author: Mr. Presiding Justice Gridley Mr. Justice Scanlan

text:
    Florence Morris, Appellee, v. Central West Casualty Company, Appellant.
    Gen. No. 35,251.

      Scanlan, J., dissenting.
    Heard in the second division of this court for the first district at the June term, 1931.
    Opinion filed February 23, 1932.
    Cassels, Potter & Bentley, for appellant; Ralph F. Potter, of counsel.
    Kremer, Branand & Hamer, for appellee.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

On May 25, 1929, plaintiff, widow of Roscoe Morris, commenced an action in assumpsit in the superior court to recover the sum of $3,800 from defendant. The action is based upon a policy of insurance issued by defendant, dated March 23, 1928, and headed “Universal Standard Workmen’s Compensation Policy. ’ ’ There was a jury trial during March, 1931, resulting in a verdict and judgment against defendant for $3,499.61, and the present appeal followed. .

Plaintiff’s declaration consisted of one special count, to which defendant filed a plea of the general issue. After setting out the policy in haec verba, the declaration alleges that at the time of the issuance of the policy and thereafter Roscoe Morris was the owner of an automobile truck “used and operated by him in and about the delivery of materials for the Central Lime & .Cement Co.” (hereinafter called the Lime Co.); that on December 29, 1928, while Morris was delivering a load of lime in the truck for the Lime Co. to a certain building in Chicago, known as the Drake Tower, and “while attempting to lower the tail-gate of the truck,” he was forcibly struck by the tail-gate and suffered severe injuries, as the direct result of which he died at the Alexian Brothers Hospital in Chicago on January 18, 1929; that on January 8,1929, plaintiff caused written notice of the accident and injuries to be given to defendant; that on January 9, 1929, defendant, upon receiving said notice, caused a physician to visit him and also caused his removal to the hospital where he received further medical attention at defendant’s request; that immediately following the accident Morris was given first aid and medical attention by a physician, Dr. Weiss, who made a reasonable charge for his services of $50; that during the year preceding the injury Morris’ earnings “amounted to a sum in excess, of $2,500”; that from the date of the injury and until Morris died, defendant paid to plaintiff the- sum of $14 a week, for two weeks’ total disability; that Morris left him surviving only his widow (plaintiff) whom he was under obligation to support and was supporting at the time of his death; that he during his lifetime and she after his death kept' and performed all the requirements of the policy; and that there is now due to plaintiff, “under the provisions of and within the terms of the policy,” the sum of $3,750, together with the sum of $50, incurred for the services of Dr. Weiss, aggregating $3,800, which said sums defendant, although often requested, has refused to pay to plaintiff, etc.

By the terms of the printed policy (introduced in evidence by plaintiff on the trial) No. 10,012,914, dated March 23, 1928, and expiring April 4, 1929, defendant insured Eoscoe Morris, designated as “employer,” as respects “personal injuries sustained by employees, including death at any time resulting therefrom. ’ ’ In paragraph “One (a)” defendant agrees. “to pay promptly to any person entitled thereto, under the Workmen’s Compensation Law and in the manner therein provided, the entire amount of any sum due and all instalments thereof as they become due,” and it is further agreed that all of the provisions of the Workmen’s Compensation Law of Illinois “shall be and remain a part of this contract as fully and completely as if written herein, so far as they apply to compensation or other benefits for any personal injury or death covered by this policy, while it shall remain in force. ’ ’ In paragraph ‘‘ One (b) ” defendant agrees “to indemnify this employer against loss by reason of the liability imposed upon him by law for damages on account of such injuries to such of said employees as are legally employed.” In paragraph “Six” it is stated: ‘ ‘ This agreement shall apply to such injuries so sustained by reason of the business operations described in the Declarations which, for the purpose of this insurance, shall include all operations necessary, incident or appurtenant thereto, or connected therewith, whether such operations are conducted at the work places defined and described in said Declarations or elsewhere in connection with or in relation to such work places.” On a printed page, filled in with typewriting and headed “Declarations,” it is stated that the name of the employer is “Eoscoe Morris”; that the “policy period” is “from April 4, 1928 to April 4, 1929”; that the location of the work places of the employer is “4041 Patterson avenue, Chicago, and elsewhere in the State of Illinois”; that the “Classification of Operations” (Item 3. la) is “Delivering for the Central Lime & Cement Co.”; that the “estimated total annual remuneration” is “$2,500”; that the “rate per $100 of remuneration” is “$1.50”; and that the “estimated premium” is “$37.50.” And there is another stated rate “per $100 for Drivers and Drivers’ Helpers, if any.” Among the “Conditions” of the policy are the following:

“D. The obligations of Paragraph One (a) foregoing are hereby declared to be direct obligations and promises of the Company to any injured employee covered hereby, or, in the event of his death, to Ms dependents; and to each such employee or such dependent the Company is hereby made directly and primarily liable under said obligations and promises. This contract is made for the benefit of such employees or such dependents and is enforceable against the Company, by any such employee or such dependent in his name or on his behalf, at any time and in any manner permitted by law, whether claims or proceedings are brought against the Company alone or jointly with this employer. If the law of any state in which the policy is applicable provides for the enforcement of the rights of such employees or such dependents by any Commission, Board, or other state agency, for the benefit of such employees or such dependents, then the provisions of such law are made a part hereof, as respects any matter subject thereto, as fully as if written herein. . . .
“Gr. No action shall lie against the Company to recover upon any claim or for any loss under Paragraph One (b) foregoing unless brought after the amount of such claim or loss shall have been fixed and rendered certain either by final judgment against this Employer after trial of the issue or by agreement between the parties with the written consent of the Company, nor in any event unless brought within two years thereafter. '
“L. No condition or provision of this Policy shall be waived or altered except by indorsement attached hereto signed by the President, Vice-President or
Secretary; nor shall knowledge possessed by any agent, or by any other person, be held to effect a waiver or change in any part of this contract. . . . ”

Attached to and made a part of the policy is a printed form of an indorsement, signed by the company’s president and countersigned by its resident agents. It is therein stated, inter alia, that “this employer upon the acceptance of this Policy agrees that at the effective date hereof he is in full compliance with the above cited Workmen’s Compensation Law, and will not during the policy period exercise any privilege which exists under such law to reject the obligations thereof”; and that “any termination of this Policy shall not be effective as to the employees covered thereby until 10 days after notice of such termination by cancellation or otherwise has been received by the Industrial Commission of Illinois at its office in Chicago.” Also attached to the policy is another indorsement or rider, similarly signed and countersigned and dated April 4, 1928 (the first three clauses being in typewriting and the last in printed type) as follows:

“It is understood and agreed that the policy to which this indorsement is attached is hereby specifically extended to apply to injuries and/or death suffered by the Employer named in said policy (Morris) in the same manner and under the same conditions as it would apply to injuries and/or death suffered by an employee.
‘‘In consideration of the above extension of coverage, it is further agreed that if the Employer takes the place of an employee an arbitrary amount of $2,500 shall be included in the payroll upon which final premium adjustment is made as the entire annual remuneration of the said Employer in lieu of his actual earnings.
“Classification 1 (a) of Item 3 of the policy to which this indorsement is attached shows that the work undertaken by the Employer named in said policy is delivering for the Central Lime and Cement Co. It is understood and agreed, however, that the said policy shall also apply while work is occasionally being done for other concerns.
“Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the policy other than as above stated.”

On the trial it was disclosed that on April 1, 1928, the company issued another Workmen’s Compensation Policy (No. 10,016,633) to the Central Lime & Cement Co., as Employer, on a like printed form. From a portion of this policy (introduced in evidence) it appears in the “Declarations” that the “policy period” is from “April 1, 1928 to April 1, 1929,” that the “classifications of operations” (Item 3. 1 (a)) is “delivering for the Central Lime & Cement Co.” and that the ‘1 estimated premium” is “$200.” And attached to said Lime Co.’s policy is the following duly executed indorsement :

“In consideration of the premium determined as hereinafter provided for, it is understood and agreed by and between the named employer (the Lime Co.) and the company that this policy shall apply to all drivers of hired automobiles and/or trailers and/or teams used for the purpose stated in the declarations of the said policy.
“It is further understood and agreed that the said policy is hereby specifically extended to apply to injuries and/or death suffered by a hired truckowner in the same manner and under the same conditions as it would apply to injuries and/or death suffered by an employee.
“It is also understood and agreed that the premium charge for this policy shall be determined by applying a rate of $.50 for each $100 of the amount paid by the Central Lime & Cement Co. for the hire of automobiles and/or trailers and/or teams, the amount so paid shall be verified by the records of the Central Lime & Cement Co., the hirer, and the coverage under this policy shall apply while the hired drivers are engaged in the business of hauling for the Central Lime & Cement Co.
“It is further understood and agreed that this policy of contract hire shall in no way affect the present existing policies of contractors now engaged in hauling for the named employer, or which may be hereafter written on a specific coverage basis, and insured under individual policies with this company.
“Nothing herein contained shall be held to vary, alter or extend any of the terms, conditions, agreements or limitations of the policy other than as above stated. ’ ’

The Illinois Workmen’s Compensation Act of 1913, as amended, was in force in this State when the policy sued upon was issued on March 23,1928. (See Cahill’s St. 1927, ch. 48, H 201 to 236.) In the title it is recited that the purpose of the Act is to provide “compensation for accidental injuries or death suffered in the course of employment.” In the second paragraph of section 5 of the Act, the term “employee,” as used in the Act, is construed to mean: “Every person in the service of another under any contract of hire, express or implied, oral or written. . . . ” In section 6 it is provided that

“No common law or statutory right to recover damages for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided shall be available to any employee who is covered by the provisions of this Act, to any one wholly or partially dependent upon him, the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury.” Cahill’s St. 1927, ch. 48, ff 206.

