text:
    The People of the State of Illinois ex rel. Dr. Pierre Chemical Company, Appellant, v. The Municipal Court of Chicago and Joseph J. Drucker, Judge Thereof, Appellees.
    Gen. No. 40,118.
    Heard in the third division of this court for the first district at the June term, 1938.
    Opinion filed November 30, 1938.
    Frederick A. Brown, of Chicago, for appellant; G. Gale Roberson, of Chicago, and Daniel F. Kemp, of counsel.

      Joseph D. Irose and Hiram T. Gilbert, both of Chicago, for appellees.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiff from an order entered by the superior court of Cook county sustaining the motions of the defendants to strike plaintiff’s petition for a writ of prohibition and thereby dismissing plaintiff’s petition.

'The petition for a writ of prohibition alleges that on October 5,1937, a certain suit was filed in the municipal court of Chicago by one Robert V. Taft against petitioner Dr. Pierre Chemical Company, a corporation.

The statement of claim alleges that said Robert V. Taft, the plaintiff, is the owner of $196,000 of debenture bonds of an outstanding issue of $1,240,000 of debenture bonds issued by the Dr. Pierre Chemical Company ; that said bonds mature January 1, 1956, and draw interest “to the extent that the available net income of the company, as determined by the standard methods of accounting, would suffice for payment at the rate of 7% per annum”; that during the year 1936 Dr. Pierre Chemical Company earned $42,087.50, “which was sufficient as determined by the standard methods of accounting, to pay interest on all outstanding and unpaid bonds at the rate of 3.39% per annum”; that during the first quarter of 1937 the Dr. Pierre Chemical Company earned $9,300 “which was sufficient as determined by the standard methods of accounting, to pay interest on such outstanding and unpaid bonds at 3% per annum and still leave a surplus in the treasury of $53,013.88”; that according to the terms and conditions of said bonds and the standard methods of accounting, the defendant in said suit, Dr. Pierre Chemical Company, “should have distributed said surplus of $53,013.88 as interest on said bonds during the first quarter of 1937, but failed so to do”; that on or about December 31,1937, an item of $6,264.03 was deducted from the account of the plaintiff, Robert V. Taft; and credited to the account of one Eva A. Taft; that in March, 1937, said sum of $6,264.03 was charged to general expense instead of charging same back to Eva A. Taft; that the officials of said Dr. Pierre Chemical Company, are unfriendly to plaintiff and such charge was deliberately made to defeat the plaintiff of the sum of $964.66, which otherwise would have been paid to him if said sum had been charged back to the account of Eva A. Taft; that on December 31, 1936, an item of $2,199.60 was “illegally charged to Profit and Loss ’ ’; that the plaintiff is entitled to recover his pro rata share, amounting to 15.4 per cent, or the sum of $338.74.

As pointed out to this court, the statement of claim in the suit in the municipal court of Chicago further sets forth a tabulation of the amounts claimed to be due the plaintiff, totalling $17,346.29, less credits of $2,368.47, and claiming an alleged balance of $14,977.82; that the Dr. Pierre Chemical Company appeared in said suit in the municipal court of Chicago and filed a motion to dismiss the same on the ground that the municipal court of Chicago had no jurisdiction over the subject matter of said suit, which motion was overruled by one of the judges of the municipal court of Chicago; that Dr. Pierre Chemical Company thereupon filed in the superior court of Cook county a petition for a writ of prohibition, praying therein that such writ issue restraining and prohibiting the said Joseph J. Drucker and each and every other judge of the municipal court of Chicago from assuming jurisdiction in said suit of Robert V. Taft v. Dr. Pierre Chemical Co., upon the ground stated in said petition.

Separate motions to dismiss said petition for a writ of prohibition were filed by the defendant Judge Joseph J. Drucker by his attorney and by defendant, the municipal court of Chicago, by its attorney. The superior court of Cook county sustained said motions and ordered the petition for a writ of prohibition dismissed, from which order this appeal is taken.

