author: Mr. Justice McSurely

text:
    Benjamin B. Morris, Appellant, v. Samuel C. Levin and Belle Levin, Defendants. Samuel C. Levin, Appellee.
    Gen. No. 40,636.
    Opinion filed November 27, 1939.
    David I. Spark, of Chicago, for appellant.
    Dwork & Epton, of Chicago, for appellee; Jack E. Dwork and Saul A. Epton, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

June 22, 1938, judgment by confession was entered in the municipal court of Chicago in favor of plaintiff and against the defendants for $883.15, which was the amount due with interest and attorney’s fees on a real estate gold bond executed by the defendants and owned by plaintiff; defendant Samuel Levin pleaded that he had been discharged in bankruptcy October 8, 1934, upon his petition filed in the United States District Court for the Northern District of Illinois in case No. 55,712; the municipal court sustained his motion for a permanent stay of execution, and plaintiff appeals.

June 24, two days after the judgment by confession was entered, defendant Levin moved in the United States District Court for an order restraining the issuance of an execution, but this motion was subsequently withdrawn and in lieu thereof he filed his motion September 16,1938, in the municipal court for a permanent stay of execution. In this petition he set forth the bankruptcy proceedings in the district court in due form; that he scheduled his liability on the real estate bond in question and set forth his discharge in the bankruptcy proceeding on October 8, 1934. No execution was issued on the judgment obtained by plaintiff. Counter-afiidavits were filed by plaintiff in the municipal court and after several continuances, on October 26, 1938, defendant’s motion was sustained and a permanent stay of execution ordered.

Plaintiff’s entire brief discusses the alleged negligence of the defendant in failing to take the necessary steps to vacate the judgment within the proper time. He asserts that defendant was guilty of laches in failing to present his petition within the statutory period of 30 days. The briefs of both parties are devoted largely to "the question of the time required in the municipal court after judgment has been entered for defendant to move to vacate it or open it up. We hold that the practice in such a case is not relevant to the present situation. The applicable provisions of the Bankruptcy Act are sections 25(a) and 35(a).

“The bankrupt shall . . . (8) . . . file ... a schedule of his property, . . . and a list of all his creditors . . . showing their residence, if known, or if unknown that fact to be stated . . . .” (11 U. S. C. A. Sec. 25[a].)

“A discharge in bankruptcy shall release a bankrupt from all of his provable debts whether allowable in full or in part, except such as . . . (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor, if known to the bankrupt, . . . .” (11 U. S. C. A. Sec. 35[a].)

There is no denial but that defendant duly and in proper form scheduled in the bankruptcy proceeding the liability to plaintiff by reason of the note in question. Therefore, when the order of discharge was entered in the bankruptcy court on October 8, 1934, it took effect upon its entry and defendant’s liability upon the note was discharged. In Glick v. Wallach, 301 Ill. App. 600 (Abst.), opinion filed in this court June 30, 1939, where the schedule filed in the bankruptcy proceedings was in form like that in the present case, we held that a discharge in bankruptcy discharged the indebtedness. The statutory regulations or rules of the municipal court touching the time within which motions to vacate a judgment should be made, are not applicable. The order of discharge nullified any liability of defendant arising out of the note. The power to confess judgment was at the same time invalidated and there was no judgment against the defendant which required prompt action on his part to obtain a stay of execution.

In Monroe v. Upton, 50 N. Y. 593, the defendant did not receive his discharge in bankruptcy until almost six months after the entry of judgment against him; he made no move for any stay of execution until almost three years after the discharge in bankruptcy when plaintiff caused an execution to be issued upon his judgment; defendant then moved for a perpetual stay of execution, which was granted. The court held this was the proper practice, as defendant had no opportunity to plead Ms discharge until some creditor had attacked him.

The defendant in the present case had no opportuMty to plead his discharge in bankruptcy before plaintiff obtained his judgment by confession and the only circumstances which would justify the opening up of the judgment and setting the cause for trial would be a showing of fraud or some other ground tending to impeach the validity of the order of discharge in bankruptcy. The bankruptcy proceedings are not questioned. Other cases holding that a discharge in bankruptcy is a final discharge of liabilities are Boynton v. Ball, 121 U. S. 457; Huntington v. Saunders, 166 Mass. 92; Sanderson v. Daily, 83 N. C. 67; Blair v. Carter’s Adm’r, 78 Va. 621; Palmer v. Hussey, 87 N. Y. 303; Smith & Bro. v. Kinney, 6 Neb. 447 and Leonard v. Yohnk, 68 Wis. 587.

For the reasons indicated the order of the municipal court is affirmed.

Affirmed.

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


source: Caselaw Access Project

author: Justice McSurely.

license: Public Domain

text:
    Harry J. Myerson and Jacob E. Replogle, Appellees, v. Glenn D. Norton et al., Appellants. G. W. Rodway, Appellant. L. J. Bartlett, Inc. et al., Appellees.
    Gen. No. 40,676.

      opinion filed November 27, 1939.
    Yowell & Langdon, for certain appellant; Elbridge W. Rice, for certain other appellants; William A. Rogan and William C. Burns, for appellees, Harry J. Myerson and Jacob E. Replogle.
   Opinion by

Justice McSurely.

“Not to be published in full.”


text:
    William Leslie Thoma, Executor of Last Will and Testament of Ida C. Dutton, Deceased, Plaintiff, v. Robert H. Eberle et al., Defendants. William Leslie Thoma, Appellant, v. Robert H. Eberle et al., Defendants. Robert H. Eberle, Appellee.
    Gen. No. 40,685.
    opinion filed November 27, 1939.
    Harris E. Williams and Robert C. Baumgartner, for appellant; Robert H. Eberle, pro se; Thomas W. Winton, of counsel.
   Opinion by

Justice McSurely.

“Not to be published in full.”


text:
    Minnie Davis and Samuel E. Weinshenker, Appellants, v. A. K. Selz et al., Appellees.
    Gen. No. 40,697.
    opinion filed November 27, 1939.
    Harry J. Myerson and Shulman, Shulman & Abrams, for appellants; Levinson, Becker, Peebles & Swiren, for certain appellees; Arthur B. Schaffner and Taylor, Miller, Busch & Boyden, for certain other appellee; Arthur B. Schaffner, Francis X. Busch, John S. Miller, Benjamin V. Becker, Don M. Peebles and Leo Wolfson, of counsel.
   Opinion by

Justice McSurely.

“Not to be

.published in full. ’ ’


text:
    Famous Permanent Wave Shops, Inc., Appellant, v. Archie C. Smith, Appellee.
    Gen. No. 40,711.

      Opinion filed November 27, 1939.
    Barnard & Barnard, of Chicago, for appellant; Morton John Barnard, of counsel.
    Frank Moland, of Chicago, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff filed its complaint in chancery seeking to restrain defendant from declaring a forfeiture of, or attempting to terminate a lease between defendant as lessor and plaintiff as lessee and from taking any steps to recover possession of the demised premises from plaintiff, and by its amended complaint asked for money damages; defendant moved to dismiss the complaint as amended on the ground the court had no jurisdiction of the subject matter, plaintiff had an adequate remedy at law and, the complaint was insufficient in law to entitle plaintiff to the relief sought, which motion the court sustained. Plaintiff appeals.

September 18, 1937, defendant Archie C. Smith, as trustee, as lessor, and plaintiff, as lessee, entered into a written lease of the store located at 4704-06 Irving Park Boulevard, Chicago, for the three-year period commencing October 1, 1937, and expiring September 30, 1940, at a rental of $4,500 for the term, payable to the lessor at the office of Smith & Wickersham, 4728 Irving Park Boulevard, Chicago, or at such other address as the lessor may in writing designate, in monthly instalments of $125 each, in advance, on the first day of each month, it being provided that the time of payment was of the essence of the agreement. The lessee was to have an option to renew the lease for an additional three-year period, and at the expiration of that period to renew at a monthly rental of $300 for the period of five years expiring September 30, 1948. Under its terms the lessee had the right to assign the lease or to sublet the demised premises, and at its own expense, to make any alterations, improvements or additions thereto.

The following provisions, found in paragraph 12 of the printed portion of the lease, together with the condition that time of payment of rent was of the essence of the contract, give rise to the present controversy.'

“. . .in case of the non-payment of the rent reserved hereby, or any part thereof, . . . lessee’s right to possession of the demised premises, thereupon shall terminate, with or without any notice or demand whatsoever, . . . and if the Lessor so elects, but not otherwise, and with or without notice of such election or any notice or demand whatsoever, this lease shall thereupon terminate, . . . The acceptance of rent, whether in a single instance or repeatedly, after it falls due, or after knowledge of any breach hereof by Lessee, or the giving or making of any notice or demand, whether according to any statutory provision or not, or any act or series of acts except an express written waiver, shall not be construed as a waiver of Lessor’s right to act without notice or demand or of any other right hereby given Lessor, or as an election not to proceed under the provisions of this lease.”

Plaintiff’s original complaint was filed October 26, 1938. Its amended and supplemental complaint, filed December 6, 1938, sets up the lease, as above outlined; alleges that plaintiff has been in possession of the premises from October 1, 1937, until the present time and is still in possession under the terms of the lease; that plaintiff paid the rent of $125 per month for the months commencing October, 1937, to and including September, 1938, and that although some of these payments were made prior to the first day of the month for which the same were due and some were made subsequent to the first day of the month, defendant accepted the rents for each of said months.

