago, for appellee.
   Mr. Justice Matchett

delivered the opinion of the court.

In a suit for rent to the amount of $3,300, on trial by jury, there was a verdict for plaintiff in the sum of $1,100. There were motions by each of the parties for judgment non obstante veredicto, which were in each case denied, and a motion by defendant for a new trial, which was allowed on August 1, 1940. This appeal is by leave from that order.

The material (and as we think, uncontradicted) facts are that the defendant with his family was in possession of an apartment used for residence purposes, under a written lease with the plaintiff, which by its terms expired September 30, 1938. The lease contained a clause (paragraph 11 not abstracted) providing that if defendant held over he would become liable for double rent. Mr. Kishin was the bookkeeper for plaintiff. He was also an attorney employed by the firm of Pennish and Rashbaum, and Mr-. Pennish was managing director of this building. It contained 13 floors comprising 24 apartments, 12 of 7 rooms each and 12 of 9 rooms each. The apartment leased by defendant was known as 3-A. It contained 9 rooms, and the rent paid by defendant under his lease was $275 per month. The business oEce of defendant was at 544 N. Wells street.

Mr. Fleury was engineer in charge of the building, and Mr. Danny was his assistant. Mr. Zeri was a janitor helper. There was an elevator in the front of the building used exclusively by passengers and an elevator in the back of the building used exclusively for deliveries and general service. The passenger elevator was operated by an attendant. The freight elevators were operated without an attendant by the use of electricity applied by pushing buttons.

Defendant determined to move at the expiration of his lease, and about two months before the lease expired so notified plaintiff by registered mail. Defendant employed the Federal Storage and Moving Company to do the necessary work and transportation of goods to that end. Two packers delivered boxes and barrels and necessary material for the packing of breakables on September 27. The breakable goods were packed in boxes and barrels and September 29 part of the household goods (including large items of furniture) were moved out by way of the elevator in the rear. Six to 10 van loads were moved out on September 29; 40 to 50 barrels (including cases). The moving continued for 3 days, the 28th, 29th and 30th of September.

While this was going on Danny was washing the walls and removing trash and garbage. Most of the goods had been moved out by the 30th, the day 'on which the lease expired. The work was, however, not quite completed. There had been some delay in getting the use of the elevators. Defendant gave evidence tending to show that the servants of plaintiff were responsible for this, but the evidence is denied by them and they on the contrary say they gave assistance. This would seem to be true as Mrs. Hirschfield testified she tipped them as a reward for their help. At any rate, when the lease expired at 12 o’clock on the night of September 30, the family was not yet out and with the servants slept in the apartment. Carpets and the bedroom furniture had not been removed but were promptly taken out on the following day, October 1.

At about 10 o’clock on the morning of October 1, Mr. Pennish, for plaintiff, served upon defendant at his office in Wells street, a notice as follows: “In view of the fact that you did not vacate possession of your apartment within the time provided for in your lease, the undersigned has elected, and does hereby elect to treat you as a hold-over tenant for another year, and you are accordingly requested to pay October rent immediately.”

While the law is otherwise in England (16 R. C. L., § 684, p. 1163) it was decided in New York in the early case of Conway v. Starkweather, 1 Denio 113, that a tenant who holds over after the expiration of his term may, at the election of the landlord, be held to be either a trespasser or tenant for another similar term. Later New York decisions adhere to that rule (Oussani v. Thompson, 43 N. Y. S. 1061; Ketcham v. Ochs, 34 Misc. 470, aff'd 74 App. Div. 626; Lang v. Ruehl, 163 N. Y. S. 1085; Witt v. New York, 28 N. Y. Sup. Ct. 248) although the later case of Herter v. Mullen, 159 N. Y. 28, 70 Am. St. Rep. 517, seems to decide that the holding must be voluntary on the part of the tenant.

The New York rule was adopted by the Illinois Supreme Court in the case of Clinton Wire Cloth Co. v. Gardner, 99 Ill. 151, and has been followed in subsequent cases based upon the theory, however, that the rule is to be applied only where the holding is voluntary. United Cigar Stores Co. v. Worth-Gyles Grain Co., 212 Ill. App. 26.

The argument for strict adherence to the New York rule is based upon the'; necessity for certainty as between landlords and tenants with regard to their respective rights.' In a note to Herter v. Mullen, in the American State Eeports, it is said:

'‘It is a universal rule that if premises are let for a year or from year to year, and the tenant holds over, the landlord may elect to treat him as a tenant from year to year, or when the renting is for a shorter period and the tenant holds over, he may be deemed to hold upon the terms upon which he entered, and the landlord may recover rent of him according to the terms of the original contract or lease. ... or the landlord may at his election treat the tenant holding over as a trespasser and may bring ejectment against him without any previous notice, unless the holding over has been such that it may be presumed that the landlord has assented thereto. ...” Among cases cited is Brown v. Keller, 32 Ill. 151, 83 Am. Dec. 258.

The trial court in granting defendant’s motion for a new trial stated that it would be sustained “only upon the error the court made in the giving of plaintiff’s instruction No. 7.” But on an appeal of this kind we are not limited in our review of the appeal to the reasons stated by the trial court. Marks v. Pope, 289 Ill. App. 558; Rowoldt for use of Flanagan v. Cook County Farmers Mut. Ins. Co., 305 Ill. App. 93. Upon a consideration of the whole record we are of the opinion that the motion for an instructed verdict in favor of defendant should have been given, and that after the trial the motion of defendant for a judgment in his favor notwithstanding the verdict should have been allowed.

