author: Mr. Presiding Justice Matchett

text:
    Max Rosen, Trading as Western Slipper Manufacturing Company, Appellee, v. United Shoe and Leather Workers Union Local 48 et al., Appellants.
    Gen. No. 38,882.
    Opinion filed November 2, 1936.
    Rehearing denied November 16, 1936.
    Joseph M. Jacobs, of Chicago, for appellants.
    Harold L. Levy and Lawrence S. Jacobson, both of Chicago, for appellee; Lawrence S. Jacobson, of counsel.
   Mr. Presiding Justice Matchett

delivered the opinion of the court.

Rosen, the plaintiff, who is engaged in the business of manufacturing and selling women’s and men’s slippers, operates a shop located on Blue Island avenue in Chicago. He owns the premises, which are improved with a three-story building. The shop is on the first floor; the upper floors are occupied by plaintiff’s family and the families of two tenants. The front entrance is from the street, Blue Island avenue, and there is a rear entrance from the alley. The premises are worth about $8,000, and the machinery in the shop where the business is conducted is of the same value. Plaintiff employs about 14 workers and transacts a business which amounts to about $40,000 annually.

November 29, 1935, plaintiff filed a bill duly verified against the United Shoe and Leather Workers Union Local 48 and certain employees thereof, most of whom were persons formerly employed by him in his business, charging that these defendants on or about October 25, 1935, entered into a conspiracy to injure and destroy his business and perform other illegal acts; that in furtherance of these designs pickets were stationed, in front of his place of business with signs stating that the “employer refused to bargain collectively with his employees”; that members of the Union congregated in the vicinity of the ship throughout the day; that defendants accosted prospective employees and by threats and intimidations barred them from entering plaintiff’s shop. The bill recited specific instances of vile language, intimidations, assaults, etc., which often exist where an industrial strike is being carried on.

The bill prayed that other persons also conspiring might, when discovered, be made parties; that the defendants should answer, but not under oath; that a temporary injunction might issue immediately upon the filing of the complaint, and upon final hearing be made permanent, “restraining the said defendants and each of them, and all associations, firms and persons assisting, aiding, confederating or conspiring with them, or having knowledge of said injunction, ’ ’

“ (a). From picketing or maintaining any picket or pickets at or near the place of business of the plaintiff, Max Rosen, doing business as Western Slipper Manufacturing Company, located at 1324 Blue Island avenue, Chicago, Cook county, Illinois.

“(b) From patroling or congregating in front or in the vicinity of the said place of business of the plaintiff, Max Rosen, in furtherance of such picketing.

“(c) From exhibiting or causing to be exhibited any sign, placard or other matter in front of or in the vicinity of the said place of business of the plaintiff, designating the plaintiff’s said place of business as being non-union or unfair to organized labor, or as refusing to permit collective bargaining, or designed to induce or influence persons not to enter the plaintiff’s place of business.

“(d) From soliciting, inducing or influencing or attempting to induce or influence persons, employees or prospective employees of the said plaintiff not to enter the plaintiff’s said place of business.

“(e) From menacing, intimidating, threatening or harassing persons employed by, or persons going to and from the plaintiff’s said place of business; from calling the plaintiff and members of the plaintiff’s family, and the plaintiff’s employees vile names and shouting offensive epithets.

“(f) From threatening, coercing, intimidating or assaulting the employees of the plaintiff, or harassing .the employees of the plaintiff while on their way to and from their homes to the plaintiff’s place of business.

“(g) From threatening, coercing, intimidating or assaulting prospective employees, or persons seeking employment from the plaintiff; and from preventing by threats, coercion or intimidation such prospective employees and persons seeking employment with the plaintiff from entering the plaintiff’s place of business.

“(h) From advising, encouraging or assisting or participating in the doing of any of the things which are herein forbidden.”

Certain affidavits were submitted in support of the preliminary injunction, which was granted as prayed. Defendants answered the bill admitting that pickets had been placed before plaintiff’s place of business, but denying in detail all use of force, intimidation, offensive language, etc. The cause was heard by the chancellor in open court, and on December 16,1935, a decree was entered finding that the material allegations of plaintiff’s complaint were true, and the equities with plaintiff, “that there is not now and has not been at any time in the past, any dispute between the plaintiff and the defendants herein concerning terms or conditions of employment, and that this cause is not a case involving or growing out of a dispute between the plaintiff and the defendants herein concerning terms or conditions of employment.” It was therefore adjudged that the temporary injunction issued in the cause should be made absolute, perpetual and permanent. The decree sets out, substantially in the language of the prayer as heretofore recited, the things which defendants are enjoined from doing. The defendants bring this appeal contending among other things that the injunction violates the Anti-Injunction Act of 1925 (see Illinois State Bar Stats. 1935, ch. 22, ii 58, p. 237). That Act in substance provides that no injunction shall be granted in this State “in any case involving or growing out of a dispute concerning terms or conditions of employment . . . from ceasing to perform any work or labor, or from peaceably and without threats or intimidation recommending, advising1, or persuading others so to do; or from peaceably and without threats or intimidation being upon any public street, or thoroughfare or highway for the purpose of obtaining or communicating information, or to peaceably and without threats or intimidation persuade any person or persons to work or to abstain from working, or to employ or to peaceably and without threats or intimidation cease to employ any party to a labor dispute, or to recommend, advise, or persuade others so to do.”

The hill is framed upon the theory that the defendants are guilty of an illegal and unlawful conspiracy, and the decree, as recited above, expressly finds that there has not been at any time in the past, any dispute between plaintiff and defendants concerning terms or conditions of employment, and that the cause is therefore not one growing out of a dispute concerning terms or conditions of employment. The necessary inference is that the statute is not applicable, and that the plans and purposes of the defendants being illegal and unlawful, any act done in pursuance thereof, however innocent in itself, is also unlawful.

The distinction between a strike begun for a lawful as distinguished from a strike begun for an unlawful purpose, is vital and controlling. Whatever doubts may have been hitherto entertained by the courts as to whether there may be peaceable and lawful picketing as stated in Philip Henrici Co. v. Alexander, 198 Ill. App. 568, has been finally settled in this State by the Anti-Injunction Act construed and held valid in Fenske Bros., Inc. v. Upholsterers International Union of North America, 358 Ill. 239, and the law now is that there may be such peaceable and lawful picketing. The same result has been reached in Federal jurisdictions, construing the Clayton Act, as illustrated in American Steel Foundries v. Tri-City Central Trades Council, 238 Fed. 728, C. C. A. 7th 1916 (as modified in 257 U. S. 184). Section 20 of the Clayton Act there considered was apparently copied from section 2 of the England Trades Dispute Act of 1906. The English act, as the opinion in Great Northern Ry. Co. v. Brosseau, 286 Fed. 414, points out, describes the specific acts which striking workmen may do, and expressly forbids any injunction directing that workmen shall refrain from doing them. The social theory upon which these statutes are based was well stated by Judge Baker in Iron Molders’ Union v. Allis-Chalmers C., 166 Fed. 45, 91 C. C. A. 631, 20 L. R A. (N. S.) 315, where the opinion says:

“For another thing that must not be forgotten is that a strike is one manifestation of the competition, the struggle for survival or place, that is inevitable in individualistic society. Dividends and wages must both come from the joint product of capital and labor. And in the struggle wherein each is seeking to hold or enlarge his ground, we believe it is fundamental that one and the same set of rules should govern the action of both contestants. For instance, employers may lock out (or threaten to lock out) employees at will, with the idea that idleness will force them to accept lower .wages or more onerous conditions; and employees at will may strike (or threaten to strike), with the idea that idleness of the capital involved will force employers to grant better terms. These rights (or legitimate means of contest) are mutual and are fairly balanced against each other. Again, an employer of moldersT-diaving* locked out his men, in order to effectuate the purpose of his lockout, may persuade (but not coerce) other foundrymen not to employ molders for higher- wages or on better terms than those for which he made Eis~ stand, and not to take in his late employees at all, so that they may be forced back to his foundry at his own terms; and molders, having struck, in order to make their strike effective may persuade (but not coerce) other molders not to work for less wages or under worse conditions than those for which they struck, and not to work for their late employer at all, so that he may be forced to take them back into his foundry at their own terms. Here, also, the rights are mutual and fairly balanced.”