The complaint alleges that the check for rent for the month of September, 1938, was dated September 1, 1938, mailed by plaintiff on September 6 and received by defendant September 7; that notwithstanding the fact that plaintiff paid the rent for September, 1938, and that defendant accepted such rent, defendant on September 8 sent plaintiff a purported notice of termination of the lease which was received by plaintiff September 12, notifying it that by reason of its failure to make payment of the September rent on September 1, 1938, as provided for in the lease, “. . . the undersigned (defendant) has and did heretofore elect to terminate said lease without notice as provided in paragraph 12 thereof. If you desire to retain possession of said premises, your tenancy will be on a month to month basis at a rental of $125 per month, payable on the first day of each month, in advance.” September 13, 1938, plaintiff sent to defendant a letter, by registered mail, in which it denied the right of the defendant to so terminate the lease and refused to enter into any agreement for the use of the premises other than that provided in the lease, and stating that plaintiff’s check for $125, which was previously sent to and retained by the defendant, was for rent for the month of September, 1938, in accordance with the provisions of the lease and not under any other tenancy or agreement. It is also alleged that thereafter, on October 6, 1938, defendant deposited said check for payment and it was paid.

The complaint alleges that on September 27, 1938, plaintiff tendered the rent for the month of October, 1938, in accordance with the terms of the lease, but defendant refused it; that on October 10 defendant served upon plaintiff a landlord’s five-day notice to the effect that there was then due $125 as “rent for the premises” and that unless payment thereof was made on or before the expiration of five legal days “your Lease to said premises will be terminated.” It is alleged that thereafter, on October 12, and within the five days specified in said notice, plaintiff again tendered the rent due for October, 1938, in accordance with the terms of the lease, but defendant refused to accept it; that on October 27 plaintiff tendered the rent due for the months of October and November, 1938, in accordance with the terms of the lease, which tender was refused, as was a similar tender on November 28 for the months of October, November and December. The complaint contains an express tender and offer to pay to defendant the rent of $125 per month for the months of October, November and December, 1938, in accordance with the terms of the lease, and to pay the rentals prescribed by the lease for the months following the month of October, 1938.

The complaint charges that notwithstanding the fact that the lease is in full force and effect and that plaintiff has complied with it except in so far as a strict compliance with its terms has been waived by the defendant in accepting rental due thereunder subsequent to the first day of the month for which it has become due, and notwithstanding the fact that plaintiff has tendered the rental provided by the- lease to be paid, in accordance with its terms, defendant has attempted to cancel the lease and has instituted or has threatened to institute suit for possession, and unless restrained from so doing defendant will endeavor to forfeit and terminate the lease and plaintiff will suffer irreparable injury and will be deprived of its legal rights and of its lawful possession of the premises.

The complaint prayed that a decree be entered declaring the lease to be in full force and effect; that defendant be restrained from declaring any forfeiture thereof and from instituting any suit to recover possession or to oust plaintiff, and from taking any action to recover any money alleged to be due to defendant from plaintiff for rent or otherwise, and that pending the hearing a temporary injunction be entered restraining defendant from doing any of these things.

The complaint concludes that because of the acts of the defendant in wrongfully attempting to terminate the lease, plaintiff was deprived of an opportunity to sublet a portion of the premises and has lost the rental which it would otherwise have received therefor, and by reason thereof plaintiff has sustained damages in the sum of $5,000, for which amount it asks that a judgment be entered against the defendant.

The rule is well established that equity will relieve a tenant from an attempted forfeiture for nonpayment of rent on a fixed date. ££ That a court of equity, even in the absence of special circumstances of fraud, accident, or mistake, may relieve against a forfeiture incurred by the breach of a covenant to pay rent, on the payment or tender of all arrears of rent and interest by a defaulting lessee, is elementary.” Kann v. King, 204 U. S. 43, 54, 55. This general principle has been recognized and followed in many cases in this State. Palmer v. Ford, 70 Ill. 369; Mayer v. Collins, 263 Ill. App. 219; Charles Mulvey Mfg. Co. v. McKinney, 184 Ill. App. 476; Watson v. Smith, 180 Ill. App. 289; Illinois Merchants Trust Co. v. Harvey, 335 Ill. 284. This is conceded by the defendant, but it is said the rule has not been extended to cases where, as here, the parties have made time the essence of their contract, and Brink v. Steadman, 70 Ill. 241; Mactier v. Osborn, 146 Mass. 399; Oesting v. City of New Bedford, 210 Mass. 396, and Klein v. New York Life Insurance Co., 104 U. S. 88, are cited in support. In the Brinh case no question of a forfeiture for nonpayment of rent was involved, but a bill to enforce a specific performance of a contract to convey certain premises where time was material and of the essence of the contract and plaintiff failed in a very substantial way to perform his part; in dismissing plaintiff’s bill for failure to show a just excuse for nonperformance, the court said that if parties choose to contract for a forfeiture in the absence of any fraud or improper practices on the part of the vendor, the law can afford the vendee no relief. In the Mactier case it was said that the result of the authorities is, that where there has been a breach of a covenant to pay rent equity will relieve against a forfeiture even if the breach is wilful on the part of the lessee, although no question of a forfeiture •for nonpayment of rent was there involved. In the Oesting case the defendant city was about to claim title to buildings upon the land conveyed to it by plaintiff because plaintiff failed to remove them from the land before a specified time; plaintiff invoked the rule that equity will relieve against a forfeiture, but the court in denying him any relief said: ‘ ‘ The nature of the contract having expressly made the time of performance essential, and his right to the property dependent upon it, the plaintiff shows no equitable circumstances of accident or mistake under which relief should be given.” Nor is the Klein case in point on the facts.

In Williston on Contracts, Rev. Ed., vol. 3, sec. 741, pp. 2101, 2102, it is said that continued acceptance of late performance without objection may operate as a permission to make similarly late performance in the future, “even where the exact time of performance is made of the essence by the contract between the parties,” and that this principle finds frequent application in the law of landlord and tenant, citing Stevinson v. Joy, 164 Cal. 279, and other cases. In that case the court said: “The true rule is firmly established and recognized by all the authorities. Where time is made of the essence of the contract for the payment of rent or other payments of money, and this covenant has been waived by the acceptance of the rent or other moneys after they are due, and with knowledge of the facts, such conduct will be regarded as creating ‘such a temporary suspension of the right of forfeiture as could only be restored by giving a definite and specific notice of an intention to enforce it.’ Such is the language of Monson v. Bragdon, 159 Ill. 61, 66, quoted with approval by this court after an extensive review of the authorities in Boone v. Templeman, 158 Cal. 290.” The Monson case involved,a bill for the specific performance of a contract and to enjoin defendant from bringing an action of forcible entry and detainer; in September, 1890, the defendant sold to the plaintiff a lot with a cottage thereon, payments to be made on the first day of each month; it was afterwards agreed between the parties that the payments might be made quarterly instead of monthly; thereafter three payments were made, one on January 9, 1891, another July 10 and the last on February 27, 1892; in September, 1892, the defendant served plaintiff with notice of the forfeiture of the contract for nonperformance of its terms. In holding against the defendant the court said: “It is well settled by our previous decisions, that although the vendor in a contract like this may have the right to declare a forfeiture for noncompliance with its terms in making prompt payment, time being made of the essence of the contract, that right may be waived by his conduct in dealing with the vendee,” and that while the defendant’s conduct was not necessarily an absolute permanent waiver, yet in a court of equity there was at least such a temporary suspension of the right as could only be restored by his giving a definite and specific notice of an intention to that effect. To the same effect is Davies v. Dayton, 298 Ill. 201, 205, where, also, time was made of the essence of the contract. This rule is quoted with approval in Plummer v. Worthington, 321 Ill. 450, 457, and Cottrell v. Gerson, 371 Ill. 174, 180.

Nor, under the allegations of the complaint, can it be argued that plaintiff has an adequate remedy at law in that whatever rights it has can be asserted by way of defense to any action brought by defendant to recover possession of the demised premises. In Mayer v. Collins, 263 Ill. App. 219, the court said:

“It is a well recognized principle that it does not follow that, because a remedy at law is afforded in a case, equity will not also take jurisdiction of the same state of facts. If the remedy in equity is more adequate because of special circumstances in the situation, the jurisdiction of equity will be sustained.” To require plaintiff to await the bringing by defendant of an action at law, in which only the right to possession would be determined, before being entitled to have the question decided as to whether the lease has been forfeited, would place plaintiff at the whim of the defendant. With plaintiff’s right to renew the lease is coupled its right to assign it or sublet the premises, and these are valuable rights, and the chances of their being interfered with by reason of a continuing threat on the part of defendant to bring an action for possession thus hindering any effort of plaintiff to sublet or assign, give rise to equitable jurisdiction under the circumstances. Indeed, the complaint alleges that plaintiff has already been prejudiced in its right to sublet the premises under the provisions of the lease. The remedy at law cannot be adequate if its adequacy depends upon the will of the opposing party, and a court of equity will relieve against such a predicament by deciding the rights of the parties immediately. Metropolitan Life Ins. Co. v. Consento, 297 Ill. App. 450, 459.

