author: Mr. Presiding Justice Burke Mr. Justice Hebel

text:
    Quinlan and Tyson, Inc., Appellee and Cross Appellant, v. National Casualty Company, Appellant and Cross Appellee.
    Gen. No. 41,601.

      Heard in the third division of this court for the first district at the February term, 1941.
    Opinion filed June 25, 1941.
    Rehearing denied September 26, 1941.
    George C. Bliss, of Chicago, for appellant.
    Burke, James & Burke, of Chicago, for appellee; Edmund Webster Burke, of Chicago, of counsel, for defendants in error.
   Mr. Presiding Justice Burke

delivered the opinion of the court.

Plaintiff, a corporation engaged in the real estate brokerage and management business, had in its employ as a bookkeeper and cashier at its Evanston office from the year 1923 up to December 18, 1934, a woman named Bertha C. Burnham. On the latter day it was discovered that during the last eight years of her employment she had embezzled $72,297.57. Of this sum she embezzled $33,917.60 up to May 31,1931; $13,563.94 during the year preceding June 1,1932; $6,587.97 during the year preceding June 1,1933; $12,080.57 during the year preceding June 1, 1934, and $6,147.49 from June 1, 1934 to December 18, 1934. On May 26, 1931, defendant issued its fidelity schedule bond No. N-6692, reading, in part, as follows:

“The National Casualty Company, as Surety, binds itself to pay Quinlan & Tyson, Inc. as Employer, such pecuniary loss as the Employer shall have sustained of money or other personal property (including that for which the Employer is legally responsible) by any act or acts of . . . Embezzlement ... on the part of any of the employees named in the schedule attached to and hereby made a part of this bond, while in any position or at any location in the employ of the Employer; the suretyship for any employe not to exceed the amount specified in said schedule for such employe, and to begin with the date set opposite the name of the employe and to end, (a) with the date of the discovery by the Employer either of. loss thereunder or of dishonesty on the part of the employe, or (b) with the date of the retirement of the employe, from the service of the Employer, or (c) with the date of the termination of the suretyship by the Surety or the Employer in the manner hereinafter set forth.
“Provided: 1. That loss be discovered during the continuance of the suretyship for any defaulting employe or within the twenty-four months immediately following the termination thereof, and that notice of such loss be delivered to the Surety at its office in the City of Chicago within ten days after such discovery.
“3. That in no event shall the liability of the Surety for any one or more defaults of any employe during any one or more years of the suretyship for such employe exceed the amount specified in said schedule for such employe. . . .
“6. That the Surety may increase or decrease the amount of the suretyship on behalf of any employe covered hereby without impairing the continuity thereof. In the event of such increase or decrease the Surety’s liability as respects such employe shall not exceed the schedule amount in effect as to such employe when the dishonest act of the employe shall have occurred. Also other employes may be added to said schedule. The Employer shall make written application to the Surety for such increases, decreases or additions, specifying the names of such employes, their location, the effective date and the amount of such increase, decrease or addition. No such increase, decrease or addition shall be binding upon the Surety until the Employer has received the Surety’s written acceptance thereof.
“7. That the suretyship on any employe may be terminated by the Surety upon thirty days’ written notice to the Employer, or by the Employer upon notice in writing to the Surety specifying the date of termination. Thereupon the Surety shall refund the unearned premium for such suretyship if no claim has been .made thereunder.” The schedule attached to the bond reads:
“Notice op Acceptance
(Schedule Bond)
“It is understood that the National Casualty Company does not assume liability during any year or years or for any default or defaults in the aggregate exceeding the amount of its suretyship as determined by the original obligation of suretyship. . . .
“Subject to the conditions of this Company’s Schedule Fidelity Bond issued to you, the liability of this Company thereunder, as Surety for the following named employes, is specified as being in the amount and from the date set opposite the names of such employes, respectively.” Here follows a list of eighteen employes, numbered from 1 to 18, with the date when the coverage was to become effective as to each, which is shown as June 1, 1931. The schedule also shows the position occupied by each employe, the location where employed, the amount of the coverage and the amount of the premium. Miss Burnham is shown on the list as employe No. 11 and her occupation that of cashier, employed at Evanston, coverage $25,000 and premium $75. Below the list of employes, and pasted thereon, appears another form, entitled “Notice Of Acceptance,” signed by defendant, and reading the same as above quoted, starting with the words, “Subject to the conditions,” and ending with the word “respectively.” On June 1, 1932, defendant issued a document called “Schedule Bond — Anniversary List,” reading, in part, as follows:
“SCHEDULE BOND-ANNIVERSARY LIST . . .
“Whereas, the National Casualty Company has heretofore executed a certain Schedule Bond No. N-6692, in favor of Quinlan & Tyson, Inc. — Chicago, Illinois and covering certain . . . employes named in or added to the schedule attached to said bond.
“Now, Therefore, it is hereby understood and agreed that all . . . employes that were covered under said bond before the 1st day of June 1932, and who are not named in the following list, shall be deemed to be deducted from said schedule as of said last mentioned date, unless deducted or canceled therefrom as of some prior date; that all . . . employes that are named in the following list and not already covered under said bond shall be deemed to be added to said schedule as of said last mentioned date, in the amounts set opposite the names of such . . . employes respectively, and that, in case the amount formerly carried on any . . . employe shall be larger or smaller than the amount set opposite the name of such . . . employe in said list, the former amount shall be deemed to be increased or decreased accordingly, effective as of said last mentioned date; provided that in case of any such increase or decrease the liability of said National Casualty Company on account of such . . . employe shall not exceed in the aggregate the larger of said amounts.” Plaintiff endorsed its acceptance of the last mentioned “Schedule Bond — Anniversary List.” This list contained the names of nineteen employes. Miss Burnham is again shown as No. 11. However, the amount of her coverage is shown as $15,000 and the premium is shown as $49.50. Pasted on this “Schedule Bond — Anniversary List” and below the list of- the names of the employes, appears a “Notice of Acceptance,” reading:
“Notice op Acceptance
(Schedule Bond)
“It is understood that the National Casualty Company does not assume liability during any year or years or for any default or defaults in the aggregate exceeding the amount of its suretyship as determined by the original obligation of suretyship.” On June 1, 1933, defendant again issued its Schedule Bond — • Anniversary List, which is similar to the one heretofore quoted, the only change therein being that it refers to the employes who were covered under bond No. N-6692 before the 1st day of June, 1933, and shows Miss Burnham as employe No. 10, the amount of coverage $15,000 and the premium $49.50. On June 1, 1934, defendant issued another Schedule Bond — Anniversary List, similar to the ones issued in 1932 and 1933, listing 47 employes and showing Miss Burnham as No. 10. Her coverage is shown as $15,000 and the premium is $49.50.