The results of this conception of the mutual rights of the employer and the workmen in this industrial welfare are far-reaching. 44 Harvard Law Review, 971.

The controlling question here, therefore, seems to turn upon the question of whether the strike which these workmen defendants conducted was begun and continued for a lawful purpose, namely, to the end that they might by collective action secure a larger share of the proceeds of the industry in which they were engaged, or whether it was begun with a design that was unlawful and illegal, namely, to injure their employer, or to secure for themselves illegal and unlawful benefits. If the purpose was lawful, they had the right to employ peaceable and lawful means to that end. If unlawful, even peaceful and lawful rights could not be perverted and used for unlawful and improper purposes.

We have examined the evidence bearing upon this question and find that the facts with reference to this issue are practically uncontradicted. In the first place, the plaintiff produced no evidence concerning the cause of the strike. His evidence seems to have been directed entirely toward proof of the things that occurred subsequently; that even if it is conceded unlawful acts were proved, such as use of vile names, intimidation and assaults (and we do not understand defendants to contend that the decree in this respect is against the preponderance of the evidence) this is not controlling nor conclusive. The general situation as to plaintiff’s shop, kind of work, number of workmen, etc., have been already stated and need not be repeated. As to the particular circumstances under which the strike arose, Gallagher, one of the defendants, testified that he worked for the plaintiff for four years and eight months; that he was a man of family with ten children, eight of whom are living; that prior to the strike he joined the union and just before that attended a meeting of slipper workers at which seven of his fellow employees were present. A second meeting was held at which there was a larger attendance, and at that meeting the organizer of the union, defendant Smith, was present for the first time. Gallagher was appointed chairman and acted in that capacity. Nine of the employees were present, and among them was one Peter Perlongo, who made a talk in which he said that slipper workers should have as high wages as picture operators, which was $125 a week. At this meeting also conditions and hours of service in the shop were discussed, and Gallagher, with two other employees of plaintiff, one of whom was Perlongo and the other Lazarovich, were appointed a committee to meet plaintiff and discuss these matters with him on the following day, and on that day, October 25, 1935, this committee called on Mr. Rosen, accompanied by the representative of the union and their own representative, Mr. Smith, and arranged for a meeting in his office on Sunday morning at 11 o’clock. Before that meeting occurred, Rosen talked with some of the workers and said to them, “There will not be any meeting,” and further said he wouldn’t have anything to do with the committee at all, and that he didn’t want to have anything to do with the organization. On Sunday almost all the slipper workers in his factory and several other slipper manufacturers appeared at the meeting. Peter Perlongo was absent, and Mr. Rosen did not appear. He was called up and gave as an excuse for not coming that he was ill, but apparently did not request that any other time should be fixed for the meeting. On the following day the strike was begun.

The evidence of all the defendant workers is to the effect that they were dissatisfied with conditions at the plant; that their wages had been cut at the beginning of the depression; that plaintiff had agreed to restore these wages but had not done so; that the workers were required to work 72 hours a week; that toilet facilities at the plant were inadequate; that the work was done by piecework; that they received 90c a dozen for making the slippers. Other witnesses testified in substance to this same effect, and their evidence is not contradicted.

Charles H. Smith, the Chicago organizer for the union, testified that its present membership is between 69,000 and 70,000; that there are 81 local organizations; that the organizations extend from Bangor, Maine, to Los Angeles, California; that he first became acquainted with plaintiff’s employees on October 24th; that at his meeting with defendant employees questions were taken up as to demands which should be made concerning standards of wages and hours in the industry; that they should try to get back some of the pay cuts heretofore given the workers; that he was introduced to their employer, who received him courteously; that he made the appointment for Sunday; that other employers appeared but Mr. Bosen was absent; that he talked with him on the ’phone and asked him if he would be there; that Bosen replied he was not feeling very good; he then asked Bosen if he would send a representative, but he did not do so. He warned plaintiff that it was a serious question, and that the workers would strike if they did not get some kind of satisfactory terms; that plaintiff replied he “didn’t care whether there was a strike or not; he wasn’t interested.” This witness also testified that he was in charge of the strike, and that two pickets were placed on the line, and he denies any unlawful acts as alleged as against these pickets or the union. Other employees testified, and their testimony is not contradicted, that plaintiff called them into the office and threatened them with loss of their positions if they joined the union.

Without discussing all the evidence in detail, it is sufficient to say that it establishes by a preponderance that the finding in the decree to the effect that there had not been at any time in the past any dispute between plaintiff and defendants concerning terms or conditions of employment is not justified; that on the contrary, the cause presents a case involving or growing out of a dispute between the employer and the employees concerning* terms or conditions of employment. It follows that the decree of the court, in so far as it forbids peaceful and lawful acts as directed in paragraphs (a) (b) (c) and (d) must be reversed. However lawful the purpose of the strike may have been, these employees had no right to resort to unlawful acts in furtherance of their cause. There is evidence that such unlawful acts were committed and therefore the decree as to paragraphs (e) (f) (g) and (h) should be affirmed. The decree is therefore affirmed in part and reversed in part, and the cause remanded for further proceedings consistent with this opinion.

Affirmed in part; in part reversed and remanded.

O’Connor and McSurbly, JJ., concur.


source: Caselaw Access Project

author:
      Mb. Pbesiding Justice Matohett
      Mr. Justice O’Connor

license: Public Domain

text:
    In re Estate of Michael J. Teehan, Deceased. Claim of Joshua Christian, Appellee, v. City National Bank and Trust Company, Appellant.
    Gen. No. 38,935.

      Opinion filed November 2, 1936.
    Robert P. McArdle and Edward J. MoArdle, Jr., both of Chicago, for appellant.
    Ellis & Westbrooks, of Chicago, for appellee; Richard E. Westbrooks, Claude W. B. Holman and Edward M. Byrd, of Chicago, of counsel.
   Mb. Pbesiding Justice Matohett

delivered the opinion of the court.

May 19, 1934, the claimant, Joshua Christian, filed in the probate court of Cook county a claim against the estate of Michael J. Teehan for the total sum of $3,127, by clerical error, apparently, stated as $3,227. The statement was verified by the affidavit of the claimant and consisted of five items as follows:

Painting at Wellington Hotel.......$1,367.00
Painting garage .................. 120.00
Screening windows ............... 30.00
Installing bathrooms.............. 210.00
Decorating rooms ................ 1,400.00
$3,127.00

Thereafter, an amended statement of claim was filed for the sum of $1,727 composed of the following items:

“Decorating rooms at Wellington Hotel including painting said rooms. .$1,367.00
Painting garage and patching roof.. 120.00
Screening windows ............... 30.00
Installing six bathrooms........... 210.00
$1,727.00.”

The amended statement was also verified by the claimant and stated that all work was done intermittently between March 19, 1932, and March 13, 1934.

November 9, 1934, the probate court entered an order disallowing this claim. The claimant took an appeal to the circuit court where the cause was heard de novo, and that court, overruling two motions of the Estate for a new trial, made a finding in favor of the claimant in the sum of $1,750 for labor and services as set forth in the claim, and entered judgment in favor of the claimant to be paid in due course of administration,

It is contended for reversal that the evidence was so uncertain and doubtful that the judgment cannot stand, and, moreover, that the court erred in admitting incompetent evidence offered in behalf of the claimant.