Defendant bases his right to forfeit or terminate the lease on the provisions of paragraph 12 thereof, quoted earlier in this opinion, to the effect that in case of nonpayment of rent the lessee’s right to possession thereupon shall terminate, with or without notice, and if the lessor so elects, but not otherwise, and with or without notice of such election or any notice or demand whatsoever. In Donovan v. Murphy, 217 Ill. App. 31, the lease in question provided that the lessor might declare a forfeiture of the lease for the failure of the lessee to pay rent when due, and also that the lessee waived his right to notice of an election on the part of the lessor to declare the term ended upon default in any of the provisions of the lease; the landlord accepted rent on the 10th day of each month and not upon the 1st day of the month, as provided for in the lease. In reversing a judgment in favor of the lessor in a forcible detainer suit brought by him to obtain possession, the court said the tenant was led to believe, by a course of dealings with the landlord, that payment on the 10th of the month would be a compliance with the conditions of the lease and, after reviewing several cases, held that under the circumstances, “notwithstanding the provisions of the lease with respect to notice,” it was the duty of the lessor to notify the lessee of the intention to insist upon a strict compliance with the terms of the lease as written. See also Bernstein v. Weinstein, 220 Ill. App. 292. Defendant’s contention, therefore, that the provisions of the lease excused any requirement that he serve notice on plaintiff, cannot be sustained.

Even if the provisions of the lease were construed as giving defendant the right to declare a forfeiture without notice, the service of the five-day notice operated as a waiver of this right. In the instant case plaintiff tendered the rent due for the month of October on September 27, 1938, and this was refused; defendant on October 10 served on plaintiff a landlord’s five-day notice to the effect that there was then due $125 as rent for the premises and that unless payment thereof was made on or before the expiration of five legal days after date of service of the notice, plaintiff’s lease would be terminated; plaintiff again tendered the rent on October 12, which was two days after the service of the notice, but defendant refused the tender. In Sixeas v. Fogel, 253 Ill. App. 579, 583, an action of forcible entry and detainer, the court said that having served the notice, the lessor was bound to comply with the statute relating to landlord and tenant and, the tender having been made within apt time, the lessor was without right to oust the lessee. And in a like action in Martin v. Dunlap, 259 Ill. App. 551, 553, the court said: “The landlord, after notifying his tenant in writing that he had waived his right to declare a forfeiture for a period of five days, ought not to be permitted to stultify himself within that time and to declare a forfeiture of the lease.” See also Hopkins v. Levandowski, 250 Ill. 372, 376. In the instant case the defendant recognized the existence of the lease at the time of the service of the five-day notice inasmuch as the notice itself stated that unless the rent were paid within five days after service of the notice “-your Lease to said premises will be terminated.” This is strong evidence of a waiver of the right to forfeit the lease except for nonpayment within the five-day period. As plaintiff tendered the rent within this period no right of forefeiture existed.

Another ground upon which it may be said the defendant clearly waived any right to declare a forfeiture is that he accepted and retained the rent for the month of September, 1938, with knowledge of the breach. This is the month for which the defendant contends the facts show a forfeiture for nonpayment of rent had been established. The rent was sent September 6 and received by defendant on the 7th; on the 8th defendant sent plaintiff a notice that defendant had forfeited the lease for nonpayment of the September rent on the 1st of September. Defendant, however, retained the rent. He therefore had knowledge of the breach at the time he accepted the rent and by so doing waived the right to declare a forfeiture. In Bernstein v. Weinstein, 220 Ill. App. 292, the lessor, claiming that the payment of the rent on the 5th of the month instead of the 1st was a breach of the terms of the lease, brought suit to oust the lessees and to terminate the lease; in denying the lessor any relief the court said: “If we are to consider the plaintiff . . . entitled to have the defendants ousted for failure to pay the rent for the month of April on the first of the month, it could only be on the assumption that he had not, prior to the beginning of the suit or trial, accepted the rent for that month. It hardly lies in the mouth of the plaintiff to say that he is both entitled to the rent for the month of April and to oust the defendants for failure to pay it on the first of the month.” To the same effect is Goldberg v. Pearl, 306 Ill. 436, 440.

We base our opinion upon the general rule, as stated in Jakes v. North American Union, 186 Ill. App. 1, 7: “Forfeitures are not favored in the law, and courts readily seize hold of any circumstances that indicate an intent to waive a forfeiture.” The present circumstances indicate an intention on the part of defendant to forfeit the lease, not because of any lapses of the tenant but because of “a mere secret mental operation” of the defendant. Donovan v. Murphy, 217 Ill. App. 31.

For the reasons above stated the order of the trial court dismissing the complaint is reversed and the cause is remanded with directions to proceed in accordance with the views expressed in this opinion.

Reversed and remanded with directions.

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


text:
    Adrian Pearlman and John Lancaster, Appellants, v. W. O. King Lumber Company et al., Appellees.
    Gen. No. 40,729.

      Opinion filed November 27, 1939.
    Werdell & Siniarski, of Chicago, for appellants; Stanley Werdell, of counsel.

      Rowe & Bailey, of Chicago, for appellees, W. O. King Lumber Co. and H. Denton; Joseph A. Bailey and Henry H. Caldwell, of Chicago, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiffs brought suit to recover damages to their respective automobiles alleged to be caused by the defendants; the jury brought in a verdict for the defendants and plaintiffs appeal.

The statement of claim alleged the negligence of defendant Denton, as the driver of a truck belonging to defendant W. 0. King Lumber Company, and also alleged the negligent operation of a Ford auto driven by the defendant Chester H. Brown; that as the result of the negligent operation of the truck and the Ford auto, plaintiffs ’ autos were wrecked.

In an action for tort, the declaration charging two or more defendants with jointly injuring plaintiff, there may be a verdict and recovery against only one of the defendants and it is immaterial that he remains charged in the declaration with joint negligence. Linguist v. Hodges, 248 Ill. 491.

Defendant Brown in his affidavit of defense admitted that he was operating a Ford auto at the time in question but denies any negligence on his part and alleges that the damage done was the result of the negligent and reckless operation of the lumber truck. The lumber company and its driver, Denton, in their defense deny any negligence on their part but allege that the damages were the direct result of the careless manner in which the Ford auto driven by defendant Brown was operated. They admit that their auto truck struck plaintiff Lancaster’s auto but deny this was caused by any negligence on their part.

Both plaintiffs are employed by the Parmelee company, which has offices and a garage on the southeast corner of Monroe street and Racine avenue; plaintiffs, driving their respective autos to work at about 4 o’clock in the afternoon of July 15, 1937, parked their cars at the curb, facing west on the north side of Monroe street, which runs east and west, and about 50 feet west of Racine avenue, which runs north and south; Pearlman’s car was in front of and west of Lancaster’s car; the brakes were set on plaintiffs’ cars. Lancaster had crossed Monroe street and was just stepping into the Parmelee company’s place of business when he heard a loud crash and ran out to see what had happened; he saw defendant lumber company’s truck pushed up against the back end of his car; he also saw a Ford on the southwest corner that had been wrecked; he then had a conversation with defendant Denton, who expressed regret that the accident happened and explained it by saying: “My motor died and I got hydraulic brakes on my truck and when the motor dies I have no brakes.” Another employee of the Parmelee company, working in the garage, heard the crash and his testimony as to what he saw is substantially the same as plaintiff Lancaster’s. He also testified as to the expressions of regret and explanation made by defendant Denton that his truck had run into Lancaster’s car. Plaintiff Pearlman testified to parking his car at the north curb of Monroe street with the brakes set; that he immediately went to work but knew nothing about the accident until his car had been removed.

No evidence, except as to the extent of the damage to Lancaster’s car, was introduced on behalf of the defendants.

We are of the opinion that the verdict of the jury was produced by improper instructions. It was improper to give so many instructions defining and explaining the preponderance or greater weight of the evidence. The substantial facts were not disputed and, in fact, were admitted by the affidavits of defense.

The court also improperly instructed the jury that the mere fact that there was a collision and plaintiffs ’ automobiles were damaged does not of itself entitle them to recover against the defendants. ° The jury was in fact told that unless the plaintiffs could prove by a preponderance of the evidence which of the defendants was to blame they could not recover, and also were instructed that if the jury believed that the defendants did nothing to cause the damage in question the verdict should be not guilty. The court repeatedly and at length instructed the jury to the effect that there was no evidence on which to predicate a verdict of guilty as to the defendants.

While it is a general rule that the mere happening of an accident, together with the exercise of ordinary care by the plaintiff, does not, alone, raise the presumption of negligence, yet, as pointed out in Barnes v. Danville St. Ry. & Light Co., 235 Ill. 566, 573, the presumption of negligence does arise where the accident is shown to proceed from an act of such a character that when due care is taken in its performance no injury ordinarily results from it, or where it is caused by the mismanagement of a thing over which the defendant has control. The opinion cites cases supporting the proposition that, where an accident happened under certain circumstances where ordinarily no accident would happen, this will amount to a presumption of the defendant’s negligence. The law presumes that the usual and ordinary thing will occur, and where a vehicle runs into another vehicle which is safely parked at the side of the road, the accident is of such a nature that it would not occur where due care had been used. It is reasonable to assume that it is chargeable to some want of care on the part of the driver of the vehicle causing the damage. This was the view taken in Howlett v. Randol (Mo. App.), 39 S. W. (2d) 463; Waite v. Boutross, 225 Mo. App. 724, 39 S. W. (2d) 454; Slappey v. Schiller, 116 Cal. App. 274, 2 P. (2d) 577; Becker v. Mattel (La. App.), 165 So. 474; Bryne v. Great Atlantic & Pacific Tea Co., 269 Mass. 130; Griffith v. V. A. Simrell & Son Co., 304 Pa. 165, and Davis v. Brown, 92 Cal. App. 20, considering similar facts. This applies to the facts in this case. The truck was under the exclusive control of the driver Denton. If run as usual, no accident would have happened.

