text:
    John W. Cherry, Receiver of the Danville Hotel Company for the Use of O. K. Yeager, Trading as Yeager & Sons, and Carson-Payson Company, Appellee, v. Charles Benson, Inc. and The Aetna Casualty & Surety Co., Defendants. The Aetna Casualty & Surety Company, Appellant.
    Gen. No. 8,510.

      Opinion filed November 4, 1931.
    Rehearing denied January 7, 1932.
    Dent, Dobyns & Freeman and Steely & Steely, for appellant; W. Braxton Dew and Seward H. Bowers, of counsel.
    Swallow & Bookwalter and' G-unn, Penwell & Bindley, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

On November 11, 1925, The Danville Hotel Company, as owner, and Charles Benson, Inc., as contractor, entered into a written contract for the construction of a hotel building for the sum of $604,899 in cash and $217,800 in common stock of the owner at the par value of $100 per share. For the faithful performance of this contract Charles Benson, Inc., as principal, and the Aetna Casualty & Surety Company (appellant) as surety, executed a bond in the penal sum of $822,699. This bond contained the following provision:

“Now, Therefore, the condition of this obligation is such that if the Principal shall faithfully perform the contract on his part and satisfy all claims and demands, incurred for the same, and shall fully indemnify and save harmless the Owner from all cost and damage which he may suffer by reason of failure so to do, .and shall further reimburse and repay the Owner all outlay and expense which the Owner may incur in making good any such default, and shall pay all persons who have contracts directly with the Principal for labor or materials, then this obligation shall be null and void; otherwise, it shall remain in full force and effect.”

Charles Benson, Inc. sublet the masonry and concrete work to Yeager & Sons and the plumbing and ventilating to Carson-Payson Company. During the construction of the building a receiver was appointed for the Danville Hotel Company and this action in debt was instituted by the receiver for the use of the subcontractors, Yeager & Sons and the Carson-Pay-son Co. against Benson as principal and the Aetna Casualty & Surety Co. as surety on the bond. A second amended declaration was filed to which the surety company filed three pleas, the first of which is one of nil debet; the second alleges that the bond sued upon was made to the Danville Hotel Co. and was not made for the use or benefit of said subcontractors; the third plea alleges in substance that the Danville Hotel Co. did not keep and perform the agreements in said contract upon its part to be kept and performed and did not during the progress of the work make the payments to Charles Benson, Inc., as provided by the terms of the contract whereby it was impossible for Charles Benson, Inc. to keep and perform its part of said contract and said surety became and was released as such upon said bond. A demurrer was filed to all of the pleas and sustained and appellant elected to stand by their pleas. By agreement a jury was waived and the cause submitted to the court for a hearing on the question of damages, at the conclusion of which the court entered a judgment in the sum of $822,693 debt and damages for Yeager & Sons in the sum of $33,122.16 and for Carson-Payson Co. $15,554.61. The only questions involved are the merits of the respective pleas.

In the case of Mix v. People, 92 Ill. 549, the court held: “We are at a loss to see why defendants should file a plea of nil debet to an action of debt on a bond when there are no common counts in the declaration. All know such a plea in this case is inapplicable and bad on demurrer. If issue had been joined on it we are unable to conceive its use to defendants on the trial. It was bad, and the court, of course, sustained a demurrer to it.’-’ The above has always been held to be the law in this State. Kilgour v. Drainage Dist., 111 Ill. 342, 348; McDonald v. People, 222 Ill. 325.

The second plea alleges that the bond was made to the Danville Hotel Co. and for its use and benefit and was not executed for the use and benefit of the subcontractors. This plea is but a conclusion of law and in fact simply attacks the sufficiency of the declaration. It presents no issue of fact upon which issue could be joined.

The third plea is one of confession and avoidance in that the Danville Hotel Co., obligee in the bond sued on, did not keep and perform its agreements, covenants and conditions in said contract "by making the payments to Charles Benson, Inc. in accordance with the terms of the contract whereby Charles Benson, Inc. was in turn unable to pay said subcontractors and that appellant was released thereby as surety upon said bond. The sufficiency of this plea depends upon the construction to be given to the language of the provisions of the bond itself. That such construction or performance bonds may be so worded as to have a dual purpose, one to protect the owner of the building and one to protect the subcontractors who furnish labor and material for the erection thereof, has been held in the case of Alexander Lumber Co. v. Aetna Accident and Liability Co., 296 Ill. 500.

Counsel for appellant contend (a) that the condition of the bond in question is not a covenant or a promise, but a mere defeasance clause and that the only promissory part of the bond is the agreement to pay the penal amount to the obligee therein named; (b) that even if the condition of the bond be construed as a promise, no recovery can be had thereon unless there was not only an intent to secure some benefit to the subcontractors but also that the promise was made directly and primarily for their benefit. ' To sustain these contentions counsel rely greatly on the case of Searles v. City of Flora, 225 Ill. 167. In that case the provision in the bond was as follows: “Now, therefore, if the above bounden principal shall well and truly keep, do and perform each and every, all and singular, the matters and things in said contract set forth and specified to be by said principal kept, done and performed, at the time and in the manner in said contract specified, and shall pay over, make good and reimburse to the above named obligee all loss and damage which said obligee may sustain by reason of failure or default on the part of said principal, then this obligation shall be null and void, otherwise to be and remain in full force and virtue.” The court held: “We think the evidence in this case clearly shows that the bond and contract were not entered into with the intention of securing third parties as to labor and material furnished in the completion of said contract, but they were entered into for the purpose of securing the city of Flora, and it alone, in this respect. Nothing whatever is said in the contract or bond about paying third parties for material.” In the case of Board of Education v. Aetna Indemnity Co., 159 Ill. App. 319, the provision in the bond was that if the contractor “shall promptly make payment to all persons supplying him with labor or materials in the prosecution of the work provided for in said contract,” then the obligation to be void, otherwise to remain in full force and effect. The court in construing such a bond held the same was given with the intention of protecting the subcontractors and in commenting on the Searles case said: “To hold the bonds in question valid and binding is only to compel the obligors to do the thing they bound themselves to do. The distinction between these cases and Spalding Lumber Co. v. Brown, 171 Ill. 487, and Searles v. City of Flora, 225 Ill. 167, is, that in those cases the bonds contained no condition that the obligors should pay for labor or materials furnished to the contractors, and in these cases the bonds contain such conditions.” In the case of Board of Education v. Chicago Bonding and Surety Co., 218 Ill. App. 20, the bond in question after providing that the contractor shall well and truly keep and perform covenants in said contract contains the following condition, “and shall promptly make payment to all persons supplying it labor and materials in the prosecution of the work provided for in said contract, then the above obligation to be void, otherwise to remain in full force and effect.” In discussing this question the court held:

“We think this whole controversy so far from being debatable is settled in this court in Board of Education v. Aetna Indemnity Co., 159 Ill. App. 319. The bond in that case was in the same form and of the same purport and effect and given for a like purpose as was the bond in suit. It was in case supra contended, as it is here, that the bond was intended solely for protection of the Board of Education and not for the protection and benefit of materialmen and laborers. These questions were raised by the presentation of suitable propositions of law, which were refused by the trial court and such refusal was sustained on appeal.”

A similar bond to the one here between the same parties containing identical provisions was before the court in Danville Hotel Co. v. Benson, 262 Ill. App. 288. The same defenses that are raised in the case at bar were raised in that case and the court held against the contentions of appellant.

A great many cases have been cited from other jurisdictions in support of the doctrine that if the bond provides directly that the principal shall pay all claims of the materialmen, it will be considered as having been executed for the benefit not only of the owner but for all subcontractors of the principal and that such a clause will be deemed a promise notwithstanding that it may be designated as a condition in the bond. Byram Lumber & Supply Co. v. Page, 109 Conn. 256; Fidelity & Deposit Co. v. Rainer, 220 Ala. 262; Hartford Accident & Indemnity Co. v. Knox Net & Twine Co., 150 Md. 40; American Surety Co. v. DeWald, 30 Ga. App. 606; Pittsburgh Plate Glass Co. v. Fidelity & Deposit Co. of Maryland, 193 N. C. 769; Mansfield Lumber Co. v. National Surety Co., 176 Ark. 1035; Concrete Steel Co. v. Illinois Surety Co., 163 Wis. 41; Yawkey-Crowley Lumber Co. v. Sinaiko, 189 Wis. 298; Walker Realty Co. v. American Surety Co., 60 Utah 435; Royal Indemnity Co. v. Northern Ohio Granite & Stone Co., 100 Ohio 373; Orinoco Supply Co. v. Shaw Bros. Lumber Co., 160 N. C. 428; Guilford Lumber Mfg. Co. v. Johnson, 177 N. C. 44; Southwestern Portland Cement Co. v. Williams, 32 N. Mex. 68; Forburger Stone Co. v. Lyon Bonding & Surety Co., 103 Neb. 202; La Crosse Lumber Co. v. Schwartz, 163 Mo. App. 659; Algonite Stone Mfg. Co. v. Fidelity & Deposit Co., 100 Kan. 28; Getchell & Martin Lumber & Mfg. Co. v. Peterson & Sampson, 124 Iowa 599; Ochs v. Carnahan Co., 42 Ind. App. 157; Knight & Gillson v. Castle, 172 Ind. 97; Union Sheet Metal Works v. Dodge, 129 Cal. 390; Hines v. Consolidated Coal & Lime Co., 29 Ind. App. 563; Baker v. Bryan, 64 Iowa 561; Nye-Schneider-Fowler Co. v. Bridges, Hoye & Co., 98 Neb. 27; Connor Co. v. Aetna Indemnity Co., 136 Wis. 13; National Surety Co. v. Hall-Miller Decorating Co., 104 Miss. 626; Toner & Co. v. Long, 79 N. H. 458; Dolese Bros. Co. v. Chaney & Rickard, 44 Okla. 745; Columbia County v. Consolidated Contract Co., 83 Ore. 251; Aetna Casualty & Surety Co. v. Earle-Lansdell Co., 142 Va. 435; Steffes v. Lempke, 40 Minn. 27; United States Fidelity & Guaranty Co. v. American Blower Co., 41 Ind. App. 620; Empire State Surety Co. v. Des Moines, 152 Iowa 531; National Surety Co. v. Wyandotte Coal & Lime Co., 76 Kan. 914.