The evidence shows that Teehan, who died in March, 1934, was in his lifetime the owner of the Wellington hotel, which was situated at 933 Edgecomb place, Chicago, and contained about 56 rooms. The claimant, Christian, was employed as janitor of the building and received compensation for his services at the rate of $12 a week. Mrs. Christian was also employed as a maid at the hotel. They were paid each month for their services, and they were paid in full.

The claimant testified in his own behalf and the Estate contends that he was an incompetent witness, citing section 2 of chapter 51 of the statutes. (See Illinois State Bar Stats. 1935, page 1615.) The section in substance provides that no party to a civil action or persons directly interested in the event thereof shall be allowed to testify of his own motion when any adverse party sues or defends as executor, administrator, etc.

Defendant did not object to the competency of the witness upon the trial and he cannot raise that question for the first time in this court. Millard v. Millard, 221 Ill. 86; Smith v. Trefz, 202 Ill. 587; Kunkel v. Chicago Consolidated Traction Co., 156 Ill. App. 393. This rule, however, does not prevent this court from giving proper consideration to the interest of the witness in weighing his evidence. As a matter of fact, however, the witness did not testify directly as to the matters in issue. His testimony concerned only his own identification and the identity of documents in his handwriting purporting to be memoranda indicating the dates upon which he performed the work and labor upon which his claim is based. The court admitted these documents in evidence over the objection of the Estate, and, it is earnestly contended by the Estate, erred in its ruling-.

The heading of the first item is. as follows:

“1932

Joshua Christian, Extra hours on Decorating room, March 17 — Amount of hours 7 on " " ” Four pages of such items appear, covering a period of two years. Defendant says that these memoranda are not, properly speaking, books of account as described in section 3 of chapter 51 for the reason that they do not disclose debits and credits, but are at most self-serving declarations of the claimant and therefore no more admissible against the defendant, who defends as executor, than would be the testimony of the claimant himself. This contention must, we think, be sustained. Graham & Morton Transp. Co. v. Young, 117 Ill. App. 257; United States Health & Accident Ins. Co. v. Harvey, 129 Ill. App. 104; Leist v. Busch, 174 Ill. App. 331.

Evidence by claimant’s wife, Virginia Christian, was also received over the objection of the Estate that she was an incompetent witness. There is a long line of decisions of our courts so holding, as claimant concedes. Indeed, in Treleaven v. Dixon, 119 Ill. 548, the Supreme Court expressly overruled its prior decision to the contrary in Marshall v. Peck, 91 Ill. 187. The rule then announced has been consistently followed in many cases down to Evans v. Tabor, 350 Ill. 206, decided in 1932.

The claimant contends, however, that this rule has been abrogated by an amendment to the statute adopted May 3, 1935. See Laws of Illinois, 59th (general Assembly, 1935, page 869; Illinois State Bar Stats. 1935, ch. 51, sec. 5, page 1616. The entire section as amended including the preamble and enacting clause as appears in the Session Laws is as follows:

“An Act in regard to e'vidence and deposition in civil cases, approved March 29, 1872, as amended.

“Be it enacted by the People of the State of Illinois, represented in the General Assembly:

“Section 1. Section 5 of ‘An Act in regard to evidence and depositions in civil cases,’ approved March 29, 1872, as amended, is amended to read as follows: “Sec. 5. In all civil actions, husband and wife may testify for or against each other, provided that neither may testify ■ as to any communication or admission made by either of them to the other or as to any conversation between them during coverture, except in actions between such husband and wife, and in actions where the custody or support of their children is directly in issue, and as to matters in which either has acted as agent for the other.

“Filed Mav 3, 1935. (Smith-Hurd, p. 1453; Cahill, p. 1404.)”

The claimant contends that by reason of this enactment husband and wife are now competent to testify for or against each other in the matter of the claim of either against the estate of a deceased person. Section 5 as it was prior to the amendment of May 3, 1935, is found in Illinois State Bar Stats. 1935, ch. 51, p. 1616. It provides in substance that husband and wife should not be rendered competent to testify for or against each other by virtue of section 1 of the Evidence and Deposition Act except in certain contingencies named, upon which, within certain provisos, they might so testify.

It will be noticed the amendment inserted this section as a part of the statute approved March 21, 1872, as amended. It is inserted as a part of that statute and must therefore be construed with reference to these other particular sections of the Act, and the Act as a whole, and as amended. The Act does not specifically purport to change in any way the provisions of section 2, or of any section other than section 5. A long line of cases construing sections 1 and 2 as the same were and now are held that not only husbands and wives but other persons interested directly were incompetent to testify against the estate of a deceased person. We must presume the Legislature knew the law as thus declared. Some cases in addition to those already cited are Mitchinson v. Cross, 58 Ill. 366; Schreffler v. Chase, 245 Ill. 395; Ely v. Prudential Ins. Co. of America, 247 Ill. App. 345. The law does not favor repeal by implication, and section 13 of Article 4 of the Constitution (see Jones Ill. Stats. Ann. Vol. 1, page 249; Smith-Hurd,' Illinois Annotated Statutes Constitution, page 445) contains several provisions the evident purpose of which is to prevent any such repeal except under circumstances where the effect thereof will be clearly and fully understood. To that end is the provision that no act may embrace more than one subject and that this subject shall be expressed in the title of the act, and that no law shall be revived or amended by reference to its title only, but that the law revived or the section amended shall be inserted at length in the new act. We concede that the general tendency of recent statutes as well as judicial construction has been in the direction of removing the restrictions by which witnesses are rendered incompetent to testify under the common law. The reasons therefor are well stated in Funk v. United States, 290 U. S. 371, where the Supreme Court held that in the absence of a Federal statute the wife of a defendant in a criminal case was competent to testify. That case was, however, clearly unlike this. The Legislature there had not acted. There was no statute applicable. Here we are required to construe a statute. It also differs in that the particular case was of a criminal nature, while here we consider a civil action or proceeding. The problem before this court therefore is to determine just what the Legislature intended by the enactment of this amendment. This statute is plainly by inference limited to cases purely civil in their nature. Criminal cases are by inference excluded from its scope. The language of the statute also shows a further limitation in that it is made applicable alone to witnesses between whom the marital relationship exists or has existed. Indeed, its main purpose seems to be to define the communications which are and which are not privileged where the marriage relationship exists or has existed. It does not purport to cover the far larger class of witnesses, of which those between whom the relationship of husband and wife exists are only a part. The law applicable to the larger class is stated in sections 1 and 2 of the statute. Was it the legislative intention to make competent an interested husband or wife while other interested persons are rendered incompetent and disqualified to testify?

The language would seem broad enough to permit of such a construction if it were not evident from the whole statute that the Legislature did not intend such discrimination. When we read the several sections of the Act together as amended, it would seem that the question of the competency of interested witnesses to testify as against one defending as executor, etc., was not in the mind of the Legislature, was not considered by it, therefore that there could not have been any intention to change the long settled policy of this State with reference to such testimony.

We are disposed to hold that the phrase “in all civil actions,” as used in the first clause of the sentence which composes the paragraph, must be limited by excepting therefrom actions where the party sues or defends as executor, etc. When so construed the several sections harmonize with each other, and thus construed will express what was the evident intention of the Legislature. Notwithstanding the amendment of section 5, we hold that the wife of the claimant in this case was incompetent to testify, and that the admission of her testimony was error, which would alone compel a reversal of the judgment.