Plaintiff paid the premiums called for and also complied with the conditions of the bond with reference to giving notice to the defendant and in submitting to defendant in writing its claim and proof of loss. All of the conditions in the bond required to be performed by plaintiff were complied with. Conferences and negotiations were had between the officers and agents of the respective parties. In these negotiations plaintiff contended that the defendant was obligated to pay the sum of $38,379.97 or in any event, $25,000, and defendant contended that the most it was obligated to pay was $15,000. On May 1, 1935, defendant sent to plaintiff a check for $15,000, accompanied by a letter. Plaintiff deposited this check in its bank account and was credited accordingly. Defendant maintains that the acceptance of the check constituted an accord and satisfaction. On January 6, 1936, plaintiff filed its two count complaint in the Superior Court of Cook county. The theory of the first count is that on May 26, 1931, a single bond was issued which secured it against any defalcations on the part of Miss Burnham to the extent of $25,000; that the execution on June 1, 1932, of the agreement entitled ‘ ‘ Schedule Bond — Anniversary List” was the execution of a new bond for which plaintiff paid a premium of $49.50 for protection against any defalcations by Miss Burnham to the extent of $15,000; that the execution on June 1, 1933, of another “Schedule Bond — Anniversary List” constituted the execution of another new bond; that the execution on June 1, 1934, of another “Schedule Bond — Anniversary List” was, in effect, the execution of another bond; that the defendant, in effect, executed four bonds which would entitle the plaintiff to full coverage so long as plaintiff continued having defendant write the fidelity insurance covering Miss Burnham. The theory of plaintiff in the second count is that on May 26, 1931, the bond was a continuing bond, which afforded protection so long as it remained in force; that the agreements entered into on June 1, 1932, June 1, 1933 and June 1, 1934, for which separate premiums were paid, were continuations of the original obligation, in other words, that the bond was a continuing bond affording to plaintiff protection against any pecuniary loss as employer by reason of any act of embezzlement by Miss Burnham from the execution of the original bond on May 26, 1931, until the defalcations were discovered on December 18, 1934, subject to the conditions and limitations contained in the original bond and agreement subsequently entered into, entitled “Schedule Bond — Anniversary List.” Under the second count plaintiff maintains that inasmuch as the larger of the amounts during the four-year-period was the sum of $25,000 and inasmuch as there were embezzlements during each of the years, which total a sum in excess of $25,000, that the defendant is clearly obligated by reason of the terms of the bond to pay to plaintiff a liquidated sum of $25,000. Defendant answered, setting up the theory that the bond issued by it was one continuing bond and not renewed each year by the so-called Schedule Bond — Anniversary List; that plaintiff was entitled to recover the sum of $15,000; which amount was paid prior to the filing of the action, and that there was an accord and satisfaction entered into between the parties whereby plaintiff agreed to accept and did accept the sum of $15,000 in satisfaction of the claim under the bond and the anniversary list. The case was tried before the court without a jury. The parties stipulated on the facts. The stipulation contained a clause permitting either party to offer additional testimony not inconsistent with the facts stipulated. There is virtually no dispute as to the facts. The court found that the bond and the Schedule Bond — Anniversary Lists created a single continuing bond, rather than four separate bonds, finding against the plaintiff on the first count. The court further found that defendant was obligated to pay plaintiff on December 18, 1934, the sum of $25,000; that such sum of $25,000 was liquidated and certain, pursuant to the terms of the bond and the Schedule Bond — Anniversary lists, and that as a consequence thereof the payment of the sum of $15,000 did not constitute an accord and satisfaction and did not serve to release defendant from its further liability to the extent of $10,000. The court further found that the sum of $25,000 was payable not later than five months after December 18, 1934, and that as a consequence plaintiff is entitled to interest on the sum of $10,000 from and after May 15, 1935, at the rate of 5 per cent per annum. The court entered judgment in accordance with the finding, and defendant appealed. Plaintiff filed notice of cross-appeal for the purpose of sustaining its contention that defendant’s liability is $38,379.97.

The first proposition urged by defendant is that the fidelity bond and anniversary lists were one continuous contract. Plaintiff insists that the bond and anniversary lists constituted separate and distinct contracts, on each of which the defendant corporate surety is liable to the limit set therein, for defalcations occurring during the term for which each was in force. Under this heading plaintiff argues that where the insured, as in the instant case, pays an annual premium securing coverage for a definite term, it is entitled to annual protection, and that as a consequence each renewal constitutes a separate and distinct contract and obligation. Plaintiff also maintains that insurance contracts should be liberally construed in favor of the insured; that doubt as to the meaning of ambiguous language in the insurance policy will be resolved against the insurer, that doubtful provisions will be liberally construed in favor of the beneficiary, and that if the bond is obscure and ambiguous and is fairly open to two constructions, it will be construed in favor of the insured and against the insurer. Plaintiff points out that the doctrine of strictissimi juris, which favors an individual surety, has no application where the surety is corporate and compensated. Defendant does not challenge the statements of law as to the rules applicable to the construction which the court should place on the language contained in the bond and the anniversary lists. In order to determine the meaning of the obligations assumed by the defendant, the court should and did carefully read all of the language. The documents should be read as a whole and not separately. The parties have cited numerous cases which they assert support their respective contentions. We have read these cases. No good purpose will be served by a lengthy discussion of the cases. The decision of each case depends on the language used by the parties and other pertinent facts therein. We are of the opinion that the bond and the anniversary lists are a single continuing contract and not four separate contracts, and in that respect we agree with the finding of the trial court. The important factor that establishes that the bond and anniversary lists are a single continuing contract is the provision in clause No. 7 of the bond that the suretyship on any employe could be terminated by the surety or by the employer on giving notice in writing. This clause contemplates a continuation of suretyship for no definite specified time. Clause No. 6 provides that plaintiff may increase or decrease the amount of the coverage without impairing the continuity thereof. Although the employe embezzled $13,-5'63.94 between June 1, 1931 and June 1, 1932, such embezzlement was not discovered until December 18, 1934, or more than four years after the embezzlement took place. The bond and anniversary list being a continuing contract, the plaintiff on discovering the embezzlement had a right to an allowance of its claim under the provision of clause No. 1 of the bond. Should the bond and each anniversary list be deemed four separate bonds, as plaintiff contends, then the continuity would be broken, and under the provision of clause No. 1 plaintiff could not recover for the loss during the first year as more than twenty-four months would have passed, following the termination of the coverage during the first bond. So also, the provision in the bond to the effect that the defendant does not assume liability during any year or years, or for any default or defaults in the aggregate exceeding the amount of its suretyship, as determined by the original application of suretyship, contemplates that the bond is a continuing bond and not a bond in force for one year. The language used in each of the Schedule Bond — Anniversary Lists contemplates that the bond as originally issued was in force and effect beginning as of June 1, 1931. All of the provisions taken together establish a continuity of one single bond over a period of time commencing with June 1, 1931, up to the time when the bond would be canceled by either party on written notice. Plaintiff argues that “if we are to hold that there is but one contract, then, as a consequence, the plaintiff manifestly received no consideration for the premiums it paid on the second, third and fourth renewal policies.”0 It also argues that it would follow that the only way an employer would be protected would be to take out a new policy in a new company each year. We cannot agree with this reasoning. At the time the bond is issued and at the time each anniversary list is issued the employer is given the protection that he pays for. If he wishes an increased coverage he may have it. However, he must pay an increased premium. In the instant case, plaintiff reduced the coverage after the first year. The employer and the bond company could also write up a different form of policy whereby the coverage could he made continuous and at the same time cumulative. The parties make their own contract. We are of the opinion that the trial court was right in finding in favor of the defendant and against plaintiff on the first count.

