author: Mr. Justice Friend

text:
    Harrison Parker, Appellant, v. Weymouth Kirkland, Appellee.
    Gen. No. 39,804.

      Opinion filed January 19, 1939.
    James C. Byrne, of Chicago, for appellant.
    Kirkland, Fleming, Green, Martin & Ellis, of Chicago, for appellee; Howard Ellis, J. B. Martineau and George L. Haggard, all of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

Harrison Parker appeals from an order of the superior court dismissing for insufficiency his amended complaint, wherein he alleged that Weymouth Kirkland, defendant, maliciously and falsely uttered and published certain statements or remarks derogatory to Parker’s character and reputation, while acting as counsel for the Tribune company in defense of a complaint brought by Parker before the board of appeals of Cook county, seeking a review of the capital stock assessment against the Tribune for the year 1935.

The amended complaint consists of two counts, the first of which alleged in substance that in the course of the hearing before the board, which is characterized as “a purely administrative body,” and “not a quasi judicial body or a judicial body, ’ ’ and in the presence of some five hundred persons, Kirkland as attorney for the Tribune in the matter then on hearing before the board, maliciously and falsely assailed Parker’s character, integrity, honesty and moral qualities, by speaking of him as a “contemptible falsifier,” whose sole purpose in filing the complaint “is of blackmailing the Chicago Tribune”; that Parker had a “diarrhea of the mouth,” is a “rat,” a “dirty rat,” and “ought to be taken for a ride.”

The second count of the complaint is more specific, in that it sets forth the proceedings before the board and incorporates as exhibits both Parker’s complaint and a stenographic report of the proceedings, showing the statements or remarks made by Kirkland in their connection with the subject matter of the hearing, and alleging* that the remarks were not germane to questions or issues then pending* before the board; and it is averred that by reason of the utterances of these false, scandalous and malicious statements by Kirkland, Parker’s business and reputation for honesty, integrity and character were greatly injured; wherefore he seeks judgment ag’ainst Kirkland in the sum of $100,000.

The hearing* before the board of appeals was had on June 3,1936. There were present Messrs. "Whalen and Drymalski, members of the board, Parker, acting pro se, Kirkland and Leslie A. Hodson, a lawyer associated with Kirkland in his firm, acting* as counsel for the Tribune, and J. E. Battle, appearing for John S. Clark, tax assessor of Cook county. The hearing was predicated on Parker’s sworn complaint and the Tribune’s answer thereto. Parker appeared before the board as a taxpayer, acting on his own behalf and all other taxpayers, and in his complaint he alleged that the assessor of Cook county, John S. Clark, was in a conspiracy with the Tribune company, “to pass on to the tax distressed bungalow owners, the debt harassed farmers, and day laborers the taxes that should be imposed on and paid by the provisions of the Illinois Constitution, in derogation of the right reposed in the Illinois legislature to make the tax laws, in defiance of the rules and regulations made and promulgated by the Illinois Tax Commission that have never been repealed, rejected, or modified either by the Illinois Tax Commission, or by any Court, in violation of the duty imposed upon him by law and his oath of office, the said John S. Clark has set up a new tax that he brazenly dubs a capital stock tax in order to hide the fraud that exists in the Cook County Assessor’s office to soak the poor, the needy and defenseless for the benefit of the opulent and politically powerful Tribune Company that for sixty odd years has masqueraded as a ‘Free Press’ in order to cover the fact that it has enriched its opulent, greedy and selfish stockholders by cheating and defrauding the State of Illinois of money that was and is due to the State as capital stock taxes; . . . . ”

It was Parker’s contention that Clark had entirely omitted assessing* the Tribune for capital stock tax by not following Rule 11 of the tax commission,* and that his failure to assess a capital stock tax against the Tribune was not the result of mistake or error of judgment, but was in pursuance of a conspiracy and ‘ ‘ done maliciously, fraudulently and with malice aforethought, and for the purpose of favoring the said Tribune Company.” Parker contended that if the assessor had followed Eule 11, the legal capital stock tax of the Tribune would have been approximately $2,000,000 in addition to the $95,000 personal property tax which he described as a “mere pittance of a tax.” He asked the board to make the capital stock assessment defined in the statutes and to fix the tax thereon pursuant to the State laws and Eule 11 of the tax commission, and to determine the fair cash value of the Tribune’s capital stock, or in the alternative that the board direct the assessor so to do.

The Tribune answered Parker’s sworn complaint, denying that it had received any preference over other taxpayers, and averred that the assessment had been uniformly and fairly made; it pointed out that certified copies of its balance sheets and other books and records had been submitted to the assessor; denied all allegations of conspiracy, characterizing them as “contemptible falsehoods,” and averred that Parker was filing the complaint in bad faith and in an attempt to blackmail the Tribune into making a financial settlement of a libel suit which Parker had filed against the Tribune. In this connection it was averred that in the previous year Parker had complained of the Tribune company’s capital stock assessment for the years 1873 to 1934 inclusive; that upon hearing of the former complaint in 1935 it was shown that Parker had filed his com- • plaint solely for the purpose of compelling the Tribune to settle the libel suit which he had pending against it, and was still pending, and that the present complaint had been lodged as part of his common scheme to blackmail the Tribune into settling the libel suit; and it was suggested in the answer that the record as to Parker’s attempted blackmail made before the board during 1935 be incorporated in the proceedings then before the board.

It has long been the well recognized rule of law that proceedings in the regular course of justice are privileged. Under the English decisions, statements of counsel in the course of a judicial proceeding are held to be absolutely privileged (Astley v. Younge, 2 Burr 807; Munster v. Lamb, 11 Q. B. D. 588), and this privilege “attaches to all proceedings of, and to all evidence given before, any tribunal which by law, though not expressly a court, exercises judicial functions— that is to say has power to determine the legal rights and to effect the status of the parties who appear before it. . . . It is not necessary that the tribunal should have all the powers of an ordinary court; e. g., the proceedings will still be absolutely privileged although the tribunal cannot compel the attendance of witnesses, or has no power to administer an oath, provided it can discharge its judicial duties without such powers.” (Odgers on Libel and Slander, 6th ed., p. 195, citing cases.) In America the same privilege protects counsel “not merely in regular courts of justice but in all inquiries before magistrates, referees, municipal and ecclesiastical bodies” (Newell on Slander and Libel, 4th ed., sec. 363, p. 397), but subject to the qualification that the statements must be pertinent and applicable to the subject of inquiry and made in courts or tribunals having jurisdiction of the subject, and power to hear and decide the matter of complaint, and in such case the motive of counsel in using the language is immaterial. (Hoar v. Wood, 44 Mass. 193 Marsh v. Ellsworth, 50 N. Y. 309; Jennings v. Paine, 4 Wis. 358; Lawson v. Hicks, 38 Ala. 279; Rice v. Coolidge, 121 Mass. 393.) Subject to the restriction that a party or counsel shall not avail himself of his situation, to gratify private malice by uttering slanderous expressions, either against a party, witness or third person, which have no relation to the cause or subject matter of the inquiry, our courts have uniformly held that on the whole, for the public interest, and best calculated to subserve the purposes of justice, counsel ought to be allowed full freedom of speech in conducting causes and advocating and sustaining the rights of their constitutents, unimpaired by numerous and refined distinctions. (Hoar v. Wood, 44 Mass. 193.) Said the court in that case (p. 194): “Great latitude of remark and observation is properly allowed to all persons, both parties and counsel, in the conduct and management of all proceedings in the course of the administration of justice. It is for the interest of the public, that great freedom be allowed in complaints and accusations, however severe, if honestly made, with a view to have them inquired into, to have offenses punished, grievances redressed, and the laws carried into execution. And this extends not merely to regular courts of justice, but to all inquiries before magistrates, referees, municipal and ecclesiastical bodies; and they are only restrained by this rule, viz., that they shall be made in good faith, to courts or tribunals having jurisdiction of the subject, and power to hear and decide the matter of complaint, or accusation, and that they are not resorted to, as a cloak for private malice.” In Illinois this doctrine was approved in the early case of Spaids v. Barrett, 57 Ill. 289, wherein the court, in affirming the action of the trial court in sustaining a demurrer to a count in slander, said (p. 291): “It is nothing more than a count in slander, based upon an alleged libelous affidavit, filed in a legal proceeding. "Whatever is said or written in such proceeding*, pertinent and material to the matter in controversy, is privileged, and no action can be maintained upon it.” Strauss v. Meyer, 48 Ill. 385, and McDavitt v. Boyer, 169 Ill. 475, are to the same effect.