There are many circumstances in evidence tending to discredit the claim. One of these is the inconsistency between the original and the amended statement of claims, both of which are verified by the claimant. Another is the inherent improbability of the evidence. The deceased, it appears, was accustomed to make prompt payment of his obligations. It seems highly probable that if a contract in fact existed and work thereunder was actually done as alleged, some claim would have been made under the contract during the lifetime of the deceased, or some payment made by him thereon. There is no evidence of any such demand by defendant or partial payment by the deceased.

Excluding the incompetent evidence there remains in the record the testimony of Helen Taylor, a nurse, Mack Wiley, a janitor who lived nearby, and Hosea Rogers, a building contractor.

Helen Taylor gave indefinite evidence as to a supposed conversation between claimant and deceased in 1932, about decorating, and says that she saw claimant thereafter doing some work of that kind. Mack Wiley testified that in 1933 and 1934 he helped claimant cleaning rooms and plastering*, and that he did about $50 or $60 worth of work altogether, for which claimant paid him. He also says that in July, 1933, Teehan said to him, “I understand Josh wants you to help him,” and said, “I am going to pay Josh for this work, and if Josh don’t pay you I will.” Teehan afterward asked him, “Are you helping Josh”? to which the witness replied, “Yes” and Teehan said, “If Josh don’t pay you I will, because Josh is going to get $1,300 or $1,400 out of the job when the job is completed.” He also said that he later asked Mr. Teehan how Josh was getting along and Teehan replied, “Josh is getting along fine; he did a swell job painting up the building ; nobody in Chicago could do it better,” and further, “When he gets it completed he is going to get a nice piece of money.” The witness also said that claimant always paid him in cash for his work; that he does not remember how- many rooms he plastered; and that he and claimant worked about four or five days getting a buzzer straightened out. Wiley also says that when Teehan died claimant was working on the fourth floor, and he does not know whether it was ever completed or not; that he didn’t go over there any more after Mr. Teehan died; that he did not know who furnished the money to buy the materials, paints, brushes and pails, etc.

Rogers, a contractor, gave testimony as to the reasonable price for repairing rooms in a hotel of this kind in Cook county, at the time in question, and said that when he inspected the building in July, 1934, the work was apparently newly done, but whether it was done by the claimant or someone else he did not know. This testimony is hardly consistent with the theory that much of the work had been done beginning in 1932. The burden of proving claim was upon the claimant. Crandall v. Carey-Lombard Lumber Co., 164 Ill. 474, and it is the "duty of the courts to scrutinize with care claims against the estates of deceased persons. If the work was done and material furnished as claimed, much more competent and convincing evidence than was produced must be available.

For the errors indicated the judgment is reversed and the cause remanded for another trial.

Reversed and remanded,

McSheelt, J., concurs.

(See next page.)

Mr. Justice O’Connor

specially concurring: I concur in the result that the judgment be reversed and the cause remanded, but not in all that is said in the opinion.

Section 5, which was enacted in 1935, does not purport to lift the common law disqualification of husband and wife where the adverse party defends as executor, etc., as specified in section 2 of the Act.


author: Mr. Justice McSurely

text:
    Rose Drysch for use of Arthur E. Boeing, Appellee, v. The Prudential Insurance Company of America, Appellant.
    Gen. No. 38,886.
    Opinion filed November 2, 1936.
    Hoyne, O’Connor & Rubinkam, of Chicago, for appellant ; Nathaniel Rubinkam and William S. Allen, of Chicago, of counsel.

      Hutsoh, Traeger & Bolger, of Chicago, for appellee; Johít D. Bolger, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

This is a garnishment suit based on a judgment against Rose Dryseh for $568.90. Defendant, as garnishee, answered that it had issued a 10-year endowment policy on the life of Rose Dryseh, payable to her if living 10 years after date, or in case of her prior death, to her daughter; that the policy had a net cash' surrender value of $1,101.93, and that it did not have any moneys, credits or effects in its possession due and owing to her at the time of the service of the writ.

Upon trial by the court the finding was against the garnishee and judgment for $568.90 was entered, from which it appeals.

It was stipulated that the insurance company on January 21, 1935, in consideration of $2,402.01 had issued to Rose Dryseh its 10-year endowment policy in the sum of $3,000, payable to her 10 years after date, or in case of her prior death to her daughter; before the garnishment action she had applied for and received a loan of $1,000 upon the policy; the cash surrender value of $1,101.93 was the balance of the surrender value after the loan had been made. The policy contained a provision that the insured might borrow from the company an amount up to the limit of the cash surrender value by making written application for the loan and assigning the policy to the company as security. The policy also provides that if it be legally surrendered to the company within three months after the end of one year after its date, the company will pay the cash surrender value. This garnishment proceeding was brought May 1, 1935, long prior to the expiration of one year after the date of the policy. It was stipulated that the insured had not exercised any of her options given by the terms of the policy and has not made application for the cash surrender value nor the loan value of the policy, and that if she had been called upon to do any of these acts she would have refused to do so.

It is the general rule that a judgment creditor may by garnishment recover only such indebtedness as his debtor might recover in an action against the garnishee. Pogline v. Central Mut. Ins. Co., 280 Ill. App. 5. There are cases in other jurisdictions holding that a judgment creditor could not garnish the loan or cash surrender value unless all the conditions precedent have been complied with. Farmers’ & Merchants’ Bank v. National Life Ins. Co., 161 Ga. 793; Van Dyke Co. v. Moll, 241 Mich. 255; Kothe v. Phoenix Mut. Life Ins. Co., 269 Mass. 148; Hilliard v. Wisconsin Life Ins. Co., 137 Wis. 208.

We have held to the same effect in the recent case of Larson v. McCormack, 286 Ill. App. 206. In that case plaintiff had obtained a judgment against McCormack and had garnished the Massachusetts Mutual Life Insurance Company; application had been made by the insured for a loan on the policy, which had been approved by the company. The statute makes it obligatory upon a life insurance company to malee such a loan. A check representing the amount of the loan, payable to the order of the insured, had been forwarded by the main office of the company to the Chicago agency, with instructions not to deliver the check to the insured until he had nominated a beneficiary of the policy; although the loan had been passed by the company and the check for the amount of the loan was in the hands of its agent at the time the summons was served, we held that garnishment would not lie until the loan had been consummated, nothing remaining to be done except to deliver the check to the insured. Leave to appeal from the judgment against the judgment creditor was denied by the Supreme Court-.

If the amount of the loan under such circumstances is not subject to garnishment, clearly it would not be subject to garnishment in the case at bar where no application has been made for a loan.

It is equally clear that the cash surrender value of the policy is not subject to garnishment. The insured could make no claim for the cash surrender value unless she was living at the end of one year from the policy’s date and demanded the surrender value. Both these contingencies were uncertain.

Plaintiff says that while this may be true as to ordinary life insurance policies it is not the rule with reference to what he calls endowment insurance contracts ; that in some courts it has been held that a policy like this is no more than such a contract as a savings bank might make and therefore the fund is not exempt from attachment by creditors. Ellison v. Straw, 119 Wis. 502; Uhlman v. New York Life Ins. Co., 109 N. Y. 421. These cases involved dividends which were due and not the cash surrender value of policies. Counsel also cite In re Bowers, 11 F. Supp. 848, District Court, but neglect to inform the court that the decision of the District Court was reversed in 78 F. (2d) 776, certiorari denied by the United States Supreme Court. That case involved an annuity contract, and it was held that the cash surrender value of the policy was exempt under the Pennsylvania statute although the insured reserved the right to collect the cash surrender value.