To comment upon all these cases would extend this opinion to an unnecessary length but we do desire to refer to the cases of Aetna Casualty and Surety Co. v. United States Gypsum Co. and Aetna Casualty and Surety Co. v. Wheeler and Putnam Co. consolidated and decided by the Court of Appeals of Kentucky March 27, 1931 (not yet published) where the same doctrine is upheld in a very masterly and logical opinion. In one of the cases there under consideration the condition in the bond was as follows: “If the principal shall faithfully perform the contract on his part . . . and shall pay all persons who have contracts directly with the principal for labor or materials, then this obligation shall be null and void. Otherwise, it shall remain in full force and effect.” The court held that such a bond is given for the benefit of those furnishing material or labor in the construction of the building and might be sued on by such subcontractors to recover the amounts due. Holding as we do that the condition as expressed in the bond in the case at bar is a direct promise of the principal in the bond to pay for all material contracted for by subcontractors and used in the building, appellant as surety is liable therefor and his liability cannot be avoided by the fact of the breach of the hotel company in failing to make the payments to the contractor, Charles Benson, Inc., at the times provided for in the contract. It follows, therefore, that the pleas were bad and the circuit court did not err in sustaining a demurrer thereto.

The judgment of the circuit court is affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Justice Eldredge

license: Public Domain

text:
    Edna S. Sollars, Appellee, v. Review Publishing Company, Appellant.
    Gen. No. 8,537.

      Opinion filed November 4, 1931.
    Rehearing denied January 7, 1932.
    Whitley & Fitzgerald and Arthur F. Delahunty, for appellant; Dobbins & Dobbins, of counsel.
    McDavid, Monroe & Mann, for appellee.
   Mr. Justice Eldredge

delivered the opinion of the court.

Edna Solíais, appellee, recovered a judgment in an action on the case against Review Publishing Co., a corporation, appellant, in the circuit court of Macon county for the sum of $9,664 for injuries sustained as a result of an automobile accident.

The accident occurred on the public cement highway known as Illinois State Route No. 2 on November 12, 1929, in Christian county. In the first count of the declaration it is averred that appellee was riding in an automobile owned by appellant and driven by its servant and was carrying and transporting her so that she might obtain information necessary to prepare a newspaper article for appellant; that she was a totally blind person which fact the defendant and its servant well knew; that she was riding in said automobile at the defendant’s invitation and request and was at all times in the exercise of due care for her own safety; that by the negligence and improper conduct of the defendant by its said servant said automobile overturned and upset by means whereof plaintiff was injured permanently and necessarily incurred great expense to the amount of $1,000 for nurses, attendants, doctors and hospital services in endeavoring to be cured.

In the second count there are additional averments to the effect that appellant was the owner and publisher of a certain newspaper called “Thé Decatur Daily Review,” published in the City of Decatur, and that appellant requested and directed the plaintiff to prepare an article for its newspaper, said article to be based on data and information to be secured by appellee in the vicinity of the City of Shelbyville in Shelby county; that on said day appellant by its servant took appellee in its said automobile for the purpose of conveying her from her home in the Village of Moweaqua to said City of Shelbyville to secure the data and information necessary for the newspaper article above mentioned and of thereafter returning her from Shelbyville to her home at Moweaqua.

The third count is substantially the same as the second with the exception that it is also averred therein that appellee was riding in the car upon the mission aforesaid at appellant’s invitation and request.

The fourth count is the same as the third count except that it is averred therein that the car was being driven over a slippery road at a speed greater than was reasonable and proper, having regard for the traffic and the use of the way, and so as to endanger the life and limb of other persons, at, to wit, a speed of 40 miles per hour.

The only plea filed was that of the general issue.

Appellant owns the newspaper called The Decatur Daily Review which is published in the City of Decatur. Appellee at the time of the accident was 52 years of age and lost her eyesight when she was a girl 18 years old. Her vocation was the writing of special articles on different subjects for various newspapers among which was The Decatur Daily Review. She had also, for a number of years prior to the accident, contributed local items concerning events in and about the Village of Moweáqua to The Decatur Daily Review. She had written special feature articles for various newspapers among which were the Chicago Daily News and the St. Louis Post-Dispatch and had also written a number of special articles for the Decatur Daily Review. She received no salary for any of the work which she did for appellant but was paid $3 per column for such articles as were accepted by appellant. Mr. D. L. Davis was State editor for appellant during the time and all her business for the newspaper was transacted through him. She testified that Davis told her she would be paid so much per column for material which was accepted but would not be paid for her time; that sometimes her material was rejected; that Davis told her if anything important or unusual should happen she was not to wait and write in, but to telephone it in at once so that it would get out in the first edition of The Decatur Daily Review; that there was nothing said about rules and regulations as to hours of work, or time of work, or anything of that kind; that he told her she could write for any other newspaper or periodical she cared to except a Decatur publication; he also told her that she should branch out to other towns and further into the country her to do so without assistance as she had no car and was blind whereupon Davis told her to procure what assistance she needed and the Review would pay the expenses at the rate of five cents per mile for her assistant which was sometimes done and she sent in each month an itemized statement of such expenses; for two or three years Mr. Sidthorpe was farm editor and she went around several times with him; later Mr. Bailey was sent to her at times. Bailey was a regular employee of appellant and took pictures for the newspaper. Prior to the accident he had taken her on three occasions. Several days prior to the accident she discussed the matter of making a trip to a farm near Shelbyville. She had previously written an article about this farm which appellant had published and she told Davis that she thought the subject justified another article to be illustrated with pictures; he told her that as soon as it could be arranged he would send Bailey to take her to the farm; that on November 9, he telephoned to her and told her he was going to let her have Bailey all day Tuesday and to get all the pictures she could for her stories; she wanted pictures of a very large drove of hogs on this farm and of a very interesting old home; that on November 12, Bailey called for her in an automobile and she with Mrs. Long, a friend of hers, and Bailey started east of Moweaqua and first visited a farm for the purpose. of getting information for the story to go with the pictures; they then went to another farm west of Moweaqua for information there about Angora goats and race horses which were to be the subject of an article about that farm; that they then started towards Shelbyville; it had been raining and the pavement was wet and slippery and Mrs. Long requested Bailey to drive slower because the slab was wet and she felt it was dangerous; Whereupon Bailey said to appellee, “You aren’t afraid, are you, Mrs. Sollars?”, to which she replied, “I couldn’t tell but I want you to be very careful” and that it was a short time after that when the accident occurred.

The testimony of appellee is substantially uncontradicted. Davis testified: “I suggested that she go down to the farm near Shelbyville and write the article. Some weeks before that she had written an article touching the same farm. It is the Samuel Tilley farm. She had written an article about Mr. Tilley, and later told me he had a large herd of hogs she thought would be good for another story and pictures. She submitted the first article on the farm at her own volition. I had not told her when to go and get the second or additional article. When I first talked to her she did not tell me when she was going to get it. I may be wrong, but I would say the first article about the Tilley farm was published two or three months before that.”

The errors relied on by appellant for the reversal of the judgment are: (1) that appellee was acting as an employee of appellant and was injured through the negligence of a fellow servant; (2) that if she was acting as an independent contractor then Bailey was at the time loaned to her, and was under her control and direction and acting as her servant; (3) that the verdict is excessive; (4) errors in the giving and refusal of instructions.