An examination of the cases discloses that usually they proceed upon one of two theories. First, that the voluntary action of the tenant is such as to disclose the right of the landlord to assume an intention on the tenant’s part to create a second tenancy, or, secondly, that the action of the tenant is such that the court will as a matter of law hold the tenant liable for a second lease upon the principle of quasi contract that justice may prevail. Williston on Contracts, Vol. 6, § 1856.

On the undisputed facts of this case we thin^ plaintiff is not entitled to recover upon either theory. The uncontradicted evidence recited above shows no grounds on which a voluntary agreement for a new tenancy could be inferred. Defendant was vacating the premises with reasonable speed and in good faith. The representatives of the landlord were present, knew and assisted them in getting their goods out of the apartment and were given extra pay for doing so. There is not a scintilla of evidence from which the jury could reasonably find there was any intention on the part of defendant to 'continue the lease. Unfortunately, notwithstanding good faith, the removal of the last piece of furniture was delayed for a few hours. The tenant and his family did not arise at midnight and move out. They waited until the rising of the sun. Shortly thereafter the landlord availed himself of this supposed ancient rule of law and served notice of his intention to collect from defendant $3,300 for his delict. There is nothing either in word or deed of the tenant that indicates \ an intention on his part to renew.'1. Every action indicated the contrary intention. Defendant, therefore, cannot be held on the theory of a voluntary contract. Nor in our opinion can defendant be held on the theory of quasi contract that ■ justice required an absolute presumption of a contract for another tenancy. The lease provided for precisely such a contingency. The provision was in substance (paragraph 11 not abstracted) that if the tenant failed to move at the expiration of the lease, he should pay double the usual rent for the actual time of his occupancy. This is the agreement of the parties and is reasonable. The claim of plaintiff is highly penal in its nature. It has been held in New York that the rule is not applicable in such a case. Pickett v. Bartlett, 107 N. Y. 277. In Green v. Kroeger, 67 Mo. App. 621, under similar circumstances the court said:

“In this case the lease by express terms provides for the rights of the parties in the contingency of a holding over after its expiration. By the clause to that effect it is distinctly provided that the continued occupancy of the premises after the end of the term shall entitle the lessor to recover double rent from the occupiers for ‘all such time.’ This clause did not deprive lessor of his option to retake the premises at the expiration of the lease, but in case of his failure so to do or to make a new agreement with the lessees, it deprived him of the power to do more than recover double rent for the time he should permit the lessees to hold over after the expiration of the lease.”

There are no Illinois decisions so far as we are informed to the contrary. We hold the motion of defendant for judgment in his favor notwithstanding the verdict should have been allowed. Under § 92 of the Civil Practice Act (Smith-Hurd Ann. Stats., ch. 110, par. 216, p. 419 [Jones Ill. Stats. Ann. 104.092]) the order allowing a new trial will be reversed and judgment entered in this court for the defendant notwithstanding the verdict.

Reversed with judgment here for the defendant.

MoSurely, J., concurs.

Mr. Presiding Justice O’Connor

specially concurring: I agree with what is said in the foregoing opinion and the result reached but I think it ought to be said that the claim made by plaintiff for $3,300 shocks the conscience of the court. It is wholly without merit and ought not to be entertained by any court of justice. As stated in the opinion, defendant had the right to remain in the premises all day of the 30th of September and it is common knowledge in Chicago, of which we take judicial notice, that some leases of apartments expire on the 30th of April and others on the 30th of September, and that a lease to a succeeding tenant begins the first of May and others on the first of October. And everyone knows that tenants who are vacating on the 30th of April or on the 30th of September, as the case might be, have not completed their moving on the last day covered by their respective leases, there being a great many persons moving at those times so that it is physically impossible to do so. But in such cases the “rule of reason” must constantly be kept in mind. Maher v. New York, C. & St. L. R. Co., 290 Ill. App. 267; Standard Oil Co. of N. J. v. United States, 221 U. S. 1. Under this rule which is in every case whether we realize it or not, it is not every dereliction however slight which will give rise to a cause of action.


author: Justice Dady.

text:
    James Machac and Mary Machac, Appellees, v. East St. Louis and Interurban Water Company, Appellant.
    opinion filed October 28, 1940.
    Farmer, Klingel & Baltz, for appellant; Beasley & Zulley, for appellees.
   Opinion by

Justice Dady.

“Not to be published in full.’’


author: Presiding Justice O’Connor.

text:
    Joseph Blume et al., Appellants, v. Victor H. Munnecke et al., Appellees.
    Gen. No. 41,228.
    opinion filed December 23, 1940.
    Ratner, Miller & Ratner and Benjamin Levinson, for appellants; David J. Ratner and George J. Miller, of counsel; Pennish & Rashbaum and Norman C. Barry for certain appellees; Lawrence Kasakoff, of counsel.
   Opinion by

Presiding Justice O’Connor.