Counsel are in substantial agreement that this is the settled rule applicable to judicial tribunals. We held in Kimball v. Ryan, 283 Ill. App. 456, that it also applies to hearings “before bodies whose duties are quasi judicial, boards, or commissions.” Plaintiff argues, however, that it does not apply to proceedings before the board of appeals, because that body is neither judicial nor quasi judicial in character, but purely an administrative body. The question therefore arises whether the board of appeals is a quasi judicial body. Considerable light is thrown on this inquiry by reference to the duties of the board as defined by the statute. (Ill. Rev. Stat. 1937, ch. 120, secs. 31-43, pars. 310-322 [Jones Ill. Stats. Ann. 119.352-119.374].) Though, a branch of the executive department of the government, the board of appeals, which succeeded the board of review, nevertheless exercises quasi judicial powers. It is vested with the duty, when complaint is made, to review the entire assessment of any taxpayer or any part thereof and correct the same as shall appear to them to be just. The statute defines the requisites of a proper complaint, provides that hearings shall be public, and held pursuant to notice to the taxpayer; that after hearing the board shall enter orders of record, and shall set forth in writing its reasons for a revision of the assessment. The statute grants the board particular powers to summon witnesses and administer oaths in connection with its hearings, and to find witnesses who do not appear or who refuse to testify, guilty of a misdemeanor and to subject them to a fine of $500. If a complaint charges that the property is wrongfully omitted and the board so finds, after hearing, it is required to direct the assessor to assess such property. Unlike an assessing body, the board can only act upon evidence adduced at the hearing. It cannot itself make an assessment, but only reviews assessments. In this respect it is an appellate tribunal of limited jurisdiction and its functions in the matter of reviews are judicial or quasi judicial only, (Jarman v. Schuyler County Board of Review, 345 Ill. 248, 253; Allwood v. Cowen, 111 Ill. 481; People v. Concordia Fire Ins. Co., 350 Ill. 265; People ex rel. Harding v. Atwater, 362 Ill. 546.)

34 Corpus Juris 1180, sec. 5, defines a quasi judicial duty as one lying in the judgment or discretion of an officer other than a judicial officer, and in drawing the distinction between acts that are quasi judicial and those that are purely judicial, says that where a power vests in a judgment or discretion, so that it is of a judicial character or nature, but does not involve the exercise of the functions of a judge, or is conferred upon an officer having no authority of a judicial character, the expression used is generally “quasi judicial. ” It is further said that ‘ ‘ a quasi judicial power is one imposed upon an officer or a Board involving the exercise of discretion, judicial in its nature, in connection with, and as incidental to, the administration of matters assigned or entrusted to such officer or board,” and that a function is deemed “quasi judicial” when such officer is charged with looking into and acting upon facts, not in a way which the law specifically directs, but after a discretion in its nature judicial ; and that quasi judicial functions are those which lie midway between the judicial and ministerial ones.

In determining whether proceedings before various types of boards and commissions are privileged, the courts of Illinois and other States have from time to time defined the character of tribunals similar to the board of appeals, and have held them to be quasi judicial for the purpose of extending privilege to counsel and other interested parties. In Kimball v. Ryan, 283 Ill. App. 456, in passing upon proceedings had before the board of election commissioners, we said (p. 463) “It is the law that a person is not subject to be sued for slander or libel for defamatory statements in papers filed in a judicial proceeding or before bodies whose duties are quasi judicial, boards or commissions,” citing Krumin v. Bruknes, 255 Ill. App. 503. In so holding, we pointed out that the board of election commissioners had the legal duty to pass upon the sufficiency of petitions filed by candidates for aider-man. The duties imposed upon the board of appeals by statute, vesting it with certain discretions and imposing upon it the duty to find facts, enter orders, revise assessments in whole or in part, swear and hear witnesses, and enter orders upon its findings, are of equal import, and the Supreme Court in People ex rel. Harding v. Atwater, 362 Ill. 546, in passing upon the findings of the board of assessors and of the board of review with reference to exemptions on property, characterized the action of the board as “judicial in character.”

Where the contention has been made that the board of appeals is purely an administrative body, the courts of this State have consistently held that in reviewing assessments it possesses powers of a quasi judicial nature. In Jarman v. Schuyler County Board of Review, 345 Ill. 248, the Supreme Court said that decisions of that board were reviewable by certiorari, and certiorari is not available unless some property right is involved. (Commissioners of Drainage District v. Griffin, 134 Ill. 330.) To the same effect, are Allwood v. Cowen, 111 Ill. 481; People ex rel. Harding v. Atwater, 362 Ill. 546; People v. Concordia Fire Ins. Co., 350 Ill. 265.

In Independent Life Ins. Co. v. Rodgers, 165 Tenn. 447, 55 S. W. (2d) 767, the Supreme Court of Tennessee held that pertinent expressions uttered by parties and witnesses in judicial proceedings are absolutely privileged; that statements made by an insurance company’s president to the State insurance commissioner, indicating shortage in a former agent’s accounts, on the basis of which the commissioner who had issued a license to the former agent, called on him for an explanation, were absolutely privileged, and that the right of absolute privilege may be accorded statements made before other tribunals having attributes similar to courts of justice.

In Shumway v. Warrick, 108 Neb. 652, 189 N. W. 301, the Supreme Court of Nebraska held, in an action for libel, that defendant was justified by way of defense in questioning the integrity and responsibility of plaintiff, in an inquiry by the State banking board where the issues raised in his pleading were relevant and material to the inquiry.

In Alagna v. New York & Cuba Mail S. S. Co., 155 N. Y. Misc. 796, 279 N. Y. S. 319, the court held the steamship company’s letter to the federal radio commission, containing some alleged libelous matter, was absolutely privileged since the commission was authorized to subpoena witnesses, to hear and determine charges, and in so doing exercised judicial functions.

Plaintiff’s counsel cites and relies on North Chicago Hebrew Congregation v. Board of Appeals, 358 Ill. 549, as holding that the board was purely administrative and not judicial. The court was there called upon to determine whether the subject matter brought the controversy within either the appellate or original jurisdiction of the court, so as to justify the exercise of discretion in favor of taking the case, and in discussing* the question held that the board is not a court within our judicial system from which an appeal can be taken to the Appellate or Supreme Court, and that for the purpose of determining whether or not an appeal could be taken from the board, it was a nonjudicial body. We do not understand this decision as being at variance with prior cases in this State, holding that the board, in reviewing* assessments, possesses powers of a quasi judicial nature. It was only for the purpose of determining* whether a reviewing* court would entertain an appeal from the board that its character was designated as administrative. No other cases are cited in support of plaintiff’s contention. After a careful examination of the statute creating the board and defining its duties, and all available decisions in Illinois and other States, we are of the opinion that for the purpose of invoking the rule of privilege in proceedings had before it, the board of appeals possesses the attributes of a quasi judicial body.

These conclusions lead to the inquiry whether Kirkland’s statements and remarks were pertinent and material to any matter pending* before the board. Count one of the amended complaint does not set forth any of the proceedings before the board, nor does it contain any allegations from which it can be determined whether or not the statements and remarks were pertinent or material to the subject of inquiry; it merely alleges that at a public hearing before the board, “a purely administrative body, . . . not a quasi judicial body or a judicial body, ’ ’ Kirkland maliciously made the statements attributed to him, by reason of which plaintiff was greatly injured in his business and reputation. No averment is made with reference to the possible pertinency of the remarks set forth in this count to the matter pending before the board; it is not even alleged in count 1 that the offensive statements were impertinent or immaterial to the subject matter on hearing. Under the well settled rules of pleading in this State this count is vulnerable to a motion to dismiss, which under the Practice Act takes the place of the former demurrer. Schwender v. Smith, 152 Ill. App. 436, is a ease' precisely in point. The court had there sustained a demurrer to a declaration for libel, and the defendants electing to abide by their demurrer judgment was entered for defendants and plaintiff appealed. In affirming* the judgment the Appellate Court pointed out that the sole count of the declaration contained matter published in a bill in chancery filed in the circuit court which was alleged to be libelous; that under the recognized rule of law the matter was prima facie privileged ; that to state a cause of action it was necessary for the pleader to aver facts bringing the case within some exception to the rule and that the allegation in the declaration, charging the matter alleged to be libelous, “irrelevant, impertinent and immaterial to the subject matter or question involved in said bill,” rested on no alleged fact as to the contents, scope, purpose or object of the bill, and that “unaided by presumptions or inferences from facts alleged, such averments are only statements of the legal conclusions of the pleader.”

Count 2, as Exhibit B, however, attaches substantially all the proceedings before the board, and therefore the determination whether Kirkland’s statements were pertinent, relevant and material to the subject of inquiry, necessitates an examination of these proceedings. Exhibit “B,” occupying some 40 pages of the abstract, shows the connection between Kirkland’s remarks and the subject matter on hearing, and may be briefly summarized as follows: At the outset Parker read his complaint into the record. He sought thereby, as a taxpayer on his own behalf and that of other taxpayers, to induce the board to make the capital stock assessment against the Tribune, on the theory that it had been entirely omitted by the assessor, and to fix the assessment pursuant to Rule 11 of the Illinois tax commission, which he charged had not been followed or taken into consideration by the assessor. The complaint made serious and caustic charges against the Tribune, its stockholders, the assessor and his predecessors in office, and alleged that the omission to tax the Tribune resulted from a conspiracy between the assessor and the Tribune to do the things of which Parker complained, maliciously and fraudulently. He claimed that J. E. Battle, of the assessor’s office, had admitted to Mm that Bule 11 had not been followed, that the tax in question had been entirely omitted, and that the assessor had preferred the Tribune over other taxpayers in respect of the capital stock tax. Battle emphatically denied all these contentions, and since there was nothing before the board except Parker’s complaint, the question arose as to whether Parker was to be believed as against Battle with reference to these material contradictions.