The form of the instant policy has been repeatedly adjudicated as a life insurance policy. In Briggs v. McCullough, 36 Cal. 542, decided in 1869, the court had the question as to whether the proceeds of an endowment policy were exempt from the claims of creditors ; it was there argued that the policy was not a life insurance policy but simply a contract by the company that in consideration of a certain sum deposited by McCullough the company would pay him a certain stipulated sum at the expiration of 10 years, or sooner in the event of death, to whomever designated. The court held that the policy was, “strictly speaking, an insurance on the life of the party,” and that the undertaking to pay McCullough at the end of 10 years, if he did not die, “does not divest it of its character of life insurance.” See also Commonwealth v. Wetherbee, 105 Mass. 149; Endowment S Benevolent Ass’n v. State, 35 Kan. 253.

Counsel also says that the policy created a debt from the company to Rose Dryseh. This is not true. No debt is created until the insured has the right to sue for the money. The option of the insured to elect to take the surrender value is not an evidence of debt until the option is exercised. Blume v. Pittsburgh Life & Trust Co., 263 Ill. 160; Duffy v. Mutual Benefit Life Ins. Co., 272 U. S. 613; Industrial Loan & Inv. Co. v. Missouri State Life Ins. Co., 222 Mo. App. 1228, 3 S. W. (2d) 1046.

For the reason that neither the loan value nor the surrender value of the policy can be reached by garnishment, we hold that the judgment was erroneously entered and it is reversed without remanding.

Reversed.

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


text:
    Clara V. Gawne, Executrix Under the Last Will and Testament of Daniel Gawne, Deceased, Appellant, v. William L. O’Connell et al., Appellees.
    Gen. No. 38,939.
    Opinion filed November 2, 1936.
    Charles J. Trainor, of Chicago, for appellant.
    Altheimer, Mayer, Woods & Smith, of Chicago, for appellee William L. O’Connell.
   Mr. Justice McSurely

delivered the opinion of the court.

This appeal, and also a companion appeal — case No. 38,938 — involves the question as to whether Daniel Gawne, who signed a certain note, was personally liable.

The note was dated April 6,1931, for $1,482, payable to the order of Lincoln State Bank of Chicago on demand, with interest; it was signed — ■

“Illinois Beal Estate Trust A Common Law Trust
Frederick J. Selden, Prest. Daniel Gawne”

Subsequently the Lincoln State Bank went into the hands of the receiver; also, Daniel Gawne died; the receiver of the bank presented a claim on the note in the probate court in the estate of Daniel Gawne, deceased; the claim was there allowed for $1,642.82; the executrix appealed to the circuit court.

While that appeal was pending in the circuit court she filed a complaint in équity, asserting that through mistake Daniel Gawne signed his name individually to the note; that it was the intention of both the payee and all parties in the matter that the words ‘ ‘ as Treasurer” should follow his signature; that these words were omitted by mutual mistake, and that it was the intention of the officers of the Lincoln State Bank and the trustees of the Illinois Beal Estate Trust that the note should be signed by Daniel Gawne in his capacity as treasurer of the Illinois Beal Estate Trust, and it was not intended that he should sign the note as surety, guarantor, indorser or individual maker. The complaint further alleged that defendant was not a holder in due course or a bona fide purchaser for value, but merely an assignee of the original payee, Lincoln State Bank of Chicago.

The complaint prayed that the note be reformed on its face to show that Daniel Gawne signed it in a representative capacity as treasurer of the Illinois Real Estate Trust and not as an individual.

The appeal from the order of the probate court allowing the claim and the issues in the equity proceeding to reform the note were heard under an order of consolidation of the circuit court. After a hearing of proofs on the order of consolidation and in the appeal from the probate court judgment, judgment was entered against the estate and the complaint in the equity case was dismissed. Appeals have followed.

In Vial v. Norwich Union Fire Ins. Soc. of Norwich, England, 172 Ill. App. 134, the general rule was clearly stated, supported by many citations, that “where a mutual mistake is made in the terms of a contract ... a court of equity will in a proper case between the proper parties rectify the mistake . . . and when it is so rectified such court will retain jurisdiction to enforce it as between the parties to it and their privies, according to its terms as so rectified.” And in Sheehan v. Reardon, 223 Ill. App. 365, it was said that while in law the parties to a written contract are bound by its terms as executed, if bound at all, courts of equity have the right in proper cases to reform contracts and to enforce them as reformed, citing many cases.

The evidence in the instant case demonstrates conclusively that it was never intended that the note should impose any personal liability on Daniel Gawne, and that through inadvertence and oversight0 he had failed to add to his name the words “as Treasurer.”

April 6, 1931, the date of the note, the Real Estate Trust was indebted to the Lincoln State Bank on a past due note in the sum of $700, and on a past due account for $782, aggregating $1,482.

George Leibrandt testified that he was president of the Lincoln State Bank; that the note in question was given to take up the prior note of $700 of the Real Estate Trust and its overdrawn account; that the new note was credited to the Illinois Real Estate Trust account; that Daniel Gawne “forgot to put his name on as Treasurer ’ ’; there was no request that he sign individually and there was no surety on the note; that Daniel Gawne never borrowed a dollar from the bank. This witness repeated that Gawne did not sign the note as an individual but forgot to put his name as treasurer on it; that he, the witness, did not see the note after it was signed; that no demand was ever made by the bank on this note.

Frederick Selden testified that he was a director of the Lincoln State Bank and president of the Illinois Real Estate Trust, whose name is subscribed to the note; that Gawne was the treasurer of the Illinois Real Estate Trust, whose by-laws required that its notes should be signed by the treasurer; that no request was made that Gawne sign as a guarantor or as an indorser; that he had been ill for several months and his signing as an individual “was an oversight on Ms part; that he had never signed a note for the Real Estate Trust as an individual.” Selden said he had not observed that the name “treasurer” was omitted after the name of Daniel Gawne, as he, the witness, had been ill and was in a hurry to get home; that he never saw any note of the Real Estate Trust signed by Gawne without the word “treasurer” on it. Mr. Gawne was 84 years old at the time he signed the note and had been sick and was “shattered a little.”

There was no evidence tending to contradict these witnesses. Thus it appears from the evidence of the officers of the payee bank and of the Illinois Real Estate Trust that it was through inadvertence and mutual mistake that Gawne failed to add the words “as Treasurer” after his signature.

Many other cases might be cited holding that a court of equity may grant relief from a mistake of fact where it would be inequitable to do otherwise and where no intervening rights are asserted. Kyner v. Boll, 182 Ill. 171; Gibbons v. Bressler, 61 Ill. 110; Hunter v. Bilyeu, 30 Ill. 228, 244; Pomeroy’s Equity Jurisprudence, vol. 2, 4th ed., sec. 862. And a court of equity should decree that a negotiable instrument be reformed on its face where through mutual mistake it does not express the intention of the parties thereto. Fisher v. Barnett, 56 Ill. App. 649.

Counsel for defendant bank cite the cases of Hypes v. Griffin, 89 Ill. 134, and Herman v. Metropolitan Petroleum Co., 253 Ill. App. 536, as holding that oral testimony will not be permitted to show that the signer of a note, individually, was not to incur any personal liability. In those cases the payees of the respective notes were seeking to recover in actions at law. A different rule obtains in equity where both parties to the transaction agree that the instrument as executed did not express the true agreement of the parties.

For the reasons indicated the order dismissing the complaint is reversed and the cause is remanded with directions to reform the note attached to the complaint on its face so as to show that Daniel Gawne signed the note “as Treasurer” and not in his individual capacity.

Reversed and remanded with directions.

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


text:
    William O. Wainscott, Appellee, v. C. H. Penikoff, Appellant.
    Gen. No. 38,950.
    Opinion filed November 2, 1936.
    Byron C. Sharpe, of Chicago, for appellant; Abraham Miller, of Chicago, of counsel.
    R. E. Blackwood, of Chicago, for appellee.
   Mr. Justice McSurely

delivered the opinion of the court.