At times it is very difficult to determine whether the relation between parties is that of master and servant or of principal and independent contractor. Various rules have been laid down by very respectable authority but it is very difficult to formulate any rule which can be applied to every set of facts and circumstances which may appear. In 39 C. J. 35, the rule is announced as follows: “The relation of master and servant exists whenever the employer retains the right to direct the manner in which the business shall be done, as well as the result to be accomplished, or, in other words, not only what shall he done, hut how it shall be done. Inasmuch as the right to control involves the power to discharge, the existence of the power to discharge is essential, and is an indicium of the relationship.” In 18 E. C. L. 490, the rule is declared to be: “The relation, whatever term may be used to describe it, exists, it ordinarily is said, whenever one person stands in such a relation to another that he may control the work of the latter and direct the manner in which it shall be done. The essential elements are that the master shall have control and direction not only of the employment to which the contract relates, but of all of its details, and shall have the right to employ at will and for proper cause discharge those who serve him. If these elements are wanting, the relation does not exist. Again, the manner in which payment is made may under some circumstances be decisive of the question, but this is not an invariable criterion by any means. ’ ’ In the case of Decatur Railway & Light Co. v. Industrial Board, 276 Ill. 472, it was held: “The right to control the manner of doing the work is the principal consideration which determines whether the worker is an employee or an independent contractor. This work was very simple. No control would ordinarily be required except to direct where the coal should be unloaded, and this control was exercised. There was nothing in the contract indicating that the company surrendered the right to control the manner in which the unloading should be done. It retained the right to discharge Mulverhill on the instant. The method of payment was not inconsistent with a contract of hiring, and the retention of hospital dues and the giving of a pass tended to establish the relation of employer and employee.” In Yeates v. Illinois Cent. R. Co., 241 Ill. 205, the court said: “The relation of master and servant exists where the employer has the power to direct what work the employee shall do and the way and manner in which it shall be done, and has power to remove and discharge him. ’ ’

As to what is an independent contractor it is held in 39 O. J. 1315: “An independent contractor is one who in rendering services exercises an independent employment or occupation and represents his employer only as to the results of his work and not as to the means whereby it is to be done.” It is held in Nelson Bros. & Co. v. Industrial Commission, 330 Ill. 27: “It is impossible to lay down a hard and fast general rule or state definite facts by which the status of men working and contracting together can definitely be defined in all cases as employees or independent contractors. Each case must depend on its own facts. Ordinarily no one feature of the relation is determinative but all must be construed together. (Bristol & Gale Co. v. Industrial Com., 292 Ill. 16.) The right to control the manner of doing the work is the principal consideration which determines whether the worker is an employee or an independent contractor. (Decatur Railway and Light Co. v. Industrial Board, 276 Ill. 472.) The test of the relationship is the right to control. It is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent. An independent contractor is one who undertakes to produce a given result but in the actual execution of the work he is not under the orders or control of the person for whom he does the work but may use his own discretion in things not specified. An independent contractor is one who contracts to do a specific piece of work, furnishing his own assistance and executing the work either entirely in accordance with his own ideas or in accordance with a plan previously given him by the person for whom the work is done, without his being subject to the orders of the latter in respect to the details of the work. (LaMay v. Industrial Com., 292 Ill. 76; Meredosia Drainage District v. Industrial Com., 285 id. 68). If the person for whom the work is being done retains the right to control the details and the manner and method by which the work is to be done the relation of employer and employee exists. The fact that payment is to be made by the piece or the job or the day or the hour does not necessarily control where the workman is subject to the control of the employer as an employee and not as a contractor. Franklin Goal Co. v. Industrial Com., 296 Ill. 329; Amalgamated Roofing Co. v. Travelers Ins. Co., 300 id. 487. . . . The real test was the right to control the manner of doing the work, and no such right was reserved.” It was held in the case of Besse v. Industrial Commission, 336 Ill. 283: “An independent contractor is one who renders service in the course of an occupation representing the will of the person for whom the work is done only as to the result of the work and not as to the means by which it is accomplished. ’ ’

In the case at bar appellant reserved no control over appellee as to the way or manner or method she might use in writing the special articles in question. The only reservation which appellant had was to either accept or reject the work of appellee as it saw fit and pay her or not for her labor as it saw fit. Appellant had no control over the way appellee went about writing the article in question, the way her ideas were expressed in words, the length of the article or the things described. If, after the work was done by appellee, it met with the approval of appellant it could accept it or reject it, pay for it or refuse to pay for it as it saw fit. In our opinion such facts are entirely inconsistent with the theory of master and servant. The work of a descriptive writer is a highly specialized vocation. If one requested an artist to paint a portrait of a person or to paint a picture of an existing thing it certainly could not "be said that the artist became the servant of such person while in the process of doing such work. The difference between such a case and the case at bar is that appellee was to paint her picture in words instead of colors.

The second contention of appellant that if it be held that appellee was not the servant of appellant, then Bailey, the driver of the car, was, under the circumstances shown, a servant loaned to her by appellant and while he was being used by her appellant would not be liable for his negligence. The plea of general issue admits that Bailey was the servant of appellant, therefore, this contention cannot be sustained.

The first four instructions given for appellee allege the substance of each of the four counts respectively and each concludes that if the jury find from the preponderance of the evidence under the instructions of the court that the plaintiff has proved her case as alleged in the respective counts of the declaration then the jury should find the defendant guilty. The first objection to these instructions is that it was error to embrace the allegations of the declaration in the instructions as the reiteration of the averments of the declaration in four successive instructions tended to emphasize the facts therein alleged and also to mislead the jury. It must be conceded that such instructions have been criticized to some extent (Reivitz v. Chicago Rapid Transit Co., 327 Ill. 207; Attabella v. Krzepton, 233 Ill. App. 320) but so far as we are informed the giving of them has never been held to be reversible error. But, if error, the jury were fully instructed as to the issues in the case and in our opinion could not have been misled or confused thereby. It is also urged that these instructions are erroneous because they direct a verdict and (a) ignore the defense that appellee was a fellow servant; (b) ignore the defense that if she was not a fellow servant Bailey was loaned to appellee and became her servant and (c) that she assumed the risk. We have held as a question of law that under the conceded facts in this case appellee was not a servant of appellant. We have also held that whether Bailey was loaned to appellee is not a defense of which appellant could avail itself. As to the defense of assumed risk this was not presented on the trial in the court below and cannot be raised for the first time in this court.

The fifth instruction given on behalf of appellee informed the jury that in determining the amount of damages -the plaintiff is entitled to recover in this case, if any, the jury have a right to, and they should, take into consideration all the facts and circumstances as proven by the evidence before them; the nature and extent of plaintiff’s physical injuries, if any, so far as the same are shown by the evidence; her suffering in body and mind, if any, resulting from such physical injuries, and such future suffering and loss of health, if any, as the jury may believe from the evidence before them in this case, she has sustained or will sustain by reason of such injuries; her loss of time and inability to work, if any, on account of such injuries; all expenses incurred by her for doctor’s and hospital bills, if any, while being treated for such injuries; and may find for her such sum as in the judgment of the jury, under the evidence and instructions of the court in this case, will be a fair compensation for the injuries she has sustained, or will sustain, if any, so far as such damage and injuries, if any, have been shown by the evidence in this case. It is contended that this instruction is erroneous because it tells the jury that they should take into consideration all the facts and circumstances as proven by the evidence before them and that this necessarily includes the fact that appellee was blind. A fair construction of this instruction is that it refers only to a question of damages for injuries received as a result of the accident as have been proven by the evidence. Any other construction would be very strained and hypercritical. Wolczek v. Public Service Co. of Northern Illinois, 342 Ill. 482. That the jury could not have been misled in this regard is shown by the giving of the eighth, twelfth and fifteenth instructions offered on behalf of appellant. The eighth instructs the jury that they should not be influenced by any matters of sympathy which they may have, as men, for the plaintiff and that matters of sympathy or compassion are not proper for their consideration. The twelfth charged the jury that damages, in order to be recovered, must be proved by a preponderance of evidence in the case, and a verdict for damages cannot be based upon guess, conjecture or speculation. The fifteenth instructed the jury that no damages can be awarded the plaintiff on account of sicknesses, or illnesses, or diseases which she might have had prior to the accident, or the result of such illnesses or sicknesses afterwards, or to accrue to her as the result of previous sicknesses or diseases and no damages can be awarded to plaintiff not the sole and direct result of the injury complained of in the declaration, and the same must be proved by a preponderance of the evidence in the case. Instruction No. 5 is also complained of in that it allows the jury to assess all expenses incurred by her for doctors’ and hospital bills, if any, while being treated for her injuries, on the ground that there was no proof of what were the customary and reasonable charges thereof. In this, counsel are apparently mistaken as Dr. Sparling testified that the usual, fair, reasonable and customary charge for services, medical and hospital, such as were rendered to appellee was $664. This testimony was all admitted without objection by appellant, nor was any motion made to exclude it but was permitted to go to the jury uncontradicted.

It is also claimed that the court erred in refusing to give instructions 19, 22, 23, 24 and 25 offered by appellant. No. 19 is fully covered by instruction 16 given on behalf of appellant. Instruction No. 22 contained nothing but what had already been referred to in instructions 8, 12 and 15 given for appellant. Instruction No. 24 refers to the care required by the driver of the car and is covered by instruction No. 16 given for appellant. Eefused instruction 25 is but a proposition of law and not applied to any particular facts in the case.

One of the errors assigned is that the verdict is excessive, but no argument is advanced in support of this contention. There is no conflict in the evidence as to the injuries sustained by appellant as no evidence was introduced or offered to be introduced by appellant in regard thereto. That appellee was very seriously injured is not contested.

In our opinion there is no reversible error in the case and the judgment is therefore affirmed.

Affirmed.


author: Mr. Justice Shurtleff

text:
    American Mexican Refining Company, Appellee, v. R. E. Wetzel, Appellant.
    Gen. No. 8,507.

      Opinion filed November 4, 1931.
    Rehearing denied and opinion modified January 7, 1932.
    Ralph W. Adams and Provine & Williams, for appellant.
    Hershey & Vogelsang, for appellee.
   Mr. Justice Shurtleff

delivered the opinion of the court.