There is no defense in this case. Either one or both of the defendants are guilty. The only question for the jury to decide is, which one of the defendants is guilty, or both, and the amount of the damages. Plaintiffs have been damaged in their property and should be paid the amount of their damages.

The case should have been submitted to the jury under proper instructions, as we have indicated. For the error in this respect the judgment is reversed and the cause remanded.

Reversed and remanded.

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


author: Justice O’Connor.

text:
    Allan M. Loeb et al., Appellants, v. General Acceptance Company, Appellee.
    Gen. No. 40,578.
    opinion filed November 27, 1939;
    rehearing denied December 11, 1939.
    Markheim, Parker & Miller, for appellants; A. R. Milled, of counsel; A. S. and E. W. Froehlich, for appellee.
   Opinion by

Justice O’Connor.

“Not to be published in fuU.”


author: Mr. Justice O’Connor

text:
    John Valant, Appellee, v. Metropolitan Life Insurance Company, Appellant.
    Gen. No. 40,654.
    Opinion filed November 27, 1939.
    Rehearing denied December 11, 1939.

      Hoyne, O’Connor & Rubinkam, of Chicago, for appellant; Nathaniel Rubinkam & James C. Rich, of Chicago, of counsel.
    Gilbert F. Wagner and William C. Greatman, both of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff: (the assignee of his mother, Marcella Val-ant, the beneficiary named in a policy issued by defendant April 5, 1933, on the life of Kazimer Valant, the husband of Marcella and father of plaintiff), brought an action to recover the face of the policy, $2,500, with interest. The defense interposed was that the person who signed the application and submitted to a medical examination was not Kazimer Valant, named in the policy — that someone had impersonated him. There was a jury trial and a verdict in favor of defendant. Afterward the court entered judgment, notwithstanding the verdict, in favor of plaintiff for $2,875 and defendant appeals.

The action of the court in entering judgment for plaintiff, notwithstanding the verdict, was bottomed on the proposition that the policy by its terms was incontestable after two years, and that since the policy was dated April 5, 1933, and the named insured died September 6, 1935, the defense interposed was unavailing.

The application, dated March 25,1933, which is made a part of the policy, shows that the applicant, Kazimer Valant’s place of business was 8856 S. Lowe avenue, Chicago; that he had resided at that residence for four years; that he was born in Lithuania, October 25, 1893 and was married. The beneficiary was his wife, Marcella Valant, 38 years old, who lived at the same address. Charles Stone was the representative of the insurance company who took the application. Another part of the application shows that the applicant was examined at 8856 S. Lowe avenue by Dr. A. I. Sprague, on March 31, 1933. Four receipts issued by the defendant company are also in evidence. They show that the semiannual premiums were paid October 11, 1933; April 24, 1934; October 12, 1934 and March 25, 1935. Each of these was countersigned by Charles Stone and state that the payments were received from Kazimer Valant, of 8856 S. Lowe avenue. The evidence further shows that Kazimer Valant died September 6, 1935; that at that time he had lived for 10 years at 4180 Archer avenue, Chicago; that November 10, 1916, Charles Walantas made application to defendant insurance company giving his address 2935 W. 39th place, Chicago, and his occupation as a carpenter; that he expected to go back into the grocery business; that Marcella Walantas, his wife, was named beneficiary. A policy on this application was issued January 2, 1917, to Charles Walantas, who then resided at 4039 S. Albany street, Chicago, and that on October 27, 1923, his address was changed to 4180 Archer avenue. There is further evidence that the English translation of “Kazimer Valant” is “Charles Valant” and that Charles Walantas was the same person as Kazimer Valant named in the policy in suit.

The policy provided it should be incontestable after it had been in force for a period of two years, except for nonpayment of premiums. There is other evidence in the record but since we have reached the conclusion that the case must be tried again, it is unnecessary to refer to it here.

The contention of defendant is that Kazimer Valant, who signed the application and who submitted to the medical examination prior to the issuance of the policy, was in business and lived at 8856 S. Lowe avenue, Chicago, and that the four semiannual premiums were paid by him from that address; while the man who died (whose son sues as assignee of the beneficiary of the policy) lived and was in business for many years at or near the vicinity of 4180 Archer avenue — in other words the person who signed the application and took the medical examination, was not the man who died and whose representative is seeking to recover here; that this question was submitted to the jury which found in favor of defendant, and that the incontestable clause in the policy does not apply in such a situation. On the other side, it is contended that all the evidence shows defendant had no defense and that the policy is incontestable because it had been issued more than two years before the insured died.

Whether the incontestable clause can be invoked (where the person making the application and submitting to the medical examination impersonates another), so far as we are advised, has never been passed upon by a court of review in this State, and the question is not free from difficulty.

In Powell v. Mutual Life Ins. Co., 313 Ill. 161, it was held that the purpose of the incontestable clause in a life insurance policy is to fix a limited time in which the insurance company must ascertain the truth of the representations made in securing the policy; that such clause does not waive all defenses nor condone fraud, but provides a short statute of limitations in favor of the insured, and within the limited period the insurer must assert its claim either by affirmative action or by defending a suit on the policy. The court there said (pp. 164, 165): “Clauses in life insurance policies known as ‘incontestable clauses’ are in general use, and in this State (Laws of 1921, p. 482), and in other States are now required by statute. In the earlier development of insurance contracts it not infrequently occurred that after the insured had paid premiums for a large number of years, the beneficiaries under the policy found, after the maturity thereof by the death of the insured, that they were facing a lawsuit in order to recover the insurance; that in certain answers in the application it was said by the insurer, the insured had made statements which were not true, and the beneficiaries were not entitled to recover on the policy. It is needless to call attention to the fact that this situation gave rise to a widespread suspicion in the minds of the public that an insurance contract was designed largely for the benefit of the company. . . . Such a clause is generally upheld as valid, because it gives to the insurer a reasonable time in which to discover fraud, if there be such, in the securing of the insurance contract.”

In that ease there was no question about one party impersonating another. This is also true as to the other cases cited by counsel for plaintiff, on, the question of the incontestability of a policy, viz., Mutual Life Ins. Co. of N. Y. v. Hurni Packing Co., 263 U. S. 167; State Mut. Life Assur. Co. v. Stapp, 72 Fed. (2d) 142; Service Life Ins. Co. v. Weinberg, 81 Fed. (2d) 359.

On the other hand, it has been held that where a policy of insurance has been procured by impersonation of the person named in the policy as the insured, without application made or authorized by the designated insured, no contract is made, and the incontestable clause does not estop the insurance company from denying liability. Ludwinska v. John Hancock Mut. Life Ins. Co., 317 Pa. 577 (178 Atl. 28, 98 A. L. R 705); Petaccio v. New York Life Ins. Co., 125 Pa. Super. Ct. 15, 189 Atl. 697; Carter v. Metropolitan Life Ins. Co., 275 Mo. 84; Maslin v. Columbian Life Ins. Co., 3 Fed. Supp. 368.

The Ludwinska case was an action on a policy of insurance for which Bertha Ludwinska applied representing herself in the application as Victoria Ludwinska. Victoria was confined to an insane asylum at the time. Afterward she died and suit was brought on the policy. It contained a provision that it should be incontestable after a period of two years, except for nonpayment of premiums. The trial court refused plaintiff’s motion for judgment. On appeal to the superior court, the judgment was reversed with directions to enter judgment for the amount of the policy. The case was then taken to the Supreme Court of Pennsylvania, where the judgment of the superior court was reversed. The Supreme Court said that the superior court, in reversing the trial court, accepted as correct the insurance company’s contention that fraud, material to the risk, was committed and quoted from the opinion of the superior court the following (pp. 579, 580): “it was defendant’s duty, however, to investigate within the two-year period to ascertain if deceit had been practiced. If defendant had moved to protect itself from such imposition within that period, and the facts now alleged had been discovered, the contract would have been declared invalid. The very purpose of an incontestable clause is to give assurance to the insured that after the lapse of the two-year period the validity of the policy will not be attacked, except for the express reasons therein mentioned.” After this quotation the Supreme Court continuing said:

“ The difficulty we find with this conclusion is that the court did not go back far enough to ascertain whether there was any contract between Victoria and the insurance company that would permit the operation of the incontestable clause. . . .

“In all insurance policies, as in other contracts, there must be some point where the minds of the parties meet in contractual relation. . . . There must be identified parties to the contract or, at least, identified parties to take place in the negotiations leading to the contract. When the parties have been identified and their minds have at least met on the question of whom they are respectively dealing with, then whatever fraud, misrepresentation, substitution or impersonation may occur in the negotiations leading to the ‘formation of the contract itself, are matters of defense. The contract may be induced by fraud or by active misrepresentation of material facts by one of the parties, but before such fraud or misrepresentation comes into play, there must be a relationship, at least in a tentative form, between two or more identified parties who are negotiating the terms of the contract.