“Not to be published in full.”


text:
    Roman Koppert, Appellee, v. City of Chicago, Appellant.
    Gen. No. 41,257.
    opinion filed December 23, 1940.
    Barnet Hodes, Corporation Counsel, for appellant; Alexander J. Besa, L. Louis Karton and Sydney B. Drebin, Assistant Corporation Counsel, of counsel; Francis J. Gariepy, for appellee; Charles E. Mallon, of counsel.
   Opinion by

Presiding Justice O’Connor.

“Not to be

published in full.”


text:
    Fulton E. Burke, Appellee, v. Margaret Lee Burke, Appellant.
    Gen. No. 41,281.

      opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Guy M. Blake, for appellant; Robert E. Cantwell, Jr., for appellee.
   Opinion by

Presiding Justice O’Connor.

“Not to be published in full.”


text:
    James A. Maguire, v. Lux Cleaners, Inc. Lux Cleaners, Inc., Appellee, v. Joseph Mottle, Trading as "Mottle Cleaners," Appellant.
    Gen. No. 41,292.
    opinion filed December 23, 1940.
    John E. Pavlik and Roman E. Posanski, for appellant; Robert A. Meier III, for appellee.
   Opinion by

Presiding Justice O’Connor.

“Not to be published in full.”


author: Presiding Justice O'Connor.

text:
    John Drabek and Jerry Drabek, Trading as Central Motor Sales, Appellees, v. Frank C. Stach, Appellant.
    Gen. No. 41,314.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Joseph J. Kroupa, for appellant; James O. Basta, for appellees; Paul W. Pretzel, of counsel.
   Opinion by

Presiding Justice O'Connor.

“Not to be published in full.”


text:
    John Simon, Appellee, v. Harold J. Green, Trading as Green Realty Company, Appellant.
    Gen. No. 41,331.
    opinion filed December 23, 1940.
    Green, Shapiro & Green, for appellant; Jules R. Green, -of counsel; no appearance for appellee.
   Opinion by

Presiding Justice O’Connor.

“Not to be published in full.”


text:
    In re Estate of Dora Oberheide, Deceased. William Oberheide, Appellant, v. City National Bank and Trust Company of Chicago, Executor of the Estate of Dora Oberheide, Deceased, Appellee.
    Gen. No. 41,350.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Lord, Bissell & Kadyk and Barry & Crowley, for appellant; C. H. Gr. Heinfelden and Jerome J. Crowley, of counsel; D’Ancona, Pflaum & Kohlsaat, for appellee; D. H. Mann, of counsel.
   Opinion by

Presiding Justice O’Connor.

“Not to be published in full.”


text:
    Bernard Horwich, Appellee, v. Andrew H. Dressel et al. Andrew H. Dressel and Julia Schanze, Appellants.
    Gen. No. 41,390.
    opinion filed December 23, 1940.

      Julian O. Ryer and Clarke B. Richie, for appellants; John E. Johnson and John R. Wall, for appellees.
   Opinion by

Presiding Justice O’Connor.

“Hot to be published in full.”


text:
    Dagny Eizerman, Appellee, v. Gus Kypros, Trading as Ideal Meat Market, and 1935 East 71st Street Building Corporation. Appeal of 1935 East 71st Street Building Corporation.
    Gen. No. 41,453.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Rawlins & Wright, for appellant; Fay Warren Johnson, of counsel; Louis T. Herzon, for appellee.
   Opinion by

Presiding Justice O’Connor.

“Hot to be published in full.”


author: Justice McSurely.

text:
    Village of Oak Park, Illinois, Appellee, v. Grace A. Prugger, Appellant.
    Gen. No. 41,253.

      opinion filed December 23, 1940.
    Louis S. Gibson, for appellant; Robert C. Barney and C. A. Willard, Jr., for appellee.
   Opinion by

Justice McSurely.

“Not to be published in full.”


text:
    Stella Strassberg and M. Lewis, Appellees, v. Lamborn, Hutchings and Company et al., Appellants.
    Gen. No. 41,302.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Bell, Boyd & Marshall, for appellants; David A. Watts and Victor M. Harding, Jr., of counsel; Martin M. Gross, Samuel Block and B. Pelechowiez, for appellees.
   Opinion by

Justice McSurely.

“Not to be published in full.”


text:
    Cesira Calzavara et al., Appellants, v. Henry A. Scandrett et al., Trustees, Appellees.
    Gen. No. 41,367.
    opinion filed December 23, 1940.
    Irving M. Greenfield and Julius S. Neale, for appellants; M. L. Bluhm and Edwin R. Eclcersall, for appellees; C. S. Jefferson, of counsel.
   Opinion by

Justice McSurely.

“Not to be published in fuU.’’


author: Justice Matohett.

text:
    La Salle Mortgage and Discount Company, Appellee, v. Albert J. Horan et al. The Turner Type Founders Company, Appellant.
    Gen. No. 40,829.
    opinion filed December 23, 1940.
    Louis I. Lewis, for appellant; Leo Spira, of counsel; Welch & Hoffman, for appellee; William L. Bourland, of counsel.
   Opinion by

Justice Matohett.

“Not to be published in full.”


text:
    La Salle Mortgage and Discount Company, Appellee, v. Albert J. Horan et al. The Turner Type Founders Company, Appellant.
    Gen. No. 40,830.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Louis I. Lewis, for appellant; Leo Spira, of counsel; Welch & Hoffman, for appellee; William L. Bourland, of counsel.
   Opinion by

Justice Matohett.

