author: Mr. Justice Dove

text:
    Roy F. Hall, Appellant, v. Rodney I. Putney and Helen Putney, Appellees.
    Gen. No. 9,207.
    Heard in this court at the May term, 1937.
    Opinion filed June 30, 1937.
    Rehearing denied October 7, 1937-.
    Hall & Dusher, of Rockford, for appellant.
    Frank E. Maynard, of Rockford, for appellees.
   Mr. Justice Dove

delivered the opinion of the court.

The complaint in this case was filed August 7, 1935, praying for an injunction to suppress the continuance of an alleged nuisance. On November 21, 1936, a supplement to the complaint was filed. The defendants answered and the cause was heard by the chancellor in open court, resulting in a decree dismissing the complaint for want, of equity and the plaintiff brings the record to this court for review.

The nuisance complained of is a root beer stand which the defendants have been operating since July 27, 1931. The stand is equipped with a basement of cement blocks and the upper portion is of wood construction, the boards running parallel with the earth. It is approximately 12: feet square and the eaves extend out some four feet. There is a counter around the stand about four feet from the ground and above the counter the sides of the stand raise outward and are hinged at the top and when the stand is open for business, these sides are fastened at the top and all four sides are open. On top of the stand there is a sign upon which appears, “Putneys Ice Cold Root Beer, Barbecues, Hot Dogs, Ice Cream.” On each side of the stand on the edge of the cornice there are two 60-watt electric lights and on top of the stand in reflectors pointing toward the sign are two 200-watt electric lights. The stand is supplied with gas and water and is operated from the beginning of warm weather in the spring, May or June, until cool weather in the fall; ordinarily about five months of the year. In addition to selling root beer, the defendants vend peanuts, candy bars, popcorn and sandwiches. Hamburgers and hot dogs are cooked as ordered, but the other meat used for sandwiches is not cooked at the stand.

The evidence further discloses that the plaintiff has a substantial, modern residence located on a five-acre tract at the intersection of Spring Creek road and North Second street road outside of the city limits of Rockford and has been living there since April, 1928. North Second street extends in a northeasterly direction and is a four-lane cement highway upon which a great deal of traffic passes. Spring- Creek road runs east and west and is also a much traveled cement highway. The plaintiff’s property lies directly to the east of and borders North Second street road and lies north of and borders Spring Creek road. One hundred feet east of the plaintiff’s residence on the north side of Spring Creek road is the residence of J. H. Abramson and across Spring Creek road from the Abramson residence are the Homer Bliss and Edward Eisnor residences. North of the plaintiff’s residence and on the same side of North Second street is the residence of Dr. Edward Weld and northeast of the plaintiff’s residence is the home of Robert Gaylord, which is on the north side of the Spring Creek road. The property of the defendants is located on Lot Three of Shorewood Addition and this stand is 266 feet northeast of the intersection of the Spring Creek road and North Second street on the west side of North Second street and 250 feet west of the residence of the plaintiff. From the northeast corner of the intersection of Spring Creek road and North Second street, it is 350 feet to the southwest corner of plaintiff’s residence. At the intersection of the Spring Creek road and the North Second street road is an automatic red, yellow and green traffic signal and the evidence is that it is a busy intersection. Some 600 or 700 feet west of the plaintiff’s property is the Rock River running in a northerly and southerly direction. East of the river and between it and the plaintiff’s property are the tracks of the Northwestern Railway Company and east of those tracks are the office building, garage, two storage warehouses, two lumber sheds and coal yard of the High Bridge Lumber Company and east of these and directly west of the defendants’ property is the abandoned right of way of the Rockford and Interurban Railway Company. At the south end of the Lumber Company’s property and facing* Spring Creek road is a gasoline filling station and it is approximately 400 feet from the residence of the plaintiff. South of the defendants ’ stand about 200 feet is another root beer stand which was operated in 1936. This stand is about 300 feet from the plaintiff’s residence.

The customers of the plaintiff are chiefly those who come to the stand in automobiles. The stand opens for business about nine or ten o’clock in the morning and is kept open until midnight or shortly thereafter every day in the week, including Sundays. At the time the complaint was filed the family of the plaintiff consisted of himself, his wife and eight children, and at the time of the hearing consisted of himself, wife and seven children, one child having passed away on October 25, 1935.

The evidence further discloses that the plaintiff, his wife and members of the family had been disturbed by the bright lights from the stand entering the sleeping room of one of the children of the plaintiff and they had also been awakened by noise that came from the stand, such as the tooting of horns, the grinding of brakes, the starting of an automobile engine and the closing of automobile doors. The stand maintains curb service and when a car stopped the horn of the automobile was sounded and a waiter came to secure the order of the occupants of the car, and when those in the automobile desired to leave the horn of the automobile was again sounded and the waiter came to get the trays. Carl A. Nelson testified on behalf of the plaintiff to the effect that he was employed by the plaintiff and from a point 75 or 80 feet east of the stand, he observed on several evenings the number of cars which stopped at the stand of the defendants and upon those occasions made a notation of what occurred. For instance, he testified that on Saturday evening, July 27, 1935, between 9:00 p. m. and 12:45 a. m. there were 119 cars stopped at the stand; that frequently when the cars stopped the brakes squeaked and some cars did not have mufflers on them and the usual noise accompanied the starting of the engines on the various automobiles. On Sunday night, July 28, 1935, Nelson testified that the stand closed at 12:30 a. m. and that 131 cars stopped at the stand that evening; that some of the cars blew their horns and that two of the cars had no mufflers and one had a radio that was turned on. On August 1, 1936, Nelson testified that' from 9 o ’clock until 10 o ’clock 96 cars stopped and from 10 to 11 o’clock 75 cars stopped and from 11 o’clock to midnight 47 cars stopped and from midnight until‘one o’clock of the following morning 96 cars stopped.

It would serve no useful purpose to set forth in detail all the evidence in this record. The plaintiff and his wife testified about the noise, the odor caused from cooking meat and the light emanating from the defendants’ stand, which forms the basis of this suit. In addition to their evidence and that of Mr. Nelson, to which we have referred, L. T. Ryder, a commercial photographer, was called as a witness and identified two photographs of the defendants’ property taken on July 9,1936. We have examined these photographs and others found in the record. Homer Bliss and Nellie Bliss, his wife, who live on the south side of Spring Creek road some 500 feet from defendants’ stand, both testified on behalf of the plaintiff, Mrs. Bliss to the effect that the radio, lights and loud talking at the stand bothered her and Mr. Bliss to the effect that particularly on Saturday and Sunday he could hear the grinding of brakes, loud talking and the sound of a radio which disturbed him and the members of his family. J. H. Abramson, who lives about 100 feet east of the plaintiff, testified on behalf of the plaintiff and stated that he had planted considerable shrubbery to screen out the lights from the stand of the defendants and that when sitting in his yard on summer evenings, he was disturbed by the honking of horns, the screeching of brakes, the slamming of doors and radio programs coming from the premises of the defendants. W. L. Taylor also was called as a witness for the plaintiff and testified that the view from the west window of the northwest upstairs room of the plaintiff’s home to the defendants’ stand was unobstructed and that in order to screen out the lights of the stand of the defendants, it would be necessary to use five tall evergreens which would cost about $250 to plant and insure their growth.

Twenty-one witnesses, including the defendants, testified on their behalf and the record of their testimony embraces 213 pages of the record. Many of the witnesses testified that they had been at defendants’ stand at various times and upon those occasions there were no loud or unusual talking or noises of any kind and no loud or continued honking of horns or squeaking of brakes or slamming of automobile doors and that there was no radio at the stand during 1935 or 1936 except on two occasions, one of which was when the Lewis-Schmeling fight was broadcast and that as soon as this particular feature was concluded, the defendants returned their radio to their home. The evidence offered on behalf of the defendants further discloses that as automobiles proceeded over North End Bridge and turned from the east towards the north, that at night their headlights shone directly into and upon the plaintiff’s property and upon and into his residence, that when automobiles, trucks and busses approached the intersection of Spring Creek road and North Second street road and were obliged to stop in obedience to the traffic signal there, that considerable noise was made from squeaking brakes and the honking of horns which could be distinctly heard at the defendants’ stand 200 feet distant, and for a further distance than the plaintiff’s .residence. That automobiles also stopped and started at the other root beer stand conducted at this intersection the same as they did at the defendants’ stand.