“To secure a policy of insurance there must be some offer or application by one capable of making it. The contract must be made by someone capable of contracting under the insurance law. Without this neither the incontestable clause contained in the policy nor the policy itself has any life. The clause can rise no higher than the policy; the incontestable clause cannot of itself create the contract. ’ ’ The court then said that Victoria was an imbecile without power to do any act at all and “therefore a contractual relation between Victoria and the company never existed. ’ ’ The court then cited authorities from the Federal and State courts and said (p. 581): “In these cases it was held that if the insured never made any application for insurance and the policy was procured by impersonation, no contract existed between the parties which would make the incontestable clause applicable.” Citing a case from Alabama and another from Louisiana. The court continued:

“Where one contracts with an individual face to face and intends to contract with the person before him, the contract, if any, is made with that particular person, regardless of what name he may assume for the transaction. . . . ‘All that the law looks to find is the identity of the individual and when that is ascertained and clearly established, the act will be binding-on him and others.’ ”

In the Petaccio case (189 Atl. 697), the superior court of Pennsylvania held that the incontestable clause of a life insurance policy did not bar the insurance company from showing that the person who signed the application and submitted to medical examination was not the person in whose name the application was made and the policy issued. In that case suit was brought to recover on a number of insurance policies which, on their face, purported to insure the life of John Petaccio, but through the fraud and deception of the plaintiff, the insurance company had been induced to contract to insure the life of a middle aged man who was not plaintiff’s father and whose identity was still unknown. The defense was that the person who died was not the one who signed the application or took the medical examination. The trial court submitted to the jury two questions — whether plaintiff’s father contracted with the insurance company and, whether defendant’s doctor examined plaintiff’s father or some other person impersonating him. It was held that this action of the trial court was proper, the court following the holding in the Ludwinska case.

In the Garter case (275 Mo. 84), the question turned on the construction of a statute of Missouri. The court quoted with approval from 138 Ky. 359 the following (p. 93): “If a person other than the insured made the application and was examined, there was, of course, no contract between the company and the insured.”

The Maslin case (3 Fed. Supp. 368), was an action to recover on two life insurance policies which contained clauses rendering them incontestable after one year from issuance, except for nonpayment of premiums. The court said (p. 369): “The first defense is that an imposter posing as Samuel Maslin made the application and took the physical examination for the policies; that the defendant, believing such person to be Samuel Maslin, issued” the policies; that upon discovering the facts, the insurance company tendered back the premiums. The court said the second defense was that Samuel Maslin had been suffering from tuberculosis for a number of years; that he conspired with one of the insurance company’s agents to get insurance on his life. The opinion then continues, “The more important question of this motion is one of law, whether the matters pleaded by the defendant, if true, furnish any reason why it should not pay the policies, in view of the incontestability clause. . . .

“The general rule cannot be questioned that after the passage of the stipulated time the insurance company is precluded from contesting the policy on the ground of false representations by the insured, even those made fraudulently.” Citing cases from New York, Tennessee and other jurisdictions, and continuing the court said:

“I think it equally clear, however, that the other defense, the alleged impersonation of Samuel Maslin by another who is said to have made the application and, more important still, to have taken the physical examination, is not barred by the incontestable clause. ’ ’

Under the authorities above discussed, we are of opinion that under the evidence, the. question of whether there had been an impersonation of Kazimer Valant by another was, in the first instance, a question for the jury, and therefore the court erred in entering judgment for plaintiff, notwithstanding the verdict. On such a motion, the court is not authorized to weigh the evidence. Boyda Dairy Co. v. Continental Casualty Co., 299 Ill. App. 469; White v. City of Belleville, 364 Ill. 577; McNeill v. Harrison & Sons, Inc., 286 Ill. App. 120. But if there is any evidence tending to support the defense, the case must go to the jury; and if the court is of opinion that the verdict of the jury is not sustained by a preponderance of the evidence, it is his duty, under the law, to set aside the verdict and award a new trial.

Counsel for defendant say the question for decision, as to whether there had been an impersonation of Val-ant, was a question of fact for the jury, and since it returned a verdict in favor of defendant, this court should reverse the judgment and enter judgment on the verdict because the incontestable clause on which plaintiff relies, is not a defense under the facts in the case. Ordinarily, if no procedural errors were urged, this would be proper practice. But in view of the manner in which the case was tried, we think there should be a retrial so that the question might be presented to the jury without confusion. A great deal is said by counsel for defendant that whether the person insured is dead is a question of fact for the jury. The jury were instructed on this theory. We think the question was not in the case. There was no dispute that Kazimer Valant was dead, the only question was whether someone had impersonated him. We think such argument and instruction would only tend to confuse.

We think we ought also to say that the testimony of the two investigators, Gfregersen and Schabes, by which it was sought to show that in investigating the matter (the character of which is not discussed) a few months before the death of Kazimer Valant, to the effect that they had talked to Kazimer and his wife, Marcella, was clearly competent. It was direct evidence of what Kazimer and his wife said in relation to the policy and was in no way hearsay. The other question, about the admissibility of documents for the purpose of comparing the signature of Kazimer Valant, can be obviated by counsel following the provision of the statute, pars. 51 and 52, ch. 51, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 107.116, 107.117].

We are also" of opinion that defendant did not admit liability by tendering to plaintiff the amount of the premiums received by it.

The judgment of the municipal court of Chicago is reversed and the cause remanded for further proceedings not inconsistent with the views herein expressed.

Reversed and remanded with directions.

Matchett, P. J., and McSurely, J., concur.


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    Mary Osborn et al., Appellants, v. William Leuffgen et al. Frank A. Schmidt, Appellee.
    Gen. No. 40,679.
    Opinion filed November 27, 1939.
    Rathje, Hinckley, Barnard & Kulp, of Chicago, for appellants; Francis E. Hinckley, of counsel.
    Lord, Bissell & Kadyk, of Chicago, for appellee; Raymond Wearing and Gordon R. Close, both of Chicago, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiffs brought an action against defendants to recover damages under the provisions of section 14 of the Dramshop Act (ch. 43, par. 135, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 68.042]). The complaint alleged that William Leuffgen was the owner and keeper of a tavern located in Chicago; that defendant, Peter Gilgenberg, was his employee and acted as bartender; that defendant Lilly E. Weil, was the owner of the premises which were occupied by the tavern, and defendant, Schmidt, “had the full control and management of the said premises and the legal right to rent dr lease the same to any person or for any purpose and the right to reject or select tenants for the same and had full charge of said premises as if he were the owner, and had been engaged as an agent to take control of the said premises without the interference of the owner and did on or about the 10th day of February, 1938, execute in his own name, as lessor, describing himself as the agent of Lilly E. Weil, a certain lease” of the premises to defendant William Leuffgen in which to conduct a tavern.

Defendants Leuffgen and Gilgenberg filed their answer, defendants Weil and Schmidt filed their joint and several motion to dismiss the suit as to them, on the ground that it did not state a cause of action, specifying a number of reasons. The court denied the motion as to defendant, Weil, but sustained it as to defendant, Schmidt, and plaintiffs appeal.

It is alleged in the complaint that Hope J. Osborn went to the tavern in question and at the time, there were intoxicated persons in the tavern who had purchased and consumed intoxicating liquors which caused in whole or in part, the intoxication of such persons; that in consequence of such intoxication Hope was assaulted as a direct result of which, two days later, he died. Plaintiffs are the widow and minor children of the deceased.

Section 14, of the Dramshop Act gives plaintiffs a right of action “against any person or persons who shall, by selling or giving* alcoholic liquor, have caused the intoxication, in whole or in part, of such person. ’ ’ It also gives them a right of action against “any person owning, renting” or “leasing” premises where alcoholic liquors are to be sold. And counsel for plaintiffs contend that since defendant Schmidt “had the full control and management and the legal right to rent or lease the same to any person . . . and the right to reject or select tenants . . . and had full charge of the premises as if he were the owner and had been engaged as agent to take control of the premises without interference of the owner and executed in his own name as lessor” he came within the meaning of “any person owning, renting” or “leasing” the premises. And they point out that since section 1 of the present Dramshop Act, which was approved January 31, 1934 (ch. 43, par. 94, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 68.001]), provides that the act shall be liberally construed “to the end that the health, safety and welfare of the People of the State of Illinois shall be protected and temperance in the consumption of alcoholic liquors shall be fostered and promoted,” and that by adopting this liberal construction of section 14, Schmidt is one of the parties against whom the action may be maintained because he leased the premises to defendant, Leuffgen.

In Armour & Company v. Industrial Board, 275 Ill. 328, the court in discussing the rule of construing statutes said, (p. 334): “The rules as to strict or liberal construction are of value only as assisting in finding the real meaning of the statute. They are not considered as important in recent years as formerly, for it has become more and more recognized that ‘the paramount duty of the judicial interpreter is to put upon the language of the legislature, honestly and faithfully, its plain and rational meaning and to promote its object.’ . . . The intention of the law-makers is the law, to be gathered from the reading of the statute, having in mind all the rules of construction which may apply. ’ ’

The question for decision then is, What persons fall within the meaning of “any person owning, renting” or “leasing” premises where alcoholic liquors are to be sold? Counsel for plaintiffs concede that the ordinary renting agent would not be one against whom such an action could be maintained. But they say that since it is alleged in the complaint that defendant, Lilly E. Weil, was the owner of the premises, and defendant, Schmidt, had full control and management of them and the legal right to lease them to any person for any purpose, and the right to select tenants, and since it is further alleged that Schmidt had full charge of the premises “as if he were the owner” and could rent the premises without interference of the owner and did execute the lease “in his own name, as lessor, describing himself as the agent of Lilly E. Weil,” he falls within the category of the person “leasing” the premises, within the meaning of that word as used in section 14. We are unable to agree with this contention for it is clear that Schmidt had no interest in the premises which he could convey by lease. Harms v. McCormick, 132 Ill. 104. The allegations of the complaint are that Lilly E. Weil owned the premises; that Schmidt was her agent and executed the lease in question “as the agent of Lilly E. Weil.”