At this stage of the proceedings Kirkland asked and had leave to make an opening* statement, in which he commented on Parker’s lack of credibility and asserted that anyone who charged the Tribune with having entered into a conspiracy with the assessor was just “a, contemptible falsifier.” He called the board’s attention to the fact that its members were charged with similar criminal offenses in a mandamus proceeding filed by Parker, wherein he alleged among other things that the board, the assessor and his predecessors back to 1873, had been guilty of a conspiracy with the Chicago Tribune to prefer it over other taxpayers in the assessment of its capital stock taxes; that in the preceding year Parker had admitted before the board that a like complaint was part of his scheme to blackmail the Tribune into paying some $400,000 in settlement of a libel suit then pending against the Tribune, and that Parker had admitted coming* to Kirkland’s office and threatening that unless this sum were paid to him by way of settlement, he would file a tax complaint seeking to collect $87,000,000 from the Tribune, as an omitted capital stock tax, dating back to the year 1873, pursuant to a conspiracy, as he claimed, between the Tribune and the assessor and all of his predecessors in office, who were charged with defrauding the taxpayers to the extent of $87,000,000 for back taxes on capital stock; that in the hearing before the board during the preceding year Parker had admitted dictating an affidavit making various charges and threats against the publisher of the Tribune and certain judges, and Kirkland asked that in accordance with the prayer in the Tribune’s answer, the former proceedings before the board be made a part of the present record. The purpose and theme of Kirkland’s opening statement was to emphasize Parker’s lack of credibility, and by calling attention to events that occurred in connection with Parker’s complaint before the board in 1935, to convince the board that his present complaint was part of a scheme to blackmail the Tribune into settlement of the libel suit, and to show the board that he was unworthy of belief. It was in the course of Kirkland’s opening statement that the first four of the remarks complained of were uttered, namely, “he is just a contemptible falsifier,” “his sole purpose is of blackmailing the Chicago Tribune Company,” “he was a contemptible blackmailer, ’’ and “he has a diarrhea of the mouth.” The record clearly shows that as to the first of the three slanderous remarks complained of Kirkland, as counsel advocating his client’s cause, was merely orally explaining the defenses set up in its written answer, and however harsh they may seem they were, upon Kirkland’s theory of defense, pertinent and material to the issues and therefore privileged.

When Kirkland had finished' his opening statement charging Parker with being a falsifier and with attempting to blackmail the Tribune, Parker made no specific denial of the charges, but claimed that the reason he had not been indicted for blackmail and perjury was because Kirkland was afraid to complain of him to the State’s attorney on account of the fact that Parker himself had charged Leslie A. Hodson, Kirkland’s associate, with having committed fraud and perjury before the board in connection with the Tribune’s taxes for the year 1933. Parker freely admitted that he had sought Hudson's indictment for falsely swearing that the capital stock of the Tribune was worth only $19,186 in 1933, and these accusations and statements were repeated by him several times in the course of the hearing, and finally provoked the remaining statements by Kirkland, that “he is a rat, trying to get this young lawyer indicted,” “he ought to be taken for a ride,” and “it is a contemptible lie, and you are a dirty rat.” After Parker’s charges against Hodson had been repeated several times, the document purporting to have been falsely made and signed by Hod-son was produced for examination before the board and it showed that not only had Hodson not sworn to it but that he had not signed it, and that the capital stock of the Tribune was assessed at $1,444,006 in 1933, and not at $19,186, as Parker claimed. When these facts were called to his attention Parker seemingly closed the incident by admitting that, “I don’t know who did it,” “We will forget that.” Nevertheless, as the hearing progressed Parker again repeated the charge against Hodson and also accused Kirkland of complicity with Hodson, and it was in this connection, after Parker’s charges had been repeated several times, that Kirkland made the remark, “he is a rat, trying to get this young lawyer indicted,” “he ought to be taken for a ride.” Twice thereafter Parker again repeated the charge against Hodson and the last time he accused the Tribune of defrauding the bungalow owners. It was then that Kirkland in apparent exasperation said, “you are a contemptible liar, and you are a dirty rat,” to which Parker replied, “You are getting angry, isn’t it fine 1 ’ ’

Defendant argues that in addition to the foregoing proceedings had before the board, Parker’s autobiography, as disclosed by Parker himself, wherein he volunteered the information that he was a former inmate of a prison or jail, without stating the charge upon which he was sentenced or how long a term he had served, gives further color to the imputation of blackmail and lack of credibility, but we do not think it necessary in view of the length of this opinion to further detail the statements made by Parker and Kirkland touching upon this phase of the proceeding.

In the light of Kirkland’s contention that Parker was not to be believed, that he was actuated by improper motives in bringing his second complaint before the board, that Parker had falsely accused and preferred charges against Hodson for perjury, and on the face of the charges made in the complaint that the assessor, his predecessors in office, and others had entered into a conspiracy with the Tribune, fraudulently and maliciously, to defraud the taxpayers of back taxes on capital stock, it seems to us that Kirkland’s first three remarks were pertinent to the inquiry. Parker’s claims went to the root of his complaint, and if he were a credible person, actuated by good motives, the board might be swayed to grant the relief he prayed. Kirkland was seeking a dismissal of the complaint, charging Parker with lack of credibility and bad motives, and his statements were uttered in the course of an attempt as counsel for the Tribune to convince the board that it ought not to entertain Parker’s second complaint, in the light of all the circumstances which were called to the board’s attention by Kirkland.

The fourth statement that “he has a diarrhea of the mouth,” was uttered in Kirkland’s opening statement, wherein he called the board’s attention to the fact that “the complaint does not state a single allegation of fact. It is just a jumble of words, a diarrhea of the mouth, which this gentleman is quite capable of having most of the time,” and to which Parker replied, “Yes.” Parker’s counsel contends that this statement is actionable because it implies plaintiff was infected with a dreaded and loathsome disease and not physically fit to associate with human beings. The remark, although occasionally used, is not one that should be expected or countenanced in the course of orderly procedure, but we do not consider it actionable in connection with the statement made by Kirkland, because there is no such disease, and, when considered together with the subject matter of Kirkland’s statement, undoubtedly was intended merely to charge Parker with talking too much.

The remarks, “He is a rat,” or “a dirty rat,” and “He oug’ht to be taken for a ride,” though ill chosen and harsh, do not constitute actionable slander. The latter is more in the nature of a threat, if any meaning can be imputed to it, and the former are not defamatory per se, because neither of these utterances impute a crime, unchastity, loathsome communicable disease, or dishonesty and unfitness in his business. The only decision that we find giving judicial definition to a remark of a similar nature is State v. Christie, 97 Vt. 461, 123 Atl. 849, where the Vermont court defined the word, “rat,” when applied to a person, as “one who works under conditions contrary to those prescribed by the union; a dirty, paltry fellow.”

American courts have shown great liberality in construing remarks as pertinent and material to the subject matter on hearing. In People ex rel. Bensky v. Warden of City Prison, 258 N. Y. 55, 179 N. E. 257, the New York court of appeals, in speaking of the privilege of counsel in appealing to the exercise of the court’s discretion in a mandamus proceeding, said: “The granting of the order rested in the sound discretion of the court. Any allegation which appellant or his counsel could possibly have believed would tend to influence the court to grant the order cannot be said to be impertinent beyond any question.

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“The appellant might have believed that the court’s discretion would be more readily moved to grant the relief prayed for, if it were informed that the granting of the certificate of occupancy was the result of a corrupt agreement rather than of an innocent mistake. It is not necessary to decide that such considerations should influence the discretion of courts. It is sufficient if the appellant, under the circumstances, believed that the language would have a tendency to move the court’s discretion to grant the relief asked.”

In Warner v. Paine, 4 N. Y. Super. Ct. (2 Sandford) 195, the court said (p. 200): “The veracity of the complainant, to the mind of the defendant, may have been a material question, as it was on his alleged information that the principal statements in the bill rested. The defendant, after this, was not restricted to a mere denial of those facts; nor to the simple statement that the plaintiff was in an error, in respect to them. It was competent for him, if he had reason to think his interest in the suit would be advanced thereby, not only to say that the affidavit of the plaintiff in whole or in part, was false, but wilfully false, which is tantamount to what he did state; . . . .” And at page 201: “ . . . where matter is put forth by a party, or his attorney or counsel, in the course of a judicial proceeding, which may possibly be pertinent, courts should not, and will not, feel disposed so to regard it as to deprive its author of its privilege and protection. . . . Where it is fairly debatable whether the matter is relevant or not, we would incline to give the party or counsel using the words, the benefit of the doubt which may fairly exist as to its pertinency. In this case, we consider the matter alleged to be libelous, relevant.”

Other instances of words spoken which were held to be privileged, may be found in Maulsby v. Reifsnider, 69 Md. 143, 14 Atl. 505, where defendant’s counsel, on the trial of an action by an attorney to recover for professional services, said that plaintiff, an attorney, had collected and refused to pay over $5,000 of defendant’s money. This statement was said to be pertinent to the subject matter of inquiry, and whether true or false and whether spoken maliciously or in good faith, would not sustain an action for slander. In Hollis v. Meux, 69 Cal. 625, an attorney, in the course of his employment filed specifications of opposition to an insolvent’s discharge, charging him with having been a privy to making false and fraudulent entries in his books with intent to defraud creditors, and with having sworn falsely in relation to his estate, and while acting in a fiduciary capacity with fraudulently converting property to his own use. These charges were held to be absolutely privileged. In Craig v. Burris, 4 Pennew. (Del.) 156, plaintiff was arrested for obtaining money under false pretenses, and the attorney for the prosecuting witnesses, while outside the justice’s office, and before plaintiff had been before the justice to answer the charge, in the presence of plaintiff and others, said: “You collected this money by false pretenses, and it has to be settled here and now or you go up the road.” It was held that these words were not outside the attorney’s privilege.