In section 7 it is provided in part:

“The amount of compensation which shall be paid for an injury to the employee resulting in death shall be:
“(a) If the employee leaves any widow, child or children whom he was under legal obligations to support at the time of his injury, a sum equal to four times the average annual earnings of the employee, but not less in any event than $1,650, and not more in any event than $3,750. ...
“(f) All compensation, except for burial expenses . . . , shall be paid in installments equal to the percentage of the average earnings as provided for in section 8 of this Act, at the same intervals at which the wages or earnings of the employees were paid; or if this shall not be feasible, then the installments shall be paid weekly: provided, such compensation may be paid in a lump sum upon petition as provided in section 9 of this Act.
“(g) The compensation to be paid for injury which results in death . . . , shall be paid to the persons, who form the basis for determining the amount of compensation to be paid by the employer. . . .
“The payments of compensation by the employer in accordance ivith the order or award of the industrial commission shall discharge such employer from all further obligation as to such compensation.” Cahill’s St. 1927, ch. 48, ff 207.

In sections 9 and 11 it is provided in part:

“9. Any employer or employee or beneficiary who shall desire to have such compensation, or any unpaid part thereof, paid in a lump sum, may petition the Industrial Board, asking that such compensation be so paid, and if, upon proper notice to the interested parties and a proper showing made before such board, it appears to the best interest of the parties that such compensation be so paid, the board may order the commutation of the compensation to an equivalent lump sum, which commutation shall be an amount which will equal the total sum of the probable future payments capitalized at their present value upon the basis of interest calculated at 3 per cent per annum, with annual rests; . . .” Cahill’s St. 1927, ch. 48, 209.
“11. The compensation herein provided, together with the provisions of this Act, shall be the measure of the responsibility of any employer engaged in any of the enterprises or businesses enumerated in section three (3) of this Act, . . .” Cahill’s St. 1927, ch. 48, II211.

In sections 13 and 14 provision is made for the creation and organization of the Industrial Board, and in section 15 it is provided:

“The Industrial Board shall have jurisdiction over the operation and administration of this Act, and said board shall perform all the duties imposed upon it by this Act, and such further duties as may hereafter be imposed by law and the rules of the board not inconsistent therewith.” Cahill’s St. 1927, ch. 48, 215.

In section 16 is prescribed the powers of the board and the procedure before it. Power is given to administer oaths, to subpoena and examine witnesses, and to issue subpoenas duces tecum for the production of books and papers, etc. And in section 18 it is provided :

“All questions arising under this Act, if not settled by agreement of the parties interested therein, shall, except as otherwise provided, be determined by the Industrial Board.” Cahill’s St. 1927, ch. 48, H 218.

In section 19 it is provided that “any disputed questions of law or fact shall be determined as herein provided.” Then is set forth a complete system for the determination of all such disputed questions by means of a prescribed arbitration, review by the Industrial Commission of the decision of the arbitrators, further review by the circuit court, and still further review by the Supreme Court. In subsection “f” in section 19 it is provided in part:

“The decision of the industrial commission acting within its powers . . . , shall, in the absence of fraud, be conclusive, unless reviewed as in this paragraph hereinafter provided.
“ (1) The Circuit Court of the county where any of the parties defendant may be found shall, by writ of certiorari to the industrial commission, have power to review all questions of law and fact presented by such record; . . .
“(2) . . . The court may confirm or set aside the decision of the industrial commission. If the decision is set aside and the facts found in the proceedings before the commission are sufficient, the court may enter such decision as is justified by law, or may remand the cause to the industrial commission for further proceedings and may state the questions requiring further hearing, and give such other instructions as may be proper. . . .” Cahill’s St. 1927, ch. 48, ft 219. .

In section 26 it is provided in part that the employer (A.3) may “insure to a reasonable amount his liability to pay such compensation in some corporation or organization authorized, licensed or permitted to do such insurance business-in this State,” and, if he does so, shall file with the commission in proper form evidence of that fact; that, if such insurance is carried, the sworn statement relative thereto (b) “shall be subject to the approval of the commission”; that the commission, if it shall find that the insurer is insolvent, or shall practice a policy of delay or unfairness towards employees in the adjustment, settlement or payment of benefits, (c) may order and direct said insurer to discontinue the writing of Workmen’s Compensation insurance in this State; and that (d) the failure or neglect of an employer to comply with the provisions of paragraph “a” of this section “shall be deemed a misdemeanor punishable by a fine,” etc. Cahill’s St. 1927, ch. 48,. 226. In section 28 it is provided:

“In the event the employer does not pay the compensation for which he is liable, then an insurance company, association or insurer which may have insured such employer- against such liability shall become primarily liable to pay to the employee, his personal representative or beneficiary the compensation required by the provisions of this Act to be paid by such employer. The insurance carrier may be made a party to the proceedings to which the employer is a party and an award may be entered jointly against the employer and the insurance carrier.” Cahill’s St. 1927, ch. 48, fl 228.

On the trial, over defendant’s particular objection to the jurisdiction of the superior court to determine the issues made by the pleadings, and over other objections as to the competency of certain testimony, plaintiff’s evidence disclosed in substance that in December, 1928, Morris was employed by the Lime Co. as a truck driver; that he hauled materials for it, using his own truck, and was paid a fixed price for each load hauled; that early in the morning of December 29, 1928, by direction of the Lime Co., he left its premises with a load of lime to be delivered to the Drake Tower building, then in process of construction, in Chicago; that after he had arrived there, about 10 o’clock, a labor foreman (Yldovich) of one of the contractors on the building saw Morris standing behind his loaded truck, “holding his right hand on his leg”; that “the tail-gate of the truck was down”; that Yldovich asked him. what the matter was and he replied that “the tailgate hit him and hurt him on the leg”; that he reached home about 4 o’clock in the afternoon, appearing “upset”; that he “went to bed” and his wife (plaintiff) rubbed him with alcohol “where he had been bruised on the left chest and right leg”; that his condition did not improve and on the evening of December 31, 1928, his wife called Doctor Weiss, who then found him in an “extremely sick condition with a temperature of over 105” and treated him; that he told Dr. Weiss, in response to inquiries, that, “while loosening the tailgate of his truck, it fell and knocked him in the chest and he fell down and it struck him on the leg”; that he (Weiss) continued daily thereafter to treat him; that in his opinion Morris “was suffering from a streptococcic infection . . . due to trauma or injury”; that plaintiff, having found in the house the policy sued upon, wrote defendant a letter at Dr. Weiss’ suggestion advising it of Morris’ condition, etc.; that thereafter representatives of defendant called and at their suggestion Morris, his condition having become more critical, was removed to the Alexian Brothers Hospital on January 9, 1929; that about this time plaintiff signed and delivered a “preliminary report of accident,” which had been filled out by a representative of defendant; that thereafter, under the policy and the Workmen’s Compensation Law, defendant made two payments of $14 each for weekly indemnity for total disability, which payments plaintiff accepted; that at the hospital Morris was treated by Dr. Swift, employed by defendant for that purpose and also by Dr. Weiss; that Dr. Swift examined Morris on January 9 and “found an abscess on the left chest in the region of the nipple, about 4 or 5 inches in diameter and full of pus”; that “under general anesthesia he incised this abscess and put in drainage”; that, thereafter, “because the infection had spread,” he performed two other operations; and that Morris died at the hospital on January 18, 1929. No evidence was introduced by plaintiff showing that any attempt ever was made to commence proceedings before the industrial commission or to have an award made by it. And the only attempt made by plaintiff to show damages sustained by her was by the witness Dan Wilson, who then was, and had been since 1915, the chief clerk of the Illinois Industrial Commission. He testified that he had had 15 years’ experience “in computing lump sum, settlements” in connection with his other general- duties, and that he had with him “certain tables,” which give information “as to the value of the dollar for a certain number of weeks based upon 3 per cent interest, with annual rests.” He then was asked the following questions:

“Q. Assume a death award based on earnings in excess of $2,500, a dependent widow, no children, and the death occurring on January 18, 1929, can you compute for us the amount of an award based upon those conditions?
“Q. Assume' that the award under such circumstances would be $3,750, can you compute for us how many weeks’ instalments at $14 per week would have been due on May 25, 1929, — the date the present suit was started?”

The court (properly in our opinion) sustained objections to both questions. Thereupon, with the court’s permission and in the presence and hearing of the jury, plaintiff’s attorney made the following offer, also objected to by defendant’s attorney:

“I offer to prove by this witness that, based upon an award of $3,750, there would be on May 25, 1929, 18 weeks’ compensation due at $14 per week, making a total sum of $252. Further, that the present value as of that date, computed on the basis of interest at 3 per cent per annum, would have been $3,484; that the measure of plaintiff’s damages in this suit would have been that sum, plus $252, ... or a total of $3,736.
“Q. What is-that figure, Mr. Wilson?
“A. $3,499.61; .' . . that takes into consideration the discount: . . . -
“Q. What is the discount?
“A. The discount amounts to $236.39.”

It will be noticed that the net figure given by Mr. Wilson during the refused offer of plaintiff’s attorney, $3,499.61, is the exact amount of the verdict, as subsequently returned by the jury, and upon which the court entered the judgment appealed from.