This suit is brought by appellee to recover the value of 10 shipments of oil, amounting to about 100,000 gallons, commencing on August 6, 1927, and extending to September 15,1927. The declaration consists of the common counts and a special count in which a special contract is set out charging that on February 25,1927, Orval Osborn, then sole commissioner of highways of the town of Prairieton, county of Christian and State of Illinois, acting as agent for said town, entered into a written agreement with J. W. Debrun & Son of Assumption, Illinois, as follows: That J. W. Debrun & Son, party of the first part, has sold to Orval Osborn, commissioner as aforesaid, party of the second part, 10 tank cars of approximately 100,000 gallons of road oil, specifications as follows: “E-3 or E-4”; shipments to be made as near as possible on instructions of party of the second part; all shipments to be made from May 1 to November 1, 1927, price to be $.0547 per gallon f. o. b. Stonington, Moweaqua and Eadford; the contract provides for delivered price, the price being based on a freight rate of $.27 per cwt. from refinery at Group 3 and if an increased or decreased freight rate is in effect at time of shipment the price to vary accordingly.- The. contract is dated February 25, 1927, and it was charged that on that date and on April 19, 1927, there was sufficient money in the hands of the treasurer of the commissioner of highways of the township of Prairieton not otherwise appropriated and of the taxes levied for the township of Prairieton for road purposes in September, 1926, and of taxes levied for1 road purposes pursuant to the special election with which to pay the amounts due or to become due to J. W. Debrun & Son according to the terms of the aforesaid contract.

It was further charged that prior to the execution of the contract on August 3, 1925, a special tax was levied at an election held in the township of Prairie-ton to authorize a special annual tax to he levied of $.66 2/3 on each one-hundred-dollar valuation, as aforesaid, for a period of five years for the purpose of improving* maintaining and repairing earth roads by dragging, grading and oiling for the years 1925 to 1929 inclusive, which tax was certified to the county clerk of Christian county, Illinois, and by the clerk extended on the tax books of the county among other years for 1927, 1928 and 1929.

The contract contained this further clause: “Assignability: This contract is not assignable by the purchaser or seller except with the written consent of the other.” Nevertheless, the special count charges: “That on May 4, 1927, the plaintiff for valuable consideration, received an assignment of the aforesaid contract from J. W. Debrun thereby receiving all of the interest of J. W. Debrun & Son in the oil sales contract above referred to and in compliance with the terms of the contract, the plaintiff did deliver to Orval Osborn as sole commissioner of highways of the township of Prairieton, the road oil in the contract specified, at the designation therein directed as requested by the said Orval Osborn, that is to say, it did deliver to and Orval Osborn did accept on the following dates, various amounts of road oil as follows: ’ ’

The cause was tried before the court, without jury, various proofs were submitted and there was a judgment for appellee in the sum of $3,962.05, which included interest upon the items of various deliveries from the date of delivery to the date of judgment.

Appellant has brought the record to this court by appeal for review.

No legal proofs were offered at any time as to the original contract or the submission for bids upon oil or any other substance, for which this claim is made. John W. Debrun, Jr., testified orally and identified as “Exhibit A” an original sales contract made by J. W. Debrun & Son with the commissioner of highways of Prairieton township, and stated that the assignment to appellee was first made verbally, but was later confirmed by letter and a carbon copy of a letter from appellee to J. W. Debrun & Son was produced and appeared in the record as “Exhibit B.” No record of the highway commissioner’s office was offered or shown in regard to the contract, although Orval Osborn, who was commissioner when the contract was made and when the oil was delivered, testified orally that he signed the contract and that the oil was delivered and was spread upon the roads of Prairieton township. The only testimony as to “bids” was oral testimony by the witness Osborn, who states: 11 There had previously been a meeting of the highway commissioners of Christian county relative to the purchase of oil; that there had been no previous agreement relative to the purchase of oil; that bids were submitted at the meeting and J. W. Debrun & Son were the successful bidders.” Just why the witness interjected “there had been no previous agreement as to oil” is not pointed out and just what is meant by the “successful bidder,” is not explained. No record appears in the office of the highway commissioner as to any of this transaction and it would therefore appear to be void. (People ex rel. Greenwood v. Board of Sup’rs Madison County, 125 Ill. 334; Village of Bellwood v. Galt, 321 Ill. 504, 508; People v. Finley, 97 Ill. App. 214, 216.)

In People v. Finley, supra, the court held: “All townships in counties under township organization, are corporations. Hurd’s E. S. 1899, Chap. 139, Sec. 38. And commissioners of highways are quasi corporations. People v. Madison County, 125 Ill. 334. The corporate acts of the town are required to be recorded by the clerk. Secs. 112 and 113 of said chapter.

“The corporate acts of the highway commissioners are likewise required to he recorded. Sec. 10 of same chapter. Under these provisions all corporate acts, whether of townships or of highways commissioners, are provable by record evidence only. People v. Madison County, supra."

In People ex rel. Greenwood v. Board of Sup’rs Madison County, the court said:

“The principles announced seem to be well supported by authority. Where the law requires records to be kept, they are the only lawful evidence of the action to which they refer, and such record cannot be contradicted or supplemented by parol. The whole policy of the law would be defeated if they could rest partly in writing and partly in parol. Stevenson v. Bay City, 26 Mich. 44 ; Hall v. People, 21 id. 456; Morrison v. City of Lawrence, 98 Mass. 219; Hanneman v. Fire District, 37 Vt. 40; Mayhew v. District of Gay Head, 13 Allen 129. So where county commissioners and township trustees were required by law to keep a true record of their proceedings, it was held that they could ‘only speak by their record’ when legally assembled. (Commissioners of Fayette County v. Chitwood, 8 Ind. 504.) And where school districts are required by law to keep an account of their proceedings by a sworn clerk, such proceedings can only be proved by the record. Offered parol proof was rejected. (Jordan v. School District, 38 Maine 164.) ”

In Village of Bellwood v. Galt, supra, the court held: “When a record of its proceedings is required to be kept the record is the only lawful evidence of its action, and it cannot be contradicted or added to by parol. People v. Madison County, 125 Ill. 334; People v. Smith, 149 id. 549; People v. Carr, 231 id. 502; People v. Warren, id. 518; Southworth v. Board of Education, 238 id. 190; City of Belleville v. Miller, 257 id. 244; People v. Toledo, St. Louis and Western Railroad Co., 270 id. 472; People v. Hartquist, 311 id. 127.”

Further it is a principle of law that a party has a right to select with whom he will contract; he cannot have substituted party thrust upon him without his consent. (Rodhouse v. Chicago & Alton Ry. Co., 219 Ill. 596; Chicago & Alton R. Co. v. Chicago, V. & W. Coal Co., 79 Ill. 121; Barker v. Keown, 67 Ill. App. 433.) No attempt was made to show that appellant was even consulted about the assignment of the pretended contract. There is no competent evidence in this record tending to show that appellant ever entered into any contract with appellee for oil or any other goods. But appellee insists it is entitled to recover the value of the oil which appellant received and for which it impliedly promised to pay. Under this phase of the case appellee seeks to recover upon 10 different items of sales and deliveries, at different dates, each item and sale amounting to about $500. It appears from the declaration and proofs that at a regular election held in Prairieton township in 1925, under subdivision VIII of chapter 121 of Cahill’s Revised Statutes, tf 117, entitled “Gravel, Rock and Macadam — Hard Roads” the electors of that township had by a majority determined to levy a special tax of 66 2/3 cents upon each $100 of assessed value of property in said town for a period of five years, for the purpose of improving, maintaining and repairing certain earth roads by dragging, grading and oiling the same. Under this act the roads to be improved must be pointed out and described (People v. Toledo, P. & W. Ry. Co., 248 Ill. 105, 112) and the tax collected “shall be known and kept as the permanent road fund.”' Cahill’s St. ch. 121, 123; section 122, ch. 121, Smith-Hurd’s Rev. Stat. 1929. Whether this becomes a town fund and charge under Cahill’s St. ch. 139, U124; subsection three of sec. 124, ch. 139, Smith-Hurd’s Eev. Stat. 1929, as follows:

“The following shall be deemed town charges:
“3. The moneys authorized to be raised by the vote of a town meeting for any town purposes,” — we are not called upon in this case to decide. Section 115 of the act, Cahill’s St. ch. 121, IT 124, provides that when any township shall, by vote, have determined to levy a special tax for hard roads, as set out, the county superintendent of highways shall at once survey the route of the road thus to be improved and prepare suitable maps, plans and specifications and estimates of the cost of the proposed improvement and file copies with the town clerk, the commissioner of highways and the State road department. Section 116 of the same chapter, Cahill’s St. ch. 121, 125, provides: “When the plans and specifications are completed, the commissioners shall advertise for sealed bids for said work, by publishing a notice thereof for at least three weeks in some newspaper published in said township or road district. If there is no newspaper published therein, then in the newspaper published nearest said township or road district, and also by posting notices in at least ten of the most public places in said town or road district.
“But, if it has been voted to improve, maintain or repair earth roads by draining, grading, dragging or oil-treating, the county superintendent of highways may, in his discretion, direct the highway commissioner of the town or road district in which this work is to be done, to do the work according to the plans and specifications, without any advertisement for bids or public letting. (As amended by act approved June 24, 1921. L. 1921, p. 780.)”

Nowhere in this record is it shown that there was any notice given asking for bids in connection with this work, nor did the county superintendent of highways, at any time, direct the commissioner of highways to do the work or purchase the oil in any manner, according to plans and specifications or otherwise. No plans or specifications are shown and no action on the part of the county superintendent is shown. The declaration charges that the county superintendent of highways approved the Debrun contract, but it does not so appear in the record. No such proof was offered. It is axiomatic that an implied promise to pay cannot be based upon such an open and flagrant violation of the law when a municipal corporation is involved, and in connection with the expenditure of public funds. McChesney v. People, 200 Ill. 146, 151.