We have read the evidence as abstracted by counsel for appellant and as abstracted by counsel for appellees and have also examined the record and the several photographs and plat' included therein.. According to the testimony of some of the witnesses for the plaintiff, the defendants had a radio which was turned on broadcasting ball games every afternoon and was operated loudly every evening. This was denied by the defendants and from their testimony it appears that only upon two occasions and then for a short time only did they have a radio at their stand. Other witnesses testified that the only radio heard at the stand was an occasional one in some customer’s automobile. A witness for the plaintiff testified that no lights from automobiles came into the plaintiff’s residence as those automobiles crossed North End Bridge and turned north and east into North Second street road, but a number of witnesses for the defendants testified that they did. Mr. Ryder testified that when he was in the Hall residence for the purpose of taking a night photograph, which is in the record, he looked out of an upstairs window and saw cars crossing across the North End Bridge and turn north into Second street road and that their lights shone on the ceiling of the room where he was. The father of a boy who had been accused of shooting fireworks near the defendants’ stand along in July, 1935', went upon the plaintiff’s property and stood in the shrubbery about 75 feet away from the defendants’ stand on three different evenings in July of that year. He testified that he remained there for some "time, observed and heard what was going on at the defendants ’ place of business and his evidence was to the effect that there were no loud or unusual noises that could disturb anyone.

In Phelps v. Winch, 309 Ill. 158, the complainants sought an injunction restraining the defendants from operating a dance pavilion. In reversing the judgment of this court and the decree of the circuit court and remanding the cause to the circuit court with directions to enter a decree enjoining the defendants from operating the pavilion in such manner as to interfere with the reasonable comfort and enjoyment of life by complainants and other persons of ordinary sensibility occupying their premises, the Supreme Court quoted from First M. E. Church v. Cape May Grain & Coal Co., 73 N. J. Eq. 257, as follows: “While defendant is entitled to the enjoyment of its property in the pursuit of a lawful business, that business must be conducted with due regard to the well recognized rights of surrounding property owners. When such business becomes creative of conditions which clearly render the appropriate enjoyment of surrounding-property impossible the rights of others are invaded, and equity will restrain the persistent pursuit of such injuries. . . . The law takes care that lawful and useful business shall not be put a stop to on account of every trifling or imaginary annoyance such as may offend the taste or disturb the nerves of a fastidious or over-refined person; but, on the other hand, it does not allow anyone, whatever his circumstances or condition may be, to be driven from his home or to be compelled to live in it in positive discomfort, although caused by a lawful and useful business carried on in his vicinity.”

In Off v. Exposition Coaster, Inc., 336 Ill. 100, the court affirmed a decree of the circuit court which restrained the defendants from operating- a roller coaster, shooting- gallery, tipsy house, a “dodgem,” a dance hall, a merry go round, a cat’s meow and other amusements near the dwellings of the plaintiffs. After reviewing the evidence, the court stated that in its opinion the noises described by the several witnesses would unquestionably affect the sensibilities of ordinary people in the enjoyment of their homes and held that a court of equity would enjoin a business which is not a nuisance per se if the manner in which the business is operated seriously injures the premises of the complainants and interferes with the physical comforts of ordinary people.

In Klumpp v. Rhoads, 362 Ill. 412, the plaintiffs sought to enjoin the defendants from operating a gasoline, oil and ice service station in the vicinity of their residence. In holding that there was no sufficient testimony to show any substantial interference with the rest, comfort or privacy of the plaintiffs, the court said: “"When a business creates conditions which clearly render the appropriate enjoyment of surrounding property impossible, the rights of others are invaded and equity will restrain the persistent pursuit of such injuries. If the damages are of a nature which can not be adequately compensated for in a suit at law, equity will afford relief by injunction. On the other hand, lawful and useful business may not be stopped on account of trifling or imaginary annoyances which do not constitute real injury. If the right to relief is doubtful, either as to the law or under the facts proved, equitable relief will not be granted.” (Citing the Off and Phelps cases, supra.)

The facts in the instant case are clearly distinguishable from the facts in any of the cases herein referred to. The term nuisance extends to everything that endangers life or health, gives offense to the senses, violates the laws of decency or obstructs the reasonable and comfortable use of property. 20 R. 0. L. 380. The defendants ’ business is the vending of non-intoxicating beverages, confections and sandwiches. It has none of the objectionable features of a dance pavilion or an amusement park. The objectionable noise chiefly comes from the honking of horns, screeching of brakes, the starting of the engines and the closing of doors of automobiles, the occupants of which are customers of the defendants. Our sympathies are with the plaintiff and we have no doubt that at times the conditions at and near the stand of the defendants are annoying to the plaintiff and his family and are such as to interfere with their full and complete enjoyment of their home; there is some conflict in the evidence, however, and we hesitate to substitute our judgment for that of the chancellor who heard the evidence in open court and who had an opportunity of observing the several witnesses who testified. Under a well "established principle of law,, this court, from all the evidence found in this record, would not be justified in disturbing* his findings unless we felt that those findings were manifestly and palpably wrong. Hall v. Pittenger, 365 Ill. 135.

Inasmuch as the decree of the circuit court of Winnebago county will be affirmed, it is unnecessary for us to pass upon the motion of appellee to strike a portion of appellant’s brief.

Decree affirmed.


source: Caselaw Access Project

author: Mr. Presiding Justice O’Connor

license: Public Domain

text:
    Anna M. Lee et al., Appellees, v. Carl A. Hansberry et al., Appellants.
    Gen. No. 39,754.

      Heard in the first division of this court for the first district.
    Opinion filed October 7, 1937.
    Rehearing denied October 22, 1937.
    Earl B. Dickerson, Truman K. Gibson, Jr., C. Francis Stradford, Loring B. Moore and Irvin C. Mollison, all of Chicago, for appellants.
    Charles A. Churan and Schuyler & Hennessy, both of Chicago, for appellees.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiffs filed their verified complaint in equity against defendants to enjoin them from violating the provisions of a restrictive agreement entered into between about 500 property owners of property on the South side of Chicago known as the Washington Park subdivision. The restrictive agreement provided against the leasing or selling of any of the premises to persons of the colored race. Certain of the defendants filed their motion to strike the complaint in the nature of a special demurrer. Plaintiffs moved for a temporary injunction and the court entered an order finding that the complaint was sufficient to require an answer, defendants were ordered to answer it within 30 days, and that a temporary writ of injunction issue restraining the defendants. They prosecute this interlocutory appeal, seeking a reversal of that part of the order which awarded a writ of injunction. The validity of the restrictive agreement in question was upheld by another division of this court. Burke v. Kleiman, 277 Ill. App. 519.

The allegations of the complaint, so far as it is necessary to state them here, are that defendant James Joseph Burke had been president and executive secretary of the Woodlawn Property Owners’ Association until March 1, 1937, when he resigned. The object of the Association was to enforce the restrictive agreement entered into by the owners of the property involved ; that Burke had a falling out with the members of the Property Owners’ Association, and afterward entered into a conspiracy with defendants Hansberry and Pace, members of the colored race, the latter an attorney and secretary of the Supreme Liberty Life Insurance Company, to violate the terms of the restrictive agreement by placing Negroes either as owners or tenants of property in the restricted area; that through fraud and misrepresentation these defendants induced the First National Bank of Englewood, which held title to the premises known as 6140 Rhodes avenue, and which was in the restricted area, to sell it to J. B. Crook, a white person, and thereupon Crook conveyed the premises to defendant Hansberry; that some time prior to the conveyance of the Rhodes avenue property Hansberry, through connivance, secured a lease on the premises at 549 East 60th street, in the restricted area, and that afterward this lease was held invalid by the circuit court of Cook county, and such holding was affirmed by this court. Plath v. DeLauntry, 289 Ill. App. 625 (Abst); that Hansberry having on May 26, 1937, been ousted from the property on 60th street, immediately moved into the Rhodes avenue premises where he was living at the time, and on June 7th thereafter the instant suit was brought.