The main contention here urged by defendant’s counsel is that the superior court, in proceedings upon a workmen’s compensation policy of insurance, has no jurisdiction to determine any question arising under the Illinois Workmen’s Compensation Act, and that the judgment appealed from cannot stand. Plaintiff’s counsel, on the other hand, contend in substance that plaintiff’s action is in assumpsit and predicated upon a policy of accident insurance, and that the fact (viz., that the policy includes by reference the provisions of the Illinois Workmen’s Compensation Act) does not make the present action a proceeding under that act. And counsel argue in their brief that “the effect of the indorsement” on the policy sued upon (viz., that the policy be extended to injuries and/or death suffered by Morris) “was nothing more or less than to make the policy in question, as far as Morris was concerned, purely an accident policy covering him against áccidental injuries and/or death arising out of and in the course of his employment.” After considering the provisions of the policy sued upon, including said indorsement and the other indorsements, and the provisions of the Workmen’s Compensation Act, we cannot agree with plaintiff’s counsels’ contention or argument. It appears that about the time the indorsements were made on the policy sued upon, another workmen’s compensation policy was issued to the Lime Co. for whom Morris worked as a hired truck owner for the hauling of its materials'. By the indorsements on the policy sued upon we think it is clear that it was the intention of both Morris and the defendant that Morris should be considered as an employee and, if injured, while delivering materials in his own truck, entitled to recover compensation under and in accordance with the Workmen’s Compensation Act. And we are of the opinion, considering the evidence and the policy sued upon and the provision of said act, that defendant’s counsels’ main contention has substantial merit. In Mehay v. Industrial Commission, 316 111. 97, 103, it is said: “Whether the claimant has sustained accidental injuries and whether a disability of the claimant is the result of an accidental injury arising out of and in the course of his employment are questions of fact to be determined in the first instance by the Industrial Commission. ...” In Peters Mach. Co. v. Industrial Commission, 346 Ill. 403, 407, similar language is used, and it is also said: “Where the decision of the • Industrial Commission is clearly against the manifest weight of the evidence, or where it is based upon incompetent evidence, the court should set aside the award.” In Kudla v. Industrial Commission, 336 Ill. 279, 281, it is said: “The writ of certiorari au-. thorized by this section (paragraph f of section 19 of the Workmen’s Compensation Act) is the only method provided for the review of decisions of the Industrial Commission. . . . The writ of certiorari, by which the circuit court is given power to review the award of the Industrial Commission in cases under the Workmen’s Compensation Act, is wholly statutory, and in the exercise of the special statutory jurisdiction conferred upon circuit courts in such case's, they act not by virtue of their general jurisdiction but as courts of special and limited jurisdiction, and their, powers are limited by the provisions of the statute. - Their authority to make any order must be found in the terms of the statute.” In view of these holdings of our Su-, preme Court and the provisions of the Workmen’s Compensation Act, particularly sections 6, 7, 18, 19, 26 and 28 as above outlined, and holding as we do that the policy sued upon is a workmen’s compensation policy, we think it clear that the Industrial Commission alone had jurisdiction in the 'first instance to pass upon plaintiff’s claim as stated in her declaration. Plaintiff’s counsel also argue in their brief that “the Industrial Commission had no jurisdiction to construe the contract in question and to determine whether or not the widow of Morris (plaintiff) had or had not anything coming by reason of said contract.” We think that counsel misconstrue the act, or fail to realize the intent and force thereof, particularly the sections last above mentioned.

Defendant’s counsel also contend (1) that plaintiff did not show by competent evidence that Morris ’ death was caused by accidental injuries arising out of and in the course of his employment; (2) that the court committed prejudicial error in admitting over objection certain medical testimony; and (3) that there is no basis in the evidence for the amount of the damages awarded by the jury. In view of our holdings and decision on counsels’ main contention it is unnecessary for us to discuss these other contentions.

Our conclusion is that the superior court was without jurisdiction to hear or adjudicate upon plaintiff’s claim and erred in entering the judgment appealed from. Accordingly the judgment is reversed without remandment of the cause.

Reversed.

Keener, J., concurs.

Scanlan, J., dissents.

Mr. Justice Scanlan

dissenting: As I read the record the opinion of the majority of this court does not fully state the position of the - defendant. When the plaintiff, in the trial court, offered the policy in evidence, the following occurred: “Mr. Potter (attorney for defendant): I am not objecting to the authenticity of the document or its execution. I object to it as immaterial, irrelevant and incompetent in that by reason of uncertainty it is a void contract and because the Court has no jurisdiction of the remedy and by reason of the uncertainty of amount involved there could1 be no judgment upon it.” In its argument that the superior court was without jurisdiction to pass upon the claim involved in the instant suit, the defendant does not concede that the plaintiff could have obtained relief in a proceeding before the Industrial Commission. On the contrary, it boldly states, “That anything is due to the plaintiff under that law (Workmen’s Compensation Law) is disputed.” The defendant strenuously contends that even if the plaintiff had treated the policy as a workmen■’s compensation policy of insurance and had pursued her remedy before the Industrial Commission, nevertheless, she could not have recovered under the policy, for the reason that the deceased was an employer and therefore he could not occupy the position of an employee within the contemplation of the Workmen’s Compensation Act. The defendant argues that “any attempt of the parties to the contract to provide for the payment of compensation to the person named in the policy as an employer upon the theory that he was his own employee, not only ‘borders on the ridiculous, ’ but is a palpable attempt to extend the terms and application of the Workmen’s Compensation Act, which, in the language of the Supreme Court of Wisconsin, cannot be so ‘enlarged, restricted or modified, ’ ” and in the oral argument before us the defendant contended that the policy was void because in contravention of the statute. In support of this contention it cited Lyle v. H. R. Lyle Cider & Vinegar Co., 243 N. Y. 257 (decided July, 1926); Porter v. Industrial Commission, 173 Wis. 267 (decided February 8, 1921); and Porter v. Travelers’ Ins. Co., 188 Wis. 638 (decided Jan. 12, 1926), which seem to sustain the contention that an employer cannot be an employee within the contemplation of the Workmen’s Compensation Acts of the respective. States. The policy in the instant case was issued March 23, 1928, and the defendant must be presumed to have known the law which it now cites when it issued the policy. It characterizes the policy as a ridiculous attempt of the parties to run counter to the Act. It would be a reasonable conclusion from the defendant’s argument that it knowingly issued what it assumed to be a policy void under the Act. The defendant then advances a contention, inconsistent with the former one, that in the present case the plaintiff’s right of action, if any she have, “could only be determined in accordance with the provisions of the Workmen’s Compensation Law and not by a suit in the first instance in the Superior Court of Cook County,” and this contention is strenuously argued. The defendant also contends that the policy is a void one and recovery under the same would therefore be impossible in any forum. The decision of the majority of this court, upholding the contention that the superior court was without jurisdiction to pass- upon the claim of the plaintiff, especially in view of- the position of the defendant, does not accord with my sense of justice. The plaintiff’s action is in assumpsit, and it is not based upon the theory that the defendant was bound under the Workmen’s Compensation Act. It is a suit to recover the amount the plaintiff claims to be due her under an alleged policy of insurance. ■

In Healey v. Mutual Acc. Ass’n of the Northwest, 133 Ill. 556, 561, the court quotes with approval the following: “ ‘No rule in the interpretation of a policy is more fully established, or more imperative and controlling, than that which declares that in all eases it must be liberally construed in favor of the insured, so as not to defeat, without a plain necessity, his claim to the indemnity which, in making the insurance, it was his object to secure. When the words are, without violence, susceptible of two interpretations, that which will sustain his claim and cover the loss must, in preference, be adopted.’ May on Insurance (2d ed.) sec. 175.” (See also Travelers’ Ins. Co. v. Dunlap, 160 Ill. 642, 646.) In Julius v. Metropolitan Life Ins. Co., 299 Ill. 343, 348, it is said: “If there is any ambiguity in an insurance policy it is the fault of the insurance company. It prepares the contract and the language used in the contract is its language. If that language is susceptible of two interpretations, that one will be -adopted which is most favorable to the insured in order to indemnify him for the loss he has sustained.” (See also Wilkinson v. Aetna Life Ins. Co., 240 Ill. 205; Clarke & Co. v. Fidelity & Casualty Co. of New York, 220 Ill. App. 576; Goetz v. Continental Casualty Co., 245 Ill. App. 350, 356.) “It is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of insured and strictly as against the company. Stated more fully, the rule is that, where, by reason of ambiguity in the language employed in a policy or contract of insurance, there is doubt or uncertainty as to its meaning and it is fairly susceptible of two interpretations, one favorable to insured and the other favorable to the company, the former will be adopted. Similar statements of this rule have been repeatedly reiterated in numerous decisions of the courts.” (32 O. J. 1152.) In support of this statement of the law the editor cites a great many cases from the various states. Numerous Illinois cases are cited. “Contracts of insurance should be liberally construed to accomplish the purpose for which they are made.” (Ib.) “Insurance or indemnity against loss, being the object and purpose of the contract, the courts will construe it, when possible, so as to effectuate this purpose and so as to uphold rather than defeat or.avoid, the contract.” (Id. 1150; Weisguth v. Supreme Tribe of Ben Hur, 194 Ill. App. 17, affirmed in 272 Ill. 541.) “No one can doubt that the language employed in an insurance policy is to be construed in aid of the insurance rather than to the end of defeating it, for, indeed, the insurance vouchsafed is the'very object and purpose of the contract.” (De Mun Estate Corp. v. Frankfort General Ins. Co., 196 Mo. App. 1, 7.) If the policy in .question is interpreted as a workmen’s compensation policy, it follows, of course, that it must be held to be a void policy, for the reason that an employer cannot be an employee within the contemplation of the Act. Therefore, in construing the policy, we must interpret it, if possible, in a way that will give effect to it “so as to uphold rather than defeat or avoid, the contract.” Here, we have an insurance company boldly asserting that it attempted, in a “ridiculous way,” to contravene the Act. The policy was prepared by it, and it cannot be presumed that the deceased, a teamster, was engaged in any such alleged attempt. He sought insurance. The defendant -claims that it did not give him insurance of any kind by the policy. Under all the circumstances in this case the defendant should not be allowed to make this claim. If it is a valid policy, and I think it is, as it is not a policy under the Workmen’s Compensation Act, it necessarily follows that it is a contract of insurance.