Defendant appeals from a summary judgment entered against him in a forcible detainer action.

Plaintiff alleged in his complaint that he was entitled to the possession of certain premises on West Madison street, Chicago, and that defendant unlawfully withheld possession of the premises from plaintiff although plaintiff made demand therefor in accordance with the statute.

Defendant filed an answer denying in general terms that plaintiff was entitled to possession of the premises and that the defendant unlawfully withheld possession.

Subsequently plaintiff filed a motion for a summary judgment, supported by his affidavit; defendant moved to strike this affidavit as insufficient in law; this motion was denied and plaintiff’s motion was allowed and judgment was entered that plaintiff recover possession of the premises described in the complaint and have a writ of restitution; this appeal followed.

Defendant argues plausibly that the provisions of the Civil Practice Act with reference to summary judgments, and the rules adopted pursuant thereto, are not applicable to actions for forcible detainer.

Section 57 of the Civil Practice Act, Ill. State Bar Stats. 1935, ch. 110, jf 185, is the Summary Judgment Act; it provides that, subject to rules, if the plaintiff “in any action to recover possession of land . . . shall file an affidavit ... of the truth of the facts upon which his complaint is based ... the court shall, upon plaintiff’s motion, enter a judgment in his favor for the relief so demanded.”

In 1935 section 11 of the Forcible Entry and Detainer Act was amended to read as follows:

“The provisions of the Civil Practice Act, and all existing and future amendments of said Act and modifications thereof, and the rules now or hereafter adopted pursuant to said Act, shall apply to all proceedings hereunder in courts of record, except as otherwise provided in this Act.” (Ill. State Bar Stats. 1935, ch. 57, IT 11.)

Defendant says that section 57 of the Civil Practice Act, authorizing summary judgments, was intended to apply only to actions of ejectment, as the phrase of the section relating to the possession of land “with or without . . . mesne profits ’ ’ applies only to actions of ejectment as provided for in section 33 and section 43 of the Ejectment Act, and does not apply to forcible entry and detainer actions where no provisions for the recovery of rents or mesne profits are to be found.

It is also said that the Forcible Entry and Detainer Act is a complete code of procedure in itself, excluding any other mode of procedure or kind of judgments, and that summary judgments can be rendered in those cases only in which express authority therefor is found in the statute, and that in our present statute there is no express authority for summary judgments in forcible detainer actions.

These points might have been persuasive prior to the 1935 amendment of the Forcible Entry and Detainer Act, section 11, above referred to. By clear and definite language it was there provided that the provisions of the Civil Practice Act, which provide for summary judgments, shall apply to forcible entry and detainer proceedings. To hold that these provisions do not apply to forcible detainer actions would amount to adding, by judicial interpretation, an exception to the comprehensive provisions of section 11. It hardly requires argument to produce the conclusion that section 11 means just what it says, and therefore the provisions of the Civil Practice Act providing for summary judgments apply to actions in forcible entry and detainer.

It was proper for defendant to test the sufficiency of plaintiff’s affidavit and motion for summary judgment by a motion to strike. People for use of Dyer v. Sanculius, 284 Ill. App. 463. In the opinion in that case Mc.Caskill’s work on the Civil Practice Act is quoted as saving- that the affidavits contemplated on a motion for a summary judgment “are designed to inform the court of the existence or non-existence of an issue worthy of trial.”

Supreme Court Rule 15, Ill. State Bar Stats. 1935, ch. 110, If 238, provides that the affidavits for summary judgments shall set forth with particularity the facts upon which the plaintiff’s cause of action is based, and shall not consist of conclusions but of such facts as would be admissible in evidence.

Does the affidavit filed by plaintiff in support of his motion for summary judgment meet these require-, mentsf He makes the affidavit, asserting that the action is brought to recover possession of certain premises in Chicago, describing them; that “affiant has a lease for said premises in good standing; — (see page 3 hereof) ”; that affiant personally served a demand for the possession of the premises upon the defendant, and the demand, with an affidavit of service upon the defendant, is set forth in detail; that plaintiff also posted upon the premises duplicates of this notice of demand; that by reason of these facts plaintiff is entitled to possession of the premises and asks for judgment. The lease, appearing- on page 3, attached to the affidavit, is a lengthy document, partially printed and typed; it is dated July 29, 1935, and purports to be a lease from the Chicago Title & Trust Company, as trustee, lessor, to William 0. Wainseott (the plaintiff) lessee of the premises involved, for a term beginning September 1, 1935, and ending August 31, 1936, at a certain rental, payable monthly; the lease is signed by both parties.

We agree with the defendant that the affidavit must set forth the evidentiary facts, from which the conclusion of law follows that plaintiff has a valid claim.

The motion of defendant to strike alleges that plaintiff’s affidavit fails to set forth the facts on which plaintiff’s cause of action is based, as it fails to have attached thereto a sworn or certified copy of the lease upon which plaintiff relies. The objection is technical. It has been held in Schornick v. Prudential Ins. Co., 277 Ill. App. 36, that highly technical interpretations of the Civil Practice Act are not favored. While plaintiff’s affidavit in this respect may be subject to criticism' as inartificially and awkwardly expressed, yet giving it a fair interpretation it manifestly means that when plaintiff said he had a lease for the premises, as appears on page 3 of his affidavit, he in effect swore that the lease referred to was the lease under which he was claiming, thus meeting the requirements of Rule 15 of the Supreme Court.

The affidavit is not open to criticism of the affidavit involved in La Prise v. Wayne Circuit Judge, 234 Mich. 371, where the affidavit merely stated that in the opinion of the attorney plaintiffs had a good and meritorious cause of action against the defendant.

Plaintiff’s claim in the instant case rested upon his rights under his lease. Proof of this document, with evidence of a demand for possession, in the absence of any defense would entitle plaintiff to a judgment. All the necessary evidentiary facts authorizing a judgment are contained in plaintiff’s affidavit.

Defendant’s affidavit of merits does not avail him upon the motion for summary judgment. It denies only in general terms the right of action in plaintiff. It was held in Dwan v. Massarene, 192 N. Y. S. 577, that the defendant must show that he has a bona fide defense to the action, and cannot shelter himself behind general denials.

Defendant by his motion to strike admitted that plaintiff was a lessee of the premises for a term covering the time when plaintiff demanded possession of the premises. If there was any meritorious defense defendant could have presented it in an affidavit of merits to prevent the entry of a summary judgment, as required in Supreme Court Eule 15, ch. 110, 1f 238.

We see no convincing reason to reverse the judgment and it is affirmed,

Affirmed.

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


author: Mr. Justice O’Connor

text:
    The First National Bank of Chicago, Appellee, v. William C. Gordon et al. Appeal of Edison Park State Savings Bank, Appellant. James B. Kaine, Appellee.
    Gen. No. 38,867.

      Opinion filed November 2, 1936.
    Rehearing denied November 16, 1936.
    Rathje & Connor, of Chicago, for appellant.
    Gallagher, Rinaker, Wilkinson & Hall and SonNENSOHEIN, BeRKSON, LaUTMANN, LiEVINSON & MORSE, both of Chicago, for appellee; Arthur R. Hall and Jesse H. Brown, both of Chicago, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

James B. Kaine, receiver appointed in a foreclosure suit, filed his petition against the Edison Park State Savings Bank, tenant of part of the premises in foreclosure, to compel payment of rent. The Bank answered, setting up that prior to the appointment of the receiver the lease had been terminated by written agreement between the mortgagor, who was the owner of the equity, and the tenant, and therefore the tenant was liable only for the fair cash rental value of the premises during the time it occupied them after cancellation of the lease, and that such rental value was fixed in the agreement at $50 a month. A further contention is that the appointment of the receiver terminated the lease. The matter was referred to a master in chancery who found in favor of defendant Bank, and held that it was liable for $60 a month during the time it occupied the premises after the cancellation of the lease, which finding was overturned by the chancellor, and it was decreed that the tenant, the bank, pay the monthly rental of $200 as provided in the lease, which aggregated $4,000, and the bank appeals.