On October 22, 1927, the witness Osborn, who was then highway commissioner, gave appellee an order upon the treasurer of the commissioners for the sum of $3,457.80 “in the hands of said treasurer, not otherwise appropriated for oil.” This order is marked “due April 15th, 1928. Iivt. 6 per cent. ’’ This was the total amount of the ten purchases, less the freight which had apparently been paid and deducted. This order is drawn upon the general fund and was signed by Orval Osborn, commissioner. Osborn testified he did not know how much was unpaid on the oil October 22, 1927; that the oil when shipped was billed to Prairieton township. The supervisor, treasurer of the fund when the suit was tried testified he had been treasurer of the fund since 1929; that no moneys came into his hands from the special tax fund; that he has had none of the special tax funds; that apparently the moneys were paid out on old orders and new orders issued and carried along; that the town has been on a cash basis since the spring of 1929, but there are still some old claims, none as large as this claim, yet to be paid. The witness further testified that none of the old warrants paid -were turned over by the former treasurer and he could not tell much about what the payments were for. The treasurer’s record book of receipts and expenditures from 1925 to October, 1927, was offered in evidence and the entire fund appeared to have been paid out by warrants. No attempt was made to show what these warrants were for. From the whole testimony it was apparent that there was a system of warrants being carried, drawing interest, and that the larger items were for taking up old warrants that had been drawing interest. There were quite large items paid to the Debruns for spreading the oil. No one seemed to know very much about how the system was managed and appellee did not inquire.

This suit was started on February 20, 1930, for oil sold in the summer of 1927 and for which a warrant was issued October 22, 1927, the warrant to become due April 15, 1928. The five years of tax levies have run and expired. The moneys were all expended, presumably upon hard roads, long before appellee commenced to realize that he had an interest in the funfi and commenced this suit. The property owners have performed their full duty in having paid the tax. The legislature was wise and just in requiring this tax to be segregated into a separate fund and into a permanent fund especially devoted to the improvement of specified roads, and to be kept separate and apart from all other funds so that appellee, if it had exercised caution and its dealings with the township officials had been legal and lawful, would have received payment upon its bills promptly. The law especially guards trust funds of this nature, not only for the benefit of those entitled to receive them, but to protect the taxpayer who may be called upon to replace them. Miller v. Hale, 308 Ill. 275, 281.

Appellee is not entitled to a judgment against the township or against the commissioner of highways upon this record, and is entitled to participate only in the permanent fund as levied to the extent that it has not been legally and lawfully expended. (Eames v. Doris, 102 Ill. 350, 353; Queenan v. Palmer, 117 Ill. 619, 628; Tunesma v. Schuttler, 114 Ill. 156, 165; Golden v. Cervenka, 278 Ill. 409, 435; Golden v. Ellwood, 299 Ill. 73; Pomeroy Equity Jur. Third Ed. Vol. 3, secs. 1280 to 1284.) No attempt has been made in this suit to inquire into that question and this may not be the proper form of action to successfully make such inquiry. In numerous cases cited (Brown v. Ellis, 219 Ill. App. 543), it is held: “All that such authorities hold is that a town cannot go in debt except to the extent that it may anticipate the collection of a levy already made and that a debt, illegal because there were no taxes levied with which to pay it when it was contracted, cannot be collected out of revenues later acquired.” Tax levies are shown only for the years 1925 and 1926 and the treasurer’s record shows the disbursement of all these funds in which J. W. Debrun participated at numerous times and without further proof we must presume that all disbursements made were legal and lawful and of prior validity. For this reason and the other reasons set forth in this opinion, the judgment of the circuit court of Christian county is reversed.

Reversed.

Upon petition for rehearing and the citation of the case of Euziere v. Highway Commissioner of Town of Rockville, 346 Ill. 131, it is sufficient to add that the Eusiere case merely defines a rule of pleading and does not, in any manner, change the law of this State, as to highway commissioners and has no bearing upon this case.

Petition denied.


text:
    Albert Winkel and Carl F. Winkel, Appellants, v. Jacob Haning et al., Appellees.
    Gen. No. 8,520.

      Opinion filed November 4, 1931.
    Rehearing denied and opinion modified January 7, 1932.
    Ralph Dempsey and P. A. D’Arcy, for appellants.
    T. N. Smith and Wm. A. Potts, for appellees.
   Mr. Justice Shurtleff

delivered the opinion of the court.

This is a suit in equity to set aside an alleged unauthorized marginal release of a trust deed and to foreclose the equity of redemption of the grantors in said trust deed. The bill of complaint was filed to the' May, 1929, term of the circuit court of Tazewell county by appellants, Albert Winkel and Carl F. Winkel, the legal owners and holders of two unpaid bonds, secured by said trust deed, against appellees Jacob Haning and Emma B. Haning, the grantors therein, and certain other parties, including the unknown owners of certain other bonds.

Appellants’- bill alleges, and the evidence tends to establish, that Albert Winkel is the owner of bond numbered 6,306 in the principal sum of $1,000 and that Carl F. Winkel is the owner of bond 6,307 in the principal sum of $5,000; that both of said bonds are dated March 1, 1920, and payable to bearer at the Farmers National Bank of Pekin, Illinois, with interest at 5% per cent per annum, payable annually; that said bonds are secured by a trust deed on certain real estate in Tazewell county, executed to one John Fitzgerald as trustee; that said Albert Winkel and Carl F. Winkel purchased said bonds for a valuable consideration before maturity; that said appellants have been at all times since the purchase of said bonds, and are now, the legal owners and holders thereof, and that no part of said bonds, or any interest thereon from the 1st day of March, 1928, has been paid to said appellants.

The bonds held by appellants are two of a series of 14 bonds, numbered 6,297 to 6,310, both inclusive, aggregating $30,000, all dated March 1,1920, and payable to bearer at the Farmers National Bank of Pekin, Illinois, on March 1, 1925, with interest from date at 5% per cent per annum, payable annually. The parties defendant to the bill of complaint are Jacob Haning, Emma B. Haning, his wife; John Fitzgerald, trustee; Arthur A. Sipfle, successor in trust; H. Redlingshafer, the unknown owners of bonds dated March 1, 1920, numbered 6,297 to 6,305, both inclusive, and 6,308 to 6,310, both inclusive, secured by trust deed to John Fitzgerald, trustee, recorded in book 41 of trust deeds, page 23, of the records of Tazewell county, Illinois ; and the unknown owners of bonds dated March 1, 1928, numbered 8,384 to 8,403, both inclusive, and secured by a trust deed to John Fitzgerald, trustee, recorded in book 41 of trust deeds, page 375, of the records of Tazewell county, Illinois.

Summons was duly served on all defendants except H. Redlingshafer and the various unknown owners of the bonds above described. H. Redlingshafer entered his appearance in writing in said cause on May 4, 1929, and jurisdiction was obtained over the various unknown owners by publication as provided by law. Appellees Jacob Haning and Emma B. Haning filed their joint and several answers to the bill of complaint and appellants Albert Winkel and Carl F. Winkel filed their replication thereto. No answer or entry of appearance was filed by any parties defendant to said cause except as above set forth. On May 13, 1929, an order was entered in said cause finding that the court had jurisdiction of the subject matter of said cause and of all parties thereto, defaulting all parties defendant who had not answered, and referring- said cause to the master in chancery to take the proofs of the respective parties who had joined issue as aforesaid, and report the same to the court, together with his conclusions of law and fact.

The master proceeded with the taking of testimony touching the issues involved, and when he had completed his report he furnished copies thereof to the respective parties and gave them notice to file objections thereto. Said report was adverse to appellants and recommended that their bill of complaint be dismissed for want of equity. Objections to said report on behalf of appellants were filed with said master, who overruled said objections and filed his report in the circuit court of said county. On motion of appellants the court allowed the objections to stand as exceptions to said report, and on a hearing had in open court said exceptions were overruled by the chancellor and a decree entered approving the findings of the master and dismissing the bill for want of equity at the cost of appellants. Thereupon an appeal was prayed to the Appellate Court of the Third District and allowed. Bond was filed within the time specified and appellants having perfected their appeal in the manner provided by law, the cause is presented to this court for consideration.

The controversy between the parties hereto arises out of the following state of facts: On March 1, 1920, Jacob Haning executed 14 farm mortgage bonds, to wit: bonds numbered 6,297 to 6,306, inclusive, each in the principal sum of $1,000, and bonds numbered 6,307 to 6,310, both inclusive, each in the principal sum of $5,000. The bonds were dated March 1, 1920, were payable to bearer five years after date,, at the Farmers National Bank of Pekin, Illinois, and bore interest from March 1, 1920, at the rate of 5% per cent per annum, payable annually, evidenced by coupons of even date with said bonds, payable to bearer at said bank.

On the same date, to wit, March 1, 1920, said Jacob Haning, his wife, Emma B. Haning, joining with him, executed a trust deed to John Fitzgerald, as trustee, with Arthur A. Sipfle, successor in trust, conveying the east half of the northwest quarter and the west half of the northeast quarter in section 18, township 23 north, range 2 west of the third principal meridian, Tazewell county, Illinois, subject to the right of way of Peoria, Lincoln and Springfield Traction Company, containing, exclusive of said right of way, 155 acres, more or less, to secure the owners and holders of said bonds numbered 6,297 to 6,310, both inclusive. This trust deed, duly acknowledged on March 6, 1920, was filed for record in the recorder’s office of Tazewell county on March 9, 1920, and recorded in book 41 of trust deeds, page 23.