In any event, the judgment of this court that the superior court was without jurisdiction to adjudicate the claim of the plaintiff is an erroneous one. The position of the defendant is that the policy is not a valid workmen’s compensation policy and that if a proceeding were brought under it before the Industrial Commission it would fail. The plaintiff admits that the defendant was not bound to make compensation payments to her under the Compensation Act, and she is not attempting, in the present proceeding, to have the superior court pass upon a claim brought under the Act. Her action is in assumpsit and, as I have heretofore stated, it is not based upon the theory that the defendant was bound under the Workmen’s Compensation Act, but it is a suit to recover the amount the plaintiff claims to be due her under an alleged policy of insurance. In my opinion the superior court had full jurisdiction to pass upon the subject matter of the action. Nor would the claim of the defendant that the alleged contract was nonenforceable by its "terms affect, in any way, the jurisdiction of the court.

I dissent from the judgment of this court holding that the superior court of Cook county was without jurisdiction to hear or adjudicate upon the plaintiff’s claim.


source: Caselaw Access Project

author: Mr. Presiding Justice Gridley

license: Public Domain

text:
    Herbert J. Buchsbaum, Appellee, v. Hyman Halper, Appellant.
    Gen. No. 35,341.

      Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.
    Cutting, Moore & Sidney, for appellant; Charles S. Cutting, of counsel.
    Eisendrath, Solomon & Borden, for appellee; David S. Eisendrath, of counsel.
   Mr. Presiding Justice Gridley

delivered the opinion .of the court.

In a fourth class action in contract, commenced on February 28,1929, the municipal court on May 14,1931, on plaintiff’s motion, struck defendant’s amended affidavit of merits from the files and, defendant electing to stand by his affidavit, defaulted him “for want of an affidavit of merits.” On the same day the court “heard the evidence as contained in the affidavit of plaintiff’s claim,” found that “there is due to plaintiff the sum of money as shown in said affidavit,” and assessed plaintiff’s damages at the sum of $1,046.57. Judgment was entered against defendant in said sum and he appealed.

The action is based upon a “real estate sale contract” which is on a printed form, partly in typewriting’, and dated November 9, 1926. A copy of the contract is attached to plaintiff’s statement of claim and made a part thereof. It is a lengthy instrument and there are many provisions in small printed type, commonly found in such instruments, which are not material to the present issues. The main provisions (those italicised below being in typewriting and the balance in printed type) are as follows:

“This Memorandum Witnesseth, that Hyman Hal-per, hereinafter called the purchaser, agrees to purchase at the price of $64,500 dollars the following described real estate, situated in Cook County, Illinois, to-wit: (Here follows description); and Herbert J. Buchsbaum, hereinafter called the seller, agrees to sell said premises at said price, and to convey or cause to be conveyed to the purchaser a good title thereto by -Trustee’s deed, with release of dower . . . and homestead rights or estates, subject to:

(1) Existing leases expiring as made;

(2) Special taxes or assessments for improvements not yet completed;

(3) The installments not due at the date hereof of any special tax or assessment for improvements heretofore completed;

(4) Water taxes payable after delivery of deed;

(5) General taxes for the year 1926 and subsequent years;

(6) Building lines of record, if any;

(7) Building or liquor restrictions of record, if any;'

(8) Zoning and building laws or ordinances;

(9) Party wall rights or agreements, if any;

(10) Principal indebtedness aggregating $53,100 secured by mortgage, trust deed or trust deeds of record, which indebtedness the purchaser does (blank) agree to assume; and to

(11) (blank)

The amount of said indebtedness is included in above mentioned price, but no assumption thereof shall be implied from that fact where the purchaser has not herein expressly assumed said indebtedness.

“Upon the consummation of this sale, existing leases and insurance policies, if any, are to be duly'assigned to the purchaser, . . . General taxes for the year 1926 are to be pro rated from January 1, to the date of said deed. . . .

“The purchaser has paid $3,000 dollars as earnest money to be applied on said purchase when consummated, and agrees to pay, within five days after the title is shown to be good or is accepted by him, the further sum of $8,400 dollars, provided a deed as aforesaid shall then be ready for delivery. . . .

“Within 15 days from the date hereof, the seller shall deliver to the purchaser (which delivery may be made at the office of Ash Realty Auctioneers, Inc.) the following:

“Guaranty Policy of the Chicago Title & Trust Company, in the usual form. . . . This property is held by Greenebaum Sons Bank & Trust Company, as Trustee, and the seller agrees to cause said Trustee to execute its Trustee’s Deed in accordance herewith. . . .
“Payment of the price and delivery of the deed herein provided for shall be made at the office of Eisendrath, Solomon <& Borden, 112 W. Adams Street. . . .
“The mailing of a notice by registered mail to the seller at Eisendrath, Solomon $ Borden, 112 W. Adams Street, or to the purchaser at Ash Realty Auctioneers-, Inc., 220 S. State St. shall be sufficient service thereof.
“The seller agrees to pay a broker’s commission to Ash Realty Auctioneers, Inc., as agreed. . . .
“This contract and the earnest money aforesaid shall be held in escrow by Ash Realty Auctioneers, Inc., for the mutual b'enefit of the parties hereto. . . . In case there shall be any error or difference between the representations contained in the circular of Ash Realty Auctioneers, Inc., relating to this sale, describing the above described property, which is hereby incorporated herein and made a part hereof, and the actual income, encumbrances or other matters referred to therein, both parties agree that the errors or differences shall be .adjusted upon the closing of the sale by charges or credits to the purchaser or seller and shall not invalidate this contract.
“Jacob Alkin is broker for the buyer.
“Dated this 9th day of November, 1926."

In plaintiff’s statement of claim he alleged that he sold the premises to defendant, Halper, for the sum of $64,500, “subject to principal indebtedness aggregating $53,100, secured, by trust deeds of record, which said sum was credited upon said purchase price, the balance thereof being paid in cash by defendant, whereby defendant assumed and agreed to pay said principal indebtedness”; that by said contract defendant “expressly assumed and agreed to pay said indebtedness”; that said indebtedness of $53,100, so assumed, “included, as a part thereof, a principal indebtedness of $23,600, evidenced by the notes of Buehsbaum (plaintiff), dated Septembér 17,1925, Nos. 5 to 19, both inclusive, for the sum of $600 each, and No. 20 for the sum of $14,600, — note No. 5 being pay-' able September' 17, 1926, and the others being payable on or before every three (3) months thereafter, with interest at 6 per cent per annum, payable quarterly on the entire unpaid balance of such principal indebtedness, secured by trust deed on the property from said Buchsbaum to Morris E. Feiwell, dated September 17, 1925, and recorded September 18, 1925, . . . all of the above described notes being payable to the order of the maker and by him endorsed”; that “note No. 13 became due and payable December 17,1928, and was not paid by defendant or the owner of said real estate”; that demand was made upon plaintiff (the maker) for the payment thereof by the holder of said note and plaintiff “was compelled to pay and did pay to said holder of said note the following sums:

“Principal due December 17, 1928 $600.00 Interest on balance of $18,800, from Sep-
tember 17, 1928 to December 17, 1928 282.00 Interest on unpaid principal and interest
from December 17, 1928 to January 25, 1929 6.52
Attorneys’ fees to attorneys for the holders of said paper, payable under the terms of said trust deed 50.00
Total $938.52”

That thereby plaintiff acquired and is the holder of said note No. 13; that by reason of the foregoing facts, and the failure of defendant to pay said note, plaintiff has been damaged in the sum of $938.52, with interest thereon from January 25, 1929. And plaintiff further alleges that prior to his making said payment he demanded of defendant that he make said payment but defendant refused and still refuses so to do.

Attached to the statement of claim is the affidavit of one Abrahams, stating that he is the duly authorized agent of plaintiff, that he has knowledge of the facts, that plaintiff’s suit is upon a contract for the payment of money, that the nature of plaintiff’s demand is as stated, and that there is due from defendant to plaintiff the sum of $938.52, and interest from January 25, 1929.