The record discloses that on May 1, 1926, the owner of the property executed a mortgage to secure an indebtedness of $55,000, pledging the rents and profits as well as the property. December 1, 1930, the mortgagor entered into a written lease with the Edison Park State Savings Bank for a part of the premises at a rental of $300 a month, which later was reduced to $200 a month. November 1, 1932, the mortgagor was in default in the payment of principal and interest, and he thereupon entered into an agreement with the mortgagee whereby the mortgagor would collect the rents and turn them over to the trustee to apply on the indebtedness. Thereafter the mortgagor collected the rents and turned over to the trustee the net amount of the rent so collected until March, 1934. March 21, 1934, complainant filed its complaint to foreclose the mortgage, and eight days thereafter, viz., March 29, 1934, at about noon served notice on the mortgag’d’ that on the next day it would ask for the appointment of a receiver to collect the rents, etc. On the afternoon of March 29, and after the service of the notice for appointment of a receiver, the Bank and the mortgagor entered into a written agreement whereby in consideration of the Bank releasing the balance of $150 which was due from the mortgagor to the Bank, the lease was canceled and terminated, and it wats further agreed that the Bank might remain in possession of the premises until June 1, 1934, at a monthly rental of $50. March 30, 1934, complainant’s motion for the appointment of a receiver was continued to April 6, and on the latter date an order was entered appointing James B. Ivaine receiver to collect the rents and “take . . . possession of all portions of said premises not included in the lease from the owner, George P. Wolf, to the defendant, Edison Park State Savings Bank, . . . and all portions of said premises not now in the possession of said other tenants under such leases”; that the receiver “shall collect the rents due and to become due under their respective leases and otherwise shall enforce the said leases with all the rights, powers and privileges of an assignee thereof, but shall not disturb the said tenants under said leases except under said leases for breach thereof.” Two days after he was appointed the receiver made a demand on the bank for the payment of the rent reserved by the lease and four days thereafter the directors of the Bank ratified the action of its president and secretary in executing the cancellation agreement with the owner of the premises. The defendant Bank occupied the premises to July 31, 1934, when it went into voluntary liquidation, it having theretofore taken action to bring this about.

Defendant Bank contends the decree is wrong and should be reversed because it entered into a valid agreement with the mortgagor before the appointment of a receiver, and in support of this contention it is argued, and authorities are cited to the effect, that there is no privity of contract or estate between the mortgagee and the tenant until the appointment of a receiver, and that the mortgagor has the right to sell the premises, make or cancel leases, and collect the rents. While, generally, the law is as contended for by counsel lor the Bank, this does not assist very materially in arriving at a proper solution of the question. While the law authorizes the mortgagor and his tenant to enter into agreements without the knowledge or consent of the mortgagee, yet such agreements are not without limitation. While a tenant under a lease from the mortgagor must pay his rent to the mortgagor, he cannot pay it in advance and thereby relieve himself from again paying it in case a receiver is appointed. Greenebaum Sons Bank & Trust Co. v. Kingsbury, 248 Ill. App. 321.

Moreover, in the instant case the tenant Bank knew of the mortgage on the property, knew the mortgagor was in default in his payments, that the mortgagor, the owner of the property, was collecting the rents and turning them over to the trustee to apply on the indebtedness, knew that Wolf was one of its stockholders and directors, and that a receiver might be appointed; in fact the written agreement which sought the cancellation of the lease was not made until after complainant had served notice that it would ask for the appointment of a receiver. In these circumstances, the agreement cannot affect the rights of the mortgagee to the rents, which were pledged as security for the indebtedness. Bank of Manhattan Trust Co. v. 571 Park Avenue Corp., 263 N. Y. 57, 188 N. E. 156; State Nat. Bank v. Union Nat. Bank, 168 Ill. 519.

In the Manhattan Trust Co. case the Court of Appeals of New York said (pp. 62, 63): “A contract by the mortgagor or its successors surrendering the right to receive rent for the mortgaged premises, or assigning, in whatever manner, the rents collectible from those premises, is unquestionably an impairment of the lien of the mortgage upon the rents. It is not necessary to find any collusion in making such an arrangement; it was simply beyond the power of the parties either to appropriate the pledged rents to a different indebtedness, or to defeat the pledge by granting the use of the premises rent free. . . . These rents were expressly made security for the mortgage indebtedness . . . The pledge of these rents could not subsequently be rendered worthless either by another assignment of rents to be received, or by contracting away the right to collect any rent.”

Defendant Bank further contends that “The appointment of a receiver in foreclosure proceedings has the effect of terminating all leases made subject to the mortgage being foreclosed.” This contention is “both novel and startling” and clearly unsound. It is contrary to the universal practice in all courts of this State. If the contention were sustained, then no complainant would have the temerity to ask for the appointment of a receiver, because if he did so a great part of his security would be wiped out. The appointment of a receiver to collect the rents pending foreclosure does not terminate the leases. Bright v. Riedy, 243 Ill. App. 314; Walgreen Co. v. Moore, 116 N. J. Eq. 348, 173 Atl. 587; Vandalia v. St. L. V. & T. H. R. Co., 209 Ill. 73; Heffron v. Gage, 149 Ill. 182; Chicago Title & Trust Co. v. McDowell, 257 Ill. App. 492; Met. Life Ins. Co. v. Childs Co., 230 N. Y. 285.

In the Walgreen Co. case the court said (p. 349): “The sole question presented on this motion is whether or not the lease of a lessee who is not a party defendant to a bill to foreclose a prior mortgage is terminated by the appointment of a rent receiver in a foreclosure suit. The answer is that it is not, and this proposition seems to me to be too plain to admit of argument. Complainant’s contention is both novel and startling. The lease by its terms was binding upon the successors and assigns of the lessor and lessee. The mortgage contained an express assignment of the rents. The lease cannot be terminated by the lessor except by some act which amounts to an eviction. The filing of a bill to foreclose and the appointment of a rent receiver do not constitute an eviction. ... A rent receiver appointed by this court is an officer of the court and' as such is entitled to collect all rents accruing subsequent to the date of his appointment. ... It is argued that possession by the receiver is possession by the mortgagee; that that possession terminated the mortgagor’s possession and title, and that since the subsequent lessee’s interest is derived from the mortgagor, the interest of the lessee is likewise terminated. If that argument were sound no mortgagee would ever take possession of mortgaged premises under the clause giving him a right to do so, nor would any receiver of rents ever be appointed in foreclosure proceedings, as upon such appointment the rental income would cease. But while the possession of a rent receiver has been likened to that of a mortgagee in possession, it is the possession of the court and not of the mortgagee. Such possession does not terminate the rights of any party to the proceedings, much less those of one not a party. They are merely held in abeyance and preserved pendente lite. And moreover, the title of the mortgagor is not ‘terminated’ until final decree and sale.”

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

Decree affirmed.

Hatchett, P. J., and HcSubely, J., concur.


text:
    Earle L. Hart, Appellant, v. O. L. Williams Veneer Company et al., Appellees.
    Gen. No. 38,918.