Two of the bonds secured by said trust deed, to wit, bond No. 6,306, in the principal sum of $1,000, arid bond No. 6,307, in the principal sum of $5,000, were purchased from the trustee, John Fitzgerald, subsequent to March 1, 1920, by one Mina Winkel Beuling, who died testate a resident of Tazewell county, on January 26, 1924. Testatrix, in and by her last will, bequeathed to her brother, appellant Carl F. Winkel, the sum of $5,000, and to her nephew, appellant Albert Winkel, the sum of $1,000, and in the settlement of said estáte said appellants received from the executrix of the last will and testament of said Mina Winkel Beuling, deceased, the bonds in question as satisfaction in kind of the bequests provided for them by said decedent. As such legatees they came into possession of said bonds a short time subsequent to March 1, 1925.

At the maturity of said bonds on March 1, 1925, they were extended for a further period of two years at the instance of Jacob Haning, the obligor therein; that at the expiration of said extension period on March 1, 1927, said bonds were again extended in like manner for a further period of one year, and that on both occasions coupons were attached to said bonds to evidence the interest to accrue during said extension periods.

The evidence shows that appellants Albert Winkel and Carl F. Winkel, by Eleanora Winkel, presented for payment at the Farmers National Bank of Pekin, Illinois, the coupons representing the interest due on said bonds 6,306 and 6,307 on the first days of March, 1926, and 1927, and that they received from said bank the interest accrued on said bonds on those dates; that on March 1, 1928, Eleanora Winkel, who was acting for appellants, presented the coupons representing the interest then due on said bonds at the Farmers National Bank, but was informed that the bank had no funds in its possession out of which to pay said interest; that at the suggestion of the assistant cashier of the bank said Eleanora Winkel went to the office of John Fitzgerald, the trustee, a few days after March 1, 1928, and demanded payment of the interest then due on said bonds; that the trustee then paid to Eleanora Winkel the interest on the bonds for the year ending March 1, 1928.

It further appears from the evidence that neither the appellants herein, nor anybody acting for them, had any dealings whatever with the trustee relative to collecting said bonds or any interest thereon prior to the time that Eleanora Winkel called at the trus-tee’s office, and that on that occasion she demanded only the interest then due on said bonds. Appellants never at any time since they came into possession of said bonds authorized John Fitzgerald, the trustee, either expressly or by implication, to make any collections for them on account of bonds 6,306 or 6,307, or on account of any interest coupons attached thereto, and they never looked to John Fitzgerald for the payment of said bonds or coupons.

It further appears that when the 1920 loan was extended in 1925 and again in 1927, Jacob Haning, the appellee, did not know who held the bonds secured by the trust deed dated March 1, 1920, but did know that John Fitzgerald had not made the loan out of his own funds, but had sold the bonds to various investors. There is abundant evidence in the record to show that neither Albert Winkel nor Carl F. Winkel, nor anyone for them, ever called at the office of John Fitzgerald, the trustee, with reference to the collection of said bonds or any interest thereon, but it affirmatively appears that they presented their 1926, 1927 and 1928 coupons for payment- at the Farmers National Bank of Pekin, Illinois, the place of payment designated in said bonds and coupons.

Appellee’s own testimony shows that prior to the time he saw the 1920 bonds in Fitzgerald’s office in the latter part of June, 1928, he did not know where the bonds were or who held them. When he extended the loan in 1925 he did not know who held the 1920 bonds or any of them, nor did he know who held any of the bonds when he made the second extension for one year about March 1, 1927. He never found out from Mr. Fitzgerald who held the bonds, appellant’s Exhibits 1 and 2, but he learned by hearsay that Mr. Winkel held them about a month' after Mr. Fitzgerald assigned his property. He looked to Fitzgerald to get the 1920 bonds together and give them to him, and he did not cease to rely on Fitzgerald to do that until about June 15, 1928. When appellee finally got 12 of the bonds from Fitzgerald he did not know where they came from. He asked Fitzgerald several times who had the other bonds, but Fitzgerald would not tell him.

Relative to the extension made in 1925, appellee was asked the following questions on cross-examination:

Q. “Then he (Fitzgerald) had authority in your behalf to arrange for a two-year extension with the bondholders; is that correct?”
A. “Yes, sir.”

The same thing was true in 1927 for the further year. Fitzgerald had authority in appellees’ behalf to negotiate or obtain another year’s extension on the 1920 loan.

Q. “The manner in which that extension was evidenced was wholly immaterial, wasn’t it? The form that the agreement took was wholly immaterial. When you negotiated with Mr. Fitzgerald for a two-year extension on this bond issue in 1925, you didn’t care what form the extension agreement took, did you?”

A. • “No, sir; I didn’t know what kind, of an agreement he made with them.”

It further appears that in the month of January, 1928, more than five weeks before the maturity of the 1920 bonds, Jacob Haning entered into negotiations with John Fitzgerald, the trustee, the object of which was the paying off of the 1920 loan of $30,000 by means of another loan on the same property for $20,000 and a cash payment of $10,000. These negotiations originated with a letter from John Fitzgerald, the trustee, to Jacob Haning, dated January 19, 1928, which is in words and figures as follows:

“January 19, 1928.
“Mr. Jacob Haning,
Minier, Illinois.
“Dear Sir:
“The principal of your loan of $30,000 will be due March 1,1928, and as I have quite a demand for money and the owners of this loan expect payment of same, will thank yon to give me any information as to what you intend to do concerning the principal of this loan.
“Tours respectfully,
“jf:ahh John Fitzgerald.”

Pursuant to this letter, Jacob Haning had several conferences with the trustee as to the manner in which a new loan could be negotiated. He testified that he looked to John Fitzgerald to get the old bonds together, meaning the bonds dated March 1, 1920, totaling $30,000, and that there was not the slightest doubt in his mind but that John Fitzgerald would get the bonds together.

The bill alleges that as to the bonds secured by the trust deed of March 1, 1928, the same became due on March 1, 1933, and are payable to bearer at the Farmers National Bank of Pekin, Illinois; that the trust deed securing same was recorded in the recorder’s office of Tazewell county on March 1, 1928, and recorded in book 41 of trust deeds, at page 375; that said bonds are negotiable by delivery and that the complainants do not know and are unable to learn the name or names of the holder or holders, or owner or owners, of said bonds or either of them, etc.; that the owners and holders of said last described bonds have or claim to have some interest in and to the premises involved in these proceedings. It is charged that the release of said trust deed, executed in 1920, the release being executed on August 24, 1928, was made without any authority and was fraudulent and void, and appellants prayed that said release be canceled and held for naught, and that said original trust deed, executed in 1920, to secure the bonds held by appellants, be foreclosed.

To this bill of complaint all of the defendants except Haning and his wife, who executed the two trust deeds, and all of the note and bondholders under both trust deeds have made default and a decree pro confesso has been entered against them. It only remains to determine the equities as they exist between appellants and the appellees Jacob and Emma B. Haning, who executed the trust deeds. We have gone quite fully into the facts in this case in order to show that Fitzgerald, the trustee, at no time acted as the agent for appellants in any of these transactions, other than as trustee of the lands to secure the payment of appellants’ bonds, and even as to Fitzgerald, trustee, a decree of default has been entered and it stands as a decree pro confesso as to all the charges of the bill of complaint. The notes or bonds, with the interest thereon, were all payable at the Farmers National Bank at Pekin. Appellees paid no moneys to this bank but made all payments directly to John Fitzgerald, trustee, and while it is true that the bank paid interest coupons connected with this loan, the bank, of which , Fitzgerald was a director, later collected the coupons from Fitzgerald.

Fitzgerald acted as agent for the appellees in procuring two extensions and when appellees undertook to pay off the original trust deed notes or bonds, of which appellants held two, the funds in the entirety were turned over to Fitzgerald in place of the bank and appellees violated the terms of the trust deed and bonds in so doing. Fitzgerald, trustee, was the paid employee of appellees in securing the original loan and in securing the second loan March 1, 1928, to meet the first loan, and they left the whole matter to Fitzgerald, trustee, as their agent to procure the funds and to make payment of and take up the notes or bonds. Appellee Haning paid Fitzgerald for securing extensions. Haning never received the 12 bonds taken up by Fitzgerald on the first loan until late in June, 1928, and Haning knew at that time that there were still two bonds not in. Haning repeatedly went to Fitzgerald and urged him to release the trust deed, knowing at the time that appellant’s bonds had not been taken up, and finally, after the marginal release had been executed by Fitzgerald, Haning was called' into the recorder’s office at Pekin to look it over and was assured it was a good release. Appellee’s insistence and urging under the proofs in this case contributed as much to the execution of this fraudulent release as Fitzgerald’s weakness. Appellee Haning employed Fitzgerald to do all of his business in* connection with these loans, employed Fitzgerald to pay his interest and principal in violation of the terms of the contract, and even paid him commissions to assist in appellants’ undoing. Nothing in this record shows even negligence on the part of appellants.. There is little occasion for citing authority as applicable to the facts in this case. Appellees executed $20,000 in bonds payable to bearer and a trust deed to Fitzgerald as trustee on March 1, 1928, and, for all this record shows, Fitzgerald may still have all these notes or bonds, secured for no consideration. Fitzgerald produced $14,000 of the old 1920 bonds and turned them over to appellee. These likely were secured by an exchange of the new bonds. If so, Fitzgerald has $6,000 of the new issue made March 1, 1928, for which he paid no consideration; or if he negotiated them or any part of them prior to August 24, 1928, the purchaser took them, with notice on the record that they were secured by a second mortgage at that time and were not secured by a first lien.