Defendant entered his appearance and demanded a jury trial. In his amended affidavit of merits by Harold A. Fein, his duly authorized agent, he admits that he purchased the premises, which were subject to a principal indebtedness of $53,100, secured by mortgages thereon, and that on November 9, 1926, entered into the written agreement as set forth in plaintiff’s statement of claim. And defendant alleges that on November 30, 1926, plaintiff procured the execution and delivery of a deed, dated November 30, 1926, conveying to defendant the said premises, “a copy of which deed is attached hereto, marked Exhibit A, and the original of which will be produced upon the hearing hereof”; that by the terms, conditions and covenants of said deed a conveyance of the premises was made to defendant “subject to trust deeds of record securing a balance of $53,100, taxes for the year 1926, special assessments and installments thereof not due on the date of said deed, existing leases, building lines, building and liquor restrictions, party wall agreements of record, and building and zoning laws”; that by reason of the execution and delivery of said deed “all the terms, conditions and covenants of the agreement of November 9, 1926, became merged in said deed”; and that the deed “contains no provision, covenant or agreement wherein defendant agreed to assume and to pay any existing incumbrance.” And defendant further alleges that “it was intended by and between the parties hereto and agreed by them upon the delivery of said deed that such conveyance was to be made only subject to said incumbrances, and that defendant was not to assume and pay said incumbrances or any part thereof.” And defendant further alleged that subsequent to said conveyance to him he conveyed the property to one Leo Hollander, who thereafter on September 30, 1927, conveyed it to one Meyer Finder; that defendant has no information or knowledge as to any default in payment of said note No. 13, as alleged in plaintiff’s statement of claim, or that plaintiff was required to pay it, as alleged, and, therefore, defendant neither admits nor denies said allegations but demands strict proof thereof; that if plaintiff was required to pay said note, it was an obligation for which he was personally liable; and that this defendant “did not assume and agree to pay said note.” Wherefore, defendant denies that he is indebted to plaintiff in said sum of $938.52, or in any sum.

From the copy of the deed of November 30,1926, attached to said affidavit, it appears that the first party (Greenebaum Sons Bank and Trust Co., as trustee), “in consideration of the sum of Ten Dollars,” conveys the premises to said Hyman Halper, second party, “subject to trust deeds of record securing a balance of $53,100,” etc.

The ultimate question for our determination is, whether the municipal court erred in striking defendant’s amended affidavit of merits from the files and in entering the judgment appealed from. It will be noticed that in the affidavit defendant alleges that by reason of the execution and delivery of the deed of November 30, 1926, “all the terms, conditions and covenants of the agreement of November 9, 1926, became merged in said deed”; that the deed “contains no provision, covenant or agreement wherein defendant agreed to assume and to pay any existing incumbrance”; and that “it was intended by and between the parties hereto and agreed by them upon the delivery of said deed that such conveyance was to be made only subject to said incumbrances, and that def endant was not to. assume and pay said incumbrances or any part thereof.” In Gillett v. Teel, 272 Ill. 106, 112, 113, our Supreme Court says:

“As a general rule, a deed made in full execution of a contract for the sale of land merges the provisions of the contract in the deed, but this is not always the result. If a deed made in pursuance of a contract embraces all the subjects contained in the contract the prior agreement merges in the deed and the agreement can only be resorted to for the purpose of evidence between the parties. An executory agreement, verbal or written, for the performance of distinct and separate provisions is not merged in or superseded by a subsequent deed in execution of a part, only, of such provisions. In such a case the prior contract is superseded only as to such of its provisions as are covered by the conveyance and remains in full force as to its other provisions.'' (Citing Laflin v. Howe, 112 Ill. 253, 260, 261.)

This is the law in other States. (13 Cyc. pp. 616-8.) In the early case of Houghtaling v. Lewis, 10 Johns. (N. Y.) 297, decided in 1813, it is said (p. 298):

“Articles of agreement for the conveyance of land are in their nature executory, and the acceptance of a deed, in pursuance thereof, is to be deemed, prima facie, an execution of the contract, and the agreement thereby becomes void, and of no further effect. Parties may, no doubt, enter into covenants collateral to the deed, or cases may be supposed when the deed would be deemed only a part execution of the contract, if the provisions in the two instruments clearly manifested such to have been the intention of the parties. But the prima facie presumption of law, arising from the acceptance of a deed, is that it is an execution of the whole contract; and the rights and remedies of the parties, in relation to such contract, are to be determined by such deed, and the original agreement becomes null and void. ’ ’

And certain holdings of the Indiana Supreme Court in the case of Wayne International Building & Loan, Ass’n v. Beckner, 191 Ind. 664, are, we think, particularly applicable to the present case, especially in view of the stated consideration in the deed, viz., “the sum of ten dollars.” The court says (pp. 669, 670; italics ours):

“Obviously the mere fact that the preliminary contract of sale provided that the grantee should ‘assume’ the mortgage, while the’deed of conveyance evidencing the consummated contract recited only that the conveyance was ‘subject to’ the mortgage, would not prove that the grantee really had assumed and agreed to pay the mortgage. The execution of the deed of conveyance merged all previous negotiations with relation to what should be sold and conveyed. . . . The conveyance of certain described lands ‘subject to’ a certain mortgage was merely the conveyance of an equity in those lands.”

And the law is equally well settled in Illinois and other States, as stated in 2 Jones on Mortgages (8th ed.) pp. 291, 293, sec. 933, that

“A deed which is merely made subject to a mortgage specified does not alone render the grantee personally liable for the mortgage debt (citing, among others, the cases of Wilson v. Munday, 238 Ill. App. 575, 584; Macfarland v. Utz, 175 Ill. App. 525, 530); to create such liability there must be language which clearly imports that the gramtee assumes the obligation of paying the debt. (Citing, among others, the cases of Siegel v. Borland, 191 Ill. 107, 111; Drury v. Holden, 121 Ill. 130, 137.) The assumption of the mortgage by the purchaser will not be presumed.” (Citing Lloyd v. Lowe, 63 Colo. 288, 290; Lange v. Bartlett, 207 Ill. App. 422, 424 — 5.)

Defendant’s counsel here contend that the trial court erred in striking defendant’s amended affidavit of merits from the files, and in entering the judgment in question without hearing evidence as to the defense as set forth in said affidavit. And in support of their contention they argue in substance that, notwithstanding the fact that the printed portion of the contract sued upon (being No. 10 of the various matters that the proposed conveyance is therein stated to be subject to) states that the purchaser (defendant) “does agree to assume” the mentioned mortgage indebtedness of $53,100, this provision (as shown by said affidavit) was superseded by the provision on the same subject in the subsequent deed of November 30, 1926, wherein it clearly appears that defendant, for the stated consideration “of the sum of ten dollars,” merely purchased the equity of redemption in the premises, and did not agree to assume or to become personally liable to pay said mortgage indebtedness. In view of the allegations in said affidavit, the language of the deed and the authorities above referred to, we are. of the opinion that there is substantial merit in the contention and argument, that said affidavit states prima facie a good defense to plaintiff’s action, and that the judgment appealed from should be reversed and the cause remanded for a trial upon the merits.

Plaintiff’s counsel here strenuously contend that the allegation in the affidavit of merits (viz., that “it was intended by and between the parties hereto, and agreed by them upon the delivery of said deed, that such conveyance was to be made only subject to said incumbrances,” etc.) is a mere conclusion, is not an allegation of fact and sets up no defense. We cannot agree with the contention. While a statement as to the “intention” of parties without alleging facts showing such intention may be improper pleading, yet we think that the statement that it was “agreed” by the parties upon the delivery of the deed that the conveyance'was to be made “only subject to” the incumbrances, is a sufficient allegation of a fact, especially when read in connection with the language of the deed, a copy of which is attached to the affidavit and made a part thereof. In Firestone Tire & Rubber Co. v. Ginsburg, 285 Ill. 132, 136, it is said: “It is not required that the defendant should state the evidence but only the ultimate facts which would give notice of the nature of the defense. ’ ’ Furthermore, it is to be noticed that this is a fourth class action in the municipal court where pleadings are not so essential and the action is what the proof makes it. (Paris Flouring Co. v. Imperial Cotto Milling Co., 181 Ill. App. 215, 219, 220; Edgerton v. Chicago, R. I. & P. R. Co., 240 Ill. 311, 313.) Furthermore, it appears from plaintiff’s statement of claim that he seeks to recover from defendant what he paid on his own matured note — No. 13 of a series; that other of his notes of the series, aggregating over $18,000, matured after the present action was commenced; and that the controversy not only involves the amount of said note No. 13, but also ultimately the aggregate amount of the other notes. And in our opinion it is not in the interests of justice that the rights of the parties should be determined by technical rules of pleading, especially where, as here, defendant’s affidavit of merits discloses prima facie a good defense to plaintiff’s action. There should be a trial upon the merits.

For the reasons indicated the judgment of the municipal court is reversed and the cause is remanded.

Reversed and rema/nded-.

Keruer and Scaulau, JJ., concur.


text:
    Leo Awotin, Appellant, v. Atlas Exchange National Bank of Chicago, Appellee.
    Gen. No. 35,391.
    Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.

      Shulman, Shulman & Abrams, for appellant ; Meyer Abrams, of counsel.
    Elbridge W. Rice, for appellee.
   Mr. Presiding Justice Gridley

delivered the opinion of the court.

In an action in assumpsit, tried before a jury in March, 1931, at the conclusion of plaintiff’s evidence the court, on defendant’s motion, directed the jury to return a verdict in defendant’s favor. Such verdict was returned, and, on May 23, 1931, the court entered judgment against plaintiff for costs and he appealed.

Plaintiff’s declaration consisted of a special count and the common counts. In the special count he alleged that on November 1, 1929, at Chicago, defendant offered to sell to him “$35,000 Dollars First National Company Collateral Trust, Series 0, First Mortgage Beal Estate 5%% Gold Bonds in denomination of $1,000 each, and then and there promised that, if plaintiff purchased the bonds and paid therefor the sum of $35,000, together with accrued interest thereon, it (defendant) would, repurchase the bonds at maturity, paying therefor the par value of the bonds .and accrued interest”; that plaintiff, in consideration thereof, on November 1,1929, paid to defendant said sum and purchased the bonds from it; that to evidence the agreement defendant reduced the same to writing and, as an inducement to plaintiff to purchase the bonds, then and there delivered to plaintiff the following writing:

“Mr. Leo Awotin, Nov. 1, 1929.
1920 S. Halsted St., Chicago.
Dear Sir:
“This is to acknowledge that we have this day sold you $35,000 par value First National Company, Collateral Trust, Series O, First Mortgage Beal Estate 5%% gold bonds, in denomination of $1,000 each, numbered as follows: #4584-4585 and 4612 to 4644, inclusive.
‘ ‘ Should you desire to resell these bonds to us, we hereby agree to repurchase same at maturity at par, or $35,000, and accrued interest.
“Yours very truly,
B. M. Blankenheim,
Cashier.”