It is further alleged in the complaint that defendant Pace unlawfully occupied premises at 413 East 60th street, within the restricted area, and that a suit to enforce the provisions of the agreement in question was filed against Pace- in the Superior court of Cook county; that defendant Burke maliciously conspired with Hansberry and Pace and other members of the colored race to violate the terms of the restrictive agreement by placing colored people as tenants or owners of property within the restricted area, and that Burke had stated he was going to do this and get even with the Woodlawn Owners’ Property Association by putting colored people in every block of the property; that violation of the provisions of the restrictive agreement by the defendants has irreparably damaged the property in question; that certain of the white tenants of some of the property are threatening to break their leases and vacate premises occupied by them. There are a number of other allegations setting up violations of the provisions of the restrictive agreement, but we think it unnecessary to refer to them further.

By the order appealed from the defendants were enjoined from violating any of the provisions of the restrictive agreement and defendant Hansberry and wife were restrained from attempting to collect rent from tenants of the second or third apartments of the premises at 6140 Rhodes avenue, and in case such tenants, who were of the white race, moved out, from placing Negro tenants in the two apartments. The two tenants were ordered to deposit their rents with the clerk of the court. The order found that Hans-berry and wife “are unlawfully in title, possession and occupancy of” 6140 Rhodes avenue because of the violation of the restrictive agreement, and it was further ordered that they vacate the premises within 90 days, and upon their failure to do so that a writ of assistance issue.

Defendants contend that the complaint fails to state a cause of action because it fails to allege the restrictive agreement was signed by the owners of 95 per cent of the frontage of the property in the restricted area and that by the terms of the restrictive agreement it was not to become effective unless signed by the persons owning 95 per cent of the frontage. The agreement provides that it shall not be effective unless “signed by the owners ... of ninety-five per centum of the frontage above described.” The allegation of the complaint is that “ninety-five per centum of the owners of the frontage above described” have signed the agreement. We think the objection is hypercritical, but in any event, even if the complaint were subject to the special demurrer or motion to strike on this ground, that would not warrant us in disturbing the order appealed from. McDougall Co. v. Woods, 247 Ill. App. 170; Friedman v. Peckler, 255 Ill. App. 199; Levy v. Rosen, 258 Ill. App. 262; Lincoln Trust & Savings Bank v. Nelson, 261 Ill. App. 370; Mayer v. Collins, 263 Ill. App. 219; DeKalb Trust & Savings Bank v. DePaul Ed. Aid Society, 278 Ill. App. 102.

In the McDougall case, which was an appeal from an interlocutory order appointing a receiver and granting a temporary injunction, we said (p. 172) : “In appeals from interlocutory orders it is not our province to determine the rights of the parties in the subject matter of the litigation, but simply to determine from the averments of the bill whether the party probably is entitled to the relief sought”; that where such order was improperly granted without notice where notice was required, or where the statute required a bond as a condition precedent and none had been given, the order will be reversed without reference to the merits of the cause. And continuing we said (p. 174): “We do not feel called upon to pass upon the demurrability of the bill or the merits of the cause. It is enough to say at present that the bill presents circumstances which lead to a belief that probably the plaintiff will be entitled to relief.” This holding was followed in each of the cases above cited.

A number of other objections of a similar character are urged by defendants, all going to the question of the sufficiency of the allegations; but what we have said we think is sufficient to hold that thesé contentions are untenable on this appeal.

A further point is made that the order is wrong and should be reversed because it disturbs “the status quo” of the parties, in that Hansberry and his wife are ordered to vacate and give up possession of the premises at 6140 Rhodes avenue within 90 days, and it is said that a preliminary mandatory injunction ‘ ‘ cannot be entered except under rare circumstances, ’ ’ where the case has not been heard on its merits.

In Peoples Gas Light & Coke Co. v. Slattery, 287 Ill. App. 379, we said (p. 389): “While as a general rule a preliminary mandatory injunction will' not be awarded, yet in a proper case the issuance of such an injunction may be the only effective remedy (Pokegama Sugar-Pine Lumber Co. v. Klamath River Lumber and Imp. Co., 86 Fed. 528), and as said in United Rys. of San Francisco v. Superior Court, 172 Cal. 80 (155 Pac. 463): ‘There is no magic in the phrase “Maintaining the status quo” which transforms an injunction essentially prohibitive into an injunction essentially mandatory.’ ” (See also Whitecar v. Michenor, 37 N. J. Eq. 6; Broome v. New York and N. J. Tel. Co., 42 N. J. Eq. 141.) There are cases in which the status quo ought not to be maintained. Such was the holding in the Pokegama case and several authorities there cited.

In the instant case it appears from the allegations of the bill, which for the purpose of this appeal must be admitted to be true, that Hansberry was familiar with the restrictive agreement of the property owners in question; that he entered into a conspiracy as above stated, to obtain title to the property which he knew was in violation of the terms of the agreement and which he knew had been held valid and binding by another division of this court. (277 Ill. App. 519.) He had been ousted from the occupancy of another piece of property in the restricted area on 60th street, by the circuit court of Cook county and which had been affirmed by this court. (Plath v. DeLauntry, 289 Ill. App. 625 [Abst.]). The day he moved from the property on 60th street he immediately moved into the property on Rhodes avenue. None of these allegations is denied, but as stated, on this record are admitted to be true. In these circumstances Hansberry is in no position to argue that the status quo should be maintained until the case is heard. The court by the order appealed from gave him 90 days in which to vacate the premises. If he had any defense he could have filed his answer and had the case heard on its merits within that time. From what we have said, we think it obvious there is no merit in Hansberry’s contention that the order appealed from should be reversed because the court had no jurisdiction to direct the issuance of the writ of assistance in case Hansberry failed to vacate the premises. Since we hold that defendants’ objection to the order was untenable, it follows that a writ of assistance was properly awarded. And under the holding in the McDougall case, from which we have above quoted, we think the order is not reversibly erroneous in finding that Hansberry unlawfully held title to the Rhodes avenue property. Obviously, if he has any defense it can be shown on the trial of the cause.

The order of the circuit court of "Cook county is affirmed.

Order affirmed.

McSurely and Matchett, JJ., concur.


text:
    Review Printing and Stationery Company, Appellant v. William H. McCoy, et al., Appellees.
    Gen. No. 9,158.

      Heard in this court at the October term, 1936.
    Opinion filed September 28, 1937.
    Welsh & Welsh, of Rockford, and Vail, Mills & Armstrong, of Decatur, for appellant.
    C. A. Pedderson, of Rockford, pro se, and appellee William H. McCoy. Hall & Dusher, of Rockford, for appellee John H. Camlin.
   Mr. Justice Dove

delivered the opinion of the court.

On March 28, 1933, appellant instituted this action of assumpsit in the circuit court of Winnebago county, to recover upon seven trade acceptances. The declaration alleged that the instruments sued on were drawn by the plaintiff in November, 1930, February, March, June, and October, 1931 for various amounts aggregating $18,135.37, and thereafter, upon sight, the defendants, styling themselves McCoy Directory Company, through their duly authorized agent, accepted said bills and thereby became liable to pay to the plaintiff the respective amounts according to the tenor and effect of the said acceptances. In addition to this special count, a separate paragraph of which declared upon each of the seven trade acceptances, the declaration contained the consolidated common counts. Attached to the declaration were copies of the seven trade acceptances together with an affidavit of claim to the effect that the amount then due the plaintiff, after allowing all just credits, was $16,500. The defendants each filed the general issue and three special pleas by which they denied joint liability and set up the statute of frauds and the five-year statute of limitations. These defendants also each filed a fourth special plea in which it was alleged that the McCoy Directory Company was a common law trust, that the .plaintiff knew it was,- that there was a provision in the trust agreement which stipulated that the trustees would not be liable personally for any obligations named in said trust, of which provision plaintiff had knowledge, and that so knowing plaintiff had its dealings with the McCoy Directory Company and no personal dealings with the defendants. In addition to these pleas, the defendants, Pedderson and McCoy, each filed a plea denying that he ever became a trustee under the trust agent of the McCoy Directory Company, a trust. To these pleas replications were filed and issue joined.