The law is well settled that when words in themselves not actionable become so by reason of some special damage occasioned by them, such special damage must be particularly averred in the complaint, even though express malice is proved. In such case it is necessary that the declaration should set forth precisely in what way the special damage resulted; it is not sufficient to allege generally that plaintiff has suffered special damages. (37 Corpus Juris 36; Strauss v. Meyer, 48 Ill. 385.) Bouvier in his law dictionary, under the division of words actionable in themselves, says that they must impute “the guilt of some offense for which the party, if guilty, might be indicted and punished by the criminal courts.” Tested by this rule, the record shows that Kirkland defined what he meant by “blackmailer” and “blackmail”; he was characterizing what he said was Parker’s admitted conduct. It was held in Searcy v. Sudhoff, 84 Ill. App. 148, that a person may at the time of speaking words which are, in their ordinary signification, slanderous by imputing crime, so qualify them by other words as to show that he uses them in a different sense and that all the words spoken at one time must be taken together, and although one part when detached from another may be slanderous, yet, if taken all together they may not be so. Foval v. Hallett, 10 Ill. App. 265, is to the same effect. Parker’s amended complaint alleges no special damage and must therefore be held insufficient in that respect.

In determining whether statements or remarks are pertinent to the subject of inquiry, the courts of this and other States have been liberal in their application of,the remarks to the subject matter, and have held that the privilege “embraces anything that may possibly be relevant. All doubts should be resolved in favor of its relevancy or pertinency.” (36 Corpus Juris, sec. 226, p. 1252, and cases cited therein.) In the leading case of Hoar v. Wood, 44 Mass. 193, the court pointed out that, subject to the restriction of pertinency, it is on the whole for the public interest, and best calculated to subserve the purposes of justice, to allow counsel full freedom of speech in conducting the causes and advocating and sustaining the rights of their constituents.

In the course of a trial or proceeding, counsel too often resort to invective when more temperate conduct and language would serve as well, but courts have repeatedly said that it is on the whole to the public interest to allow counsel full freedom of speech. We are therefore impelled to hold that the court was not in error in dismissing the amended complaint and the judgment of the superior court is accordingly affirmed.

Judgment affirmed.

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

       TMs contention was subsequently determined adversely to Parker in an opinion filed in People ex rel. Parker v. Board of Appeals of Cook County, 367 Ill. 559. An appeal had there been perfected from an order of the circuit court dismissing Parker's complaint for a writ of mandamus, and it was held among other things that under Rule 11 of the State tax commission, an assessment of capital stock is in reality an assessment upon the intangible surplus over and above the assessment levied on the tangible property of the corporation, and where the value of a corporation’s stock does not exceed the value of its tangible property, there is no basis for an assessment of capital stock as such. Subsequently Parker filed a second petition for mandamus, wherein the figures in his complaint had been modified and the allegations broken down so that they were set out by various years. In a recent opinion filed by the Supreme Court in People ex rel. Parker v. Whealan, 370 Ill. 243, the court held that 11 there have never been any allegations that the assessments complained of were lacking in uniformity, as compared with the assessments made upon other similar property,” and the judgment of the circuit court dismissing the complaint for mandamus was again affirmed.


source: Caselaw Access Project

author: Mr. Justice John J. Sullivan

license: Public Domain

text:
    People of the State of Illinois, Appellee, v. Alphonse Mazurski, Appellant.
    Gen. No. 40,310.

      Opinion filed January 19, 1939.
    Rehearing denied February 6, 1939.
    L. A. Sherwin, of Chicago, for appellant.
    Thomas J. Courtney, State’s Attorney, for appellee; Edward E. Wilson, John T. Gallagher, Melvin S. Rembe and Blair L. Yarnes, Assistant State’s Attorneys, of counsel.
   Mr. Justice John J. Sullivan

delivered the opinion of the court.

After a trial by the court without a jury the defendant, Alphonse Mazursld, was found guilty on December 14,1937, of having raped one Pearl Szumski, a 12-year-old girl, as charged in an indictment returned to the criminal court of Cook county. On January 4, 1938, after denying defendant’s motions for a new trial and in arrest of judgment, the court entered judgment, sentencing him to imprisonment for one year in the Illinois State Penitentiary at Joliet. January 19, 1938, upon defendant’s petition to vacate the judgment on the ground of newly discovered evidence, the court, after hearing the testimony of the two witnesses presented, Jane Gilarski and Steve Stanislawski, denied said petition. Although allowed until April 2, 1938, for the certification and filing of a bill of exceptions, defendant did not present such a bill for certification and failed to prosecute a writ of error to the Supreme Court to review the judgment entered against him. Defendant, represented by new (present) counsel, then made a motion in the nature of a writ of error coram nobis under section 72 of the Practice Act to vacate the judgment. This motion was supported by defendant’s sworn petition filed May 16, 1938, and an additional sworn petition filed by him May 23, 1938, nunc pro tunc, as of May 16, 1938, as well as by the affidavits of numerous persons attached to said petitions. The State’s attorney’s written motion to dismiss defendant’s petition to vacate was sustained and said petition was ordered dismissed on June 6, 1938. Defendant prosecutes this appeal from the order of June 6, 1938, dismissing his petition to vacate the judgment.

It appeared that Pearl Szumski and two other young girls were playing around a gasoline station at 83rd street and Essex avenue, Chicago, and on the streets and sidewalks in that vicinity on the evening of September 18, 1937; that Pearl having told the others that she was going to meet a man in an automobile, ran toward Kingston avenue and the two girls followed her; that they caught up with her as 82nd street and Kingston avenue, where an automobile stopped about four feet from them and the driver of same invited Pearl into his car and drove away with her about 7:30 p.m.; that a short time later the two girls who had been with Pearl met her older sister, Sophie Gouwens, and told her what happened; that she took the girls to the aforesaid gas station to ascertain, if possible, the identity of the man who had driven away with Pearl; that one Stanley Jablonski, who happened to be at the gas station, drove Sophie G-ouwens and the girls around until about 8:45 p.m. in an unavailing search for Pearl; that when Sophie Gouwens returned to her home Pearl was there; and that after the latter had told her mother and sister that defendant was the man who had driven her away in his car and that he had ravished her, her sister, Sophie complained to the police. Defendant having heard that the police were searching for him went to the police station about 11:30 p.m. and was placed under arrest.

In his original petition to vacate, after charging that he was a victim of “wrongful identity,” defendant alleged inter alia that-he “now remembers there was a wedding going on four or five doors away from 8332 Essex avenue”; that at least ten people saw bim and his automobile on the evening in question in front of 8332 Essex avenue, during all of the time between 7:30 p.m. and about 9 p.m.; and that “Pearl Szumski, when petitioner first voluntarily came in at the police station, said petitioner was not the man who had taken her out riding.” Attached to the petition was Pearl Szumski’s affidavit as follows :

“Pearl Szumanski [Szumski] being first duly sworn on oath deposes and says that she is the complainant who filed a complaint against Alphonse Mazurski, charging him with rape. Affiant now says that she was not certain at the time she made the complaint that it was Alphonse Mazurski. That after due and mature consideration, affiant is now certain that it was not Alphonse Mazurski because the man who attacked affiant was about thirty years of age, wore a grey hat, a dark overcoat and a light suit, whereas, the said Alphonse Mazurski is twenty-six years of age and is a much lighter complexioned man and younger.

“Affiant is making this affidavit to correct a wrong which has been done Alphonse Mazurski and joins in with the request that a further hearing be had in this matter so that the said Alphonse Mazursld may be exonerated.” Then followed affidavits- of Pearl’s mother and sister stating that from their talks with Pearl they are convinced that defendant was not the man who attacked her. There is interwoven throughout defendant’s petition and the numerous affidavits attached thereto allegations of fact sufficient, if true, to establish a perfect alibi for every moment of his time from his arrival at work before 8 a.m. on the morning of September 18, 1937, until he went to the police station about 11:30 p.m. that night.