“Not to be published in full.”


author: Justice Hatchett.

text:
    City National Bank and Trust Company of Evanston, Appellee, v. Harry P. Pearsons et al. Harry P. Pearsons and Katharine P. Hadden, Appellants.
    Gen. No. 41,169.

      opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Charles M. Haft, for appellants; Heth, Lister & Flynn, for appellee.
   Opinion by

Justice Hatchett.

“Hot to be published in full.”


author: Justice Matchett.

text:
    People of the State of Illinois, Defendant in Error, v. Levi Billow, Plaintiff in Error.
    Gen. No. 41,250.
    opinion filed December 23, 1940;
    rehearing denied January 6, 1941.
    Ellis & Westbrooks and Barbara Watts Goodall, for plaintiff in error; Richard E. Westbrooks, of counsel; Thomas J. Courtney, State's Attorney, for defendant in error; Edward E. Wilson, John T. Gallagher and Melvin S. Rembe, Assistant State’s Attorneys, of counsel.
   Opinion by

Justice Matchett.

“Hot to be published in full.”


text:
    Eugenia Cwiklinski, Appellee, v. E. Chapliski, Appellant.
    Gen. No. 41,286.
    opinion filed December 23, 1940.
    Bowe & Bailey, for appellant; Joseph A. Bailey and Henry H. Caldwell, of counsel; W. A. Leopold and Julius F. Trefz, for appellee; Fried-berg & Bublick, of counsel.
   Opinion by

Justice Matchett.

“Not to be published in full.”


text:
    Metropolitan Life Insurance Company, Appellee, v. Eva Jokiel, Appellant, and Leonard Jokiel et al., Appellees.
    Gen. No. 41,308.

      opinion filed December 23, 1940.
    Rubenstein, Haggenjos &) Monarch, for appellant; Edwin A. Hofeld, for appellee Leonard Jokiel.
   Opinion by

Justice Matchett.

“Not to be published in full.”


text:
    Adelaide Ebel, Appellant, v. Alexander Gasoloff, Also Known as Alex Gasoloff, and Dr. Patrick A. Sullivan, Appellees.
    Gen. No. 41,353.
    opinion filed December 23, 1940.
    Clyde C. Fisher, for appellant; Lord, Bissell & Kadyk and T. Jay Sullivan, for appellee Dr. Patrick A. Sullivan; Edward L. Hilton and T. Jay Sullivan, of counsel.
   Opinion by

Justice Matchett.

“Not to be published in full.”


author: Mr. Presiding Justice Friend

text:
    National Builders Bank of Chicago, Appellee, v. Robert L. Simons, Appellant.
    Gen. No. 40,759.
    Opinion filed December 30, 1940.
    Landis & Landis, of Chicago, for appellant; Alvin Landis, of counsel.

      Ringer, Reinwald & Sostrin, of Chicago, for appellee ; M. Lester Reinwald and Morris Sostrin, of counsel.
   Mr. Presiding Justice Friend

delivered the opinion of the court.

In 1929, Robert L. Simons, as president of Stone-Field Corporation, obtained loans from National Builders Bank of Chicago, some of which were evidenced by the promissory notes here involved, signed by Simons as president, and bearing his special personal indorsement on the backs thereof. These notes contained the usual warrant of attorney authorizing the entry of judgments of confession, and on the reverse side of each note there appeared the following: “For value received, the undersigned and each of the undersigned in addition to the obligations imposed by endorsement and waiving all notices of every character and nature, hereby become a party to, adopt, agree to, accept, guarantee and assume all the terms, conditions and waivers contained in the note on the reverse side hereof, guarantee the payment of said note at maturity, and consent without notice of any kind to any and all extensions of time made by the holder of said note. Nothing except cash payment to the holder of said note shall release the undersigned or any of the undersigned. Robert L. Simons.” On November 23, 1938, the National Builders Bank confessed judgment on three of these notes against Simons in the aggregate amount of some $13,000, and caused a garnishment writ to be issued against the University State Bank as garnishee, which at the time of service- of the writ, November 25, 1938, held $1514.19 to the credit of Simons, the judgment debtor.

Thereafter, December 8, 1938, 12 days after the garnishment writ had been served, Simons presented a motion to vacate the judgment by confession theretofore entered, on the ground that the power of attorney executed by him as maker of the notes did not authorize a confession of judgment against him as guarantor. The motion was supported by a verified petition, but no attempt was made to set up any meritorious defense to the claim. Nevertheless, the trial court vacated the judgment on December 8, 1938, instead of entering the usual order merely allowing the judgment to be opened up and to stand as security for the indebtedness abiding further hearing.

On the day that this order was entered Simons appeared at the University State Bank and attempted to obtain from it the funds on deposit in his account. The bank had not been discharged, however, and so refused to release the funds on deposit until it received from Simons as security, two United States treasury bonds in the amount of $2,000. These bonds were deposited with the bank under an agreement by which it was to hold them as security for having released to Simons the money on deposit without being discharged as garnishee before the order of December 8, 1938, had become final.