On December 21, 1933, by leave of court, plaintiff filed an additional count to the declaration. This count set out in haec verba a trust agreement, dated August 3, 1921, creating the McCoy Directory Company, and alleged that the defendant Camlin and the other trustees named therein, Reuben H. Donnelly and Harry M. Johnson, accepted the trusts thereby imposed and thereafter carried on the business of the company in the name of McCoy Directory Company until the death of Donnelly and Johnson, which occurred prior to 1929, that the defendants McCoy and Pedderson’ were appointed managing trustees to fill the vacancies caused by the deaths of Donnelly and Johnson, and that they and Camlin throughout the years 1929, 1930, 1931 and 1932 conducted the business of the trust under the name of McCoy Directory Company: That at the request of the defendants, the plaintiff, in 1930 and 1931, printed various city directories: That the specifications and prices for printing the same were originally agreed upon prior to the formation of the trust and later modified in accordance with an unsigned memorandum set forth in this count. In this additional count it was further alleged that in said contract with the plaintiff the defendants did not stipulate or require that they should not be personally liable to the plaintiff or that the plaintiff was to look solely to the trust for compensation, and that the plaintiff did not agree or stipulate with the defendants not to hold them personally liable or to look to the trust estate for compensation. Copies of invoices rendered defendants by the plaintiff and a statement of the account sued on were attached to this additional count. On February 17,1934 the trial court sustained a demurrer to this additional count and entered an order dismissing said additional count. From that order an appeal was prosecuted to this court and this court reversed the order of the trial court and remanded the cause with directions to overrule the demurrer. Review Printing & Stationery Co. v. McCoy, 276 Ill. App. 580.

Upon the cause being redocketed in the trial court, the demurrer to the additional count was overruled and the defendant Camlin filed three more pleas and a counterclaim. By an order thereafter entered these pleas and counterclaim were adopted as the pleas and counterclaim of the other defendants. The first plea was verified and to the effect that the defendant did not promise in manner and form as the plaintiff complained against him. The second plea was the five-year statute of limitations, and the third, a plea of the statute of frauds. Replications to these pleas were thereafter filed. By the counterclaim it was averred that if the defendant was personally liable to the plaintiff that then the McCoy Directory Company overpaid the plaintiff in the sum of $3,000 and that the plaintiff therefore owes the defendant and the other trustees said sum. The plaintiff then, by leave of court, withdrew its replications to the fourth special plea of the defendants which had been filed prior to the first appeal, and filed a demurrer to this special plea. The defendants confessed this demurrer and took leave to file amended special pleas within 20 days. Amended special pleas were not filed in accordance with this leave, but on April 13, 1935 it was stipulated that the pleadings and proceedings thereafter should be had under the Civil Practice Act. On April 24, 1935 the defendants filed their answer which made, as a part thereof, the pleas theretofore filed by them. By this answer they admitted the execution of the trust agreement dated August 3,1921 but denied that either the original trustees or the defendants embarked upon and thereafter continued to carry on the business of the McCoy Directory Company, denied the various allegations of the additional count relative to the plaintiff furnishing materials and printing and the delivery of the city directories for distribution by the defendants as stated in said additional count and denied that they or anyone authorized by them had contracted for such directories, denied receiving and accepting the same, denied individual and joint liability and alleged that at the time of the formation of the trust the plaintiff was advised and informed of the said trust and all provisions of the trust instrument, that it was understood and agreed that the plaintiff would deal with said trust and would look solely to the trust property for reimbursement for any dealings it had with the trust and would not hold or attempt to hold the trustees in said trust personally liable and concluded that by reason thereof the plaintiff is estopped to attempt to hold the defendants personally liable in this proceeding for said debt. On June 18, 1935 the defendants, McCoy and Pedderson, filed by leave of court, an additional answer in which they averred that all of the several supposed promises in the declaration mentioned and in the trust agreement set forth were not to be performed within one year of the making thereof and were not in writing signed by either of these defendants as required by the statute of frauds. On June 26, 1935 plaintiff filed an answer to the counterclaim denying that it was indebted to the defendants in any amount and averring that none of the defendants had any legal or just counterclaim or set-off against the amount claimed to be due the plaintiff. With the pleadings in this condition, the cause came on for trial before the court and jury. At the conclusion of the evidence on the part of the plaintiff, the trial court directed a verdict for the defendants, upon which judgment was rendered and the plaintiff has again appealed.

Counsel for appellees insist that appellant by appealing from the order of the trial court sustaining a demurrer to the additional count waived any other counts of its declaration and that after this cause was re-docketed and the trial court overruled the demurrer to the additional count in obedience to the mandate of this court, that then the only pleading of the plaintiff before the court was the additional count. We do not think so. The judgment from which appellant prosecuted its former appeal was not a final judgment. Chicago Portrait Co. v. Chicago Crayon Co., 217 Ill. 200. We did not discover that it was not a final judgment and counsel for neither party called our attention to the true condition of the record. At the time the trial court sustained the demurrer to the additional count the special count declaring upon the seven trade acceptances, the common counts and the issues made by the pleas thereto were undisposed of. Notwithstanding the fact that appellees made no motion to dismiss the former appeal, but entered their several appearances, filed briefs and participated in the oral argument, this court had no jurisdiction to consider the appeal and should have dismissed it as of its own motion at the costs of the appellant. Chicago Portrait Co. v. Chicago Crayon Co., supra.

After the cause was reinstated in the trial court after our former decision, counsel for both parties recognized the true condition of the record. Counsel for the plaintiff asked and obtained leave to withdraw its replication to the fourth special plea of the defendants to the original declaration and filed a demurrer to said pleas. Counsel for defendants confessed said demurrer and took leave to file amended special pleas within 20 days thereafter. The original declaration, which consisted of a, special count and the common counts together with the pleas and replications thereto, was a part of the record after the cause was redocketed, and was so treated by counsel and the trial court and the cause went to trial upon the issues made by the allegations of the special count upon the trade acceptanees, the common counts, the verified general issues, the allegations of the special pleas, replications and the answer of the defendant filed April 15,1935.

The additional count averred and the answer admitted the execution of a written agreement and declaration of trust by Reuben H. Donnelly, Harry M. Johnson, John H. Camlin, Mary A. McCoy, Mary M. McCoy and Walter K. Frost on August 3, 1921. This instrument was offered and admitted in evidence and by its provisions Mary A. McCoy, Mary M. McCoy and Walter K. Frost were referred to as subscribers and they appointed Donnelly, Johnson and Camlin trustees. It was provided that the trustees should be known as and nse the name of McCoy Directory Company, unincorporated, and under that name and style the trustees were to transact the business as provided in said instrument. This declaration of trust recited that Mary A. McCoy at that time owned a certain business together with certain personal property, furniture, plats, records, accounts, bills receivable, directories and data therefor, known as the McCoy Directory Company located at Rockford, Illinois; that Walter K. Frost on that day purchased a nine-fortieths interest therein and Mary M. McCoy had rendered various services to said business; that for a valuable consideration the instrument evidences that Mary A. McCoy sold to Donnelly, Johnson and Camlin all the properties and business of the McCoy Directory Company and they accepted the same and engaged to manage, carry on and control the business and distribute the profits as therein provided. Section 17 of the trust agreement provides that no one of said trustees should be personally liable for any of the acts of the trustees or of any one of them, and. in the administration of the trust, the trustees should not be under personal obligation or liability of any kind, for any accident, mistake or want of judgment other than wilful misuse or abuse of said trust. Section 19 provides that the death of any trustee shall not limit or affect the continuing of the trust and should a vacancy occur in said trusteeship then the remaining trustee or trustees should have the power to fill such vacancy. Section 20 provides that every one having any transaction with the trustees are put on notice that the trustees or their successors in the trust and the subscribers hereto and beneficiaries therein are in no way personally liable for any of the transactions of the trust. “It is further provided that in all contracts and agreements entered into by the trustees for the said trust, specific mention shall be made therein of this trust, to the end that any and all parties must look solely to the trust estate and the trust funds for any claim arising under said trust.” Section 22 provided that in June, 1923 and every two years thereafter the trustees should call a meeting of all the holders of the beneficial interests therein and at such meetings the holders of four-fifths of the beneficial interests of the trust may, by vote, require the resignation of any trustee and may elect another trustee in his place. The instrument further recited how the profits should be divided and to whom they should be distributed after the death of Mary A. McCoy, the creator of the trust and provided that the'trust should continue during the life of the last survivor of the persons named therein and 20 years thereafter, at which time the trustees should close up the business, and make distribution of the proceeds thereof as therein provided.

Walter K. Frost testified that he was a son-in-law of Mary A. McCoy, that the business of the McCoy Directory Company was the compiling and publishing of city directories, that he was one of the parties who executed the trust agreement on August 3, 1921 and that after the execution of the instrument he put in the business $9,000 and received therefor a nine-fortieth interest therein, and has been connected with the operation of the business since that time.