That the bonds matured on July 15, 1930; that on that day plaintiff presented them to defendant and demanded that it repurchase them and pay to plaintiff the sum of $35,000 and accrued interest; that defendant refused so to do; and that although plaintiff has made repeated demands on defendant since July 15, 1930, to the same effect, it has not repurchased the bonds or paid to him the $35,000 and accrued interest or any part thereof, but still refuses. To plaintiff’s damage, etc.

In plaintiff’s “affidavit of amount due,” attached to the declaration, and dated September 4, 1930, it is stated that his demand “is for the sum of $37,085.41, due and owing to plaintiff from defendant under its written agreement, dated November 1, 1929, and that there is due from defendant after allowing to it all just credits, deductions and set-offs $37,085.41.”

Defendant entered its appearance by attorney, demanded a jury trial, and filed a plea of the general issue. In the accompanying affidavit of merits of Daniel M. Healy he alleged that he is the president of defendant; that there is not owing to plaintiff any sum of money; and that ‘ ‘ defendant did not enter into any agreement with plaintiff and never authorized or empowered anyone else to enter into the agreement alleged in the declaration or in the affidavit thereto attached.” On the eve of the trial defendant, by leave of court, filed an additional plea alleging that it is a national bank, organized under the banking laws of the United States, that “neither its charter nor the general law gives to defendant any power or authority whatever to guarantee payment of the indebtedness of any other person, firm or corporation, nor to repurchase bonds at maturity,” and that the supposed guarantee or repurchase agreement of said Blankenheim, cashier, as set forth in the declaration, “is ultra vires and void.” To this additional plea plaintiff filed a replication.

On the trial plaintiff testified that he is a physician and surgeon, practicing his profession in Chicago; that he had business relations with defendant bank from 1917 to 1929, inclusive; that he had kept a savings account with it; that on November 1, 1929, he purchased of it the 35 bonds in question; (bonds tendered by plaintiff to defendant, but by agreement not introduced in evidence); that in making the purchase he dealt with Mr. Blankenheim, cashier of the bank; that Rose Kimen, who was arranging for the purchase of other bonds of the same issue, was present at the time; that he paid for the 35 bonds and accrued interest, $35,036.46; that Blankenheim said at the time that “the price is 98, but that if I buy on the written contract the price is 98% — a half of 1% in excess of the market price, in consideration of the written contract”; that Blankenheim delivered to him with the 35 bonds the contract for repurchase (introduced in evidence; same as set out in the special count as above); that the bonds matured on July 15, 1930; that on that day he (the witness) “presented the bonds to Mr. Blankenheim, as cashier, for repurchase,” but he “refused to repurchase them, and said that I would have to see Mr. Healy, president of the bank”; that about 10 days later he (the witness) saw Mr. Healy, who said to him in substance that the bonds were good, safe bonds, that he had originally purchased them for the bank for investment, that at present the First National Company were financially embarrassed and were unable to take up the bonds, but that he (the witness) “should not worry,” although he would “have to wait a few months ’ ’; that thereupon he asked Healy why the defendant bank did not repurchase the bonds, according to the contract for repurchase; that Healy replied in substance that because of its lack of money, and its assets not being liquid, the bank was unable to do so, and that he did not then say anything about “the law not permitting the bank to perform the contract.” Plaintiff further testified that although he made further demands of defendant, and had further conversations with Healy, “he never received any moneys on the bonds or any interest. ”

Plaintiff’s testimony was corroborated in certain particulars by that of Bose Kimen, an employee of plaintiff, and who in November, 1929, had purchased of defendant $4,000 worth of other bonds of the same issue under a similar contract for repurchase. She further testified that she was present at one of the conversations had between plaintiff and Healy; that Healy suggested to plaintiff that the latter “trade his bonds for Chicago mortgages” and said that he would mail a list of such mortgages within a few days; but that such list never was received.

It was stipulated that the 35 bonds in question “were securities purchased as investment securities by the bank and were its property at the time they were sold to plaintiff.” Thereupon, on.defendant’s motion, the court directed the jury to return a verdict in defendant’s favor as first above mentioned.

In section 5136 of the U. S. Bevised Statutes, relating to the powers, etc. of national banks, it is in part provided - in subsection 7- (as - amended' February 25, 1927, by the addition of a proviso):

" “To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title; Provided, That the business of buying and selling investment securities shall hereafter be limited to buying and selling without recourse marketable obligations evidencing indebtedness of any person, co-partnership, association, or corporation, in the form of bonds, notes and/or debentures, commonly known as investment securities, under such further definition of the term ‘investment securities’ as may by regulation be prescribed by the Comptroller of the Currency, ...”

Counsel for the bank contended in the trial court and contends here that under the above statute no recovery can be had by plaintiff in the present action because the agreement of November 1,1929, sued upon, is ultra vires the bank and wholly void. Counsel for plaintiff contend in substance that the court erred in entering the judgment (following the directed verdict) because (1) the sale of the bonds' by the bank to plaintiff, coupled with its written agreement to repurchase them at maturity at par and accrued interest, amounts to a conditional sale, which is valid as such and the statute has no application, and (2), even if it be considered that the bank in making the repurchase agreement acted ultra vires, plaintiff, having tendered the bonds, is entitled to recover back what he paid therefor plus accrued interest on an implied assumpsit,— the bank having retained the moneys it received in the transaction.

After considering the written agreement and the evidence, and after reviewing the printed briefs of respective counsel and numerous adjudicated cases, we are of the opinion that the trial court erred in instructing the jury as it did and in entering the judgment in question. We think that there is merit in plaintiff’s counsels’ first contention as above. The case of Wolf v. National Bank of Illinois, 178 Ill. 85, is in point, where it appears that a national bank, in selling to a customer certain bonds of the Chicago Auditorium Association, agreed to repurchase them at a specified future time at their selling price with interest. It was }ield that the contract was one of conditional sale and not an option contract. The court said (pp. 93-5): “Under the contracts the amount to be paid by the bank to the plaintiff in case he desired to return the bonds was the face value and interest on the amount which plaintiff had paid, and interest from the time of payment. The obvious intention of the parties was to make a conditional sale, and the condition upon which the purchase was made was, that the bank should take the bonds back at the same price if within a specified time the plaintiff desired to return them. . . . Is it contrary to law or justice, or does it violate any rule of public policy, for a person to sell a horse, a cow, a promissory note or a bond for a specified sum and agree to take the article back within a given time for the same price? If it is, this contract might be condemned ; otherwise not. ... In the case under consideration the plaintiff notified the bank, before he agreed to take the bonds, that he would not take them unless the bank would agree to take them back, and the bank agreed, as a condition upon which plaintiff parted with his money and received the bonds, that it would take them back in the following January at the same price, and we see no reason why the bank should not abide by its contract.” The case of Freedman v. Madison & Kedzie State Bank, 259 Ill. App. 519, may also be cited. It is there decided in substance that the agreement of an Illinois bank, selling bonds, to repurchase them on certain conditions, is a valid agreement, and that where the bank fails to perform its agreement the buyer is not limited to an action to recover damages, but may tender the bonds and sue in assumpsit for the agreed price, keeping* the tender good. A petition for certiorari was denied by our Supreme Court (259 Ill. App. XIV.) One of the contentions made by the Madison State Bank was that it was without authority to repurchase the bonds under the powers granted to it under its charter by the law of this State. In discussing the contention and deciding against it, the court, after citing certain cases, said (p. 523): “These cases also in effect hold that a sale with an agreement to repurchase by the vendor is only a conditional rather than an absolute sale.” And the court, after citing certain Minnesota decisions, and disagreeing with certain holdings therein, further said (p. 524): “We are not cited to any statute which forbids expressly such contracts as were here made; and on the plainest principles we think' defendant is estopped to set up that defense (ultra vires). Even if a statute expressly forbade it, there would remain the question of whether it was the intention of the legislature, by the enactment of the statute, to make such a contract wholly void as contrary to public policy.”

And we think that there also is merit in plaintiff’s counsels’ second contention as above. In Ohio & M. Ry. Co. v. McCarthy, 96 U. S. 258, 267, it is said: “Corporations are presumed to contract within their powers. The doctrine of ultra vires, when invoked for or against a corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong.” In Central Transp. Co. v. Pullman’s Palace Car Co., 139 U. S. 24, it is said (p. 60):

“A contract ultra vires being unlawful and void, not because it is in itself immoral, but because the corporation by the law of its creation is incapable of making it, the courts, while refusing to maintain any action upon the unlawful contract, have always striven to do justice between the parties, so far as could be done consistently with adherence to law, by permitting property or money, parted with on the faith of the unlawful contract, to be recovered back, or compensation to be made for it.
“In such case, however, the action is not maintained upon the unlawful contract, nor according to its terms; but on an implied contract of the defendant to return, or, failing to do that, to make compensation for, property or money which it has no right to retain. To maintain such an action is not to affirm, but to dis-affirm, the unlawful contract.”