Afterward, on December 13, 1938, the National Builders Bank, pursuant to the Civil Practice Act (ch. 110, sec. 57, par. 181, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 104.057]; rule 15 of the Supreme Court of Illinois and rule 21 of the circuit court of Cook county), filed a motion, supported by its affidavit of claim for summary judgment. Copies of this motion and affidavit of claim were served upon Simon’s attorneys, as required by the rules. The procedure indicated under rule 21 of the circuit court provides that within five days after service of notice upon him for summary judgment the defendant shall serve upon the plaintiff copies of the affidavits of merits and all other papers intended to be used in opposition to the motion. Simons defaulted, however, and filed no affidavit of merits whatsoever to plaintiff’s motion and verified petition, When the motion for summary judgment came up for hearing, on December 23, 1938, and it appearing that defendant had filed no affidavits of merits in accordance with the foregoing rule, the court again entered judgment for National Builders Bank of Chicago, and thereupon a second garnishment writ was served upon the University State Bank, as garnishee, based on the summary judgment.

In the meantime, before summary judgment had been entered, Simons appeared in court by his counsel December 12, 1938, and presented motions to discharge the University State Bank, as garnishee, in order .to obtain the treasury bonds which he had deposited there. Plaintiff’s counsel called the court’s attention to the fact that there was no defense to the indebtedness, and that it was based on fraud at its inception. The court indicated that he did not then care to rule on the motion to discharge the garnishee, and suggested to plaintiff’s counsel that if they would make a motion for summary judgment, the court would hold his ruling on the motion to discharge the garnishee in abeyance until such motion was made. In response to the court’s suggestion, the motion for summary judgment was filed and judgment was afterward entered.

January 5, 1939, which was within 30 days following the entry of the order of December 8, 1938, vacating the judgment in favor of plaintiff, the trial court set aside its order of December 8, 1938, and reinstated the original judgment by confession of National Build-, ers Bank. In so doing the judge indicated that this judgment was mistakenly vacated and that the order should merely have provided for opening the judgment and allowing it to stand as security for the indebtedness. At the same time the court continued the motion for judgment against the garnishee, and ordered briefs filed by the respective counsel.

February 16, 1939, the court finally disposed of plaintiff’s motion for judgment against the garnishee, and defendant’s motion in opposition thereto, by entering judgment against University State Bank, as garnishee, upon its answer, and reciting in the order the following: “And the Court being fully advised in the premises and after having considered the arguments of counsel supported by their respective briefs and finding that the order entered by this Court on December 8, 1938, vacating plaintiff’s original judgment was, in effect, and intended by this Court to be an order to open up said plaintiff’s original judgment . . . the said original judgment to stand as security, and further finding that defendant, Robert L. Simons, had no defense whatsoever to plaintiff’s claim,” and the court at the same time reaffirmed the original judgment of plaintiff and entered judgment against the University State Bank, as garnishee.

Simons appeals from three orders entered in this proceeding: (1) the order entering a summary judgment against defendant; (2) the order modifying the original judgment by confession, entered on November 23, 1938, reinstating said judgment; and (3) the order reinstating the original judgment by confession against defendant on November 23, 1938. The University State Bank also prosecuted an appeal, in Gen. No. 40,760, from the garnishment order entered against it, and while these two cases were pending on appeal an order was here entered consolidating them.

It is urged as the principal ground for reversal that the judgment upon which the garnishment order was founded was void, because the power of attorney executed by the maker of the notes did not authorize a confession of judgment against Simons under his contract of guarantee on the reverse side of the notes. If this were a confession of judgment against a simple indorser or guarantor, there would be some validity to defendant’s position, but Simons was president of the Stone-Field Corporation, and as such he signed the face of the note, which contained a warrant of attorney expressly authorizing the entry of a judgment against the “makers, endorsers and guarantors,” as herein-before set forth. Defendant cites several Illinois decisions in support of his contention that a power to confess judgment must be clearly given and strictly pursued, and that a judgment by confession cannot ordinarily be entered against a simple indorser or guarantor. However, we think these cases are not applicable to the circumstances of this proceeding, because they merely hold that a warrant to confess cannot be exercised generally and that the liability of the maker of the note and the guarantor are separate and distinct. This is true, of course, where, by the language of their respective agreements, the makers and the guarantors have assumed separate and distinct obligations, but not in instances where the maker by . apt language renders himself liable, not only as maker, but also as guarantor and indorser.