We think Schmidt does not come within the category of the persons mentioned in section 14, against whom such an action might be maintained. Bell v. Cassem, 158 Ill. 45; Castle v. Fogerty, 19 Ill. App. 442; Wall v. Allen, 244 Ill. 456. We think the liability imposed by section 14 is upon property owners who rent, lease or permit their premises to be used for the sale or gift of alcoholic liquors.

The judgment of the circuit court of Cook county is affirmed.

Judgment affirmed.

McSurely, P. J., and Matchett, J., concur.


text:
    General Finance Corporation, Appellee, v. Krause Motor Sales et al. Krause Motor Sales, Appellant.
    Gen. No. 40,690.
    Opinion filed November 27, 1939.
    Edward P. McKeown and Raymond J. Boland, both of Chicago, for appellant.
    Alexander W. Jamieson, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Plaintiff brought an action of replevin against defendants to recover possession of two automobiles, alleging that it was entitled to a 1935 Chevrolet valued at $200 and a 1936 DeSoto valued at $300. The automobiles were taken on the writ from the Krause Motor Sales (which will hereinafter be referred to as defendant) and delivered to plaintiff. Defendant Keller was not served and did not enter his appearance. What became of him so far as the record discloses, is a mystery. Defendant, in its affidavit of defense, denied that plaintiff was entitled to possession of the automobiles and averred that it was the lawful owner of them; that plaintiff gave Keller the right to sell and transfer titles to the automobiles and that plaintiff was estopped to claim it was entitled to the cars; that plaintiff knew the cars were displayed by Keller in his place of business for any purchaser and that defendant bought the two cars from Keller August 13,1938, paying him therefor $530 in cash. There was a trial before the court without a jury and a finding that plaintiff was entitled to possession of the cars. Judgment was entered accordingly and defendant appeals.

The record discloses that Keller was in the business of buying and selling new and secondhand automobiles in Chicago and was being financed by the Motor Acceptance Company of Illinois; that on June 1,1938, he borrowed from the Finance Company $1,015 on five specified automobiles, the amount of the loan on each car being separately stated. One of the cars was the Chevrolet involved in this suit on which Keller had borrowed $160; that on July 14, 1938, he borrowed from the Finance Company $291 on the DeSoto car and $301 on another car not involved here; that on each of the two occasions Keller executed as security for the loan a document consisting of three parts which are designated as (1) a bill of sale to the Finance Company for the automobiles, (2) a “Trust Receipt” and (3) a negotiable promissory note for the amounts borrowed.

The “Trust Receipt” recites that Keller, ‘£Trustee, ’ ’ received the automobiles from the Finance Company, “Entruster” to hold in trust for the Finance Company “as its property, and agrees to return the same on demand in good order and unused.” The trustee is also designated the “dealer” and it is provided that the dealer “will not rent, drive, pledge, mortgage, or otherwise dispose of or encumber said cars; that said cars shall not be sold at less than the price thereof herein stated; that the proceeds of such sale shall be kept separate from the dealer’s funds and on the day of the receipt thereof be transmitted to said Motor Acceptance Company of Illinois. . . .

“The undersigned dealer agrees to keep a separate account of each of said cars held in trust by him (it) for said Motor Acceptance Company of Illinois; that said undersigned dealer shall furnish to said Motor Acceptance Company of Illinois or its assigns a true and complete report of all sales of cars made by him on the day of the sale thereof; that the undersigned dealer shall also permit said Motor Acceptance Company of Illinois, its representatives or assigns to examine the undersigned dealer’s books and the cars in his (its) possession; . . .

“It is the understanding and agreement of the parties hereto that this Trust Receipt was drawn pursuant to the provisions of the Uniform Trust Receipt Act now in force in the State of Illinois. ’ ’ The Motor Acceptance Corporation assigned its interest to plaintiff.

Although the three parts of the document executed by Keller, June 1,1938, are designated a “bill of sale,” “trust receipt” and a “promissory note” clearly plaintiff’s only interest in the two cars was as security for the debt. “The bill of sale may seem to make the creditor a purchaser; whatever its recitals, it is a mortgage in another form. Whittmore v. Fisher, 132 Ill. 243. The trust receipt may state that the debtor holds the car as the property of the creditor; in truth it is his own property subject to a lien.” Davis v. Aetna Acceptance Co., 293 U. S. 328.

The evidence further shows that the Finance Com-party had been doing business with Keller for more than a year before he borrowed the money on the two cars involved in this controversy and during that time had financed Keller “on the floor plan” in the handling by him of about 500 automobiles which he sold to the public; that on every sale made by him he paid off the loan to the Finance Company on the cars sold. The custom was for Keller to keep the automobiles on his “show-room floor” to be sold to the public; that during the time adjusters for the Finance Company checked Keller’s cars about twice a week; that in August, 1938, Keller’s business was slow, cars held under the Trust Receipts were not moving fast enough and the Finance Company was anxious for him to reduce the number of cars by having Keller sell them and thus reduce the amount of his loans — that plaintiff was urging him to sell the cars and pay up his loans.

On August 13, 1938, Keller sold the two cars to defendant, Krause (who sold new and used cars), for $490 — $340 for the DeSoto and $150 for the Chevrolet. At the same time Keller also sold a Ford car to Krause for $40 and executed a bill of sale for the three automobiles to Krause. The price for which these cars were sold, $530, was paid by Krause who gave his check therefor to Keller. The check is in the record but is for $595, $65 more than Keller paid for the three cars. What this $65 was for does not appear. Keller failed to pay the Finance Company the two amounts it had loaned on the two automobiles, or any part thereof.

Plaintiff’s position is that by virtue of the “Trust Receipts” Act of 1935, eh. 121½, par. 166, et seq., Ill. Rev. Stat. 1939, [Jones Ill. Stats. Ann. 135.17(1) et seq.] it is entitled to the possession of the two automobiles by reason of the fact that it held the two ‘‘ Trust Receipts ’ ’ executed by Keller; that Keller had sold the two cars and failed to pay the Finance Company the amount he had borrowed on them, viz., $160 and $291, or a total of $451. On the other hand, Krause’s position, as stated by Ms counsel, is that he is a “buyer in the ordinary course of trade,” within the terms of the Trust Eeceipts Act; that he paid Keller $530 for the two cars and received a bill of sale therefor from Keller; that the “cars were displayed for sale on the used car lot” by Keller and that even if plaintiff held valid trust receipts executed by Keller “it is estopped to set up as against this defendant the lien of said trust receipts. ’ ’

Professor Bogert, of the University of Chicago, in volume 3, of the University’s Law Eeview, 1935-36 (p. 26) discusses the Trust Eeceipts Act saying: “That the statute is difficult to understand is shown by the memorandum of Governor Horner of Illinois which he filed with the Secretary of State when he permitted the bill to become law last July without his signature.” He then quotes what the Governor said in returmng the bill, and continuing said (pp. 31, 32, 33): “The fundamental purpose of the trust receipt is to afford lenders short term protection against the honest insolvency of their borrowers. It was, therefore, accepted at common law that the trust receipt was valid against the creditors of the borrower, whether lien or general, and whether acting for themselves or through a representative like a trustee in bankruptcy. . . .

“Since a cardinal object of the trust receipt transaction is ordinarily to enable the borrower to sell the goods in order to raise money to pay the lender, it has been generally held at common law that the lender could not assert any rights against the purchaser from the borrower in the usual case. The lender has given an express or implied power of sale by which he should be bound. ...

“A purchaser in the ordinary course of business from the borrower get title free of the trust receipt, if the borrower had an unlimited power of sale, regardless of filing.”

Section 13 of the act provides for the filing of a document with the Secretary of State signed by the “entrusted’ (Finance Company) and the trustee (dealer-borrower), stating’ that the entruster is to finance the dealer in buying automobiles, etc., and it is agreed that such document was properly filed.

We think the evidence shows that defendant, Krause, bought the two automobiles from Keller “in the ordinary course of trade” and that the evidence fails to show he had actual knowledge that Keller was being financed by the Finance Company. Keller, by the terms of the trust receipt, was given unlimited power to sell the automobiles. There was no requirement that he obtain the consent of the Finance Company before so doing. The trust receipts provide that Keller shall not sell the cars “at less than the price thereof herein stated” which apparently means the loan made on each of the cars; that he should keep the proceeds of the sale separate from his funds and transmit the money on the day of the sale to the Finance Company; and further that he report all sales of cars made by him, on the date of the sale thereof.

Counsel for plaintiff contends that “defendant’s transactions with Keller were not ‘Sales by Trustee in the ordinary course of trade. ’ They were not customary open market sales at retail to ‘a man in the street’ for a usual price, in a usual quantity, for a usual purpose, arrived at by usual negotiation” and therefore Krause “was not a ‘buyer in the ordinary course of trade’ ’ ’ as defined by the Trust Receipts Act. We are unable to agree with this contention. Colonial Finance Co. v. DeBenigno, 125 Conn. 626, 7 Atl. (2d) 841. That case was an action of replevin brought by the finance company to recover the possession of an automobile delivered to the Bethel Motor Sales, Inc., under an agreement in accordance with the Uniform Trust Receipts Act which is similar to the Illinois act. There was a judgment-for the defendant, which on appeal was affirmed. The court said that by the terms of the act the motor company had liberty to sell the automobile to the buyer in the ordinary course of trade and that the buyer takes the property free from the finance company’s security interest unless the limitation of sale was actually known to the buyer. The motor company delivered the car to defendant DeBenigno “and the plaintiff contends this was contrary to the terms of the trust receipt, and that the defendant who was a subdealer of Bethel Motors was not a ‘buyer itt the ordinary course of trade ’ within the meaning of the act.” And after stating the facts the court said (pp. 842, 843): “In the trust receipt it was provided that the Bethel Motors might exhibit the car and, having obtained the written consent of the plaintiff, might sell it for cash for not less than the minimum sale price specified in the receipt, being accountable to the plaintiff for the proceeds of the sale. . . . The defendant knew that Bethel Motors financed some of its automobiles with finance companies and some of the cars which it procured were subject to finance liens, but had no knowledge that the company was engaged in trust receipt financing with the plaintiff or with any other finance company, and had no actual knowledge of any limitation placed upon the liberty of sale of Bethel Motors. The defendant at all times acted in good, faith.