Having concluded that the bond and anniversary lists were one continuous contract, we now turn to the contention of defendant that under the provisions of the bond and anniversary lists it was obligated to' pay plaintiff the sum of $15,000 and no more. Plaintiff meets this contention by declaring that if the bond and the lists are to be construed as a single continuing contract, in any event the liability of the defendant is fixed, certain and liquidated in the sum of $25,000, and points out that the embezzlement of Miss Burnham, while the bond was in force, is admitted to be the sum of $38,379.97, constituting an amount, in the aggregate, in excess of $25,000, which is the largest amount in which Miss Burnham was bonded. The first year under the bond ending June 1, 1932, she embezzled $13,-563.94; the second year ending June 1, 1933, she embezzled $6,587.97; the third year ending June 1, 1934, she embezzled $12,080.57, and the fourth year from June 1, 1934, until the discovery of her embezzlement, she embezzled $6,147.49. Under the schedule bond and anniversary lists she was covered to the extent of $25,000 during the first-year ending June 1, 1932, and to the extent of $15,000 for the remainder of the time. Plaintiff calls our attention to clauses Nos. 3 and 6 of the bond, to the notice of acceptance and to the language of the Schedule Bond — Anniversary List, and particularly the clause providing “that in case of any such increase or decrease the liability of said National Casualty Company on account of such employee shall not exceed in the aggregate the larger of said amounts.” Plaintiff maintains that it purchased insurance in the amount of $25,000 for the first year for which it paid a valuable consideration, and that for the second, third and fourth years it purchased insuranee in the amount of $15,000, for which it paid a valuable consideration, and that the liability of defendant is limited in the aggregate to the larger of said amounts, and that the larger of said amounts being $25,000, that is the sum which defendant owes. Plaintiff does not contend, however, that it would have been entitled to recover any more, if the defalcations occurred during any one year, than the amount for which the employe was covered for that year, and in arguing this point states that it secured protection only to the extent of $15,000 during each of the years in which Miss Burnham was bonded for that amount, but that it can recover on the bond up to $25,000, “the larger of said amounts” mentioned in the schedule. Plaintiff also states that defendant was limited in liability for each year for defalcations occurring each year, to the amount of the bond for that year, namely, $25,000 during the first year and $15,000 in each of the following three years, and that applying the construction most favorable to the defendant to the clauses set forth, defendant’s “aggregate liability” was limited to and liquidated at the sum of $25,000. We do not agree with the statement that in construing the instrument we should apply the construction most favorable to the defendant. The parties have agreed that the rule is that the language, if obscure or ambiguous, should be construed in favor of the plaintiff and against the defendant. In the schedule attached to the bond Miss Burnham was covered in an amount up to $25,000 commencing June 1, 1931. Commencing June 1, 1932, or after the bond had been in force one year, the amount of coverage on her was reduced to $15,000. The amount of indemnity of $15,000 remained applicable to her beginning with June 1, 1932, up to December 18, 1934, the date the embezzlement was discovered. It was contemplated that the premium for each employe should be paid annually. The primary purpose of the anniversary lists was to show the names of the various employes, the amount of the coverage, the date when the coverage began and the annual premium for each employe. The bond itself continued in force regardless of the anniversary lists. The first anniversary list refers to the bond covering the employes named in the schedule attached to the bond. It provides, in part, that “in case the amount formerly carried on each employe shall be larger or smaller than the amount set opposite the name of such employe in said list, the former amount shall be deemed to be increased or decreased accordingly, effective as of said last mentioned date; provided, that in case of any such increase or decrease, the liability of said National Casualty Company on account of such employe shall not exceed, in the aggregate, the larger of said amounts.” The coverage for Miss Burnham was reduced on June 1,1932, to $15,000, and remained at that figure until the date the embezzlement was discovered. Between June 1, 1931 and June 1, 1932, when her coverage was $25,000, she embezzled the sum of $13,-563.94. The- next year when the coverage was $15,000, she embezzled $6,587.97. The succeeding year she embezzled $12,080.57. During the last year up to December 18, 1934, she embezzled $6,147.49'. In no year while the bond was in force did she embezzle any sum in excess of $1-5,000. Defendant contends that a reasonable construction to be placed on the phraseology of the various clauses in the bond and anniversary lists is that there could be no liability on the part of defendant in excess of $15,000, unless Miss Burnham had embezzled more than $15,000 during the period from June 1,1931 until June 1,1932, when the maximum amount of liability for which a corresponding premium was paid, was $25,000. Defendant maintains that if she had embezzled $25,000 or more during the first year of the coverage, the liability of the defendant would have been $25,000 and no more, even though she had embezzled various additional sums in the succeeding three years, when the indemnity of the bond was decreased to $15,000. It is obvious that if the amount of the coverage for Miss Burnham had remained at $15,000 during the entire period that the bond was in force, there would be no question but that the obligation of the defendant did not exceed $15,000. Defendant declares that the phraseology used in the anniversary lists that “in case of any such increase or decrease the liability of said National Casualty Company on account of such employe shall not exceed in the aggregate the larger of said amounts” simply means that under no condition or situation could the liability of the defendant exceed $25,000. We agree with the contention of the defendant. After the bond had been in force one year neither plaintiff or defendant had any knowledge that Miss Burnham had embezzled any funds. Plaintiff desired to reduce the amount of coverage for this woman, thereby saving a portion of the premium. Plaintiff was protected up to $25,000 for any .embezzlement of funds during the first year even though this embezzlement might not have been discovered for several years, as the bond was a continuing bond and the limitation of discovery period would not begin to run until the bond was terminated or the embezzlement discovered. Manifestly, it could not be foreseen during any year that the bond was in force, what amount, if any, any employe would embezzle. If the plaintiff desired to be protected during the entire period of time up to $25,000, it should have paid a premium based on $25,000 coverage for each year that the bond was in force, or secured a bond containing language conforming to what it now contends the present bond provides. We are satisfied that the bond and the anniversary lists under the undisputed facts do not permit plaintiff to recover more than $15,000. The amount embezzled in the first year when the coverage was $25,000 was less than $15,000, and for the remaining three years when the coverage was only $15,000 plaintiff can only recover the difference between the amount embezzled in the first year and the sum of $15,000, plus interest, if claimed. The proposition of interest will be discussed under another point.

We turn now to a consideration of defendant’s contention that the payment to plaintiff of the sum of $15,000 under the circumstances shown by the evidence, constitutes an accord and satisfaction. Plaintiff meets this contention by asserting that the defense of accord and satisfaction is an affirmative one; that the burden of proving it by a preponderance of the evidence in this case was on the defendant; that defendant was required to prove that the claim was unliquidated, and that there was a bona fide dispute; that the record shows that defendant’s obligation was liquidated; that defendant in paying an amount less than the amount due, did not create an accord and satisfaction for the balance; that the payment by defendant of a sum admittedly due and payable furnished no consideration for the discharge of an additional and distinct item of liability and did not effect an accord and satisfaction of such distinct item; that the payment to plaintiff on account of an undisputed claim, where there are two or more separate claims and one is undisputed, whereas the other or others are disputed, does not bar the right of plaintiff to sue for and recover on the disputed claim; that there was not a bona fide dispute between the parties, and that hence there could not be an accord and satisfaction. The parties are in agreement that the defense of accord and satisfaction is an affirmative one and that the burden of proving it is upon the defendant. The law of this State is that “where there is a bona fide dispute between a debtor and creditor as to how much is due, a payment of the amount claimed by the debtor to be due in full settlement, if accepted by the creditor, is a satisfaction of the claim. . . . The creditor must either accept what is offered with the condition upon which it is offered or refuse it.” (Kall v. W. G. Block Co., 319 Ill. 339, 341.) In Economy Fuse and Manufacturing Co. v. Standard Electric Manufacturing Co., 359 Ill. 504, at page 510, the Supreme Court said:

“A check for a sum less than the amount of a claim as to which there is a bona fide dispute, where such check is tendered in full payment of the amount due, . cannot he accepted by the creditor without acquiescing in the condition upon which it is tendered.” The parties stipulated:
“That prior to May 1,1935, there were several conferences between the duly authorized agents of the plaintiff and the defendant; that in said conferences the plaintiff contended that the defendant was obligated to pay to the plaintiff a sum not less than $25,-000.00, under the provisions of said bond and anniversary lists for the loss incurred to the plaintiff as the result of the embezzlement of said sums of money by Bertha C. Burnham; that in said conferences the defendant contended to the plaintiff that the most the defendant was obligated to pay the plaintiff under the provisions of said bond and anniversary lists was the sum of $15,000.00, which sum the defendant, through its agents, stated it was obligated to pay; that the defendant did offer to pay to the plaintiff the sum of $15,000.00 in full settlement of all liability under the provisions of said bond and anniversary lists resulting from the said embezzlement of the said Bertha C. Burnham.
“That on May 1, 1935, the defendant, through its duly authorized agent, E. M. Kincy, wrote and mailed a letter to the plaintiff, the original of which said letter is marked defendant’s ‘Exhibit 1’ and hereby admitted in evidence.
“That, in said letter dated May 1, 1935, there was enclosed a draft for the sum of $15,000.00, payable to Quinlan and Tyson, Inc.; that said letter and draft were received by the plaintiff herein, on or about May 2, 1935; that said draft was endorsed, ‘Quinlan and Tyson, Inc., by H. N. Tyson, Jr.,’ and deposited by the plaintiff in the bank, and the amount of $15,-000.00 was credited to its account in said bank; that said draft showing the payment of said $15,000.00 with the various endorsements thereon, subsequent to the delivery of said draft to the defendant by the plaintiff, is hereby admitted in evidence as defendant’s ‘Exhibit 2.’ ” It also appears from the record that at a conference in February 1935, attended by Howell N. Tyson, Jr., executive vice president and treasurer of plaintiff, attorney Edmund W. Burke, representing the plaintiff, and E. M. Kincy, an adjuster in charge of the surety claim department of defendant, Messrs. Tyson, Jr. and Burke contended that under the provisions of the bond, plaintiff was entitled to a minimum of $25,000, or a maximum of $38,000. They were informed that the legal department of defendant had advised Mr. Kincy that under the provisions of the bond and the anniversary lists the defendant was obligated to pay $15,000 and no more. Mr. Kincy testified that on May 1,1935, he was called to the office of Mr. M. P. Cornelius, who was president of the Continental Casualty Company, which latter company had charge of the surety claim department of defendant. From the testimony of Mr. Kincy, it appears that Mr. Cornelius recognized that plaintiff gave defendant considerable business. Because of the profitable business relationship between plaintiff and defendant, and Mr. Kincy being, in charge of the claim department for defendant, Mr. Cornelius asked Mr. Kincy if there was any way (consistent with the terms of the bond) by which defendant could pay plaintiff in excess of $15,000. Kincy testified that he did not see how defendant could do so; that if business reasons entered into it, Cornelius would have to decide that, but from the claim standpoint and from the information given him by defendant’s legal department, $15,000 was the absolute limit; that Tyson then spoke up and said that they (plaintiffs) would accept it and to conclude the settlement through Tyson, Jr.; that Mr. Cornelius said, “That is all there is to it. You issue the draft and take care of the claim”; that on the next day, May 1, 1935, Kincy got in touch with Tyson, Jr. on the telephone and stated that he presumed Tyson, Sr. had told him of the conversation in Mr. Cornelius ’ office and that he would send a draft for the amount of $15,000, that it would not be necessary for any special release, and that he would embody a release on the back of the draft so that when the draft was presented to the bank that would be sufficient for the records. On the same day, defendant, through Kincy, sent a letter to plaintiff for the attention of Mr. Howell Tyson, Jr., reading:
“As per telephone conversation of this morning, I am pleased to attach hereto our draft FN-508 in the sum of $15,000.00 in complete settlement of your claim account defalcations of Bertha G. Burnham.
“Your signature on the back of the draft will constitute a complete release.” Enclosed with the letter was a draft in the sum of $15,000 payable to the order of plaintiff, with the endorsement on the reverse side thereof, reading:
“Received of National Casualty Company the sum of $15,000.00 in full payment, release, satisfaction, settlement, compromise and discharge of any and all claims arising on account of defalcations on the part of Bertha Gr. Burnham, on whose behalf bond was issued. ’ ’ The letter and draft were received and plaintiff endorsed the draft immediately below the above quoted language. Plaintiff deposited the draft in its bank, which collected the same and the amount was credited to the account of plaintiff. There was no attempt to contradict the testimony of Mr. Kincy as to the conversation with Mr. Tyson, Sr. in the office of Mr. Cornelius. We find that defendant proved by a preponderance of the evidence that there was a bona fide dispute as to the amount due plaintiff; and that the latter accepted a draft for the sum claimed by defendant to be due, in a letter making it clear that the acceptance of the draft would constitute a full and complete release of all claims arising on account of embezzlements by Bertha C. Burnham. We reject the contention of plaintiff that defendant’s obligation was liquidated. It is manifest from the pleadings, the stipulation and the testimony that there was a bona fide dispute. Nor do we agree with plaintiff’s contention that it presented two or more separate claims. Plaintiff presented a single claim. The payment of the $15,000 was not made under conditions indicating a settlement of one or more acts of embezzlement, but was tendered and accepted by plaintiff in disposition of the entire claim. We are satisfied that defendant proved its defense of accord and satisfaction by a preponderance of the evidence.

Plaintiff further argues that the defendant undertook to answer for the defaults of Miss Burnham, and as a consequence is liable for interest from the dates of the embezzlements, plus the principal amount embezzled, and that the total amount thereof is certain and liquidated. We have held that there was a bona fide dispute and that the amount of the claim was not liquidated. Defendant replies by declaring that this point is raised for the first time in this court and that nowhere in the pleadings is there any contention that plaintiff was entitled to recover interest on the sum embezzled from the date of the embezzlement. We agree that the record does not show that the question of interest was discussed or a claim for interest made. The trial court makes no reference to the point in its judgment order. This proposition, not having been presented to or urged in the trial court, cannot be urged in this court.

For the reasons stated the judgment of the superior court of Cook county is reversed and judgment is entered here for the defendant and against the plaintiff for costs.

Judgment reversed and, judgment here.

Denis E. Sullivan, J., concurs.

Mr. Justice Hebel

specially concurring: I am unable to agree to all that is said in the opinion but concur with this conclusion.


source: Caselaw Access Project

author: Mr. Justice Hebel

license: Public Domain

text:
    Doris Josephine Kernott, Appellant, v. Irene Behnke, Appellee.
    Gen. No. 41,553.

      Heard in the third division of this court for the first district at the December term, 1940.
    Opinion filed June 25, 1941.
    Rehearing denied October 3, 1941.
    H. E. Christensen, of Chicago, for appellant.
    Marshall Solberg and Clarence D. Nyhus, both of Chicago, for appellee.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from a judgment entered in a replevin action, which contained alternative counts in trover, originally instituted against Irene Behnke individually and also as executrix of the estate of Ida M. Kernott, deceased, and the National Safe Deposit Company, to recover certificate No. 6 for 25 shares of the capital stock of Castle Amusement Company, dated October 6, 1916. The complaint consisted of six counts: Counts I and IV were against the National Safe Deposit Company; Counts II and V were against the defendant, Irene Behnke; Counts III and VT were against Irene Behnke as executrix of the estate of Ida M. Kernott, deceased.

On April 19, 1940, by stipulation of all the parties, it was agreed that a safety-deposit box of the National Safe Deposit Company be opened and the certificate of stock here involved be removed and delivered by a representative of the National Safe Deposit Company to the clerk of the court, pending the disposition of this cause, and that upon such delivery to the clerk, National Safe Deposit Company be dismissed as a party. Said stipulation further provided that the question of ownership or title to said stock be passed on by the court. On April 23, 1940, that company was dismissed by stipulation as a party defendant, and on June 5, 1940, the cause was dismissed as to Irene Behnke as executrix of the estate of Ida M. Kernott, deceased.