Appellees procured Fitzgerald as a witness in their behalf in this suit, but they did not permit him to testify to any fact as to the disposal of the $6,000 of the 1928 bonds. He did corroborate appellee Haning as to his employment by Haning in the several transactions. In equity, a release, unauthorized by the terms of the trust or by the cestui que trust, will have no effect upon the deed of trust as between the original parties or as to subsequent purchasers with notice. (Mann v. Jummel, 183 Ill. 523, 532; Barbour v. Scottish-American Mortgage Co., 102 Ill. 121; Stiger v. Bent, 111 Ill. 328; Connecticut General Life Ins. Co. v. Eldredge, 102 U. S. 545; Williams v. Jackson, 107 U. S. 478; Kennell v. Herbert, 342 Ill. 464, 469.) In Kennell v. Herbert, supra, the court held: “If one pays to the trustee named in a trust deed the debt secured thereby befope maturity which the trustee is not authorized to receive, and the trustee releases the trust deed but does not have possession of the notes, which are owned by and in the possession of a third party, the person so paying is chargeable with notice of the trustee’s want of power to receive payment. The inference of authority to receive payment arises from the possession of the trust deed and notes by the person to whom the payment is made, the inference of authority is founded upon such possession, and it does not exist without such possession. (Fortune v. Stockton, 182 Ill. 454; Stiger v. Bent, 111 id. 328; Cooley v. Willard, 34 id. 68; 1 Am. & Eng. Ency. of Law, 1026.) In equity, a release by the trustee, unauthorized by the terms of the trust deed or by the cestui que trust, will have no effect upon the trust deed as between the original parties or subsequent purchasers with notice. (Corner v. Wahl, 330 Ill. 136; Vogel v. Troy, 232 id. 481; Havighorst v. Bowen, 214 id. 90; Lennartz v. Quilty, 191 id. 174; Ogle v. Turpin, 102 id. 148.) Where the release is executed by the trustee after the indebtedness is past due, in the absence of evidence of notice to subsequent purchasers such subsequent purchasers will be protected. Mann v. Jummel, 183 Ill. 523.”

Where one of two innocent persons must suffer loss by reason of the fraud or wrong conduct of another, the loss must fall on him who put it in the power of the wrongdoer to commit the wrong. Connor v. Wahl, 330 Ill. 136, 146. Even if it be conceded that appellee Haning is not equally guilty with Fitzgerald in the release of the first trust deed, appellee Haning made it possible for Fitzgerald to release the trust deed by turning all the funds over to him and then urging him to release the trust deed when he knew appellants’ notes were unpaid. Appellees contend that by the terms of the trust deed the trustee, John Fitzgerald, was authorized to receive payment of the mortgage indebtedness at and after the maturity of the mortgage bonds and to execute the release on the margin of the record of said mortgage deed. No such power is granted expressly or impliedly in the instrument. There is no rule or construction of law that sanctions such a procedure as between the original parties to the instrument, except express power is granted. “Where a trustee releases a trust deed and receives payment of the debt without actual authority and without producing the securities, the party paying has notice of the want of power in the trustee. (Cooley v. Willard, 34 Ill. 68; Stiger v. Bent, 111 id. 328.)” Fortune v. Stockton, 182 Ill. 454, 462.

In Ware v. Schintz, 190 Ill. 189, 193, it is held: “The fee title held by the mortgagee is in the nature of a base or determinable fee. The term of its existence is measured by that of the mortgage debt. When the latter is paid or becomes barred by the Statute of Limitations the mortgagee’s title is extinguished by operation of law. (Pollock v. Maison, 41 Ill. 516; Harris v. Mills, 28 id. 44; Gibson v. Rees, 50 id. 383; Barrett v. Hinckley, 124 id. 32; Lightcap v. Bradley, 186 id. 510.) Until it is extinguished the legal title is in the mortgagee for the purpose of obtaining satisfaction of his debt. ’ ’

The trustee, in a deed of trust to secure incumbrances, has no implied power to receive payment of the debt. (Cooley v. Willard, supra; Stiger v. Bent, 111 Ill. 338; Kransz v. Uedelhofen, 193 Ill. 477, 490; Ortmeier v. Ivory, 208 Ill. 581; Campbell v. Gowans, 35 Utah 268, 23 L. R. A. (N. S.) 414 and note; Kennell v. Herbert, 342 Ill. 464, 468 and 469.) The burden is upon appellees to show agency by the trustee, Fitzgerald, to collect moneys for appellants. (Chesley v. Woods Motor Vehicle Co., 147 Ill. App. 588; Gallagher & Speck v. Chicago Title & Trust Co., 238 Ill. App. 39.)

A great many questions are argued in the briefs that have no bearing upon the equities of the parties. This suit in this court involves only the parties to the first trust deed and bonds. The proofs submitted fully and completely substantiate the allegations of the bill of complaint and the decree of the circuit court of Tazewell county should be and is reversed and the cause remanded to the circuit court of Tazewell county with directions to enter a decree in accordance with the prayer of the bill.

Reversed and remanded with directions.

On petition for rehearing opinion modified and adhered to.


author: Mr. Justice Shurtleee

text:
    Decatur Lumber & Manufacturing Company, Complainant, v. Ed. S. Crail et al., Defendants. Corn Belt Building & Loan Association, Appellant, v. Ed. S. Crail et al., Defendants.
    Gen. No. 8,527.

      Opinion filed November 4, 1931.
    Rehearing denied January 7, 1932.
    Cotton & Nichols, for appellant.
    Webber & Webber, for appellees.
   Mr. Justice Shurtleee

delivered the opinion of the court.

This suit arises out of a bill to foreclose a mechanic’s lien filed on January 2, 1930, by Decatur Lumber & Manufacturing Company against one Ed. S. Crail et ah, and a cross-bill io foreclose a mortgage filed in the same suit by Corn Belt Building & Loan Association, appellant. Various parties were made defendants to the original bill and to the cross-bill, but the only persons interested in this appeal, besides the original complainant and the cross complainant, are Morehouse & Wells Company, M. S. Clesson and M. W. lies. The claims of Decatur Lumber & Manufacturing Company, Morehouse & Wells Company and M. S. Clesson are based upon claims for mechanic’s lien against real estate in the City of Decatur, owned by one Ed. S. Crail. The claim of Corn Belt Building .& Loan Association is based upon a mortgage on the same real estate; and the claim of M. W. lies is based upon a tax sale certificate, covering the same real estate, issued in June, 1929.

All parties filed answers to the original bill and cross-bill, setting up their respective claims.

Divers other parties besides the above named were made defendants to both the original bill and the cross-bill, but having perfected no appeal, all were precluded by the decree of the court below.

As between the cross complainants, Corn Belt Building & Loan Association, and the various mechanic’s lien claimants, there is no dispute as to the validity of the claims of the said mechanic’s lien claimants, nor as to the amounts due on the same, nor is there any dispute as to the validity of the mortgage of the cross complainant. The sole question between these parties, Corn Belt Building & Loan Association, Decatur Lumber & Manufacturing Company, Morehouse & Wells Company and M. S. Clesson, is one of priorities. The claim of the appellee M. W. lies is disputed by the appellant, Corn Belt Building & Loan Association, not only on the grounds of priority but appellant denies that the appellee M. W. lies has any claim whatever against the real estate in question. Therefore, there are two issues to be tried in this case. First, the question of priorities between the Corn Belt Building & Loan Association and the various mechanic’s lien claimants; and, second, the issue between the Corn Belt Building & Loan Association and the appellee M. W. lies on a tax sale certificate. The facts concerning these two matters will be taken up separately.

In June, 1929, Ed. S. Crail was the owner of the real estate which is being foreclosed in this case, located on West Wood street in Decatur, Illinois, which real estate was subject to a mortgage to the Corn Belt Building & Loan Association in the sum of $6,000. Crail at that time decided to remodel the house located on. said premises and entered into a written contract with H. Logan and Son, of Decatur, Illinois, to remodel said house. The contract covered everything on the remodeling job except the heating plant, which was a separate contract between Ed. S. Crail and the appellee Marion S. Clesson. Logan and Son purchased material from the Decatur Lumber & Manufacturing Company to the extent of $2,794.53, and from Morehouse & Wells Company to the extent of $1,344.50, all of which was used in remodeling the house. Labor and materials were furnished by various other parties but these items have all been paid or otherwise disposed of and do not concern this appeal.