The trial court evidently relied on two Maryland decisions where the facts were strikingly similar to the case at bar. In the first of these, Rhoads v. National Bank of Cockeysville, decided by the court of appeals of Maryland, in 1937, 172 Md. 123, 190 Atl. 750, the judgment by confession was entered in favor of the National Bank, not only against Rhoads, the maker, but also against his mother, Elmira E. Rhoads, indorser, on a note containing a power of attorney to confess judgment in the usual form. Mrs. Rhoads thereupon filed a motion to vacate the judgment on the ground that the warrant of attorney did not authorize the entry of a judgment against her, as indorser. The indorsement upon which the validity of the judgment by confession rested, was as follows: “In consideration of $1.00 paid to the undersigned and of the making at the request of the undersigned of the loan evidenced by the within note, the undersigned hereby jointly and severally guarantee to National Bank of Cockeysville, its successors, endorsees, or assigns, the punctual payment at maturity of the said loan and hereby assent to all the terms and conditions of the said note, and consent that the securities for the said loan may be exchanged -or surrendered from time to time, or the time of payment of the said loan extended, without notice to or further assent from the undersigned, who will remain bound upon this guarantee, notwithstanding such changes, surrender or extension; and the undersigned further agrees that it or they or any of them, shall be regarded as principals of the within note, as between the undersigned, or any of them, and any holder of this note.” In holding that the judgment was valid against the indorser, the court said (p. 751): “The provision in the note for a confession of judgment was expressly applicable to both the maker and the indorser. In Johnson v. Phillips, 143 Md. 16, 122 Atl. 7, 10, the form of indorsement stipulated that all the provisions of the note should apply to and bind indorsers as though they were makers. The note included a power of attorney for a confession of judgment. The indorser was held to be amenable to such a judgment jointly with the maker of the note. The court declined in that case to discuss the question whether the party signing the indorsement was a guarantor or simply an indorser, because ‘the form of the indorsement made him liable to be sued as a maker, ’ ” and in commenting on the probable intention of the indorser to be bound as a principal, the court further said (p. 751) : “The intention of the appellant to be bound as a principal on the note is definitely stated in the indorsement now under consideration. . . . Having thus assumed the position of a party primarily liable, the appellant is not entitled to demand the unqualified rights of an endorser.”

The circumstances of the case at bar are stronger than in the Rhoads case, for Mrs. Rhoads was merely an accommodation indorser for her son, whereas in this proceeding Simons indorsed the note for the benefit of his corporation. In the Rhoads case Mrs. Ehoads did not execute the note on its face, and it might be said that she was unaware of the fact that the note contained a confession clause. In the case at bar, however, Simons, who signed the special indorsement, also signed the note as president, and was fully aware of the provisions and import of the document which he executed. There is also the circumstance that in the Rhoads case the confession clause did not contain any reference to any subsequent indorsers or guarantors, while in this proceeding the confession clause specifically provides that the warrant of attorney may be exercised against the makers, indorsers and guarantors. We can conceive of no stronger language to bind Simons under his guarantee than that contained in his special contract of indorsement, whereby he not only became “a party to,” but also adopted, agreed to accept, guaranteed and assumed all the terms, conditions and waivers, “contained in the note on the reverse side hereof.” The principal distinction usually made between the maker and indorser is that the indorser is entitled to notice of presentment and dishonor, and if such notice is given or waived his liability becomes as absolute as that of the maker. Under the contract of indorsement in the case at bar, Simons expressly agreed to be bound by all the terms of the note and expressly waived notice of presentment, and by so doing he rendered himself liable.

In the second case, Johnson v. Phillips, 143 Md. 16, 122 Atl. 7, which is quoted in the opinion of the court in Rhoads v. National Bank of Cockeysville, supra, a judgment by confession was entered against Leon Venable and William S. Phillips. Venable had signed the face of the note as maker. The note contained the usual confession clause. It was indorsed by Phillips in the following manner: “For value received, we, the endorsers named below, waive presentment, protest, demand of payment and notice of nonpayment, and guarantee the payment of the within note, and agree that all of its provisions shall apply to and bind us as though we were makers.” After judgment was entered Phillips, as indorser, made a motion to vacate the judgment, which was sustained by the court. In reversing this order the court of appeals applied the same rule of law as was invoked in the Rhoads case, and held the judgment by confession valid as against Phillips, who, like Mrs. Rhoads, was also an accommodation indorser.

Defendant’s counsel argue that an examination of the guarantee indicates that it refers to the note, but not to the warrant of attorney, and that under the well-settled rules of construction, a guarantee being a collateral and independent undertaking, courts will not extend the effect of the guarantee beyond, its terms, and they raise the query, Can the guarantee be extended to the warrant of attorney by implication? As we view the matter, the question involved is not whether the. warrant of attorney has been exceeded, or whether it is necessary to construe the warrant so as to hold that it may be extended to apply to the warrant of attorney by implication, but rather whether Simons adopted all the provisions and terms on the face of the note, including the warrant of attorney. The terms of the indorsement are so strong as to remove any doubt on .this question. Simons, by his indqrsement, expressly assumed all the terms and conditions contained on the face of the note, and made himself a party thereto, and by waiving all notices required by law, he became for all purposes the same as the maker of the note. We think the trial court invoked the only rule of law that could fairly be applied to the circumstances of this case, in holding that the original judgment was valid and that it properly reinstated the same by its order of January 5, 1939.

It clearly appears from the oral opinion of the trial judge that he conceived it to have been a mistake in vacating the judgment by confession, and when the matter was later, and within 30 days, called to his attention, he still had jurisdiction to rectify his mistake and he was justified in setting that order aside and reinstating the judgment. At that stage of the proceeding there were two judgments against Simons. This is permissible under section 50 of the Civil Practice Act (ch. 110, par. 174, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 104.050]), which provides that “the court shall control the proceedings so that the plaintiff shall receive but one satisfaction.” There was no irregularity in any of the subsequent orders entered.