Defendant’s additional petition to vacate filed May 23, 1938, charged the State’s attorney with suppressing certain material evidence other than that hereinafter discussed, when the case was tried and with failing to advise the court that ‘ ‘ during the month of March, 1938, while it was still time for petitioner tó perfect his appeal to the Supreme court, the prosecutrix’s sister Sophie Gouwens appeared before the assistant state’s attorney who tried this case and informed him of the doubt of herself and of the prosecutrix as to defendant’s guilt and his identity, honestly attempting to correct a mistake, and because of such doubt demanded that this court be advised and defendant cleared of the crime charged against him . . . that said Sophie Gouwens was asked by the assistant state’s attorney how much money she had received from petitioner, that said Sophie informed said assistant state’s attorney that she had received no money from petitioner, that she did so freely and voluntarily because, on deliberation, the prosecutrix and said Sophie Gouwens were not sure of petitioner’s guilt and did not want an innocent man sent to the penitentiary. ’ ’

Following are substantially the facts alleged in defendant’s sworn petition to vacate and stated in the affidavits accompanying same as to purported newly discovered evidence to establish his alibi and to show that he could not possibly have committed the crime charged. Defendant brought his car to the gas station at 83rd street and Essex avenue about 5 p.m. on September 18, 1937, and left it there to be washed. He called for same at 6 p.m., accompanied by his fiancee, Jane Wesolowski, and his brother Mike. Mike then drove Jane to the Balog home, 8332 Essex avenue, where defendant promised to call for her later, after he had driven his shop foreman, John Warren, to Goldblatt’s South Chicago store. He picked up Warren shortly after 6 p.m. and drove to Goldblatt’s store where, at 7 p.m., during his shopping expedition with Warren, he met Gertrude Becker, with whom Jane Wesolowski lived. After. Warren finished his shopping defendant drove him to his home, reaching same shortly before 7:30 p.m. He then drove to Mrs. Becker’s home, according to her, about 7:35 p.m., to call for his fiancee (although he had previously arranged to call for her at the Balog home), and, upon being informed that she was not at home, he again drove to the gas station at 83rd street and Essex avenue, reaching there about 7:40 p.m. After a brief conversation with Jablonski at the gas station defendant drove directly to the Balog home at 8332 Essex avenue, sounded his horn and his fiancee, accompanied by Frank Balog and his sister, Norma, came out to his automobile. Jane Wesolowski got in the car'with him and the Balogs stood on the sidewalk alongside the automobile. All four talked and watched a wedding celebration a few doors away continuously until 8:45 p. m. or 9 p. m., when defendant drove away with his fiancee, who remained with him constantly until he returned to his home about 11:30 p. m.

We have carefully examined defendant’s petition and the accompanying affidavits of those who now claim to have been with him during all or some of the time covered by his alleged alibi and are unable to find therein a single allegation of newly discovered evidence. The allegation in his petition that “he now remembers that there was a wedding going on four or five doors away from 8332 Essex avenue” is futile for any purpose. It certainly cannot be considered in the category of newly discovered evidence. A present recollection of a fact previously known could not possibly be newly discovered evidence of such fact.

Defendant was arrested September 18,1937. He was indicted October 14, 1937, and on Decomber 14, 1937, he was tried and found guilty of statutory rape. Judgment was entered against him January 4, 1938. If his fiancee and six or seven close friends were with him and could account for his whereabouts from the time Pearl got into the car with the man who raped her until after she returned to her home, as he and they now assert, it is strange and beyond understanding why their knowledge of his presence with them did not remain uppermost in their minds from the moment they learned of defendant’s arrest on the very night the crime was committed until his trial almost three months thereafter. In so far as the record discloses the only one of the witnesses, whose alibi affidavits are now presented as newly discovered evidence, who testified at defendant’s trial, was Stanley Jablonski, who states in his affidavit that he “was not permitted to tell all he knew at the trial.” This is a reflection on the trial judge, who it must be assumed, in the absence of a showing to the contrary, gave defendant a fair trial. The foregoing quoted statement could only have been injected into Jablonski’s affidavit to account for the disparity between his testimony at the trial and the statements in Ms affidavit. Steve StanislawsM, the gas station attendant, testified January 19, 1938, at the hearing before Judge John C. Lewe on defendant’s motion for a new trial made within the judgment term on the ground of newly discovered evidence, that the last time he saw defendant on the evening in question was between 7:15 p. m. and 7:30 p. m. and he is now made to say in his affidavit that 1 ‘ about 7:30 p. m. affiant saw Alphonse Mazurski again, he was on his way in his car to pick up his girl Jane Wesolowski at 8332 Essex avenue, Chicago, and affiant saw Alphonse’s car from then until about 8:45 p. m. parked in front of the home of Frank and Norma Balog at 8332 Essex Avenue. Alphonse and Jane were in the car, and Frank and Norma were near the car talking to them. About 8:45 p. m. Alphonse and Jane drove away.”

The allegation of defendant’s petition that it was not until May, 1938, that he learned for the first time of the matters set forth therein and stated in the affidavits of Jane Wesolowski, his fiancee, Frank Balog, Norma Balog, Stanley Jablonski, Steve Stanislawski, Gertrude Becker and John Warren is absurd on its face. If he was in the company of his fiancee from 7:30 p. m. until 11:30 p. m. on September 18, 1937, as both now say he was, he surely must have known that fact every moment from the time of his arrest until his trial. If he was in the company of the Balogs continuously from about 7:30 p. m. until about 9 p. m. on that evening, as he and they now say he was, he surely must have known that fact and remembered it constantly. Having been in the company of Warren from a little after 6 p. m. until nearly 7:30 p. m. that evening, as he and Warren now state, it is difficult to conceive how defendant could have knowledge of that fact now and not have had such knowledge from the time of his arrest until the time of his trial. Having called for his fiancee at Mrs. Becker’s home at about 7:35 p. m. that night, he must have remembered that. Having been at the gas station as many times as he now states that he was that evening and conversed with his friends Jablonski and Stanislawski for the last time at about 7:30 p. m., confronted as he was with a very serious criminal charge, he and they must have known of such occurrence prior to May, 1938. The conclusion is irresistible that the matters presented in defendant’s petition to vacate and in the affidavits attached thereto in the guise of newly discovered evidence are palpably false. If such matters now presented by way of an alibi for defendant were true, not only would defendant have produced these alleged alibi witnesses in court at his trial, but his fiancee and the others mentioned would have been anxious and eager to establish his innocence. The allegations of defendant’s petition and the statements in the affidavits of the aforementioned persons submitted with same are so obviously improbable as regards defendant’s alibi as to cast doubt upon the good faith of this entire proceeding.

It is insisted repeatedly in defendant’s brief that by the motion to dismiss, the People admitted “that defendant had no knowledge of this newly discovered evidence at the time of the trial, and therefore could not have produced it at the trial, and standing uncontradicted the court should have, where the People refuse to file an answer, set the judgment of conviction aside and granted a new trial.” It is, of course, the established rule that a motion to strike or to dismiss a petition admits the well pleaded allegations of fact contained therein as did a demurrer under the former practice. But how could the People’s motion to dismiss admit that defendant had no knowledge of what he characterizes as newly discovered evidence, establishing an alibi for him, when practically every allegation of Ms original petition shows conclusively that he must have had knowledge of such alleged evidence, if it was true, since the very Mght of Ms arrest, as has been heretofore demonstrated? Defendant’s assertions that the persons heretofore named were with him on the evening of September 18, 1937, at the times alleged, and that “he had no knowledge” that they were with him until May, 1938, are ridiculous, preposterous and absolutely inconsistent and, of course, could not be true.

The following statement by his counsel is found in defendant’s brief: “The petitions charge, and is supported by the affidavit of the prosecutrix that prior to or at the time of the trial, she had informed the Assistant State’s Attorney that she was not certain that it was the defendant who had taken her for the ride and had attacked her. This, fact defendant charges, he first discovered after May 1, 1938, and that it was suppressed by the People at the time of the trial. This has not been denied by the People. The petitions charge, and it has not been denied, that notwithstanding this disclosure by the prosecutrix to the People, that the prosecutrix was permitted on the trial to take oath and to falsely testify that it was the defendant who had taken her for the ride and attacked her. ’ ’ This is a deliberate charge that the assistant State’s attorney assigned to the prosecution of the indictment against defendant, with full knowledge of the fact at the time of the trial that the prosecutrix was not certain of defendant’s identity, withheld such information from, the trial court and caused or permitted Pearl Szumski to testify falsely that it was the defendant who had taken her for a ride in his automobile and criminally assaulted her. This charge, if true, would constitute gross fraud and furrnsh sufficient legal ground for the allowance of defendant’s motion to vacate. However, it is just one of the many distorted charges and misstatements found in defendant’s brief and finds no support in his petition to vacate or in the affidavit of Pearl Szumski. We have searched defendant’s petition in vain for any allegation that Pearl Szumski, prior to or at the time of Mazursld’s trial, informed the assistant State’s attorney that she was not certain of defendant’s identity and that such information was suppressed and not revealed to the court. Neither does Pearl Szumski’s affidavit support this vicious charge. As orginally drawn and certainly not by Pearl, her affidavit, heretofore set forth, did contain this charge, but it will be noted that the language ‘ ‘ and at the time of the trial before His Honor Judge Lewe, affiant informed the State’s attorney that. she was not certain that it was Alphonse Mazurski” was stricken from same. It is not disclosed by the record whether the above quoted language was stricken from Pearl’s affidavit by the court or whether defendant’s counsel ran a line through such language before he filed the affidavit, but said affidavit is certified to this court showing the language referred to as having been deleted. Defendant’s counsel properly abstracted the affidavit, omitting therefrom the deleted language, but in defendant’s reply brief said counsel charges in effect that while Pearl’s affidavit was in the hands of the assistant State’s attorney for examination along with the petition to vacate and the other affidavits, the language above referred to in Pearl’s affidavit was surreptitiously and fraudulently deleted. He makes this charge in spite of the fact that he made absolutely no objection in the trial court to the certification to this court of Peatfl’s affidavit as deleted. Then, after quoting Pearl’s affidavit, as if it had not been deleted, counsel makes this statement in the reply brief: “The People filed no answer to the charges of fraud and suppression of material facts from the court and defendant, and did not contradict the facts in the prosecutrix’s affidavit; that she had advised the Assistant State’s Attorney, at the time of trial, that she was not certain that it was the defendant who had attacked her.” Here counsel again deliberately attacks the integrity of the assistant State’s attorney without the slightest justification. Such conduct on the part of an attorney is to say the least unethical. We repeat that there was no charge in defendant’s petition or statement in Pearl Szumski’s affidavit that prior to or at the time of the trial she informed the assistant State’s attorney that she was not certain that defendant was the man who attacked her.