Mr. Frost further testified that trustees Johnson and Donnelly both died in 1928 and that for some time following their deaths, Camlin acted as sole trustee. That in April, 1929, Frost received through the mail from Camlin an instrument executed by Camlin on April 26, 1929 which evidenced the appointment by Camlin, as surviving trustee, of defendant McCoy to succeed Harry M. Johnson, deceased and defendant Pedderson to succeed Reuben H. Donnelly, deceased. Thereafter Camlin, McCoy and Pedderson were present at a meeting held in March, 1931, at which time a loan then held by the Peoples Bank and Trust Company of Rockford, evidenced by notes of the McCoy Directory Company, was discussed. Frost testified that he stated to the trustees that he had had a request from the bank for something to show his authority to act for the McCoy Directory Company, that the attorney for the bank had requested that a resolution which the attorney for the bank had prepared be passed by the trustees and appear upon the records of the trustees, and that a copy be given the bank. That such a resolution was passed by the trustees and he, Frost, made a record of it and lodged a copy thereof with the bank. This resolution in part is as follows:

“Be It Hereby Resolved that the McCoy Directory Company and the Trustees thereof, do hereby and by this resolution ratify all of the acts and doings of W. K. Frost heretofore done by him in the past in the purchase of materials and supplies for this company and the payments of said accounts either by cash, check, notes or trade acceptances and do further approve, ratify and confirm all loans made by him for said company at the Peoples Bank and Trust Company of Rockford, Illinois ,• and that It Is Further Hereby Resolved that W. K. Frost from and after this date and until further action of this company be and he is hereby authorized to buy and purchase any and all labor, supplies and material of every kind necessary to the operation of the business of the company on' such terms as he may see fit, and from the funds of said company to pay therefor, or to give the company’s check, note or trade acceptance executed by him.”

This witness Frost further testified that in 1930 and 1931 he had charge of the office of the McCoy Directory Company and that he dealt with appellant in connection with the printing by appellant of the Rockford Directory. That thereafter appellant sent the McCoy Directory Company a statement for the amount due it for its work and materials; that Frost checked the statement and found it correct and offered a trade acceptance in payment thereof. On November 22,1930 appellant drew such a bill of exchange for $5,649.30, the amount due it, and the McCoy Directory Company by Frost duly accepted the same on December 30,1930. The evidence is that the six other acceptances sued on were drawn by appellant and represented the amounts due appellant for printing directories for the McCoy Directory Company for six other cities and the same procedure was followed in each instance.

The original journal of the McCoy Directory Company covering the year 1921 and subsequent, years was produced on the trial. The closing entries for 1921 and the opening entries for 1922 were made by a public accountant and the following appears therein: ‘‘Note: On January 1,1922 in' accordance with a certain instrument executed, the McCoy Directory Company up to and including December 31, 1921 having been owned solely by Mrs. M. A. McCoy of Rockford, Illinois was converted into a so-called ‘Massachusetts Trust’ with the following participants:

Mrs. M. A. McCoy 81/160ths 20,250
Miss M. M. McCoy 27/160ths 6,750
Mr. W. K. Frost 36/160ths 9,000
Mr. L. H. Secor 8/160ths 2,000
Mr. Ed Merchant 8/160ths 2,000
Total 40,000
Trustees:

John H. Camlin, Rockford, Illinois

Harry M. Johnson, Rockford, Illinois
Reuben H. Donnelly, Chicago, Illinois.”

It further appears from the evidence that annual audits of the business were thereafter made and copies thereof were furnished the beneficiaries of the trust and also the trustees. In March, 1931, following the audit of a public accountant for the year 1930, the trustees met, examined the audit and decided upon the policies to be pursued thereafter in the business. This audit disclosed that the amount due appellant on December 21, 1930 was $14,772.64 and further disclosed that there was an outstanding note to the Peoples Bank and Trust Company for $5,850.

The evidence is further that the books and records of the company were kept in the office of the company in Rockford, that Frost had active charge of the business and was a beneficiary under the trust agreement. That in February, 1932 most of the compilation of a directory for Cedar Rapids, Iowa, had been done and was ready for the printer hut appellant refused to do the printing except for cash. Thereupon the trustees assigned to Frost their interests in the Cedar Rapids Directory subject to the claim of the People’s Savings Bank which held certain assignments as security for' money it had loaned the Directory Company. The agreement and the assignment executed by appellees and Frost is as follows:

“This Indenture, Made and entered into this 7th day of March, A. D. 1932, by and between the trustees of the McCoy Directory Company, hereinafter designated as first parties, and Walter K. Frost, hereinafter designated as second party, Witnesseth: Whereas, the said first parties undertook the publication of a city directory for the City of Cedar Rapids, Iowa, and Whereas, practically all the necessary material and information has been gathered by the employees of the said first parties, and Whereas, the said first parties borrowed the sum of Two Thousand ($2,000.00) Dollars from the Peoples Savings Bank of Cedar Rapids, Iowa, which is now unpaid with accrued interest and which money was used to pay for the necessary costs and expenses of gathering said information and for the purpose of publishing said city directory, and Whereas, it is necessary at this time to advance the sum of approximately $750.00 more to pay the employees and costs of gathering said material for the publication" of said directory, and Whereas, the first parties have not the money on hand wherewith to pay for the completion of gathering the necessary material for the publication of said city directory, and Whereas, the said first parties have become liable and responsible for the payment of said loan from said bank and for the present wages and expenses which have accrued to date, and Whereas, the Review Publishing Company which has heretofore printed the publication of said city directory for the said first parties has refused to do so unless certain things are complied with which is not to the interest of the said first parties. Now, Therefore, it is hereby agreed by and between said first parties and said second party as follows. ’ ’ Here appears the formal assignment of all material, information and copy in the matter of the contemplated publication and sale of the Cedar Rapids, Iowa, directory to Frost. The instrument then concludes: “In witness whereof, the said John Camlin, William McCoy and C. A. Pedderson, trustees of said directory company, and the said Walter K. Frost have hereunto subscribed their names and seals this 7th day of March, A. D. 1932. John H. Camlin (Seal) William H. McCoy (Seal) C. A. Pedderson (Seal) Walter K. Frost (Seal).”

Counsel for appellant also offered in evidence a copy of a bill prepared by appellee Pedderson as attorney for the- plaintiff therein named. This bill was filed in the Winnebago county circuit court on June 25, 1932, and had for its purpose the liquidation of this trust. A decree rendered.thereon on July 21, 1935 was also offered in evidence but objections thereto were sustained by the trial court. The bill was filed by Joseph McCoy, a son of Mary A. McCoy, who had a beneficial interest in the trust after his mother’s death, and made William McCoy, John H. Camlin, C. A. Pedderson, trustees of the McCoy Directory Company, a trust, Mary Agnes McCoy, Mary Margaret McCoy, Walter K. Frost, Agnes McCoy and Charles A. Durand defendants. In this proceeding to terminate the trust appellees here, McCoy, Pedderson and Camlin, entered their appearances, and the court on July 21, 1935, entered a decree therein which found among other things that the McCoy Directory Company is operating under a trust, said trust having been declared on August 3, 1921, at which time Reuben H. Donnelly, Harry M. Johnson and John H. Camlin were duly appointed as trustees therein and the C. A. Pedderson and William McCoy were appointed in accordance with the terms of said trust, as successors in trust to the said Donnelly and Johnson who had previously died. By the terms of this decree one G-. H. Rehr was appointed receiver of the trust with the consent of the acting trustees, and the evidence tends to prove that'the books of the company were delivered to the receiver having been removed from the office of Frost who actively managed the business of the McCoy Directory Company up until the time Rehr was appointed receiver. All the books and records of the company other than the journal, to which reference has been made, have disappeared.