See, also, Logan County National Bank v. Townsend, 139 U. S. 67, 74-78; Merchants’ Nat. Bank v. State Nat. Bank, 10 Wall (U. S.) 604, 644-5; People’s Bank v. Manufacturers’ Nat. Bank, 101 U. S. 181, 183-4; Thompson v. St. Nicholas Nat. Bank, 146 U. S. 240, 251; Aldrich v. Chemical Nat. Bank, 176 U. S. 618, 636-7; Citizens’ Central Nat. Bank of New York v. Appleton, 216 U. S. 196, 205-6. In the Thompson case it is said (p. 251): “Moreover, it has been held repeatedly by this court that where the provisions of the National Banking Act prohibit certain acts by banks or their officers, without imposing any penalty or forfeiture applicable to particular transactions which have been executed, their validity can be questioned only by the United States, and not by private parties.” In the Aldrich case it is said (pp. 636-7): “There is nothing in the acts of congress authorizing or permitting a national bank to appropriate and use the money or property of others for its benefit without liability for so doing.” In the Appleton case (pp. 205-6) it is decided in substance that although a contract made by a national bank may be illegal as ultra vires, an implied contract may exist compelling it to account for the benefits actually received. (See, also, First Nat. Bank v. Priest, 50 Ill. 321, 323.)

But defendant’s counsel contends that there can be no. recovery by plaintiff in this case under an implied promise or agreement, “where the verified statement of claim alleges an express promise.” Counsel refers to that portion of plaintiff’s “affidavit of amount due,”as above set forth, wherein plaintiff states that his demand is “for $37,085.41, due and owing to plaintiff from defendant under its written agreement, dated November 1, 1929,” etc. In support of his contention counsel cites certain Appellate Court decisions. But we think that plaintiff’s declaration, in which are included the common counts, is sufficient to warrant a recovery under an implied promise or agreement of defendant. (Sands v. Potter, 165 Ill. 397, 407; Evans v. Howell, 211 Ill. 85, 92; Arnold v. Dodson, 272 Ill. 377, 381.) If counsel’s contention be a good one, in those cases where an affidavit of claim has been filed by a plaintiff with his declaration and an affidavit of merits by a defendant with his plea, the result would be that such cases would be tried, as said in Cox v. Aetna Casualty & Surety Co., 261 Ill. App. 394, 399, “upon the issues made by the affidavits instead of by the pleadings.” In our opinion there is no merit in counsel’s instant contention.

For the reasons indicated the judgment of the circuit court is reversed and the cause is remanded.

Reversed and remanded.

Keener and Scanlan, JJ., concur.


author: Mr. Justice Kerner

text:
    The People of the State of Illinois, Plaintiff in Error, v. Estate of Jack Wirkus et al., Defendants. New Jersey Fidelity & Plate Glass Insurance Company, Defendant in Error.
    Gen. No. 35,368.
    Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.
    Arthur L. Israel, for plaintiff in error.

      Andrew J. Farrell, for defendant in error.
   Mr. Justice Kerner

delivered the opinion of the court.

Plaintiff in error brought assumpsit against the Estate of Jack Wirkus doing business as Jack Wirkus & Company, and the New Jersey Fidelity and Plate Glass Insurance Company, on an indemnity insurance contract commonly called a commission merchant’s bond. The statement of claim on motion of the defendant, New Jersey Fidelity and Plate Glass Insurance Company, was stricken from the files and the cause dismissed at plaintiff’s costs, for a reversal of which this writ of error has been sued out.

The statement of claim sets forth in substance that on July 1, 1930, the Estate of Jack Wirkus doing business under the name of Jack Wirkus & Company was engaged in the business of receiving farm produce for sale on commission at 59 South Water street, Chicago, Illinois, and that the New Jersey Fidelity and Plate Glass Insurance Company was engaged in the business of acting as surety on bonds and that defendants executed and delivered to plaintiff a certain bond or undertaking in and by which they jointly and severally acknowledged themselves to be held and firmly bound unto the plaintiff in the sum of $5,000 to be paid to the plaintiff, which said writing obligatory was subject to a certain condition thereon written to the effect that if the Estate of Jack Wirkus doing business as Jack Wirkus & Company, who had applied or at the date of said bond was about to apply to the Director of Agriculture of the State of Illinois for a license to engage in the business of receiving farm produce for sale on commission until the first day of July, 1931, at 59 South Water street, Chicago, Illinois, pursuant to the provisions of “An Act to regulate the consignment and sale on commission of farm produce,” Cahill’s St. ch. 5, if 24 et seq., approved June 28, 1919, in force July 1, 1919, as amended, and who has procured to be furnished this bond in accordance with the provisions of said act should honestly account for and handle all the produce received and should make payment to the consignors thereof of all moneys or things of value received for goods consigned to said principal for sale and should indemnify and keep indemnified said consignors from and against all fraudulent acts of said principal in the sale or handling of the goods of said consignors and should keep, perform and abide by all the terms, conditions and provisions of said act and all lawful rules and regulations of the Department of Agriculture of the State of Illinois made in pursuance thereof, then the said obligation was to be void, otherwise to remain in full force and effect; thereupon the State of Illinois- by the Director of Agriculture issued a license to the Estate of Jack Wirkus doing business as Jack Wirkus & Company to engage in the business of receiving farm produce for sale on commission, and the said Estate of Jack Wirkus doing business as Jack Wirkus & Company proceeded to engage in such business; that there was delivered to the said Estate of Jack Wirkus doing business as Jack Wirkus & Company, certain produce for sale on commission of the kind and value by the consignors and at the times as follows: (here naming the consignors, the date and the amount of their shipments); that the Estate of Jack Wirkus doing business as Jack Wirkus & Company did not honestly account for and handle nor make payment for the produce delivered, nor did it indemnify the said consignors against its fraudulent acts in the handling of the goods of said consignors.

In arguing for an affirmance defendant in error contends that the conditions imposed in the second paragraph of section 4 of the Act are conditions precedent and must be complied with, and that the failure of the plaintiff .and the consignors, on whose behalf the action was brought, to comply iVith the conditions, is a bar to recovery.

The statute involved in this case is known as ch. 5, secs. 3 and 4 (Cahill’s Revised Stats. 1931, page 82, ch. 5, fílí 26 and 27), being an “Act to regulate the consignment and sale on commission of farm produce, and to repeal an Act therein named,” and provides as follows:

“Sec. 3. Before any such license shall be issued every applicant shall execute and deliver to the Director of Agriculture an indemnity bond for five thousand ($5,000.00) dollars and with sureties satisfactory to the said director. All bonds to be of a standard form as to terms and conditions, approved by the director, and to secure an honest accounting and handling of produce received and for the payment to the consignor of all moneys or things of value received for goods consigned to such licensee for sale and to secure consignor against all fraudulent acts of said licensee in the sale or handling of the goods of consignor. And the director may bring an action in any court of competent jurisdiction in the county in which is situated the place of business of the licensee to recover payment for goods sold on commission and not paid to consignor, or not honestly accounted for, and for damages sustained by consignors by reason of such fraudulent acts and wrongful handling and if such licensee has become liable to more than one consignor, and the amount of the bond is insufficient to pay the entire liability, the consignors shall be compensated in proportion to their several claims, the said sums when collected to be promptly paid over to the parties entitled thereto.
“Sec. 4. . . .
“When a consignor of farm produce fails to obtain an honest accounting in any transaction he shall within sixty (60) days after the shipment of the goods make a demand upon the consignee for either an honest accounting or payment for goods shipped. Ten days after making this demand, if an honest accounting or payment has not been received by the consignor, he shall file with the director a copy of this demand together with an affidavit setting forth the nature and amount of the goods consigned, the date of the consignment, and the amount he believes to be due and owing him, together with bills of lading and delivery receipts showing the goods were shipped to and received by the consignee. The director shall attempt to secure an explanation or adjustment; failing this, within seven days after receipt of such complaint from consignor, he shall cause a copy thereof, together with a notice of a time and place for a hearing on such complaint, to be served personally or by mail upon such commission merchant. Such service shall be made at least seven days before the hearing, which shall be held in the city, village or township in which is situated the place of business of the licensee. At the time and place appointed for such hearing, the director or his assistants shall hear the parties to such complaint, shall have power to administer an oath, and shall enter in the office of the director at Springfield, a decision either dismissing such complaint or specifying the facts which he deems established on such hearing, and in case such facts are established as cause him to revoke such license, he shall bring an action on the bond within sixty days of the filing of such decision.”

In the case of People v. Frank G. Heilman Co., 263 Ill. App. 514 (certiorari denied by Supreme Court February 18, 1931), we found it necessary to examine critically the statute now called again into question. As a result of that examination we enounced our construction of the statute and held that compliance with section 4 was not a condition precedent to an action on a commission merchant’s bond, brought under the authority of the act for the benefit of consignors.