“The plaintiff contends that the defendant was not a buyer in the ordinary course of trade because that term does not include a transaction between a distributor and one of its agents or subdealers, but is intended to cover transactions with the ultimate consumer. . . . According to the construction placed on the act by the plaintiff the only transactions covered would be those in retail trade. There is a scarcity of decisions upon this precise point. . ■ . . There is nothing in the language of the act which requires such a construction, nor upon the facts as found are we enabled to rule as a matter of law that the trial court was in error in concluding that the defendant was a buyer in the ordinary course of trade.” Continuing the court said (p. 844): “It is significant in this connection that the Trust Receipts Statute of 1935 . . . specifically limited the protection to those purchasing at retail sale, but no such limitation is contained in the present statute which repealed the statute of 1935.” In that case the Bethel Motors, “Trustee” under the terms of the Trust Receipt with the finance company was required to get the finance company’s written consent before a sale could be made. The sale was there made to a subdealer. The automobile there involved was not paid for all in cash at the time of the sale but defendant, the purchaser, had a credit with the Bethel Company at the time which was applied toward the payment of the car and it was held that the finance company was not entitled to the possession of the automobile.

The case at bar is much stronger. There is no limitation in the Trust Receipt on the right of the trustee, Keller, to sell. He was not required to get the written consent of the Finance Company before doing so. Defendant Krause paid cash for the cars when he bought them.

Upon a careful consideration of all the evidence in the record, we are of opinion that the overwhelming weight, if not all of the evidence, is to the effect that defendant was a buyer of automobiles in the ordinary course of trade, and the judgment of the municipal court of Chicago is reversed and the cause remanded with directions to enter judgment in favor of defendant. (Sec. 92, Civil Practice Act, Ill. Rev. Stat. 1939, ch. 110, § 216, p. 2441 [Jones Ill. Stats. Ann. 104.092].)

Reversed and remanded with directions.

Matchett, P. J., and McSurely, J., concur.


text:
    John G. Weber, Appellee, v. Fred Buck et al. Thomas Mack and Greta Unfried Mack, Appellants.
    Gen. No. 40,703.
    Opinion filed November 27, 1939.
    Gurdon Williams, of Chicago, for appellants.
    Laurence M. Fine, of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

May 12,1937, plaintiff filed Ms complaint in chancery to foreclose the lien of a trust deed on certain real estate. The note for $3,500 and the trust deed were dated April 20, 1920. When the note came due April 20, 1925, the date of payment was extended for a period of five years, or until April 20, 1930. Plaintiff claims he purchased the note and trust deed about March 11, 1937. The complaint asked for the usual relief. Defendants, Buck and wife, were not served with processes and did not enter their appearance. Thomas Mack and wife, who are the owners of the equity, contested the suit contending that plaintiff was not a holder in due course for valuable consideration. Afterward an order was entered referring the matter to a master in chancery to take the evidence and report his findings solely as to the ownersMp of the note and trust deed. The master found in favor of plaintiff. Objections to his report were overruled, they were ordered to stand as exceptions and the court entered a decree that the exceptions of plaintiff and of defendants “be and they are overruled, in so far as they are not in accord with the findings of the court.” The decree further found plaintiff was the owner and holder of the note and trust deed with the right of foreclosure and that defendants Mack “are estopped to interpose their claims and defenses”; that they are “guilty of laches in that they have failed to make any claim against said trust deed and note and have failed to assert their rights, if any they had, for a period in excess of ten years”; and it was further found that the Macks were in possession of the premises, which were improved by a bungalow, and it was ordered that they be required to pay $40 per month “commencing with the 1st day of January, 1929, and for every month thereafter.”

It is from this order or decree that the defendants Mack appeal.

The record discloses that on April 20, 1920, Fred Buck and wife executed their note for $3,500 payable five years after date, with interest at six per cent, and executed the trust deed in suit to secure the payment of it. Afterward, apparently, Reed W. Gainey and wife owned the equity of redemption and on April 20, 1925, the time of payment was extended five years. Interest coupons were properly executed evidencing the semiannual interest. Defendant, Thomas Mack, a lawyer, had owned and operated an unincorporated business known as the Rezilite Manufacturing Company since 1919. Lillian C. Thesen, daughter of Elizabeth Barthel, was a lawyer and had been employed continuously by Mack for 15 years prior to October, 1930. She was confidential secretary, office manager and had complete charge of the books and business of the company; issued and signed checks, Mack being ‘ ‘ on the road most of the time. ’ ’ Miss Thesen also had access to Mack’s investments and on many occasions would detach, cancel and surrender interest coupons.

April 20, 1925, Mack bought the note and trust deed from Cochran & McCluer Company, who were engaged in the real estate business in Chicago, paying therefor $3,605, the face of the note, and $105 semi-annual interest. Miss Thesen drew the check of the Rezilite Manufacturing Company in payment of the note and trust deed, which were placed in Mack’s office vault.

Shortly after the purchase of this mortgage Miss Thesen advised Mack that her mother, Mrs. Barthel, with whom Miss Thesen lived, wanted to invest about $3,000 in a real estate mortgage. Mack told her to look through his securities and pick out one for her mother. About that time Gainey, the then owner of the equity, paid $500 principal and accrued interest reducing the amount due to $3,000. The substance of the evidence is that Miss Thesen bought the so-called “Gainey mortgage” for her mother and- advised Mack that her mother paid for it.

The evidence further shows that in the winter of 1928-29, Mack was contemplating buying a new automobile, turning in the old one he had in part payment. He advised Miss Thesen of this fact and it was decided that in place of turning in the old car (for which he was to receive a credit of $2,350 in part payment of the new one) he would sell the old car to Miss Thesen’s mother for $2,000. Mack testified that on April 11, 1929, he executed a bill of sale for the automobile to Mrs. Barthel. A duplicate of the bill of sale was produced by him and is in the record. It recites that in consideration of the assignment to Mack by Mrs. • Barthel of two-thirds interest of $2,000 in and to the Gainey mortgage and trust deed, Mack sold and delivered the automobile to her. He further testified that on that date he delivered the automobile, put it in Mrs. Barthel’s garage and delivered the bill of sale to her; that at that time the Gainey mortgage was in his vault; that in October, 1930, Miss Thesen left his employ because he found it necessary to reduce her salary; that afterward he learned the mortgage was not in his vault but apparently was in the possession of Mrs. Barthel, and in April, 1931, he tendered Mrs. Barthel $1,190.45, for her one-third of the Gainey mortgage, and demanded the mortgage and trust deed, all of which was. refused.

The evidence further shows that in endeavoring to obtain the mortgage from Mrs. Barthel, Mack employed Arthur Carlsten, a practicing attorney in Chicago to represent him, and from 1931 or 1932 through to 1935 they had a number of conferences for the purpose of effecting a settlement with Mrs. Barthel, and he tendered a certified check to Carlsten to be turned over to Mrs. Barthel; that he also gave Carlsten $100 for his services in the matter.

Some time afterward Gainey, the owner of the equity in the encumbered property, learned of the fact that there was a dispute between Mack and Mrs. Barthel as to the ownership of the note and trust deed and on August 14, 1931, he filed his bill of interpleader in the superior court to determine to whom the money was due, as he was endeavoring to secure a new loan of $5,000 on the property and desired to take up the note and trust deed. Afterward Mack became the owner of the property through foreclosure of a second mortgage which he held and apparently, in view of these facts, G-ainey was no longer interested in the property, and on August 27,1934, the interpleader suit was dismissed for want of prosecution.

The evidence further shows that shortly after the complaint in the instant case, which was filed May 12, 1937, Mack caused an audit to be made by a certified public accountant of the books of the Rezilite Manufacturing Company and for the first time learned that he had not been paid by Mrs. Barthel the $3,000 for the mortgage.

Miss Thesen and her mother, Mrs. Barthel, gave testimony to the effect that Mack had been paid for the mortgage at the time of its purchase. They also testified in substance that Mrs. Barthel had not bought the automobile from Mack; that Mack had delivered the automobile, put it in their garage, and it had been used by Miss Thesen; tfiat neither Miss Thesen nor her mother bought it from Mack but on the contrary they refused to do so.

The evidence further shows that in January, 1929, Miss Thesen got a State license in her own name to drive the automobile; that afterward she or her mother had certain repairs made upon the car, some of which were paid for by one or both of them and some by checks drawn by Miss Thesen on the Rezilite Company.

Mrs. Barthel testified in substance that about March 11, 1937 she sold the note and trust deed to plaintiff, Weber, and that he handed her $2,400 either ‘ ‘ Check or cash”; that the deal was made at her home; that a real estate man, Nicholson, was with Weber. (Nicholson was not called as a witness.)