The trust agreement of August 3, 1921, among other things provided that in all contracts entered into by the trustees, specific mention shall be made therein of the trust, to the end that all parties must look solely to the trust estate and trust funds for any claim arising under said trust. By this provision the trustees were given the power to release themselves from personal liability but in order to do so the trustees must stipulate to that effect in their contracts with a third person. In order therefore for appellees not to be liable upon the contract, which forms the basis of this suit, appellees must have stipulated that they were not to be personally responsible, but that appellant was to look solely to the trust estate. Goldwater v. Oltman, 210 Cal. 408, 292 Pac. 624, 71 A. L. R. 871; Austin v. Parker, 317 Ill. 348; Schumann-Heink v. Folsom, 328 Ill. 321, 159 N. E. 250, 58 A. L. R. 485. There is no evidence found in this record that tended to show that appellees in their transactions with appellant were not to be held personally responsible for the services rendered by appellant or that appellant should look alone to the trust estate for the payment of its printing bills or trade acceptances executed as evidence of the amount due appellant or that appellees should be relieved of personal responsibility in their dealings with appellant.

In this state of the record it was error for the trial court to give a peremptory instruction to the jury to find the issues for the defendants and for that error the judgment will be reversed. Inasmuch as there will be another trial we might add that the pleadings in the proceeding to terminate and liquidate the McCoy Directory Company, a trust, were admissible in evidence. By their verified fifth special pleas, defendants Pedderson and McCoy denied that they were trustees of this trust. The trial court admitted in evidence their written entry of appearance in that proceeding and under the circumstances as shown we think the bill and decree were likewise admissible in evidence. The record dis-’ closes that defendant Camlin was examined before trial and his deposition taken under the provisions of the Civil Practice Act. His deposition however was not used but he was called as an adverse witness and the trial court refused to permit counsel for plaintiff to examine him. The provisions of the Practice Act and Rule 19 of the Supreme Court respecting depositions before trial are not, in our opinion, to be construed as limiting the right of counsel to examine an adverse party at the trial and this right should have been accorded appellant. The record discloses that Camlin was present in court and we do not think a party to a proceeding exhausts his right to examine the opposite party in open court by taking his deposition prior to the trial. There was no error committed by the trial court in admitting in evidence the several trade acceptances declared upon or the resolution of the trustees authorizing Frost to execute the same or in admitting in evidence the entry of appearance of appellees to the proceeding to liquidate the trust and their consent to the proceeding to the appointment of a receiver. For the error in taking the case from the jury, however, the judgment will be reversed and the cause remanded.

Reversed and remanded.


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    Peter Sarelas, Appellant, v. McCue and Company et al., Appellees.
    Gen. No. 39,497.

      Heard in the first division of this court for the first district at the June term, 1937.
    Opinion filed October 18, 1937.
    Chapman & Chapman, of Chicago, for appellant; Abraham Miller, of Chicago, of counsel.
    John Taylor Booz and Charles J. Mueller, both of Chicago, for certain appellees. Nicholson, Snyder, Chadwell & Fagerburg and Haffenberg & Rosenbaum, both of Chicago, for other appellees; Richard M. Keck and Joseph Rosenbaum, both of Chicago, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiff, by virtue of section 53 of the Corporation Act of 1919 (Session Laws of 1919) brought suit in equity on behalf of himself and of all other creditors of McCue and Company, a corporation, to recover from the stockholders of the company claimed unpaid stock subscriptions, and to recover from the directors of the corporation on the claimed ground that they had assented to an indebtedness of the corporation in excess of its capital, in violation of section 23 of the act. Plaintiff also charged conspiracy on the part of the officers and directors of defendant corporation in converting its assets.

The defense interposed was that the suit against the stockholders was not brought within two. years after the dissolution of the corporation, as required by section 79 of the act, and the suit against the directors was not brought within five years after plaintiff’s claim accrued. Defendants moved to dismiss the suit on these grounds. The motion was allowed, the suit dismissed, and plaintiff appeals.

Plaintiff alleged (and the allegations are admitted) that McCue and Company was organized as a corporation under the law's of Illinois February 1, 1929, and continued to carry on the business authorized by its charter until dissolved by the Secretary of State on June 22, 1932. While the company was conducting its business plaintiff sold stock on behalf of the company, for which services he had not been paid; he brought suit in the superior court of Cook county to recover the amount claimed and on November 18, 1931, had judgment for $1,600 against defendant corporation.

In the superior court plaintiff claimed the $1,600 became due November 3, 1929. December 4, 1931, plaintiff caused an execution to be issued on the judgment in the superior court and demand made on the corporation for payment. The judgment is still wholly due and unpaid.

It is conceded by both parties that the Corporation Act of 1919 applies to the instant case. Section 14 of the act provides that all corporations organized under the laws of this State whose powers may have expired by limitations or otherwise, “shall continue their corporate capacity for two years for the purpose only of collecting debts due such corporation and selling and conveying the property and effects thereof.” Section 23 of the act provides that the directors of such corporation “shall jointly and severally be liable for the debts and contracts of the corporation. . . . For assenting to an indebtedness in excess of the amount of capital of the corporation, to the amount of such excess.” By Section 53 it is provided that after the dissolution of a corporation “leaving debts unpaid, any creditor may bring suit in equity, in any court having general jurisdiction ... on behalf of himself and of all other creditors of the corporation, against all persons who are liable in any way for the debts of the corporation, by joining the corporation in such suit. Each stockholder may be required to pay his pro rata share of such debts and liabilities, to the extent of the unpaid portion of the stock, after exhausting the assets of such corporation.” Section 79 provides that, “The dissolution for any cause whatever, of any corporation, shall not take away or impair any remedy given against such corporation, its officers or stockholders, for any liabilities incurred previous to its dissolution, if suit therefor is brought and service of process had within two years after such dissolution. ’ ’

June 1, 1934, plaintiff filed the instant suit. Summons was served on some of the defendant stockholders and on some of the directors within two years after the dissolution of the corporation, but McCue and Company, the corporation, was not served until August 16, 1934, which was more than two years after its dissolution. November 26, 1935, the court, on motion of defendants, struck the complaint with leave to file an amended complaint before December 16, 1935, and on the latter date plaintiff filed an amended complaint. Afterward, on January 27, 1936, on motion of defendants, the court struck the amended complaint and gave plaintiff leave to file a second amended complaint within 20 days; pursuant to such leave plaintiff filed his second amended complaint February 14, 1936. Defendants filed motions to strike the second amended complaint and while- such motions were pending plaintiff filed a petition on March 30, 1936, praying that an order be entered directing the sheriff of Cook county to amend his return so as to show that he had served the defendant corporation, McCue and Company, on June 4, 1934, which was within the two years after the corporation was dissolved. Certain defendants answered the petition and afterward an order was entered denying the prayer of the petition. While defendants ’ motion to strike the second amended complaint was pending, plaintiff on May 22, 1936, asked leave to file his third amended complaint, which leave the court granted, and subsequently the third amended complaint was filed. Defendants moved to dismiss this complaint, which was in four counts. The court struck from the third amended complaint all reference to McCue and Company as party defendant, and overruled certain motions of certain other defendants to strike the first count of this complaint, and ordered them to answer. Afterward certain defendants filed a motion to dismiss count one of the third amended complaint, setting up specific grounds, and on November 23, 1936, the motion was allowed, the suit dismissed for want of equity, and plaintiff appeals.

Plaintiff contends that the court erred in holding the suit would not lie because McCue and Company, the corporation, had not been served with process within two years after the dissolution of the corporation, and in support of this his counsel say, “In order to give effect to the evident legislative intent, the phrase in section 79 of the Corporation Act of 1919, ‘and service of process had,’ must be construed to mean, and service of process attempted or begun in good faith”; that the record shows that plaintiff and the sheriff in good faith made an endeavor to serve McCue and Company, and that such service failed because one of the defendant directors gave to the sheriff wrong information as to where an official of the corporation might be found. We think this contention cannot be sustained. The section is plain and unambiguous and not open for construction. It provides that the dissolution of any corporation for any cause shall not take away or impair any remedy against such corporation, its officers or stockholders, for any liability incurred previous to its dissolution, “if suit therefor is brought and service of process had within two years- after such dissolution. ’ ’ By section 53 of the act the corporation was an essential party, and since the summons was not served on it until more than two years after its dissolution, plaintiff could not maintain his suit.