      Opinion filed November 2, 1936.
    Walter A. Rooney and Friedman, Schimberg & Alster, all of Chicago, for appellant; Simon H. Alster and Irving Mantel, of Chicago, of counsel.
    Maxmilian J. St. G-eorge, for certain appellees.
    SoNNENSCHEIN, BeRKSON, LaUTMANN, LEVINSON & Morse, of Chicago, for certain other appellees; Henry S. Moser and Jerome L. Fels, both of Chicago, of counsel.
   Mr. Justice O’Connor

delivered the opinion of the court.

August 21, 1935, plaintiff brought an action against O. L. Williams Veneer Co., a corporation, and others to recover $11,000 because of a claimed breach of contract. Defendants were nonresidents and were served by publication. On the same day an attachment in aid issued against Samuel Winternitz & Co., a corporation, and others. The garnishees answered that they had no funds belonging to defendants. Defendants were defaulted for want of appearance and plaintiff’s damages were assessed against them for $11,000. Afterward there was a hearing, at the conclusion of which the court discharged the garnishees, vacated the judgment entered against defendants, and plaintiff appeáls.

The record discloses that on June 14, 1935, some of the garnishees purchased certain property from defendants for $90,000, payable in instalments, and August 19, 1935, drew their check on (he First National Bank of Chicago to the order of defendant O. L. Williams Veneer Co., Inc., for $22,500 in payment of the final instalment, mailing it to the Veneer Company at 201 East Delaware Place, Chicago, where a representative of the Veneer Company received the check and forwarded it to the Veneer Company’s home office at Sumpter, South Carolina. August 21, 1935, two days after the check was mailed by the garnishees, the garnishee summons was served. August 28, 1935, the check was paid by the First National Bank of Chicago in the regular course of business. Stamped on the back of the check appears the following: “Telephoned-0 ’K-To-Pay. ’ ’

Plaintiff’s position is that it was the garnishees’ duty to stop payment of the check since the garnishee summons was received seven days before the check was presented for payment to the bank on which it was drawn, and that the court erred in refusing to permit counsel for plaintiff to interrogate a witness (a representative of the garnishees) as to what the garnishees had done to stop payment of the check.

On the other side, the garnishees’ position is that since they mailed the check in good faith to defendant O. L. Williams Veneer Co. before service of the garnishee summons, the garnishees were under no legal duty to stop payment of the check. We think the contention of the garnishees must be sustained. Waples on Attachments and Garnishments (2nd ed.), section 364; Gretchell v. Chase, 124 Mass. 366; Vol. 2, Morse on Banks and Banking (5th ed.), section 543; 28 C. J., section 187, p. 148; Prewitt v. Brown, 101 Mo. App. 254, 73 S. W. 879; Brandfass v. Kohn, 113 W. Va. 442, 168 S. E. 476; Watt-Harley-Holmes Hardware Co. v. Day, 1 Ga. App. 646, 57 S. E. 1033; Andrews v. Sasser, 17 Ga. App. 482, 87 S. E. 717.

In Waples on Attachments and Garnishments the author says (sec. 364): “One is not liable to garnishment if he has paid what he owed the defendant in attachment by a bank check, though the latter may not have presented the check to the bank and drawn the money prior to the service of the process of garnishment upon the drawer of the check. It is true that the funds in the bank are still under his control, so that he might stop payment of the check; and, so far as the bank is concerned, he has the right to control the deposit; but he has no moral right to do so, considering his relation to the payee who has taken the check in payment or earnest of payment. At all events, the drawer, as garnishee, is not under the slightest obligation to countermand his own check for the purpose of enabling a professed creditor of the, payee to attach the credit in his hands and suspend settlement of his account with the payee for an indefinite time.”

In Getchell v. Chase, 124 Mass. 366, it was held that a check given and accepted as payment will entitle the drawer of the check to be discharged if summoned as trustee [garnishee] where the writ was served the day after the delivery of the check, although the check was not presented until a day after the service of the writ. The court there said: “Upon the facts stated in the trustee’s answer, the check was evidently given by him and received by the principal defendant as payment, and operated as such, at least until presentment and refusal, which in this case did not happen. Nothing therefore was due from the trustee to the defendant at the time of the service of this process.”

And in Morse on Banks and- Banking, sec. 543, the author says: “And a check is always so far payment until dishonored, that, after its delivery, the drawer cannot be garnisheed as debtor of the payee in respect to the debt for which the check is given. ’ ’

In section 187, 28 C. J., it is stated: “Payment by check is generally held sufficient to defeat subsequent garnishment pro tanto as long as the check has not been dishonored. . . . But the garnishment places the garnishee under no obligation to stop payment on the check, unless the check itself is still within his control, in which case it has been held that it is his duty to reclaim it.”

In Prewitt v. Brown, 101 Mo. App. 254, it was held that where a purchaser had given a check to the seller for the purchase price, he was under no obligation to stop payment of the check althoug'h he had been served with garnishee summons before the check was paid by the bank on which it was drawn. The court there said (p. 259): “A purchaser in good faith who has given his check to a seller for the price of an article bought, has so far paid for the article that he is not subject to garnishment as the seller’s debtor.” Citing Getschell v. Chase, 124 Mass. 336, and other authorities.

To the same effect is the Brandfass v. Kohn case, 113 W. Va. 442, where the court quoted with approval from 28 C. J. the following (p. 444): “ ‘But the garnishment places the garnishee under no obligation to stop payment on the check, unless the check itself is still within his control, in which case it has been held that it is his duty to reclaim it. ’ 28 C. J. 148. ’ ’

From the foregoing and other authorities we are of opinion that a debtor who has delivered his check for a debt to his creditor may, on being served with garnishment summons, stop payment on the check, and the payment being stopped is subject to garnishment, but the debtor is under no legal duty to stop payment on the check.

Plaintiff, in support of his contention that the garnishees should have stopped payment of the check, relies upon see. 21, ch. 11, Ill. State Bar Stats. 1935, and the cases of Bank of Montreal v. Clark, 108 Ill. App. 163; Binkley v. Clay, 112 Ill. App. 332; and Swope v. McClure, 239 Ill. App. 578.

Section 21 provides: “Persons summoned as garnishees shall thereafter hold any property, effects, choses in action or credits in their possession or power belonging to the defendant which are not exempt, subject to the court’s order.”

In the Bank of Montreal case, James A. Morrison held a certificate of deposit issued by the Chicago branch of the bank. Afterward, on March 8, suit was brought against him in the superior court of Cook county, where he was served personally, and the Chicago branch of the bank was served as garnishee on the same date. After Morrison was served in Chicago he went to the Toronto branch of the bank and on March 9 delivered the certificate to the bank there, and the amount of it was placed to his credit in the Toronto bank; he then drew his check against the credit and it was paid. It was held that the garnishee bank was liable. Obviously the facts in that case are in no way similar to the facts in the case before us. There the money was in the possession of the Bank of Montreal at the time of the service of the garnishee summons on its Chicago branch.

In the Binkley case, 112 Ill. App. 332, the garnishee was served with summons and on the afternoon of the same day executed a draft to the principal defendant. It is clear that this case is not in point.

In the Swope case, 239 Ill. App. 578, it appeared that after the delivery of a check the maker of it, who had been garnisheed, endeavored to stop payment of it, and it was held that judgment discharging the garnishee was proper. But the court there did not hold that it was the duty of the garnishee to stop payment of the check. That question was in no way involved.

Since there was no money in the hands of the garnishees at the time of the service of the garnishee summens, the judgment of the trial court discharging the garnishees, and the order of the court vacating the judgment entered against • the principal defendants, who had been served only by publication, were proper.

The judgment and order of the circuit court of Cook county are affirmed.

Judgment affirmed.

Hatchett, P. J., and McSurely, J., concur.