The petition to vacate contains allegations as to additional fraudulent acts of the assistant State’s attorney and others and as to perjury committed by the prosecutrix in her testimony upon the trial of defendant. We consider said allegations even more lacking in merit than those heretofore discussed, and in view of what has already been shown we feel that analysis and discussion of such other allegations would serve no useful purpose. If the virtue of defendant’s claims as presented in this cause were to be measured solely in the light of the method and manner of their advocacy, they would, indeed, be without merit.

It was unnecessary to the decision of this cause that we discuss at length, as we have, counsel’s attempt to impose upon and mislead the trial court and this court, but it was so glaring and flagrant as to render it imperative that we call attention to same. Every question of law which defendant sought to raise in his petition to vacate or which is argued in his brief has long been settled in this State. In People v. Drysch, 311 Ill. 342, our Supreme Court said at pp. 348-350 :

‘1 The defendant argues the proposition that where a verdict is obtained by the admitted perjury of a witness it may be ground for vacating the judgment even after the judgment term, citing City of Chicago v. Nodeck, 202 Ill. 257. It is held in that case that a court has power to vacate a judgment at any time after the expiration of the term where the court was without jurisdiction to enter the judgment, and also that where a judgment has been obtained through fraud, such fact constitutes a sufficient reason for vacating it after the term in which it was rendered. The fraud, however, must be a fraud committed by one of the parties on the court and not the perjury of a witness. In the case cited the fraud was the fraud of the city of Chicago, one of the parties to the suit. Granting the two exceptions of want of jurisdiction and fraud by the successful party, the rule is otherwise universal that the jurisdiction of the court to modify, change or set aside a final judgment ceases with the expiration of the term. . . .

“The plaintiff in error insists that the motion to vacate was in the nature of a writ of error coram nobis. If it be admitted that this writ is applicable to criminal cases, the errors of fact which could be made the basis for it were not errors upon such questions of fact as arose on the pleadings, upon which issue was or might have been joined, or such questions of fact as constituted the basis of the cause of action or defense upon the merits of the case. (Marabia v. Mary Thompson Hospital, 309 Ill. 147.) The writ does not lie to determine a question of fact which has been adjudicated, even though decided wrongly, (Beard v. State, 81 Ark. 515; Hamlin v. State, 67 Kan. 724; State v. Armstrong, 41 Wash. 601; State v. Stanley, 225 Mo. 525;) nor for alleged false testimony at the trial, (Asbell v. State, 62 Kan. 209; Wilson v. State, 46 Wash. 416;) nor for newly discovered evidence. (Asbell v. State, supra.) The motion to vacate the judgment was therefore properly denied.”

The ultimate purpose of every allegation of defendant’s petition was to question the establishment of his identity as the man who committed the crime charged. His identity was one of the material questions of fact which constituted the basis of his indictment, as well as his defense upon his trial on such indictment and, as was stated in the Drysch case, errors of fact which may be made the basis for a motion to vacate in the nature of a writ of error coram nobis “were not errors upon . . . such questions of fact as constituted the basis of the cause of action or defense upon the merits of the case.” Neither does such a motion lie “for alleged false testimony at the trial” except where such testimony is given by one of the parties to the proceeding and constitutes fraud, “nor for newly discovered evidence.”

We have carefully considered the other points urged but in the view we take of this cause we deem it unnecessary to discuss them.

For the reasons stated herein the judgment of the criminal court is affirmed.

Affirmed.

Burke, P. J., and Friend, J., concur.


author: Mr. Presiding Justice Biess

text:
    Charles V. O’Hern, Receiver of Peoria Life Insurance Company, Appellant, v. Clarence H. DeLong et al., Appellees.
    Gen. No. 9,140.

      Opinion filed January 24, 1939.
    Cassidy & Knoblock and George Z. Barnes, all of Peoria, for appellant.
    Acton, Acton & Baldwin, of Danville, for appellees; W. M. Acton and Harvey H. Acton, of counsel.
   Mr. Presiding Justice Biess

delivered the opinion of the court.

Plaintiff: appellant, Charles V. O’Hern, receiver of the Peoria Life Insurance Company, a corporation, has appealed from a decree of the circuit court of Vermilion county denying relief prayed for in a mortgage foreclosure proceeding filed by the plaintiff against defendants Clarence H. DeLong and Lillian E. DeLong, his wife, and in granting defendants a set-off by way of counterclaim for the amount payable under the note and mortgage.

On February 6, 1928, said defendants gave their note and mortgage on certain real estate in Vermilion county, Illinois, to the Bank of Peoria, as security for a loan of $2,100, which securities were duly assigned to the Peoria Life Insurance Company by said bank on November 12, 1931, and the defendants had defaulted in payment of principal, interest, taxes and insurance due thereon since 1933.

On August 14, 1923, the above insurance company had entered into a written contract with C. B. DeLong and Clarence H. DeLong, copartners, to act as its agents in procuring applications for life insurance policies. Under the terms of section 2 of the contract, said agents were to receive as commissions, 60 per cent of the first year’s premium and 7% per cent commission from renewal premiums for the second to the tenth year inclusive “if contract in force.” Section 3 provided that ‘1 Commissions shall accrue only as premiums are paid to first party, or the Company, in cash.” Section 25 thereof provided that “Unless otherwise terminated, this agreement may be terminated by either party by a notice in writing delivered personally, or mailed to the other party at the last known address, at least thirty days before the date therein fixed for such termination.” Section 27 provided for renewal commissions after three years, as follows: “If this Contract shall continue in force and second party shall perform all of its conditions and devote his entire time and act exclusively for said Company for a period of three years from the date said contract takes effect, and conforms to the rules of the Company during said three years, then the renewal commissions shall be paid to him subject to the limitations and stipulations herein contained for the full period as specified in paragraph number two hereof.”

The defendants continued to act as agents of the company and to procure applications for policies under their contract until 1933, at which time about 500 policies were in effect, upon which said agents had regularly received 60 per cent of the first year’s premiums and 7% per cent of all renewal premiums collected thereunder.

On November 15,1933, a bill in chancery was filed in the circuit court of Peoria county by Ernest Palmer, director of insurance of the State of Illinois, for the purpose of liquidating and winding up the affairs of said company on the alleged ground of its insolvency under the Liquidation Act of 1925, in which proceeding a decree was entered finding the company to be insolvent and ordering liquidation of its assets. The director of insurance appointed the plaintiff herein as receiver, pursuant to the provisions of the Illinois statutes, and the assets of the company, including the above note and mortgage, passed into the hands of the receiver.

After default in payment by said defendants, the receiver filed its foreclosure suit against the defendants in the circuit court of Vermilion county on December 31, 1934.

Defendants filed an answer admitting the execution and delivery of the. note and mortgage, but denying all right of recovery, and filed therewith their counterclaim setting forth the agency contract in question and alleging that by virtue of the receivership and insolvency of the company, there was a termination of the contract contrary to an implied condition that the company would continue in business, whereby the said agents would have collected commission on renewal premiums so alleged to be due in an amended counterclaim, in excess of the amount payable to the company on the note and mortgage; that the future commissions of said agents had been duly assigned to defendant Clarence H. DeLong and that such receivership and insolvency constituted an anticipatory breach of said implied obligation under the contract, whereby the defendants had sustained damages and were entitled, in equity, to have the same set off to the full amount of the mortgage indebtedness, as a vested right of the defendant under the terms of said contract.

Plaintiff filed a motion to dismiss the counterclaim, which was denied, and then filed its answer thereto admitting execution of the agency contract and such insolvency and that it had ceased to do insurance business on November 15, 1933, when said receiver was appointed for the purpose of liquidating the insolvent company, but denying defendants right to relief prayed.

The court heard the cause; held that there was such implied obligation on the part of the company; that it remained insolvent and did not carry out the contract for payment of said commission on renewal premiums; that there was an anticipatory breach of said obligation under the agency contract, whereby the defendants, under their counterclaim, had been damaged in an amount in excess of the $3,053.45 due on the note and mortgage; that defendants had no adequate remedy at law by reason of such insolvency and liquidation proceedings. The set-off was allowed and the note and mortgage decreed to have been satisfied and ordered canceled of record.

Oral testimony was also offered by defendant Clarence H. DeLong stating in substance that when the contract was entered into, he did so under the belief that the company would not become insolvent, but would continue in business until such renewal premiums were fully paid and that such belief in the stability and permanence of the company was induced by representations of the superintendent of agents of the company at the time the contract was entered into.