Section 79 is not strictly a statute of limitation but is a conditional limitation upon plaintiff’s right of action. Dukes v. Harrison & Reidy, 270 Ill. App. 372; Consolidated Coal Co. v. Flynn Coal Co., 274 Ill. App. 405; Bishop v. Chicago Rys. Co., 303 Ill. 273. The legislature apparently had in mind that after the dissolution of a corporation a creditor could bring his suit provided he did so and the summons was served on the corporation within two years,

Plaintiff further contends, as stated by counsel, that, “The court erred in holding that the plaintiff’s cause of action did not accrue within five years next -preceding the commencement of his suit . . . and erred in dismissing his suit for want of equity. ’ ’ In support of this counsel say, “The right of action of a creditor against stockholders accrues and the five year Statute of Limitations begins to run when the corporation ceases doing business leaving debts unpaid”; and further, that “the liability of directors of a corporation is not an absolute one, and the right of action against them accrues and the five-year Statute of Limitations begins to run from the date, the corporation is in default. ’ ’ In support of the claimed liability of the directors, counsel cites the cases of Wolverton v. Taylor, 132 Ill. 197, and Slater v. Taylor, 241 Ill. 102. Counsel for both parties in their briefs agree that the cause of action against the directors for permitting a corporation to become indebted in excess of its capital stock, contrary to the provisions of section 23, is barred unless brought within five years; and defendants’ counsel say the statute began to run in the instant case on November 3, 1929, when the indebtedness of McCue and Company to'plaintiff Sarelas became due and unpaid, and that plaintiff made no claim against the directors until he filed his third amended complaint June 12, 1936.

On the other side, plaintiff’s counsel say that the statute did not begin to run until December 4, 1931, when the execution issued on the judgment entered in the superior court, and demand was then made on the corporation.

In support of these respective contentions both counsel rely upon the Woolverton case (132 Ill. 197). That case was before the Appellate and Supreme Courts a number of times. (See 30 Ill. App. 70; 132 Ill. 197, and again in 43 Ill. App. 424, and 157 Ill. 485.) The plaintiff in that case held notes executed by a corporation which were not paid when due, and brought suit against the directors of the corporation to impose the statutory liability for assenting to an indebtedness contrary to the statute, the section there involved being similar in substance to section 23 of the Act of 1919. The trial court held that the five-year Statute of Limitations was applicable and that the period commenced to run at the time the directors assented to the incurring of the indebtedness. This, on appeal, was affirmed by the Appellate Court. (30 Ill. App. 70.) A further appeal was prosecuted to the Supreme Court (132 Ill. 197) where the judgments of the trial and Appellate Courts were reversed, the court holding that the statute commenced to run when the debt was due. The Supreme Court there said (p. 213): “We hold that the cause of action set forth in this bill did not accrue until the maturity of the notes . . . that the action is not for the recovery of a penalty; and five years between the date of the maturity of the first of said notes to fall due and the filing of the bill not having intervened, the action was not barred. The demurrer to the bill should therefore have been overruled.”

In the instant case, plaintiff alleged in his action brought in the superior court against McCue and Company to recover for the sale of the stock, that the $1,600 was due and owing to him on November 3, 1929, his claim having been due at that time. The Statute of Limitations, if we assume it to be five years, then commenced to run under the specific language in the Woolvert on case, from which we have just quoted, and the action would be barred five years from November 3, 1929. The only argument in the briefs on this point is as to when the Statute of Limitations began to run. Holding as we do that the statute began to run on November 3, 1929, the argument of plaintiff cannot be maintained. We are unable to agree with the argument of counsel for plaintiff or with that of counsel for defendants, but are of opinion that where a corporation is dissolved, suit must be brought and summons served within two years after such dissolution, as provided in section 79 of the Act of 1919. And that the Statute of Limitations of five years is not applicable where the corporation has been dissolved before suit. Consolidated Coal Co. v. Flynn Coal Co., 274 Ill. App. 405; Dukes v. Harrison & Reidy, 270 Ill. App. 372. The summons not having been served on defendant corporation, McCue and Company, within the two-year period fixed by section 79, the court had no jurisdiction of the case, and the motion of defendants to dismiss was properly sustained.

The sufficiency of the original complaint, the first and second amended complaints, and the orders of the court striking them, are not before us because such complaints were abandoned by plaintiff in filing his third amended complaint.

Nor is there any merit in plaintiff’s contention that defendants’ motions to dismiss the several complaints were ineffective because, before any of such motions were filed, defendants filed answers to the original complaint, and that there is no order in the record showing the court permitted the withdrawal of such ansAvers and gave leave to defendants to file such motions to dismiss. We are unable to say that the record is complete because it Avas prepared by the clerk from the praecipes filed by the parties. But in any event, the question is not before us because it is apparent that both parties and the court treated the matter as though a formal order had been entered allowing defendants to withdraAv their answers and to file their motions.

Plaintiff further contends that the charge of fraud made by him in his third amended complaint against the stockholders and directors of the defendant, McCue and Company corporation, renders defendants liable by virtue of such charged fraud, independent of the provisions of the Act of 1919, and that in such case the Statute of Limitations does not commence to run until after the fraud is discovered. Without discussing the allegations of the third amended complaint in this respect, we think it sufficient to say that they are entirely insufficient to state a cause of action on that ground, and that most of such allegations are mere conclusions of the pleader.

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

Decree affirmed.

Matchett and McSurely, JJ., concur.


text:
    Swesnik Loan Co., Inc., Appellant, v. Thomas J. Courtney, State’s Attorney, Cook County, Illinois, and Eugene O’Connor. Florence V. Davis, Appellee.
    Gen. No. 39,508.

      Heard in the first division of this court for the first district at the June term, 1937.
    Opinion filed October 18, 1937.
    Walter A. Rooney, of Chicago, for appellant; G. A. Buresh, of Chicago, of counsel.
    McFarland, Morgan & Stearns, of Chicago, attorneys for appellee Florence V. Davis; Leonard W. Stearns, of Chicago, of counsel.
   Mr. Presiding Justice O’Connor

delivered the opinion of the court.

Plaintiff brought an action of replevin against Thomas J. Courtney as State’s Attorney of Cook county, and Eugene O’Connor, one of his investigators, to recover two bonds of $1,000 each, the payment of which was secured by a mortgage on real estate. Afterward Florence V. Davis, by. leave of court, intervened claiming the bonds. By order of court the bonds were turned over to the clerk of the court, there was a trial before the court without a jury, the bonds were awarded to the intervening petitioner, Davis, and plaintiff appeals.

The record discloses that plaintiff was conducting its business in Chicago as a pawnbroker, for which purpose it was incorporated under the laws of Illinois on September 14, 1933. It obtained a license from the City of Chicago to act as a pawnbroker, and on September 30, 1936, the two real estate bonds in question were pledged with it by one who gave his name as H. G. McCarthy, to secure the payment of a loan of $600.

The intervening petitioner purchased the two real estate bonds December, 1927, from the National Bank of the Republic. The bonds were executed by Griess Pfleger Tanning Co., a corporation, bore interest at 5% per cent per annum, were due June 1, 1948, and secured by a first mortgage. The petitioner, from the time she purchased them until September 30, 1936, kept them in her safety deposit box in the National Bank of the Republic building. She testified that September 30, 1936, a man called at her apartment and said he was R. J. King, that he represented the Standard Oil Company and that the company wanted to buy a lease which she had on some property in Oklahoma; that he offered her ‘ $20,000 and a percentage ’ ’ for the lease; that he told her it would be necessary for her to put up some collateral with him as ‘ ‘ security to guarantee that I owned this lease”;-that she then went downtown with King to the safety deposit vault, obtained the two bonds and gave them to him; that he told her the bonds would be returned to her in about two weeks with a check for $5,000 as part payment of the purchase price of her lease. She never saw him afterward. A day or two thereafter she notified her attorney and he went to the State’s Attorney’s office where the matter was investigated, and shortly thereafter the bonds were given to the State’s Attorney by plaintiff.

There is further evidence to the effect that plaintiff on the day it received the bonds, or the next day, made its daily report to the Police Department, as required by the Pawnbrokers’ Act, which showed that the two bonds had been pledged with it as security for a loan of $600 by McCarthy of Kansas City, Mo.

David Swesnik, called by plaintiff, testified: “I am of the Swesnik Loan Company, ... I am in the pawn broking business and have been for the last twenty-seven years, on State street”; that about 3:30 in the afternoon of September 30th he received as a pledge the two bonds from a man who was introduced to him as Mr. McCarthy by a Mr. Abbot, with whom plaintiff had theretofore done some business; that he called up his broker to see if the bonds were good and was advised they were, and that he then gave McCarthy $100; that McCarthy said he was going home to Kansas City and told witness to pay the balance of the loan, $500, to Abbot, and that plaintiff did so, paying the amount in instalments over a period of about 10 days.