The first point called to the attention of the municipal court of Chicago is that the obligation of the Dr. Pierre Chemical Co. to pay interest on its income bonds is identical with the obligations of a corporation to pay (preferred) dividends to its stockholders. The obligation of Dr. Pierre Chemical Co. to pay interest is provided in the bond as follows: “to pay interest thereon ... to the extent that the available net income of the company, as determined by the standard methods of accounting, would suffice for payment,” and the plaintiff cites in support of its contention Yol. 6 Fletcher on Corporations, Perm. Ed., in speaking of income bonds, sec. 2644, where it is said: “They bear a close resemblance to .capital stock.” Section 2645, is as follows:

“The corporation has the right, notwithstanding such mortgage and bonds, to conduct its operations as it sees fit, subject only to the conditions of its organic law, unless the bonds or provisions of the mortgage contain limitations upon the powers of the corporation. It may make such improvements, alterations or changes as appear desirable. The only right the bondholders have is to compel the officers of the corporation to observe good faith in determining what is to be treated as net income, as governed by provisions in the bonds and mortgage as to what shall constitute net income. ’ ’

The question involved in the litigation is whether the plaintiff as a holder of income bonds has the same right to compel the payment of interest that a stockholder has to compel payment of dividends, and whether such action to enforce this right can be brought only in a court of equity.

The petitioner urges that to recover interest alleged to be due under the terms of the income debenture bonds, the suit of Robert V. Taft v. Dr. Pierre Chemical Co. was filed in the municipal Court of Chicago, and the suit being essentially an action for an accounting, the municipal court was without jurisdiction; that a suit to compel payment of interest could properly be maintained only in a court of equity, and quotes from the express terms of the bond whereby the Dr. Pierre Chemical Co. agrees to pay interest upon its debenture bonds “to the extent that the available net income of the Company, as determined by the standard methods of accounting, would suffice for payment at the rate of 7% per annum.”

The question before the court is whether the municipal court of Chicago had jurisdiction to determine the issue raised in that court regarding the amount of interest alleged to be due under the terms of the bond issued by the petitioner. We have passed upon the question of jurisdiction of the municipal court in matters of equity in the case of Barry v. Knight, 296 Ill. App. 277, in which an appeal was denied by the Supreme Court, and where the question arose as to whether the municipal court of Chicago had jurisdiction to enter a decree in a foreclosure proceeding. What we said in that case is controlling in disposing of the question of whether the municipal court has jurisdiction in equity matters. In quoting from the opinion it is necessary to do so at length. We there said:

“It is further suggested by the plaintiff that prior to the adoption of the Amendatory Act of 1931, there were many provisions contained in the original act which prescribed methods of practice which the judges were bound to follow, but after the adoption of the Amendatory Act in 1931, by the operation of Rule 311, which became effective on November 1, 1935, those provisions became ineffective except to the extent that they were not in conflict with the rules adopted by the judges. Rule 311 provides as follows:

“ ‘The foregoing rules shall be treated as in lieu of all express provisions of the Act entitled “An Act in relation to a Municipal Court in the City of Chicago, ’ ’ approved May 18, 1905, as amended, prescribing the practice in said court as well as all other statutory rules of practice in conflict with said rules and shall then be in force from and after November 1935. . . . ’

“Rule 1 of the Municipal Court provides as follows:

“ ‘ Contract Actions, which shall include all actions on contracts, express or implied, whether implied in law or implied in fact, on which actions ex contractu for the recovery of money, only, could be maintained at common law, as well as all actions in which any equitable remedy or equitable relief is sought for the enforcement of demands for money or personal property, excepting actions hereinafter otherwise classified. ’ ’ ’ And further:

‘ ‘ It has been suggested by the plaintiff that the note to Rule 1 must be treated as a part of the rule. It is in part as follows:

“ ‘Included in contract actions are not only common law actions ex contractu, but also actions for the recovery of money or personal property in which equitable remedies are sought such as actions to foreclose mortgages; to enforce vendors’ or mechanics’ liens; to correct mistakes in written instruments for the payment of money and enforce them as corrected; to enforce specific performance of contracts for the delivery of personal property, or for the purchase of personal property; to compel accountings; creditors’ bills and all other action to recover money or personal property of which courts of equity have heretofore exercised concurrent jurisdiction with courts of law. The Municipal Court is limited in its jurisdiction to actions for the recovery of money or personal property only, where no independent relief is sought, but for the purpose of recovering money or personal property and securing its payment or delivery to the plaintiff it may adopt equitable methods of procedure and enforce equitable rights, and may in any such actions give the defendant the benefit of equitable defenses. ’ ” And further:

“The municipal court was to have jurisdiction within a limited territory. It is, in effect, what also may be termed a court with limited jurisdiction, and, as stated by the Supreme Court in Lott v. Davis, 264 Ill. 272, was 1 created, not as a part of the judicial department of the State at large, but as a local court of the city for the purpose of administering the law within the city. ’

“It is apparent that the jurisdiction of the municipal court was fixed by the legislature and approved by referendum. It is also clear that the municipal court cannot confer jurisdiction by rules of court, and the purpose of the note to Rule 1, to which we have referred, was to add further jurisdiction in the trial of causes mentioned in this note to Rule 1.