No cases involving similar issues and facts appear to have been passed upon by the courts of review in the State of Illinois and bnt few in other States. However, the issues in controversy nnder a similar state of facts were directly passed upon in the case of Hepburn v. Montgomery, 97 N. Y. 617, from which we quote as follows: “Appeals from orders and judgments of the Supreme Court, at General Term, in the fourth department, in three actions brought by plaintiff, as receiver of the Continental Life Insurance Company. . . . Actions numbers one and two were to foreclose mortgages, executed by defendant Montgomery and wife. In these he interposed a counter-claim consisting of an alleged indebtedness of the company to him as its agent for commissions in pursuance of an agreement with the company. As to this the court says: ‘We are of opinion that the counter-claim in actions numbers one and two fall within the principal of the cases of People v. Globe Mutual Life Insurance Co. (91 N. Y. 174) and Attorney General v. Continental Life Insurance Co., In re claim of Jewell (93 id. 630), that the agreement of the company to pay commissions on renewals was impliedly conditioned upon the continued existence of the company and its ability to renew policies and receive premiums thereon, and was terminated by its dissolution; that the right and power of the company to receive premiums having been destroyed by the lawful action of the officers of the State, no commissions on such premiums could thereafter become due to the defendant Montgomery, and consequently his right to elect to commute for a gross sum for commissions to become due terminated, and the obligation of the company to pay either the commissions, or a gross sum in lieu thereof, ceased. ’ ’ ’

In the case of People v. Globe Mut. Life Ins. Co., supra, it was held that where the company had been restrained by an order of the court from further prosecuting its business and a receiver was appointed, a contract entered into by the company with a general agent for his services for a specified term is thereby annulled by the action of the State, and he has no cause of action for nonperformance by the company thereafter; that “what had happened was a dissolution of the contract by the sovereign power of the State, rendering performance on either side impossible. And this result was within the contemplation of the parties, and must be deemed an unexpressed condition of their agreement.”

The same principle was announced and adhered to in the case of Layton v. Illinois Life Ins. Co., claim of George F. Bachman, 81 F. (2d) 600. The court, concerning the issues therein, stated that “The single, ultimate question to be determined upon this appeal is whether a life insurance agent under a contract for post-agency renewal commissions is entitled, upon receivership of the life insurance company, and its consequent inability to continue in business, to recover the ‘present value’ of such commissions upon renewal premiums which it is alleged the company, had it continued in business, would have received in due course. ’ ’

There, appellant Bachman had entered into an agency contract with the Illinois Life Insurance Company on September 1, 1919, and continued as its agent until the appointment of a receiver by the United States District Court on November 29, 1932. The contract there, as here, contained numerous provisions and turned upon the construction of portions of the contract, which provided for the payment of commission on the cash premiums for the first year and of commission on renewal premiums so paid upon the second and subsequent years’ premiums at rates specified therein. It also contained certain provisions of similar import to the contract herein relative to payment of the renewal commissions to the agent’s representatives in case of death. The claim for commissions on future renewal premiums was denied and the appeal followed. The contract there, as here, was for no definite term and could be terminated at any time by notice of either party, and the court held that it was, in effect, terminated by the receivership of the company. The appellant contended that the provisions of the agency contract for postagency commissions was not terminable at the will of the principal and had been breached by the appointment of the receiver and consequent inability of the company to perform. Appellee therein contended that such termination was by operation of law and was within the contemplation of the contracting parties and cannot in any event be made a basis of liability.

In passing upon the issues, the court said: “A similar question was before the Court of Appeals of the Eighth Circuit in the case of Moore v. Security Trust & Life Insurance Company, 168 F. 496, 499. The only important factual difference in that case was that the insurance company had voluntarily incapacitated itself from further continuance in the life insurance business by conveying all its assets to another company. The court there held that such conduct on the part of the company did not constitute an anticipatory breach of an agreement with its agent that would sustain an action by the agent for the present worth of future commissions. . . . Section 28 of the contract must be read in connection with section 21 which obligates the company to pay a commission on renewal premiums ‘which shall ... be obtained, collected, paid to and received by said first party, in cash. . . . ’ A proper construction of the contract requires that this condition be likewise read into section 28 which deals with appellant’s rights upon termination of the agency; indeed, express reference is made in section 28 to the conditions of section 21. The contract having been terminated by operation of law, this condition was likewise incapable of fruition. The appellant’s right to commissions on future premiums being at all times a prospective right and contingent upon payment being made by the holders of the contracts of insurance— contingent both before and after ‘due termination’ of the contract — it must follow that this condition was within the contemplation of the contracting parties and the burden of failure of realization must fall alike upon them,” .

In that case, it was held that a life insurance agency contract which was for no definite term and which provided for postagency renewal commission on premiums which should be collected by the insurer, the agent of the insurer, during receivership, was not entitled to recover ‘ ‘ the present value ’ ’ of commission on renewal premiums which the insurer would have received in due course thereafter had it continued in business, since the condition of commissions being contingent on premiums being paid, was within the contemplation of the parties.

It was there further said that “The very nature of the agency contract impels the conclusion that it must have been within the contemplation of the contracting parties that the company might some day become incapacitated from continuing in the insurance business. When the district court assumed jurisdiction over the affairs of the company and appointed a receiver, we think this amounted to a termination of the contract by operation of law reasonably within the contemplation of the parties and not an actionable breach on the part of the company.”

The court then distinguished the Chicago Auditorium Association case cited by the defendant appellees herein in the following language: “The situation here is to be distinguished from that in the case of Central Trust Company of Illinois v. Chicago Auditorium Association, 240 U. S. 581, 36 S. Ct. 412, 416, 60 L. Ed. 811, LRA. 1917B, 580, where the court, in holding that bankruptcy created a breach of the contract there under consideration, said that ‘the obligation of the bankrupt was clear and unconditional. ’ The contract here abounds in contingencies. Appellant very earnestly contends that the company, having become incapacitated from further continuance of its contract with him, a right has accrued to bim to claim damages on account of such disenablement. The fallacy of his position lies in his assumption that such right is absolute, whereas in fact it is prospective and contingent. The contingency has not happened and, by force of the receivership, cannot happen and his prospective right can never ripen into an absolute right. ’ ’

The court then concluded as follows: “We think it cannot be said that the company engaged itself unconditionally to remain in business for any given period and thus be in a position to receive the renewal premiums. The continued solvency of the company and its continued ability to collect and receive future premiums from those insured was one of the contingencies to be accepted alike by the agent and the company and, therefore, within the reasonable contemplation of the parties. The success or failure of the company was of like importance to the agent and the company. . . .We think a fair construction of the contract as a whole indicates clearly that the right to renewal commissions is conditioned on the continued existence of the company and the continued collection of premiums. . . . The order is affirmed.”

The courts of review of Illinois have generally recognized the rule of construction that in contracts, the performance of which requires the continued existence of a particular person or a particular thing, a condition is always implied that the death of such person or the destruction of such thing shall excuse performance. (Martin Emerich Outfitting Co. v. Siegel, Cooper & Co., 237 Ill. 610, 86 N. E. 1104; Siegel, Cooper & Co. v. Eaton & Prince Co., 165 Ill. 550, 46 N. E. 449; Walker v. Tucker, 70 Ill. 527; White v. White, 274 Ill. App. 531; 13 C. J. 642, 643.) In the case of Martin Emerich O. Co. v. Siegel, Cooper & Co., 141 Ill. App. 147, 159 (affirmed supra) quoting from Taylor v. Caldwell, 3 Best & Smith, 826, it is said “Where from the nature of the contract it appears that the parties must from the beginning have known that it could not be fulfilled unless, when the time for fulfillment arrived, some particular specified thing continued to exist, so that, when entering into the contract, they must have contemplated such continuing existence as the foundation of what was to be done, then, in the absence of any express or implied warranty that the thing shall exist, the contract is not to be construed as a positive contract, but as subject to an implied condition that the parties shall be excused in case, before breach, performance becomes impossible from the perishing of the thing without the default of the contractor. ’ ’

The oral statements of the defendant as to what the parties contemplated cannot alter nor overcome the express provisions of the written contract, when the intention of the parties can be gathered from the language of the instrument and all of its provisions when construed together and given meaning, as they must be, with all necessary implications arising therefrom.

We hold that the principles announced in the above cases are applicable to and controlling under the facts and issues herein and that the trial court erred in granting the relief prayed in the counterclaim and in failing to dismiss the same. The plaintiff was entitled to the relief prayed in its original bill of complaint.

The decree of the circuit court of Vermilion county is therefore reversed and the cause remanded with directions to proceed and to enter decretal orders in conformity with the holdings herein.

Reversed and remanded with directions.


author: Mr. Presiding Justice Eiess

text:
    Trustees of Schools of Township No. 27 North of Range 9 East of the Third Principal Meridian, in the County of Ford and State of Illinois, Appellant, v. Benjamin S. Thompson et al., Appellees.
    Gen. No. 9,146.

      Opinion filed January 24, 1939.
    M. H. Scott, of Piper City, for appellant.
    Claude M. Swanson, of Paxton, for appellees.
   Mr. Presiding Justice Eiess

delivered the opinion of the court.

Plaintiff has appealed from a decree of the circuit court of Ford county in a foreclosure proceeding wherein a receiver, who had been appointed by the court to collect and preserve the rents and profits from the mortgaged premises, had reported a balance on hand of $1,031.64, which was ordered by the court to be paid to the owner of the equity of redemption, without allowing a credit against the same of an unpaid deficiency of $504.28 remaining due after sale of the mortgaged premises, on the ground that the rents had not been pledged nor become equitably payable to the mortgagee under the terms of the mortgage.