Plaintiff Weber, on June 15, 1937, testified that he obtained the note and trust deed and other papers from Attorney Carlsten in his (Carlsten’s) office in March, 1937 and that Carlsten was one of the attorneys appearing for him in the instant suit; that he took the money over and gave it to Carlsten who turned the papers over to him; that Mr. Nicholson, the real estate man in the deal, was present; that at the time he obtained a bill of sale, which is in evidence, from Mrs. Barthel for the note, trust deed and other papers. It describes the note, trust deed, extension agreements, etc. Among other things, the following appears in this document: “To have and hold all and singular the said notes to the said John C. Weber and his executors, administrators, and assigns to their own use and behoof forever.

“And I hereby covenant with the grantee that I am the lawful owner of the said notes and that I have good right to sell the same aforesaid. ’ ’

On cross-examination Weber testified that the deal took place in the office of Carlsten, who was his attorney; — that Carlsten and Fine, were his attorneys and that he paid $2,400 for the papers; that his intention was to buy a home and he knew he would have to take some legal steps to get title through foreclosure. “I wanted to and offered to buy this paper about April, 1937, but they didn’t seem to get into any understanding between themselves. She offered to sell it — she wanted $1,000 more and different things turned up, and then, she finally refused to sell it. It was two or three weeks prior to March 11, 1937, that the matter first came to my attention.” That nothing was said to him about a dispute as to the ownership of the mortgage; that his lawyers did not tell him anything about that matter.- After this testimony was given the matter was continued from time to time before the master, and about six months afterward, viz., February 24, 1938, Weber was recalled for further cross-examination and testified he did not see Mrs. Barthel or Miss Thesen until after he got the mortgage; that he took the bill of sale for the papers “to prove that she [Mrs. Barthel] was selling a mortgage, that she more or less guaranteed was all right”; that he knew he needed nothing further to transfer the title validly other than to hand over the papers; that Mr. Carlsten did not tell him Mack was making a claim to the mortgage. Some days after giving this testimony, viz., March 28, 1938, Weber was again called for further cross-examination. He then testified that he paid the $2,400 for the mortgage “partly cash and partly note. $1,500 cash and $900 note. I believe notes were made payable to bearer. No collateral. The notes were signed by me alone. Guaranteed by nobody. I think there is three or four notes. I don’t know when they were made payable. I have paid none of them. My intention was to pay so much a year, as much as I possibly could. . . .

“I have paid no interest on those notes. There were interest notes. I am not in default. . . . The $1,500 was paid in currency. I turned the currency and notes over to Mr. Nicholson who drew up the notes. I turned the cash and notes over to Mr. Nicholson in his or in Mr. Carlsten’s office”; that he had been out to Mrs. Barthel’s house; he was then asked whether Mrs. Barthel said anything about Mack’s claimed ownership or lien against the mortgage. His answer was “I don’t think so. But there was so much discussion there about various things — it was principally that it would have to be foreclosed. I don’t remember whether there was a discussion as to whether Mr. Mack claimed an interest in the mortgage. . . . Then I hired Mr. Carlsten to be my attorney to foreclose the mortgage.”

Arthur Carlsten, called by defendant, testified he was a practicing lawyer in Chicago; that he knew Miss Thesen and had represented her as attorney but not in connection with the mortgage in question; that he tried to get a sale for the mortgage for Mrs. Barthel; that he did some work in connection with the mortgage for her “prior to the appearance of Mr. Weber as owner”;. that he had negotiations with defendant, Mack, and at that time represented Mrs. Barthel; that now he and his associate, Mr. Fine, represented Mr. Weber solely; that at the time Weber acquired the mortgage, he, Carlsten, was representing Mrs. Barthel; that he had nothing to do with the sale of it to plaintiff Weber; that he had known Mr. Nicholson, the real estate man, for 20 years; that it was through him that he met Mr. Weber; that he had negotiations with Mr. Mack previous to the Weber deal, “The negotiations pertained to this mortgage. About two years ago, Mack brought me $1,000, plus $100 for my fee in an effort to dispose of the interest of Mrs. Barthel in the mortgage. . . . He wanted me to prevail on them [Mrs. Barthel and Miss Thesen] to take this money for their mortgage ’ ’; that he did not discuss anyone’s interest in the mortgage with Mr. Weber; that after Weber acquired the mortgage from Mrs. Barthel he came to Carlsten’s office and asked Carlsten to represent him. That he did not tell Weber anything about Mack’s claim to the mortgage; “I don’t think I told him there was any claim. ’ ’

There is considerable other evidence in the record but we think it unnecessary to refer to it.

The master found that the mortgage and trust deed had been removed by Miss Thesen from the vault of the Rezilite Manufacturing Company and delivered to her mother, Mrs. Barthel; that neither Mack nor the Rezilite Company was paid anything for the mortgage or trust deed by either Mrs. Barthel or her daughter; that Mack thought the mortgage had been paid for by Mrs. Barthel and did not learn that this was not the fact until after the instant foreclosure suit was brought; and further that the evidence was insufficient for him to find that Mack had sold the automobile to Mrs. Barthel and that she had agreed to give him a two-thirds interest in the mortgage in payment for it. There was a further finding that Miss Thesen acted as agent for defendant Mack and not for her mother in delivering the mortgage and trust deed to her mother, but if she had received any money to pay for the mortgage she would be acting for her mother. And further “I find as a conclusion of law that to establish the embezzlement or larcenous taking of said Gainey mortgage by Lillian C. Thesen from Thomas Mack requires proof beyond a reasonable doubt”; that the burden on this question was on the defendant Mack; that Weber acquired the mortgage in good faith without notice that Mack claimed any interest in it; “ That the testimony of Lillian C. Thesen, called as a witness in behalf of the plaintiff, John C. Weber, was impeached in mate-" rial respects and is unworthy of belief; that the said Lillian C. Thesen was not á credible witness.”

The conclusion of law by the master, which seems to have been approved by the chancellor (that where a crime is charged in a civil suit, the proof to establish such must be beyond a reasonable doubt), is no longer the law in this State. Sundquist v. Hardware Mut. Ins. Co., 371 Ill. 360. The law only requires that such contention be proved by a preponderance of the evidence. We are in accord with the finding of the master, which was apparently approved by the chancellor, that Mack was paid nothing for the trust deed and mortgage by Mrs. Barthel or her daughter, Miss Thesen. We think all the reliable evidence is to this effect, that Miss Thesen took advantage of her position and deceived Mack who placed implicit confidence in her.

We are unable to agree with the finding that plaintiff Weber acquired the mortgage in good faith and without notice that Mack claimed an interest in the mortgage. The overwhelming weight of the evidence is that the claimed purchase by him was merely color-able. The mortgage was seven years overdue; no interest had been paid during that time; taxes for the years 1929, 1930, 1931, 1932, 1933, 1934 and 1935 were in default. Attorney Carlsten knew that there had been a controversy between Mack and Mrs. Barthel over the ownership of the mortgage for a number of years. He knew that the bill of interpleader had been filed by Gainey setting up such a controversy. He testified that he represented Mrs. Barthel in connection with the mortgage and had negotiated with Mack; he was tendered $100 for his services by Mack in this respect. Nicholson, who was said to be the real estate man in connection with the purchase of the mortgage by Weber from Mrs. Barthel, was not called as a witness. The testimony of Weber as to what and how he paid for the mortgage is unsatisfactory. All equitable defenses to the foreclosure suit brought by Weber in the instant case were available to Mack. Olds v. Cummings, 31 Ill. 188.

In Daniel on Negotiable Instruments, Vol. 2, 7th Ed., sec. 904, the author says: “the holder, in order to acquire a better right and title to the paper than his transferrer, must become possessed of it before it is overdue. When transferred on or before the due date by the payee, the purchaser is a holder in due course. For if it were already paid by the maker or acceptor, and had been left outstanding, it would be already discharged, and they would not be bound to pay it again to anyone who acquired it after the period when payment was due. And if it were not paid at maturity, it is then considered as dishonored; and, although still transferable, in like manner and form as before, yet the fact of its dishonor, which is apparent from its face, is equivalent to notice to the holder that he takes it subject to its infirmities, and can acquire no better title than his transferrer. The doctrine applicable to this subject has been admirably stated by Chief Justice Shaw, who says: ‘Where a negotiable note is found in circulation after it is due, it carries suspicion on the face of it. The question instantly arises, why is it in circulation? why is it not paid? Here is something wrong. Therefore, although it does not give the indorsee notice of any specific matter of defense, such as set-off, payment, or fraudulent acquisition, yet it puts him on inquiry; he takes only such title as the indorser himself has, and subject to any defense which might be made if the suit were brought by the indorser.’ ” Citing Fisher v. Leland, 4 Cush. (58 Mass.) 456.

From what we have said it is unnecessary to say here whether section 52, of our Negotiable Instruments Law (Ill. Rev. Stat. 1939, ch. 98, sec. 52 [Jones Ill. Stats. Ann. 89.072]) which defines the holder in due course to be one who “became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact” or section 58, of the same chapter, which provides that “In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable ’ ’ are applicable.

For the reasons stated, the decree of the circuit court of Cook county is reversed and the cause remanded with directions to set aside the decree and to award the note and trust deed to Mack and to dismiss the bill for want of equity.

Reversed and remanded with directions.

Matchett, P. J., and McSurely, J., concur.