The cause was heard by the court without a jury on Counts II and V against the defendant, Irene Behnke, individually. The court found “the defendant, Irene Behnke, individually, and as Executrix of the estate of Ida M. Kernott, deceased, not guilty, and that the title and right to possession of the property in question is in the defendant as Executrix.” The court also found that “the defendant, Irene Behnke, individually, has necessarily incurred attorneys’ fees in and about the defense of the above entitled cause, and that the reasonable amount thereof is $125.00 and that defendant, Irene Behnke, individually, has also necessarily incurred, in the defense of said cause, court reporter’s fees for the attendance of a court reporter at the trial of the above entitled cause” in the amount of $6. The court having assessed damages against the plaintiff and in favor of the defendant and having entered judgment upon the finding and assessment of damages, this appeal is taken by plaintiff to reverse that judgment.

The trial proceeded under Counts II and V. Count II is the standard count in replevin and Count V an alternative count in trover. The defendant’s answer to Count II denies that the plaintiff is the owner of certificate No. 6 for 25 shares of the capital stock of Castle Amusement Company, dated October 6, 1916, and denies that the defendant individually took and detained the same. Her answer to Count V denies that she individually converted said stock certificate or that said certificate ever came into her possession, other than in her capacity as executrix of the estate of Ida M. Kernott, deceased; and denies that the plaintiff on December 3, 1938, at the present time, or at any other time was the owner of said certificate of stock or of any interest therein or was possessed or entitled to the possession of same. As to both counts defendant’s answer says: “This defendant, as Executrix of the estate of Ida M. Kernott, deceased, is the owner of said stock; . . . that said shares were the property of the said Ida M. Kernott at the time of her death and became the property of this defendant as Executrix. ’ ’

Prom the record the facts appear as suggested by. the plaintiff that on October 6, 1916, Clarence E. Beck was president and John Edward Kernott, father of Doris Josephine Kernott, plaintiff, was secretary of Castle Amusement Company, a family owned corporation. On that date, Mr. Kernott gave to his wife, Ida M. Kernott, plaintiff’s mother, as an anniversary present certificate No. 6, for 25 shares of stock of that company. There are 600 shares of stock outstanding in the company. The estate of John E. Kernott owns 274 shares. The executor of his estate owns one share, making 275 shares. Richard Beck owns 176 shares. Clarence E. Beck’s widow, Charlotte M. Beck, owns 124 shares, making 300 shares or a total of 575 shares. The remaining 25 shares represented by certificate No. 6 here in question completes the 600 shares outstanding.

Mrs. Kernott shortly after Mr. Kernott’s death in 1929 gave her secretary, Mrs. Wenke, a list of securities including these 25 shares of Castle Amusement Company stock and told her those shares had been given to her as an anniversary gift by Mr. Kernott and told her that those shares were very important because they gave the Kernott interest an equal share with the Beck interest, advising her that under no circumstances should she sell that stock but keep it for plaintiff.

It appears from this record that the plaintiff, on June 5, 1940, dismissed the cause as to Irene Behnke, as executrix of the estate of Ida M. Kernott, deceased, and that, subsequently, on June 7, 1940, the court entered judgment and found “the defendant, Irene Behnke, individually, and as executrix of the estate of Ida M. Kernott, deceased, not guilty, and that title and right to possession of the property in question is in the defendant as executrix. ’ ’ The question involved in this controversy is whether the court erred in denying the plaintiff the right to offer testimony regarding the facts surrounding and constituting the gift of the certificate of stock to the plaintiff by her mother, Ida M. Kernott, deceased. From the authorities there would appear to be a doubt as to the admissibility of the evidence as contended for by the plaintiff, where the defendant is defending or being sued as an executrix of a deceased person. Chapter 51, sec. 2, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 107.068]. The purpose, no doubt, of the plaintiff in dismissing the cause against Irene Behnke, as executrix, was for the purpose of offering evidence upon the questions involved, regarding whether a gift inter vivos was made to the plaintiff by her mother, Ida M. Kernott," deceased. Testimony regarding the facts surrounding the alleged gift was offered in evidence by a witness, but on objection of the defendant the court sustained the objection, and thereupon the plaintiff made an offer of proof. The facts that the plaintiff offered to prove, and upon which she predicates her right to recover on the theory of a completed gift inter vivos of the stock certificate on March 21, 1935, were in substance that on the morning of March 21, 1935, Mrs. Kernott said “Doris, I have made up my mind to give you these twenty-five shares of Castle stock today. I am going to dispose of it today. I am going to give them to you today so that the matter will be disposed of.” Mrs. Kernott then endorsed the stock certificate in blank by signing her name on the assignment form, placed the stock certificate in an envelope, wrote in ink on the envelope “Doris J. Kernott,” handed the envelope to plaintiff and said “Doris, this is now your stock. I have given it to you absolutely, for yourself, and you may keep it the rest of your life.” Plaintiff took the envelope containing the stock certificate and said, “Thank you, mother. I certainly appreciate your giving me.this stock. I will do what you told me. I will always keep it; I won’t dispose of it or sell it. But I want you, mother, to have the dividends from the stock as long as you live, and whatever dividends are paid you keep them as your own.” Plaintiff put the stock in her handbag and she and Mrs. Kernott went to the Safe Deposit Company and took out a joint box. Plaintiff deposited the envelope containing the stock certificate in the box. Both she and her mother were each given a key to that box. Consistently with this action, the day after her mother’s death, plaintiff picked up the stock certificate from the deposit box, but shortly thereafter was forced by the defendant to return it to the safe-deposit box.

The plaintiff contends that no objection was made to her testimony on the ground of immateriality nor on the ground that statements made by her mother, Mrs. Kernott, were hearsay; and urge that they would have been admissible even though objection had been made on that ground, both as part of the res gestae and as admissions against interest. Winchell v. Rice, 207 Ill. App. 608, Brush v. Blanchard, 19 Ill. 31. The objection was made on the ground that the plaintiff was incompetent to testify and was incompetent as a witness in any respect, by virtue of the provisions of section 2 of the Evidence Act, ch. 51, sec. 2, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 107.068], The trial court sustained the objection. Plaintiff’s contention is that the defendant is liable and subject to suit in her individual capacity without reference to the capacity in which she sought to defend; that the plaintiff was suing for this stock on the theory that it was not a part of her mother’s estate, and that such being the case, the defendant in wrongfully detaining and exercising dominion over it is liable as an individual; and that being so, the rule that a party in interest could not testify in a suit against an administrator or executor does not apply. One of the cases cited is that of Rose v. Cash, 58 Ind. 278, which was a replevin action for the recovery of a promissory note which defendant claimed as administrator of a deceased person. The court in its opinion said:

“The sixth instruction tells the jury, in effect, that, if the appellee had possession of the note and claimed it as administrator, the appellant could not maintain the suit against him in his individual capacity. This is erroneous. The appellant could not be supposed to know in what capacity the appellee claimed the note. If she was the owner of the note and was entitled to possession, and he had the possession and unlawfully detained it from her, she could bring her action against him in his individual capacity, and he could defend it in any capacity in which he held it by right. Replevin is a possessory action; and a plaintiff in replevin cannot recover, unless he shows the right to possession; hence a plea of property in a third person is a good answer. The defendant may say to the plaintiff, ‘true, it is not my property, but it is the property of a third person, therefore you are not entitled to the possession of it; ’ and this will defeat the plaintiff. Whoever has the possession of the property to be replevied, and unlawfully detains it, is the proper person to be sued, whether he claims it as owner, agent, administrator, trustee, custodian, or in any other capacity.”