Counsel for petitioner say in their brief that the evidence “clearly indicated that plaintiff acquired possession of the bonds in question under circumstances indicating that the same were not acquired by it in good faith.” The record fails to disclose what the trial judge found on this question. So far as the record shows,- he did not give the reasons for his decision as he might have done. (Rule 1, this court, Rule 36, Sup. Ct.) But even if we assume the trial judge indicated that the plaintiff had not .acquired possession of the bonds in good faith, this would not, as counsel for plaintiff say, be a sufficient defense, because, under the law, where one obtains a negotiable instrument before maturity and without actual knowledge of any infirmity or defect, his title cannot be defeated unless his action in taking it amounted to bad faith. Sec. 56, Negotiable Instruments Act (par. 76, chap. 98, Ill. State Bar Stats. 1935; Jones Ill. Stats. Ann. 89.076); Funk v. Mid-City Trust & Savings Bank, 260 Ill. App. 467; Graham v. White-Phillips Co., 296 U. S. 27.

The intervening petitioner contends that whether plaintiff received the bonds in good faith is not controlling, for the reason that she is entitled to recover the bonds by virtue of sec, 9 of the Pawnbrokers’ Act, and without the payment of any money advanced by plaintiff. That section provides: “No pawnbroker shall take any article in pawn or pledge from any person appearing to be intoxicated, nor from any person known to be a thief or to have been convicted of larceny ; and when any person is found to be the owner of stolen property which has been pawned, such property shall be returned to the owner thereof Avithout the payment of the money advanced by the pawnbroker thereon or any costs or charges of any kind which the pawnbroker may haAe placed upon the same. ’ ’ Counsel say that under the express wording of the section a pawnbroker is required to return the stolen property. And that there is no dispute but that the bonds were fraudulently obtained from the intervening petitioner. On the other side, plaintiff contends that the Avord “property” mentioned in the section does not include negotiable instruments, because one may obtain a good title to a negotiable instrument from the thief, and the case of City of Chicago v. Hulbert, 118 Ill. 632, is cited. It has long been firmly established that an innocent holder for value of a negotiable paper is protected though the one from whom he received such paper may have stolen it from the true owner, and this rule is founded upon principles of commercial policy. Sherman v. Smith, 244 Ill. App. 171; Pflueger v. Broadway Trust & Sav. Bank, 265 Ill. App. 569.

City of Chicago v. Hulbert (118 Ill. 632) was a proceeding brought in the criminal court against Hulbert to recover the penalty for failure to take out a license as a pawnbroker, as required by the city ordinance. Hulbert was found not guilty and the City prosecuted an appeal to this court. An examination of the records of this court discloses that to obtain a speedy decision from the Supreme Court the judgment by stipulation was affirmed pro forma, without opinion, and by the same order the case certified to the Supreme Court, where the judgment of the Appellate Court was affirmed, the court holding that Hulbert was not a pawnbroker within the meaning of the statute, and therefore not required to take out a license under the city ordinance. In the opinion the court quotes sections 1704 and 1705 of the city ordinance, the first of which provides that no person shall carry on “the business of a pawnbroker, loan-broker, or a keeper of a loan office, without being duly licensed, under penalty of $100”; the second section defines a pawnbroker to be “Any person who loans money on deposit or pledge of personal property, or who deals in the purchase of personal property, on condition of selling the same back again at a stipulated price, or who makes a public display at his place of business of the sign generally used by pawnbrokers to denote their business, to wit, ‘three gilt or more or less yellow balls, ’ or who publicly exhibits a sign of ‘money to loan on personal property, or deposit or pledge, ’ is hereby declared to be a pawnbroker. ’ ’

The court there said (pp. 633-634) : “Thomas H. Hulbert, a resident of the city, a private banker, was, and still is, engaged in loaning money (both his own, and that of others on commission) on real estate and furniture, horses, wagons, machinery, warehouse receipts, etc., without removal from the possession of the owner, and also in loaning money on watches, diamonds and jewelry.” The court then points out the method of doing business and says that, for example, one applying for a loan to Hulbert and offering' a watch as security would be directed to have some reliable jeweler place a valuation on the watch, and if it were deemed good security for the loan the owner of the watch would be requested to store it in some warehouse, get a receipt for it and deposit it with Hulbert, and the borrower would then execute his promissory note for the amount of the loan. Continuing the court said (p. 635): “From the foregoing facts the question presented is, whether Hulbert is liable to the penalty imposed by section 1704, supra.

“It appears from the stipulation found in the record, where the facts involved in the case have been agreed upon by the parties, that the defendant, Hulbert, is a private banker in the city of Chicago; that he loans money, for himself and others, on real estate and personal property security. We apprehend that a person may loan money in Chicago and take, as security, a mortgage on real or personal property, without incurring any liability under the ordinances of the city, or without becoming a pawnbroker. . . . But it is claimed that the defendant made loans and received personal property in pledge as security for the loan; that the warehouse receipts which were given to the defendant gave him the constructive possession of the property, and thus he may be regarded as one loaning on personal property actually placed in pledge, — in other words, that he may be regarded as a pawn-broker.” The court then quoted section 1 of the Pawnbrokers’ Act which is still in force and effect, which defines a pawnbroker to be “every person or company engaged in the business of receiving property in pledge, or as security for money or other thing advanced to the pawner or pledger, shall be held and is hereby declared and defined to be a pawn-broker.” And the fact that the City counsel, by ordinance, defined a pawnbroker as a person engaged in a certain business did not make him such because the ordinance was contrary to the statute. And it was held that Hulbert was not a pawnbroker. In determining* the meaning of the word “ property ”as used in section 9, the court said (pp. 636-637): “Lands are property, but it is plain they were not intended to be embraced in the word ‘property’ as used, because they are mortgaged almost daily as security for money loaned, and the person taking such security has never been regarded as a pawnbroker. Bonds and stocks and promissory notes could not have been intended, because they are pledged as security for money loaned by the banks all over the country, almost daily, and it has never been understood that our bankers are pawnbrokers. . . . We think the legislature intended by the use of the word ‘property’ to include only such articles of personal property as might be actually delivered over to the possession and custody of the person who advanced the money, and not stocks, bonds, notes or mortgages, or choses in action, or evidences of debt, . . . The defendant loaned a certain amount of money, for ivhich he received a note payable at a certain time. To secure the note, the person who obtained the money gave as collateral security a warehouse receipt. If this transaction constituted the defendant a pawn-broker, every banker in the State might be called a pawn-broker. All the banks, to a greater or lesser extent, make loans, and take as collateral, bonds, stocks, notes and mortgages, or warehouse receipts, and we think they have the right to do so without becoming pawn-brokers.”

What the court held in that case was that Hulbert was not a pawnbroker and was not required to take out a license under the terms of the city ordinance.

In the instant case, Swesnik, who represented plaintiff in the transaction, testified that plaintiff was operating as a pawnbroker; that he received the bonds as such, and that he made a report to the Police Department as required by the statute, showing that he had taken the bonds as such broker, and in this court contends that plaintiff had a right, under the Pawnbrokers’ Act to take the bonds in question. Having received the bonds as a pawnbroker, and having complied with the provisions of the Pawnbrokers ’ Act with reference to making reports to the police, etc., plaintiff will not now be heard to say that it was not bound by the Pawnbrokers ’ Act, which requires that it return stolen bonds.

Plaintiff, having acted under the Pawnbrokers ’ Act, is bound by its terms and is in no position to invoke the rule for which it contends, viz., “As between two innocent parties, where loss occurs, the intervening-petitioner having placed it in King’s power to perpetrate the fraud, the loss must fall on her.”

Nor is there any merit in plaintiff’s contention that the intervening* petitioner’s testimony as to conversations between herself and King was inadmissible because made out of the presence of any representative of plaintiff. It was incumbent on the intervening-petitioner to show that the bonds had been stolen from her by King or McCarthy. Obviously no one representing plaintiff would be present. The testimony as to the conversation was original testimony, clearly admissible, and the rule contended for is in no way applicable.

The judgment of the municipal court of Chicago is affirmed.

Judgment affirmed.

McSurely and Matchett, JJ., concur.