The remaining point urged by Simons is that no leave was granted plaintiff to proceed under the complaint it filed after the court had vacated the judgment and that the proceedings terminated with the order entered December 8, 1938. It is argued that after the judgment by confession was vacated, Simons was not before the court, and that in order for plaintiff to proceed further it was necessary to have summons issued and served upon defendant in the same manner as any other action at law. This contention is untenable for several reasons. At the time of the entry of the original judgment Simons’s appearance was entered pursuant to the warrant of authority. Moreover, on December 8, 1938, his counsel, pursuant to notice served in open court,' made a motion on behalf of their client to vacate the judgment and this matter was argued at length. Simons thereby submitted himself to the jurisdiction of the court, his appearance not having been limited specifically in any respect, and an order was afterward entered on the motion which, his counsel made. Later, December 11, 1938, his attorneys served another notice of a motion, and the following day argued at length to have the garnishee discharged. The question of jurisdiction over Simons’s person was not raised in either of these instances, and finally, December 22, 1938, the day before plaintiff’s motion of summary judgment was heard, Simons’s attorney filed a third motion in writing to strike the motion for summary judgment, which was argued December 23, and pursuant to a full hearing thereon the court entered an order overruling the motion.

We find no reason for reversal of any of the orders appealed from, and they are accordingly affirmed.

Orders affirmed.

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


text:
    National Builders Bank of Chicago, Appellee, v. Robert L. Simons, Appellant.
    Gen. No. 41,082.

      Opinion filed December 30, 1940.
    Landis & Landis, of Chicago, for appellant; Alvin Landis, of counsel.
    Ringer, Reinwald & Sostrin, of Chicago, for appellee; M. Lester Reinwald and Morris Sostrin, of counsel.
   Mr. Presiding Justice Friend

delivered the opinion of the court.

This is a companion case to two other appeals (consolidated Gen. líos. 40,759 and 40,760), in which opinions are being filed concurrently with this case. The defendant, Robert L. Simons, had negotiated loans on behalf of Stone-Field Corporation and Tailoring Corporation of America, of which he was president, for the aggregate sum of $45,000. The consolidated appeals involved notes approximating $13,000, and this appeal arises out of an action instituted on the remainder of the obligations, the amount due and owing thereon being $32,567.93. Plaintiff’s complaint .consisted of two counts. Count 1 was based on the notes and trade acceptances personally indorsed by Simons. Count 2 was predicated on fraud and sets forth in detail the manner in which Simons, by means of false financial statements, obtained the loans from plaintiff on behalf of his companies, his subsequent indictment by the United States Government for having used the mails in furtherance of a scheme to defraud creditors, his plea of guilty to the charges lodged against him, and the subsequent finding and sentence imposed on him resulting in his incarceration in the federal penitentiary.

Defendant answered count 1 denying liability on the sole ground that he, as indorser, did not receive notice of presentment, demand, dishonor or protest. In answer to count 2 he admitted the facts charged by pleading only the statute of limitations, to which plaintiff replied that the statute had been tolled by Simons’s absence from the State of Illinois. After the pleadings were at issue, plaintiff made a motion for summary judgment based on the contract action set forth in count 1. This motion was supported by the affidavit of an officer of the plaintiff bank which set forth in substance that Simons had negotiated five trade acceptances and two principal promissory notes to the bank on behalf of the Stone-Field Corporation and his other company, which he had personally indorsed ; that on the respective maturities thereof these obligations were not paid, and that on the date of each maturity notices of presentment, demand for payment, dishonor and protest were sent to the corporations and to defendant himself. Photostatic copies of the trade acceptances, notes and certificates of protest were attached to the affidavit.

Simons filed an affidavit in opposition to the motion for summary judgment, admitting the execution of the" trade acceptances and notes, his personal indorsement thereof and negotiation of the same to the bank, and set forth by way of defense that March 17, 1930, an involuntary petition in bankruptcy was filed against the Stone-Field Corporation and a receiver appointed; that March 27, 1930, an order was entered granting leave to the receiver to sell all the assets of the bankrupt corporation; that at the time plaintiff bank sent notices of presentment, demand, dishonor and protest to him on the respective maturities of these negotiable instruments, the bankruptcy had already occurred, and that therefore Simons did not have any office at 2256 South LaSalle street, the address of the corporations to which the notices were sent, and that the proper place of sending notices to him was 4940 East End avenue, Chicago. When it appeared that the sole defense interposed by Simons was the alleged failure to receive notice, plaintiff immediately sought and had leave of court to file a supplemental affidavit in support of its motion for summary judgment, which was signed by an officer of plaintiff bank, and set forth in substance that Simons was president, treasurer and director of the Stone-Field Corporation and owned all its capital stock; that March 1, 1930, prior to the maturity of the trade acceptances and notes, he advised officers of the bank that his corporations were insolvent and in financial difficulties; that March 7,1930, Simons as president and on behalf of the Stone-Field Corporation executed an assignment for the benefit of creditors, and that a creditors’ committee took over the assets of the corporation until March 17,1930, when a petition in bankruptcy was filed against the corporation; that a receiver was then appointed, and afterward, on April 5, 1930, the corporation was duly adjudged a bankrupt; that April 16,1930, the bankrupt corporation filed its schedules, signed and sworn to by the defendant Simons as its president, setting forth that its liabilities greatly exceeded its assets. Various other allegations were made, which are not immediately important in this proceeding, some of which refer to Tailoring Corporation of America, another of Simons companies, and of which he was also the president and the owner of its capital stock.