The case of Havill v. Newton, 202 Ill. App. 15, was a suit by a widow against the executor of her husband’s estate for the alleged conversion of certain notes which she claimed as her sole and separate property. The defendant, who was sued as executor and not individually, defended on the ground that the notes belonged to the estate of the deceased, contending that he was improperly sued as executor and that the action should have been brought against him in his individual capacity. The court, in reversing a judgment for the widow, said:

“The jury, by their verdict, — which is not here questioned — found that the deceased had the possession of the said notes, not as owner thereof, but as the custodian for the plaintiff, who was the rightful owner thereof. Consequently the notes herein sued for never became a part of the estate of the deceased notwithstanding their appropriation as assets of the estate, by the defendant. Whenever an administrator or executor takes property not belonging to the estate of which he has charge and appropriates it as an asset thereof, he commits a tort, for which he becomes personally liable, whether sued in tort or in contract. This view is supported both by reason and the weight of authority. . . .” Also, in support of the position taken by the plaintiff is cited the cases of Herd v. Herd,, 71 Iowa 497, and Rodman v. Rodman, 54 Ind. 444. In the case of Sando v. Smith, 237 Ill. App. 570, the action was brought by the plaintiff who claimed funds and property based on a gift inter vivos from her sister against defendant, individually, although he was the administrator of the sister’s estate. On the first trial plaintiff was allowed to testify to facts alleged to have occurred prior to the death of the sister over defendant’s objection and on the theory that the admission of that evidence was error, a new trial was awarded. On the second trial the plaintiff was not permitted to testify as to things alleged to have taken place prior to the death of the deceased. The court in discussing the question, said:
“Inasmuch as there is to be another trial of this case, we feel that we ought to say that, in our opinion, the plaintiff should be permitted to testify, as she did in the first trial of the case, as to occurrences which are alleged to have happened prior to the death of the deceased. The defendant is properly sued here, not as an administrator but in his individual capacity. Havill v. Newton, 202 Ill. App. 15. Whitaker v. Shuman, 161 Ill. App. 568. It is true that he claims the right to retain the money sued for, on the theory that it is a part of the estate of his deceased sister and, therefore, he himself, will not be permitted to assume an attitude inconsistent with that position. It is for that reason that we have held that he, claiming the right to retain this money as an officer of the court, will not be permitted to invoke the rule as to voluntary payments in ignorance of legal rights. But when it coines to the rules of evidence to be applied to the plaintiff as to the proof of her case, we must remember that the plaintiff may only recover in this case on the theory that the money she is suing for is not a part of the estate of her deceased sister and that such being the case, the defendant, in wrongfully retaining it, is liable as an individual. Inasmuch as the plaintiff may recover only on the theory that the money sued for was not a part of her deceased sister’s estate, the rules of evidence eliminating the testimony of a plaintiff in a suit against an administrator may not properly be applied here.” There is a further case, Corney v. Corney, 257 Ill. App. 13, which was a suit against defendant individually to recover money in the possession of defendant which he claimed to hold as administrator of the estate of Eliza Ann Forney, who was entitled to the use of the funds for her life, at her death to be distributed to certain persons including plaintiff under the will of another deceased person. The plaintiff there contended that his interest in the funds in the hands of Eliza Ann Forney for life was fixed at the sum of $1,000 by the terms of said will. The suit was to recover this sum plus interest. Defendant’s contention was that he had the right, as administrator, to administer the life fund; that plaintiff had no remedy except to file a claim in the probate court within one year — which was not done; and that he received the assets constituting the life estate fund in a representative capacity and was not liable individually. Plaintiff, however, contended that his interest in the funds in. the life estate under the will passed to him on the death of Eliza Ann Forney, without any action on the part of her administrator. The court as part of its opinion said:
“During the trial it appears that appellee objected to certain testimony that was offered on the part of appellant.. It is insisted that appellant was disqualified from testifying to conversations with Eliza Ann Forney. We think that appellant was competent to testify, either as to conversations or transactions with Eliza Ann Forney, during her lifetime, that related in any manner to the fund in question. It will be remembered that appellee was not sued and was not defending in a representative capacity.
“The case of Sando v. Smith, supra, announces the rule that sustains the contention of the appellant, that appellant was a competent witness to testify as to conversations had by him with Eliza Ann Forney and concerning the fund in question, . . .”

From an examination of these authorities, the dismissal of defendant, Irene Behnke, as executrix of the estate of Ida M. Kernott, deceased, as a party defendant, was properly entered. As we have indicated, such dismissal was for the purpose of qualifing the evidence that was offered by plaintiff regarding the facts as they applied to the alleged completed gift inter vivos. The trial court in disregarding the offer of proof as made by plaintiff, after dismissal of defendant as executrix, was in error, and for the reasons stated we believe that the offer of proof as made should have been admitted and considered by the court.

The defendant testified over objection and motion to strike her testimony as to alleged conversations with plaintiff’s mother, Ida Kernott, and with Mr. Beck. The substance was that Mrs. Kernott in the spring of 1936 had asked defendant to talk with Mr. Beck to find out what he would pay for 25 shares of stock as she would like to sell it; defendant talked back and forth to Mrs. Kernott and Mr. Beck; he offered $2,500, and Mrs. Kernott refused to accept. Both Mrs. Kernott and Mr. Beck were dead at the time of trial. This testimony was inconsistent with plaintiff’s theory of a gift inter vivos on March 31, 1935, and improperly admitted was highly prejudicial. Defendant was also, permitted to testify over objection and motion to strike her testimony in substance “I know that Doris had her heart set on this twenty-five shares of stock, and I went to her mother and I said ‘Why don’t you make this over to Doris, and let her feel free and easy? This is what she wants more than anything else in the world, Ida. Why don’t you give this over to Doris?’ And she said, ‘Well, I am not going to. I don’t know what I want to do with this yet.’ That was my plea always, that if Doris wanted that, — because I was very fond of Doris,- — why couldn’t she have that stock? Well, it was the same answer. ‘If anything happens to me, Irene,’ she said, ‘you know I have left a will, and that is sufficient. ’ ’ ’

Appellant argues that there is no conceivable theory upon which such testimony could have been competent or admissible, and that the testimony was plainly hearsay and inadmissible. The testimony of defendant as to conversations with Mrs. Kernott and Mr. Beck was not only not within the classification of admissions but was a bare self-serving declaration. The case of Republic Iron & Steel Co. v. Industrial Commission, 302 Ill. 401, is cited, which seems to support the rule as is contended for by the plaintiff. According to that case, the rule — that declarations or admissions are an exception to the rule as to hearsay evidence when offered against an administrator or one claiming under him, by the party sued — “is otherwise, however, when such declarations are offered as evidence by the injured party who makes them or when offered by his administrator or one suing for injury or compensation for his death. In such a case the declarations are in the nature of self-serving declarations and come strictly under the hearsay rule. For that reason the declarations of the deceased in the case of Chicago Packing Co. v. Industrial Board, supra, (282 Ill. 497) were held incompetent.”

So in the case at bar, it is further suggested that the defense is that the defendant is entitled to the stock as executrix of the estate of Mrs. Kernott; that the defendant, therefore, stands in the shoes of Mrs. Kernott and has only such right as Mrs. Kernott had; and that any alleged statement, therefore, on the part of Mrs. Kernott to the effect that she had not given the stock to plaintiff — i.e. that she (Mrs. Kernott) still owned the stock at a date subsequent to March 21,1935 (the date of the gift) — is purely a self-serving declaration. We agree with this contention because, as it is stated in the facts, the date of the gift was March 21, 1935, and the so-called declaration was made subsequently in the spring of 1936. We are of the opinion that the testimony of the defendant is clearly inadmissible and was made as we have stated at a time subsequent to the alleged gift to the plaintiff.

There are other questions called to our attention, but since the cause will be remanded for a further trial, it will be unnecessary for this court to consider same, for the reason that it will be necessary for the trial court to consider all the offers of proof as made when the case is reached for trial.