Counsel for defendant in error urges that a cause of action cannot be predicated upon the bond because the bond is a nullity, and Godair’s Estate v. Case, 220 Ill. App.. 348, is cited, in which the action failed because the named plaintiff lacked legal entity to sue. We think that case is clearly distinguishable in that in the instant case the litigation is between the beneficiary named in the bond and the surety. Whether the Estate of Jack Wirkus could or could not be sued is not the question before us. The question now before us is whether the surety is liable to the beneficiary even though the principal cannot be sued. As a general proposition, the liability of the surety is limited by that of his principal. But to this there are exceptions, and the case before us is one of them. The bond in the instant case is several as well as joint. A general demurrer admits the facts stated in the statement of claim and a motion to strike performs the office of a demurrer. By the motion in the instant case defendant in error admitted the execution of the bond sued on; that there was delivered to the principal the produce enumerated in the statement of claim, and that the principal has not honestly accounted for nor made payment for such produce. Under such circumstances, the surety is bound notwithstanding the Estate of Jack Wirkus could not be sued, as an estoppel in pais arises, the effect of which is to conclude the defendant in error from denying its bond is not a binding obligation. (Covenant Mut. Life Ass’n v. Kentner, 188 Ill. 431; Courson v. Browning, 78 Ill. 208.) In Coons v. People, 76 Ill. 383, it was claimed the bond was void, therefore the surety could not be held. It was said (p. 389): “The obligors manifestly intended to bind themselves for the faithful discharge of all the duties of Coons . . . and they delivered it, and the county authorities received it as a valid and effectual instrument. The makers, we may well suppose, intended to deliver a valid instrument. Nor did the county authorities intend to receive an invalid bond." See also People v. Johr, 22 Mich. 461; Davis v. Statts, 43 Ind. 103; and Commonwealth v. Hill, 145 Mass. 305.

We think the statement of claim stated a cause of action and that the judgment must be reversed and the cause remanded.

Reversed and remanded.

Gtridley, P. J., and Scanlan, J., concur.


text:
    Union Bank of Chicago, Administrator of the Estate of Jeanne Lola Nauman, Appellee, v. E. A. Kalkhurst et al., Defendants. Appeal of Jack Kalkhurst, Appellant.
    Gen. No. 35,407.

      Heard in the second division of this court for the first district at the October term, 1931.
    Opinion filed February 23, 1932.
    Sanders, Childs, Bobb & Wescott, for appellant; W. L. Bourland and F. M. Hartman, of counsel.
    Philip Rosenthal and Stuart B. Krohn, for appellee and defendant in error; Stuart B. Krohn, of counsel.
    Church, Haft, Robertson, Crowe & Spence, for plaintiff in error; William T. Church and Burt A. Crowe, of counsel.
   Mr. Justice Kerner

delivered the opinion of the court.

This was an action on the case brought under the statute by Union Bank of Chicago, as administrator of the estate of Jeanne Lola Nauman, deceased, against E. A. Kalkhurst, Jack Kalkhurst, Gertrude Hammes and Dorothy Marshall, for wrongfully causing the death of Jeanne Lola Nauman. During the trial the court directed verdicts of not guilty as to E. A. Kalkhurst and Dorothy Marshall. The cause was tried before a jury and plaintiff recovered a judgment against Jack Kalkhurst and Gertrude Hammes for $10,000. To reverse this judgment Jack Kalkhurst appealed, and Gertrude Hammes sued out a writ of error. The appeal and writ of error were consolidated for a hearing.

The declaration consisted of four counts. The first count alleged that April 30, 1929, the defendants were possessed of, had charge and control of, and were operating a certain automobile in a southerly direction near 215 Fifth street, Wilmette, Illinois; that while plaintiff’s intestate was proceeding westward across Fifth street, they carelessly, negligently and improperly drove, managed, ran, used, controlled and operated the said automobile southward on said highway so that it struck the plaintiff’s intestate and as the result of said negligence, plaintiff’s intestate sustained injuries resulting in her death April 30, 1929. In the second count the charge is wilful and wanton negligence. In the third and fourth counts the respective charges are the negligent propelling through a residence portion of an incorporated city at a speed of 40 miles an hour, and the negligent propelling of the automobile at a dangerous rate of speed without giving warning of its approach. Each count alleges that the parents of the deceased and her next of kin were at all times in the exercise of ordinary care for her safety. The defendants, Jack Kalkhurst and Gertrude Hammes, each pleaded the general issue and special pleas of nonownership and operation.

The record discloses that about 7 o’clock on the evening of April 30, 1929, a number of children were playing on the east side of the street near the home of the deceased at No. 215 Fifth street, Wilmette; that at the time of the accident Gertrude Hammes, accompanied only by one Dorothy Marshall, was driving an automobile south on the right or west side of the street and the deceased, seven and one-half years of age, was running from the east to the west side of the street, and while so running and when at a point three feet from the west curb she was struck by the automobile receiving injuries which caused her death.

The remaining undisputed facts, as shown by the evidence, are that E. A. Kalkhurst, the owner of the automobile, on the evening in question gave permission to his son Jack, then 18 years of ag*e, to take and use the automobile; that Jack drove the automobile to the home of one Kay Marshall, where he met Gertrude Hammes and Dorothy Marshall; that Dorothy Marshall did not know how to drive an automobile, of which fact Jack had knowledge; that Dorothy requested he take her for a ride but he replied he came to see her brother; that thereupon Gertrude Hammes, then 16% years of age, and who to Jack’s knowledge had driven an automobile before, said she would take the automobile around the block while Kay and Jack were talking; that Jack gave the key to the automobile to Dorothy and she gave it to Gertrude and the two girls entered the automobile and drove away, Gertrude doing the driving. There was no evidence that Gertrude was an incompetent driver, but on the contrary the evidence shows that she had considerable experience in the operation of automobiles, having driven an automobile every day for a year and that she never had any previous accident.

Various errors are assigned. We have deemed it necessary to consider only the first point made as it seems to be decisive of the case. The contention made by appellant is that there is no evidence to establish liability on his part for the injuries suffered by appellee’s intestate. It is his contention that the lender of an automobile is not liable to third persons for the negligent acts of the borrower while using it for her own purpose.

The rule is now firmly established that an automobile is not so dangerous an agency as to make the owner, liable for injuries caused by it regardless of the agency of the driver and that it is not dangerous per se (Arkin v. Page, 287 Ill. 420), and the owner who merely permits another to use it for his own purpose is not liable for the negligence of the person so using it. (White v. Seitz, 342 Ill. 266; Andersen v. Byrnes, 344 Ill. 240.) But, say appellee’s counsel, its claim of liability against the appellant is that Gertrude was acting as the agent of appellant, and in arguing for an affirmance say that before appellant gave the key to Dorothy Marshall he knew that she did not know how to, and could not, drive the automobile, and that it would be necessary in order to fulfill the purpose for which he delivered the key to Dorothy for someone to drive her, and he thereby appointed Gertrude his agent to drive Dorothy Marshall and therefore he is liable for any negligent act on her part while so acting. On the other hand, it is the contention of appellant that the evidence clearly shows .that the relation between Gertrude and the appellant was that of bailor and bailee, and not that of master and servant; that the legal situation contended for by appellee did not arise. In support of its contention appellee’s counsel cites Gates v. Mader, 316 Ill. 313, in which the owner of the automobile desired to have his wife, who could not drive the automobile, attend a party and for the purpose of conveying her to the party gave her permission to get someone else, to drive it. A son of the defendant drove the automobile and on the way the accident happened. The court in affirming the judgment placed its decision upon the relation of master and servant. After an examination of Gates v. Mader, supra, we are of the opinion that it is not applicable to the facts in the instant case.

The general rule is that a party injured by the negligence' of another must seek his remedy against the person who caused the injury. To this general rule the cases of master and servant and principal and agent are exceptions and the negligence of the servant or agent is imputable to the master or principal, but to bring the case within the exception it is necessary to show that the relation of master and servant or principal and agent exists between the person at fault and the one sought to be charged for the result of the wrong, and the relation must exist at the time and in respect to the particular transaction out of which the injury arose. (Mosby v. Kimball, 345 Ill. 420, 427.) A servant is one who is employed to render personal services to his employer, and who in such services remains, entirely under the control and direction of the latter. (Woods v. Bowman, 200 Ill. App. 612, 615.) In the instant case there was no evidence of any employment of Gertrude by the appellant and consequently there was no relation of principal and agent, and it is clear that Gertrude was in actual, active control and operation of the automobile in her own behalf, and that she undertook what she did in the driving of the automobile for her own pleasure and not as the agent of the appellant.

It is also claimed that appellant was negligent in turning over the automobile to an incompetent driver and that mere age alone is sufficient evidence of incompetence. It is true that although, an automobile is not a dangerous instrument per se, yet it may become such if operated by one who is unskilled in its use. And, where the owner intrusts such a machine to an inexperienced or incompetent person, liability for damages may arise (Elliott v. Harding, 107 Ohio St. 501, 140 N. E. 338; Robertson v. Aldridge, 185 N. C. 292, 116 S. E. 742), and the age of the driver may be a controlling factor in determining competency. (Rush v. McDonnell, 214 Ala. 47, 106 So. 175.) However, in the instant case there is no evidence in the record that Gertrude Hammes was an incompetent driver or that appellant knew she was incompetent at the time he loaned the automobile to her, but the record affirmatively shows he knew her to be competent. Nor can we agree that the age of Gertrude Hammes alone is sufficient evidence of incompetence. (See Cahill’s St. 1931, ch. 95a, If 32; Perry v. Simeone, 197 Cal. 132, 239 Pac. 1056, 1057.)

It will not be necessary that we express any opinion as to whether any liability exists as against the plaintiff in error, Gertrude Hammes. The judgment against Jack Kalkhurst and Gertrude Hammes is a joint one. A judgment in an action of trespass is a unit as to all defendants against whom it is rendered and if it must be reversed for error as against one it must be reversed as to all. (South Side El. R. Co. v. Nesvig, 214 Ill. 463, 469; Singer v. Cross, 257 Ill. App. 41, 44.)

The judgment of the superior court is reversed and the cause is remanded.

Reversed and remanded.

Gridley, P. J., and Scanlan, J., concur.