In order to finance the transaction, Crail, through the agency of Fred J. Pierce, a loan broker of Decatur, made an application to the Corn Belt Building & Loan Association, a corporation, of Tuscola, Illinois, for a loan of $10,500. This represented an increase over his old loan of $4,500. Subsequently it developed that this amount would not be sufficient to pay the bills on the remodeling job so the application was increased from $10,500 to $12,500, and the Corn Belt Building & Loan Association agreed to make a new loan on the property in question for $12,500. After the building was completed, a meeting was held in the office of the Corn Belt Building & Loan Association, Tuscola, Illinois, at which there were present Earl Logan, one of the partners of H. Logan & Son, contractor on the job, Fred J. Pierce, Mr. and Mrs. Crail and certain officers of the Corn Belt Building & Loan Association. At said meeting Logan, the contractor, and Crail, the owner, signed affidavits setting forth the names of all persons who had unpaid bills for material and labor furnished on the Crail job, together with the amount due each person. Checks were thereupon prepared for the various bills as the same appeared on the affidavits furnished by the owner and the contractor, and it appeared that after deducting some $6,000 which was required to pay off the old loan, the new loan of $12,500 was not sufficient to pay all of the bills. Claims which remained unpaid, after the loan funds had been practically exhausted, were as follows : Decatur Lumber & Manufacturing Company, $2,794.53; Morehouse & Wells Company, $872.73; M. S. Clesson, $1,578. Crail, in order to meet these items, thereupon produced two checks drawn upon the Plymouth Casualty Insurance Company, of which company Crail was president. One of these checks was payable to the Decatur Lumber & Manufacturing Company, and the other to Morehouse and Wells Company, but the amounts were blank. Crail then proceeded to fill' in the necessary sums to pay the accounts of Decatur Lumber & Manufacturing Company ($2,794.53) and Morehouse & Wells Company ($872.73), and stated that he had made arrangements with the Plymouth Casualty Insurance Company to carry these two items for a few days until he could finance the building by getting a second mortgage. Crail stated that he had made arrangements with M. S. Clesson to meet the $1,578 bill for the heating plant by trading Clesson a lot in the City of Decatur. This last item of the heating plant to Clesson was a separate contract and was not included in the general contract with Logan.

A lien waiver was prepared by Clyde J. Colwell, assistant secretary of the Corn Belt Building & Loan Association, which said lien waiver contained the names of the various parties having claims against the Crail property as set forth in said affidavits. This lien waiver, together with the Corn Belt Building & Loan Association checks, and the Plymouth Casualty Company checks, which were produced by Crail, were all turned over, by the Corn Belt Building & Loan Association officials and Crail, to Fred J. Pierce, the loan broker. Pierce was also given the new mortgage for $12,500, a release of the old $6,000 mortgage, and the abstract. He was instructed to record the new mortgage and the release of the old mortgage and have them shown on the abstract. He was also instructed to turn over the checks to the various parties named on the lien waiver and to have the parties receiving the checks sign the lien waiver as they got their checks.

A separate lien waiver was prepared for the Clesson heating plant and turned over to Crail, who undertook to get it signed by Clesson, stating that he had an agreement to trade Clesson a lot on the deal.

On December 3, 1929, the day after the meeting at Tuscola, Pierce recorded the new $12,500 mortgage and the release of the old mortgage. He then notified the parties mentioned in the lien waiver to call for their checks. The distribution of the checks extended over a period of a few days and all parties mentioned in the lien waiver signed the same and all received Corn Belt Building & Loan Association checks upon so signing, except the Decatur Lumber & Manufacturing Company and Morehouse & Wells Company, who received Grail’s two Plymouth Casualty Insurance Company checks. In the meantime, while the checks were being paid out, Grail informed Pierce that Clesson had refused to sign a lien waiver for the heating plant and that he, Grail, would send oyer a check for the amount of that bill. The next day Grail’s wife brought to Pierce’s office a Plymouth Casualty Insurance Company check for $1,578, payable to the order of M. S. Clesson. This check was delivered by Pierce to Clesson, who thereupon signed a receipt for the heating plant. At the same time Pierce delivered to Clesson Corn Belt Building & Loan Association check for $1,344.50 and Clesson signed the lien waiver, which said check contains the following language:

“Each of the undersigned Lien Creditors of Ed. S. Grail against the property described as (Real Estate in question) in consideration of the payment to him of the amount entered below opposite his printed name, does by his signature hereunder, acknowledge said payment, and releases all right to run a mechanic’s lien or other claim against said premises to take prior right to the mortgage lien of Corn Belt Building & Loan Association of Tuscola, Illinois, through its mortgage under date of December 2,1929.”

Subsequently the three Plymouth Casualty Insurance Company checks — -the Decatur Lumber & Manufacturing Company check for $2,794.53, Morehouse & Wells Company for $872.73 and M. 'S. Clesson for $1,578 — were all dishonored and the said three parties thereupon filed, in the office of the circuit court of Macon county, claims for mechanic’s liens against the Grail property. Nothing has ever been paid on any of these three items.

The facts about the tax claim of the appellee M. W. lies are very brief. lies purchased the taxes on the Grail property in June, 1929, and received the tax certificate. Later on, about November 26, 1929, Grail called at the office of E. A. Patterson, county clerk of Macon county, and presented a check for the payment of the taxes on the premises in question, which had been sold to lies. The clerk accepted the check and thereupon issued to Grail a certificate of redemption in the usual form. Subsequently, on December 3, 1929, the $12,500 mortgage of the Corn Belt Building & Loan Association was recorded. Thereafter, on December 7, 1929, Grail’s check which had been given to the county clerk to redeem said taxes, was dishonored and after receiving the notice of dishonor, on December 7, 1929, the county clerk canceled the memoranda of redemption on the delinquent tax register but dated the cancellation as of December 2, 1929, the day before the Corn Belt Building & Loan Association mortgage was recorded, instead of December 7, 1929, the date on which the cancellation was actually made.

The court below found that all of the parties had liens against the Grail property and entered a decree of foreclosure on the original bill and cross-bill, but found the priorities among the parties as follows: first, M. W. lies, tax claim; second, Decatur Lumber & Manufacturing Company, Morehouse & Wells Company, M. S. Clesson; third, Corn Belt Building & Loan Association; fourth, various other parties.

Since the decree was entered, the appellant, Corn Belt Building & Loan Association, has purchased the claims of Decatur Lumber & Manufacturing Company and Morehouse & Wells Company, and taken an assignment of the same.

The errors assigned are in substance that the court erred in finding that the equities of the appellee Marion S. Clesson and the appellee M. W. lies were superior to the equities of the appellant, Corn Belt Building & Loan Association.

As to the claim of appellee Marion S. Clesson for $1,578 for putting in the heating plant, it appears from the proofs that the witness Fred J. Pierce was a loan broker and made the two loans to Crail, the first one for $6,000 and the second one for $12,500 to take up the first $6,000 loan, and in addition to pay Crail’s bills to complete the house. Pierce testified that bn placed both loans with appellant and that he, Pierce, had full charge of paying off all claims, releasing the first mortgage and recording the second and procuring the waiver of liens. Appellee Clesson had two claims, one for plumbing, amounting to $1,344.50 in the Logan contract, and another for the heating plant, an independent contract, amounting to the sum of $1,578. Pierce was informed as to both of these claims and prepared separate lien waivers for each of them. Appellee Clesson signed the lien waiver for the plumbing bill and Pierce turned over to him the check of the Corn Belt Building & Loan Association for $1,344.50. Pierce also turned over to Clesson the check of the Plymouth Casualty Insurance Company, which had been furnished him by Crail, for the sum of $1,578 to pay the bill for the heating plant and appellee Clesson receipted the bill but did not sign a lien waiver for the amount of that bill. After all of these checks were distributed there remained in the loan fund the sum of $1,209.51, which Pierce turned over to the owner Crail in the check of the Corn Belt Building & Loan Association. The testimony is uncontradicted that Pierce knew and understood that Clesson did not sign a lien waiver of the heating plant claim and congratulated Clesson upon the return of the check of the Plymouth Casualty Insurance Company unpaid, that he had not signed the waiver. Appellant urges that because appellee Clesson signed a lien waiver for the plumbing claim it operated as a waiver of all of appellee’s claims. With this we cannot agree, inasmuch as all parties knew just what the facts were. The claim of appellee Clesson for putting in the heating plant was superior to the lien of the mortgage, has never been paid and no reason is shown why it should not be paid prior to the mortgage.

In this cause the claims of the Decatur Lumber and Manufacturing Company and Morehouse & Wells Company were, by the decree of the circuit court of Macon county, held to be liens against said lands and ordered paid. These claims, it is said in the briefs, have been, since the decree, assigned to appellant. The record shows that these claimants signed a waiver of lien. There are no cross assignments of error in this cause. Neither of the parties in the briefs and arguments discusses the merits of these claims and therefore we make no comment.

As to appellee lies’ claim there is a different situation. When appellant’s mortgage was placed of record it appeared that the tax sale had been redeemed and canceled of record. It is held in Moore v. Wayman, 107 Ill. 192, and Gage v. Waterman, 121 Ill. 115, that the county clerk cannot be compelled to issue a redemption certificate unless he is paid legal money. This rule, however, does not give the clerk the right to change his records in the issuing of certificates to modify the rule of notice when it affects the rights of third parties. The county clerk cannot keep books in the collection of worthless checks by making a public record and then expunging it when he finds the check is bad. A public officer is presumed to perform his duty and his records must always speak the truth. When the clerk issues a redemption certificate and enters it upon his record, so far at least as the rights of third persons are concerned, the clerk is conclusively presumed to have complied with the law and to have been paid with legal money and to have the funds in his hands. In this case the rights of appellant are superior to the rights of appellee lies and the court erred in finding and decreeing that appellee lies had a first lien upon the lands for the amount of said tax sale. As to the equities in this cause, appellee lies has no standing in this court except as to any equities that the owner, Grail, may have in and to said lands.

For the reasons stated, the decree of the circuit court of Macon county is reversed and the cause remanded with directions to enter a decree in accordance with the views expressed in this opinion.

Reversed and remanded with directions.