There is one further question in the case that we believe should be passed upon, and that is whether or not the court erred in entering judgment for attorney’s fees in the sum of $125 in favor of defendant Irene Behnke, individually, and of $6 for court reporters charges. There is no statutory provision allowing such fees and charges. In the Replevin Act (ch. 119, sec. 22, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 109.522]) it is provided that “If the plaintiff in an action of replevin fails to prosecute his suit with effect, or suffers a voluntary or involuntary dismissal, or if the right of property is adjudged against him, judgment shall be given for a return of the property if such property has been delivered to the plaintiff, and damages for the use thereof . . . shall be made, unless the plaintiff shall, in the meantime, have become entitled to the possession of the property, when judgment may be given against him for costs and such damage as the defendant shall have sustained;....” It is to be considered that in this case the property was in the possession of the clerk of the court, not in the plaintiff, and that it was ordered returned to defendant, so that no damages “for the use” thereof could have been assessed. In section 52 of the Civil Practice Act (ch. 110, sec. 176, Ill. Rev. Stat. 1939 [Jones Ill. Stats. Ann. 104.052]) it is provided that:

“The plaintiff may, at any time before trial or hearing begins, upon notice to the defendant or his attorney, and on the payment of costs, dismiss his action or any part thereof as to such defendant, without prejudice, by order filed in the cause. Thereafter he may dismiss, on the same terms, only (1) upon filing a stipulation to that effect signed by such defendant, or (2) on the order of the court or judge made on special motion in which the ground for such dismissal shall be set forth and which shall be supported by. affidavit. After a counterclaim has been pleaded by a defendant no dismissal may be had as to him except by consent of the defendant.” It does not appear that any objection was made to the dismissal of Irene Behnke, in her capacity as executrix, on the ground that costs had not been paid nor on the grounds that no stipulation was filed by defendant, or that the order of court was granted on motion not supported by affidavit. So that from the facts as they appear in this record — and no provision having been made by statute nor by agreement of the parties for the entry of judgment for such attorney’s fees and court reporter’s charges — we are of the opinion that the court erred in allowing such fees and charges, and for that reason the order allowing same will be reversed.

Having considered the question of most importance —as to the admissibility of certain evidence and testimony of plaintiff — and for the reasons stated in this opinion, the judgment is reversed and remanded with directions for a new trial.

Reversed and remanded for new trial.

Burke, P. J., concurs.

Denis E. Sullivan, J., takes no part.


text:
    Elizabeth Shilvock, Appellee, v. Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago, Appellant.
    Gen. No. 41,636.

      Heard in the third division of this court for the first district at the October term, 1940.
    Opinion filed June 25, 1941.
    Rehearing denied September 26, 1941.
    Barnet Hodes, Corporation Counsel, for appellant; George F. Mulligan, Assistant Corporation Counsel, of counsel.
    Daniel S. Wentworth and George P. Novak, both, of Chicago, for appellee; Howard F. Bishop, of Chicago, of counsel.
   Mr. Justice Hebel

delivered the opinion of the court.

This is a proceeding in certiorari to review the action of the appellant-respondent board in refusing to grant a widow’s pension to the appellee-petitioner, whose husband died on October 20, 1914, and who had previously been denied a widow’s pension on January 13, 1915, by a former police pension board created by the police pension fund Act of 1887. The nisi prius court quashed the record, and appellant appealed from that judgment order to the Supreme Court of Illinois upon the ground that the constitutionality of section 982 (f) of chap. 24 of the Statutes of Illinois (Ill. Rev. Stat. 1939, ch. 24, sec. 982 (f) [Jones Ill. Stats. Ann. 100.162]) was involved. The Supreme Court passed upon the question as to whether a constitutional question was involved, and for the reasons stated in the opinion (Shilvock v. Retirement Board of Policemen’s Annuity & Benefit Fund of Chicago, 375 Ill. 68), the canse was transferred to this court.

The facts as they' appear from the record and as called to our attention by the appellant-respondent are that the petitioner, Elizabeth Shilvock, is the widow of Charles E. Shilvock, a deceased Chicago patrolman. On May 10, 1911, Officer Shilvock, while on crossing duty, had his “left knee bruised,” according to the official accident report. On October 20, 1914, Officer Shilvock died of chronic interstitial hepatitis (hardening of the liver), and on December 24, 1914, the petitioner filed an application for a pension as his widow, claiming that his death was caused by the injury received by him on May 10, 1911, three and one-half years prior to his death. The pension board which was created by the Police Pension Act of 1887 (Ill. Rev. Stat. 1939, ch. 24, sec. 880 [Jones Ill. Stats. Ann. 100.100]) was in operation at that time and, after notice to the petitioner of the date of hearing on her claim, found against her and denied her a pension. It appears that no further action was taken by her before that board and no appeal made to any court for a review of that board’s action in denying her a pension.

In 1915 a new Police Pension Fund Act was passed by the General Assembly of Illinois, superseding the pension fund created by the Act of 1887 (Ill. Rev. Stat. 1939, ch. 24, sec. 905, 917 [Jones Ill. Stats. Ann. 100.112, 100.124]). In 1921 the Police Pension Fund Act of 1915 was itself superseded by the present Policeman’s Annuity and Benefit Fund Act (Ill. Rev. Stat. 1939, ch. 24, sec. 945, et seq. [Jones Ill. Stats. Ann. 100.125, et seq.]

In June 1923, eight years after a pension had been denied the petitioner by the 1887 board, the petitioner filed with the Retirement Board of the Policeman’s Annuity and Benefit Fund of Chicago, a declaration for a pension, accompanied by a photostatic copy of what purported to be the official record of the Department of Health of the city of Chicago, showing that her husband had died of chronic interstitial nephritis, a kidney disease. This certificate was proved to be a forgery and her application was denied on June 20, 1923.

In December 1923, the petitioner filed a petition in mandamus against the Retirement Board to obtain an order from the court that she be paid a pension. A demurrer to the petition was sustained and the petitioner given ninety days to file an amended petition. No amended petition was ever filed. On November 13, 1931, eight years after the suit had been filed and nearly seventeen years after the ruling — denying petitioner a pension — entered by the pension board created by the Police Pension Act of 1887, the court (Judge Taylor) refused to dismiss the mandamus proceeding of 1923 on the ground that the court felt that the widow should be given an opportunity to have her rights adjudicated. This was reported to the respondent board and a hearing was arranged for the petitioner to be held on December 10, 1931, with notice thereof to the petitioner. The petitioner did not appear before the board personally or with any witnesses until March 10, 1932. Hearings were thereafter held at various dates until May 19, 1933, on which later date the entire record in the case was referred to the attorney and physician of the respondent board to summarize and report their conclusions to the board.

On June 23, 1933, the respondent board considered the summation and report and entered the following-order :

“It was moved by Trustee McCarthy and seconded by Trustee Dwyer that the report of the Attorney and Physician for the Board in the Shilvock case be approved and concurred in; that said report be made a part of these proceedings, and that the Board make no change in the decision entered on January 13, 1915, denying the claim of Elizabeth Shilvock.” Petitioner sought a review of this action of the board by certiorari in the circuit court of Cook county. The writ of certiorari has twice been quashed in the circuit court, and the judgment orders reversed twice in the Appellate Court; once for defective certificate and failure to include all the evidence; and once because the evidence had been referred to the attorney and physician to be summarized and a report made.

In this appeal, pending in the Supreme Court on the ground that the constitutionality of a statute was involved, the Supreme Court held (Shilvock v. The Retirement Board of Policemen’s Annuity & Benefit Bund of Chicago, 375 Ill. 68) that in order to give the Supreme Court jurisdiction of a direct appeal involving the validity of a statute or a constitutional question, the record must affirmatively show that the question was not only presented to the trial court' for decision but was passed upon by it, and, even though the question was raised in the trial court, if a final judgment was rendered on other issues, no constitutional question is presented for review on appeal to the Supreme Court, and the court held that it had no jurisdiction of this cause on direct appeal, upon the questions as presented, and the. cause was transferred to the Appellate Court First District.