A 40-acre tract of real estate, which was tiled and fenced but had no buildings or other improvements thereon, was mortgaged to the plaintiff to secure payment of a promissory note in the sum of $4,000 dated March 1, 1910, given to plaintiff by one Benjamin S. Thompson. Both the note and mortgage were signed by Thompson and the mortgage was signed by his wife. Provision was made therein for the payment of principal, interest and taxes, but no specific provision was made concerning the appointment of a receiver or pledging the rents and profits from the premises toward the payment of the indebtedness or of any deficiency judgment. The mortgage contained a further provision that “for any failure or refusal to comply or perform the conditions or covenants herein contained, I will deliver immediate possession of the premises.”

The mortgagor remained in possession of and paid interest and taxes on the premises until 1927, when he conveyed the same by a warranty deed containing no reference to the mortgage, to Herbert Powell and Jessie B. Powell, as joint tenants. After so conveying the premises, the mortgagor, who had become insolvent, removed to North Dakota. The interest and taxes were paid by the Powells until 1933, when a default in the payment of such interest occurred, and a foreclosure suit followed to the August term, 1935, of said court, wherein the amount of the mortgage indebtedness was set forth, including alleged unpaid current taxes of $37.47 for that year, which tax was subsequently paid by the Powells before a receiver was appointed.

Thereafter, in October, 1935, upon verified petition and evidence heard, the court appointed a receiver to collect and preserve the rents and profits, from which order no appeal was taken. A decree of foreclosure and for sale in default of payment by a short day fixed therein was entered on December 11, 1935, and on November 21, 1936, the premises were sold by the master in chancery and a certificate of purchase was issued. The Powells had assigned all interest in the rents and profits to defendant Lizzie H. Bane. In the meantime, the receiver had collected corn rents from the premises due from defendant J. A. Holmes, as tenant, in the aggregate amount of $1,215.41, which was reported to the court, less a credit for bond premium, and solicitor’s and receiver’s fees allowed by the court and not in controversy herein, leaving the above balance of $1,031.64 on hand and praying that the court determine and enter an order for payment thereof to the party or parties entitled thereto. This balance was ordered to be paid to defendant Lizzie H. Bane, as assignee of the Powells, and plaintiff’s appeal followed a denial of its motion to set aside said order. In September, 1937, the property was redeemed upon payment of the purchase price, interest and costs, and the master’s certificate of sale was canceled.

The question arose as to whether or not, under the above facts and provisions of the mortgage, the deficiency decree of $504.28 due plaintiff was payable out of said rents and profits and the remainder only payable to the transferee of all interest therein by the holders of the equity of redemption, or whether the whole of said balance was so payable to said transferee, Lizzie H. Bane, without deduction of said deficiency.

It is contended by appellant that the order of appointment of the receiver upon hearing of petition therefor, when not appealed from, renders the question of the disposition of such rents other than as a credit upon the deficiency decree res judicata as against the claims of the mortgagor or his subsequent grantees holding the equity of redemption. No such conclusion follows, since the rents and profits were collected and held by the receiver as an officer of the court subject to its order as to final disposition thereof. The fact that the owner of an equity of redemption has not appealed from an order appointing a receiver of rents and profits does not prevent him or his transferee from asserting any rights to the funds collected by such receiver during the period of redemption. Burleigh v. Keck, 84 Ill. App. 607; Ruprecht v. Muhlke, 225 Ill. 188, 194, 80 N. E. 106. The entry of an order in foreclosure, directing a receiver to take charge of the rents and profits, does not affect the rights of parties to assert their claim to such funds thereafter. Burleigh v. Keck, supra; Ruprecht v. Muhlke, supra; Reeves Illinois Mortgages, Vol. 2, Secs. 555 and 557; Davis v. Dale, 150 Ill. 239, 243, 37 N. E. 215; Stevens v. Hadfield, 196 Ill. 253, 63 N. E. 633; Shinnick v. Goodman, 259 Ill. App. 107, 114; Perlman v. Marzano, 338 Ill. 109, 114, 170 N. E. 254.

Ordinarily, the mortgagee is not entitled to the rents and profits unless the same have been pledged by the terms of the mortgage. Owsley v. Neeves, 179 Ill. App. 61; West v. Adams, 106 Ill. App. 114. It is the general rule that the owner of the equity of redemption is entitled to the rents and profits of the premises until the expiration of the redemption period. Hindman v. Off, 246 Ill. App. 528, 530; Davis v. Dale, supra; Stevens v. Hadfield, supra; Standish v. Musgrove, 223 Ill. 500, 506, 79 N. E. 161.

The rule is also well settled that where the rents have not been pledged, the owner or transferee of the equity of redemption is entitled to such rents and profits where the deficiency decree under which the receiver is in possession is not against the owner or transferee of the equity of redemption, but only against the mortgagor or other parties. Coleman v. Mulcahey, 334 Ill. 64, 67, 165 N. E. 189; Wickett v. Hastings, 209 Ill. App. 305; Stevens v. Pearson, 202 Ill. App. 22; Owsley v. Neeves, supra; Beeves Illinois Mortgages, Vol. 2, Sec. 555.

Appellant earnestly contends that the declaratory provision of the mortgage to the effect that upon breach of any covenants, the mortgagor “will deliver immediate possession of the premises” carries with it both the authority to appoint a receiver and to pledge the rents and profits to the payment of the mortgage debt or deficiency decree under the facts herein. The case of Chicago Title & Trust Co. v. Mack, 347 Ill. 480, 180 N. E. 412, is cited in support of this position. There, an entirely different issue and set of facts were involved than in the case at bar. The mortgage not only waived the right to possession of the mortgaged premises, but also expressly consented to the appointment of a receiver during the pendency of the suit. The controversy concerned a contempt charge pending on appeal for refusal to attorn to the receiver, and involved a collateral attack upon the discretionary jurisdictional powers of the chancellor. It did not undertake to pass upon the rights of an assignee or transferee who was not personally liable for the indebtedness, and the opinion was not applicable to the controlling facts and issues in this case.

In the case of Standish v. Musgrove, supra, the court (at page 506) said “The appellant, so far as disclosed by the record, was the owner of the equity of redemption. There was no deficiency judgment against the appellant and she was not made personally liable for the encumbrance by the decree. Under such circumstances, if she was in fact the owner of the equity of redemption she was entitled to the rents and profits of the premises until the time for redemption had expired. The appointment of a receiver did not divest her of that right. She was still entitled to the rents and profits pending redemption, less such expenditures as were necessary and proper in preserving the property, but not in bettering its condition. Davis v. Dale, 150 Ill. 239; Stevens v. Hadfield, 178 id. 532.” Longley v. Wilk, 171 Ill. App. 419, 425; Colemam, v. Mulcahey, supra; Baldwin v. Tuttle, 215 Ill. App. 57; Cowell v. Gnatzig, 178 Ill. App. 482.

In Baldwin v. Tuttle, supra, numerous cases are analyzed and distinguished by the court, and there, as here, the court held that the case of Standish v. Musgrove, supra, controls the question presented by the order under review. Cases cited by the appellant herein are there distinguished (at page 66) in the following language: “Among the cases cited are Haas v. Chicago Building Society, 89 Ill. 498; First Nat. Bank of Joliet v. Illinois Steel Co., 174 Ill. 140; Bagley v. Illinois Trust & Savings Bank, 199 Ill. 76, and Prussing v. Lancaster, 234 Ill. 462. An examination of the first three cases, however, discloses that either the owner of the equity of redemption was also the original maker of the notes and mortgage, and therefore personally liable for the debt, or, the rents and profits during the redemption period had been expressly mortgaged by the provisions of the trust deed to secure the debt. In the Trussing case it is not disclosed what the provisions of the trust deed were. These cases, therefore, are to be distinguished from the present case.”

When the rents and profits are expressly pledged in the mortgage, it is a well settled rule of law, based upon the contract of the parties, that the same may be properly taken and applied toward the payment of the mortgage indebtedness or a deficiency thereof after sale of the mortgaged premises. Where the rents and profits are not expressly pledged nor the payment of the indebtedness or deficiency chargeable against or assumed by the holder of the equity of redemption, we hold the rule in Illinois to be that some equitable element in addition to inadequacy of value of the land and insolvency of the parties primarily liable for the debt, such as waste, failure to pay taxes or other acts that would les sen, imp air or reduce the value of the mortgage security, must appear before the unpledged rents and profits can be properly taken and applied toward the payment thereof, as against the interest of the holder or transferee of the equity of redemption not personally liable therefor. (Schaeppi v. Bartholomae, 217 Ill. 105, 110, 75 N. E. 447; Standish v. Musgrove, supra.) No such waste, impairment nor expenditure necessary to preserve the value of the mortgaged premises appears herein.

We hold that the chancellor below did not err in decreeing payment of the balance of $1,031.64 in the receiver’s hands to defendant transferee Lizzie H. Bane, under the terms of the mortgage and facts and circumstances in evidence, and the decree of the circuit court of Ford county is therefore affirmed.

Decree affirmed.