In answer to the supplemental affidavit filed by plaintiff, defendant made a motion to strike the same. He thereby admitted the material facts contained in the affidavit, no denial having been made as to the essential allegations pleaded. The only defense attempted to be set up in the motion to strike was that the officer of plaintiff bank who signed the affidavit did not have personal knowledge of the matters sworn to.

Pursuant to a hearing on the affidavit filed by plaintiff in support of the motion for summary judgment, the affidavit in opposition thereto filed by Simons, the supplemental affidavit filed by plaintiff, and defendant’s motion to strike, a summary judgment was entered in favor of plaintiff, the court being of opinion, and holding, that defendant was not entitled to notice under the provisions of the Negotiable Instruments Act and the common law, and that it was therefore immaterial whether defendant, as indorser, received notice or not. Simons has prosecuted this appeal from the summary judgment thus entered.

It is urged principally on behalf of Simons that plaintiff’s failure to give proper notice of protest to him constituted a complete defense to the action. Plaintiff’s supplemental affidavit set forth various reasons in support of its contention that this defense was untenable. They may be briefly summarized as follows: (1) That Simons, who indorsed these negotiable instruments, was president, treasurer, director and sole owner of the capital stock of Stone-Field Corporation, and active head of the company, as well as of Tailoring Corporation of America, the other concern involved in the proceeding; (2) that on March 1, 1930, within two days after Simons had negotiated the last instrument of the Stone-Field Corporation, he informed the officers of the plaintiff bank that his corporation was in financial difficulties, and that its liabilities exceeded its assets; (3) that on March 4, 1930, at a meeting of the creditors of the Stone-Field Corporation in New York, which Simons attended, he agreed to and subsequently did execute an assignment of the corporation’s assets for the benefit of creditors; (4) that a creditors’ committee took over these assets, and continued in possession until March 17, 1930, when a petition in bankruptcy was filed against the corporation and a receiver appointed; that subsequently, on April 5th, 1930, the corporation was adjudicated a bankrupt, and on April 15th of that year Simons executed the bankruptcy schedules which set forth under oath that its liabilities were greatly in excess of the assets; like allegations were made with reference to Tailoring Corporation of America, the other concern involved in these proceedings: (5) that Simons had fraudulently, wilfully and maliciously negotiated these trade acceptances and notes, bearing his indorsements to the plaintiff bank; (6) that although it was not necessary to give notice to Simons, as an indorser, that the bank had in fact sent such notices, seven in number, through the TJ. S. mails, to the only address specified by Simons as the place where all notices to him were to be sent.

Simons did not deny the facts set forth in the supplemental affidavit, nor did he file a counter affidavit. His motion to strike the supplemental affidavit rested on the ground that the matters set forth therein were immaterial and that the officer of the bank who signed it did not have personal knowledge of the facts. The court would not have been justified in allowing the motion for the reason assigned by Simons, since it was obvious that the bank official’s affidavit was predicated on facts well within his and the bank’s knowledge and on records of the transaction and the events following it, which were in the bank’s possession.

On the question of notice it was clearly shown of record that notice had been given Simons, but whether or not he received it is immaterial. He was fully conversant with all the transactions set forth in the pleadings, in fact he initiated them and knew of every fact and circumstance averred in the supplemental affidavit. Under the Negotiable Instruments Law (ch. 98, sec. 82, par. 104, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 89.104]) presentment for payment is dispensed with where waiver of presentment is either express or implied. This section of the statute is identical with that of other States where the matter has been considered under similar circumstances and passed upon adversely to Simon’s contention. (J. W. O'Bannon Co. v. Curran, 113 N. Y. Supp. 359; Ward v. Carlis, 29 Penn. C. & D. Reports 685 (1937); Atlantic Refining Co. v. Nucar Forwarding Corp., 11 N. J. Misc. 541, 167 Atl. 677; and various other decisions cited in plaintiff’s brief.

Even though it were held that presentment and notice of dishonor were required to be given to Simons, as indorser, the same was undoubtedly waived under the facts set forth in plaintiff’s supplemental affidavit. This pleading details the transaction between the parties, and supports the contention made by plaintiff and the conclusion of the court that Simons waived notice of presentment and dishonor. Negotiable Instruments Act, ch. 98, sec. 114, par. 136, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 89.136], provides that notice of dishonor is not required to be given to an indorser in either of several cases, one of which is where the indorser is the person to whom the instrument is presented for payment. We think this is precisely applicable to the relationship which Simons bore to his companies, and that in view of that relationship notice of dishonor to him was not necessary.

It is next urged that on a motion for summary judgment the trial court has power only to determine whether a meritorious issue is present. Having disposed of the question of notice, little remains to be considered or discussed. By failing to file a counter affidavit, Simons admitted substantially everything in plaintiff’s supplemental affidavit, and therefore the court properly ruled that plaintiff had presented a meritorious issue. As a matter of fact Simons had no defense on the merits to plaintiff’s claim, and the court had no alternative except to enter judgment when the motion was made.

Plaijntiff’s counsel argue that by perpetrating a fraud upon the bank in the negotiation of the instruments sued on, defendant has precluded himself from asserting the defense interposed. However, in view of our conclusion as to the other defense, we consider it unnecessary to prolong this opinion by discussing’ this proposition. We think the court properly overruled defendant’s motion to strike plaintiff’s supplemental affidavit, and that the judgment of the trial court should be affirmed. It is so ordered.

Judgment affirmed.

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