From the facts appearing in this record, petitioner in 1923 filed what was entitled a Declaration for Widow’s Pension, being a second application for a pension and constituting the application now before . the court. It is claimed that the respondent board had no jurisdiction to grant this second application. The jurisdiction of the Retirement Board is limited by section 6(g) of the Act of 1921 (Ill. Rev. Stat. 1939, ch. 24, see. 950 (g) [Jones Ill. Stats. Ann. 100.130]) as follows:

(g) Consider and pass upon all applications for annuities, pensions, and benefits; authorize the payment of any annuity, pension, or benefit whether such annuity, pension, or benefit was or shall be granted under and by virtue of the provisions of this Act, or under and by virtue of the provisions of any other Act or Acts relating to police pensions, heretofore in force and effect in such city and which have been superseded by this Act; inquire into the validity and legality of any grant of annuity, pension, or benefit paid from or payable out of the annuity and benefit fund herein provided for, whether such annuity, pension, or benefit shall have been or shall hereafter be granted in accordance with this Act or in accordance with any other Act or Acts relating to police pensions in force and effect in such city prior to the date upon which this Act shall have come in force and effect therein; increase, reduce, or suspend any annuity, pension, or benefit to be paid from the annuity and benefit fund herein provided for whenever such annuity, pension, or benefit or any part thereof was secured or granted, or the amount thereof fixed, as the result of misrepresentation, fraud, or error; provided, however, that no such annuity, pension, or benefit shall be reduced or suspended until the annuitant, pensioner, or beneficiary concerned shall first be notified of the proposed action and be given an opportunity to be heard concerning such proposed action.” The respondent calls our attention that under this statute the Retirement Board is given the power to act in the matter of any grant of pension, no matter what pension board made the grant, since it would be anomalous for the retirement board to continue to pay a pension obtained through fraud or misrepresentation; but the legislature did not give to the Retirement Board any power, and hence it has no jurisdiction, to inquire into the action of any former pension board which denied a pension, nor to review, reverse, or annul the ruling of any preceding pension board denying a pension. In other words, as respondent suggests, pensions granted can be reviewed and annulled, but pensions denied must remain denied so far as concerns the power or jurisdiction of the respondent board to set aside such denial.

The respondent board permitted the petitioner to present her evidence, but it developed that the injury alleged and the cause of death (established by the petitioner through the filing of a photostatic copy of the correct official Record of Death, filed May 19, 1933) showed that it was the same claim which had been denied in 1915. The question before this court is whether respondent board had any power to review or annul the denial of 1915, or whether the court itself can give the necessary jurisdiction. It is only the legislature, which created the board, that can confer jurisdiction, and the legislature has not given the respondent board jurisdiction to review and annul the action of a former board in, denying a pension. The legislature in the enactment of the Police Pension Act of 1887 preserved the rights of persons receiving or entitled to pensions under the Police and Firemen’s Act of 1877 (Ill. Rev. Stat. 1939, ch. 24, sec. 891 [Jones Ill. Stats. Ann. 100.111]); and in the Police Pension Act of 1915, the legislature (Ill. Rev. Stat. 1939, ch. 24, sec. 916 [Jones Ill. Stats. Ann. 100.123]) preserved the pension rights of persons entitled to or receiving pensions under the Police Pension Act of 1887 and specifically provided that “neither pension granted thereunder nor the amount thereof, shall in any wise be affected. ” It is to be noted that the board of 1887 was not given jurisdiction to review actions or rulings of the 1877 board but was merely empowered to continue; to pay pensions to those entitled thereto under the Act of 1877; and in the 1915 Act the legislature not only gave the pension board no power or jurisdiction to review the denial of a pension by a prior board but specifically denied it the power or jurisdiction to even review the grant of a pension. Then the legislature enacted the Police Pension Act of 1921, known as the Policeman’s Annuity and Benefit Fund Act, which conferred upon the pension board the power and jurisdiction to “inquire into the validity and legality of any grant of annuity, pension, or benefit paid from or payable out of the annuity and benefit fund herein provided for, whether such annuity, pension, or benefit shall have been or shall hereafter be granted in accordance with this act or in accordance with any other act or acts relating to police pensions in force and effect in such city prior to the date upon which this Act shall have come in force and effect therein” with power to increase, reduce, or suspend any pension or benefit secured or granted as the result of misrepre-' sentation, fraud or error. But from an examination of this act no power or jurisdiction was given to the board to inquire into the validity and legality of any denial of a pension by a prior board. Under section 982 (Ill. Rev. Stat. 1939, ch. 24, sec. 982, subsections 982 (f) and 982 (g) [Jones Ill. Stats. Ann. 100.162]) we find as follows:

‘ ‘ The following described wives or widows or policemen shall not have any right to annuity from the annuity and benefit fund herein provided for: . . . (f) The widow of any policeman who died prior to January 1, 1922, if such widow had been denied a pension by the board of trustees of any police pension fund existing in such city by operation of law under any legislative enactment other than this enactment, (g) The widow of any policeman who has been denied a pension or annuity by the retirement board created by this Act and who files a petition for a rehearing, or files a second application for pension or annuity, unless such petition for rehearing or such second application shall be filed within one (1) year after the date upon which pension or annuity was denied her by said retirement board; providing, however, that in the event such widow is prevented from filing such petition or application by reason of confinement in an institution because of physical or mental illness, the year of limitation herein provided shall begin to run only on the day after her discharge from such institution.” As we have indicated the petitioner filed her application for a pension on December 24, 1914, and the pension board created under the Act of 1887 found against her and denied her a petition. Thereafter, in J une 1923, eight years after a pension had been denied by the 1887 board, petitioner filed a declaration for pension, accompanied by a photostatic copy of what purported to be the official record of the department of health of the city of Chicago showing that her husband had died of chronic interstitial nephritis, a kidney disease. This certificate proved to be a forgery and petitioner’s application was denied forthwith on June 20, 1923. Subsequent to that time she filed her mandamus petition and subsequently the proceeding of certiorari now before this court on appeal. The question which we have to consider is whether the judgment — entered by the circuit court of Cook county in the certiorari proceeding — quashing the record was error.

It is called to our attention by the respondent board that it did not and could not assume jurisdiction to pass on petitioner’s second application so far as concerns adjudicating her claim that the injury received by her husband in May 1911, caused his death in 1914. It appears from this statement that the' case has simply discussed questions which have no relation whatsoever to the ultimate and decisive question of the board’s power and jurisdiction to review the action of a preceding board, operating under the entirely separate and distinct Police Pension Act of 1887.

Prom our review of the statutory provisions that govern the actions of the respondent board, it could not acquire jurisdiction by simply hearing or permitting petitioner to present evidence. Only the legislature can confer jurisdiction to review and annul the action of a former board in denying a pension, and the legislature has not conferred such jurisdiction. We believe that the court in entering the order quashing the record was in error. Referring back to sec. 982(f), this provision did not create any new law, destroy any pre-existing rights nor inflict any new hardships on petitioner, and — as is well said by respondent — it simply was a statutory declaration of a principle of pension law which had always existed in police pension administration. It is urged that no pension board had ever been given power or jurisdiction to review or alter the denial of a pension ruled on by a former board; and that the petitioner’s remedy had always been in the courts by certiorari.

Under the circumstances we are of the opinion that the trial court erred when it entered the final judgment in- the instant case quashing the record. The court should have dismissed the case by quashing the writ. The order of this court will be that the order entered by the trial court quashing the record is reversed, and it is ordered that the writ be quashed, and that respondent recover its costs in this behalf expended to be taxed and recovered from the petitioner.

Reversed and writ quashed.

Burke, P. J., and Denis E. Sullivan, J., concur.