“In this note, it is stated that included in contract actions are not only actions ex contractu, but also actions for the recovery of money or personal property in which equitable remedies are sought. The plaintiff claims that by the amendment to section 2, the legislature in ‘all actions on contract, express or implied, whether implied in law or implied in fact, ’ granted jurisdiction, after approval upon a referendum, to foreclose mortgages, to enforce vendors ’ or mechanics ’ liens, and to correct mistakes in written instruments for the payment of money and enforce them as corrected. So it is evident by the adoption of Rule 1 the Municipal Court attempted to assume jurisdiction in the cases we have outlined, and further to assume jurisdiction in actions for accountings, creditors’ bills and in all other actions to recover money or personal property in which courts of equity have heretofore exercised concurrent jurisdiction with courts of law. As far as we are able to determine from the cited authorities, the Municipal Court cannot by rule enlarge its jurisdiction to try many of the cases that have been suggested by the plaintiff in the brief filed in this cause. And upon the subject of assuming jurisdiction, we find among the several cases cited that of Ptacek v. Coleman, 364 Ill. 618, in which the thought is expressed that the fact that a court of limited jurisdiction may exercise its discretion in the use of rules of practice of a court of general jurisdiction clearly does not substitute, nor authorize that court to substitute general jurisdiction for the limited jurisdiction specified by statute. The rules of the court of general jurisdiction are subject to use only in cases within the jurisdiction of the court of limited authority.”

We there held that section 2 of the act as amended, ch. 37 [Ill. Rev. Stat. 1937, § 357; Jones Ill. Stats. Ann. 108.028], relating to the municipal court, did not confer jurisdiction upon the municipal court to hear and determine matters involved in equity proceedings.

Another question in this case is whether the trial court erroneously refused to issue a writ of prohibition as prayed for by the petitioner. It has been decided by courts passing upon the subject that a “writ of prohibition is an extraordinary writ issued out of a court of superior jurisdiction and directed to an inferior court for the purpose of preventing the latter tribunal from usurping jurisdiction of a matter with which it is not legally vested, and is used to keep inferior courts within limits and bounds prescribed by law.” It is the rule that the writ will issue only upon the ground that it is a remedy provided to prevent an excess of jurisdiction, and cannot be entertained to take the place of a writ of error, where it is apparent that the ground for error is excess of jurisdiction. It has been generally held that — “A writ of prohibition cannot be permitted to bring before the court what may properly be brought before a higher tribunal by a writ of error or certiorari, and can never be used as a process for the correction of errors in inferior tribunals where such tribunals have jurisdiction of the subject matter. Mere irregularities in the proceedings of inferior courts, or mistaken rulings on questions before such courts on matters within their jurisdiction, do not constitute a sufficient ground for granting the writ of prohibition, since such act would be the exercise of appellate power, which can only properly be adjudicated or determined on appeal or writ of error.” And the above quoted holdings have been sustained in the case of People ex rel. Graver v. Cook Circuit Court, 173 Ill. 272. In that case the court said: “Wherever an inferior court has jurisdiction of a matter in controversy it is not within the province of a superior court to interfere, by prohibition, to correct errors or mistakes, but a party aggrieved must be left to pursue the ordinary remedies for the correction of errors.”

The court further said:

“In this case a suit was brought in the circuit court of Cook county — a court of general jurisdiction — on a subject matter of which that court had jurisdiction. The contention of the relator is, that the count filed on the 10th day of June, 1895, was a count in trover and a waiver of the counts in assumpsit, and amounted to a discontinuance of the counts in assumpsit, and, upon its dismissal, no application being made to file additional counts, the court lost jurisdiction of the subject matter, and when the cause was proposed to be set down for hearing and a plea to the jurisdiction was filed, the court was usurping power in sustaining a demurrer to the plea. If the contention of the relator that the count filed on the 10th day of June was a count in trover, and that such count was a discontinuance of the other counts, were admitted (which we do not hold to be true,) still the entire subject matter was within the jurisdiction and control of the circuit court of Cook county, and the most that could be claimed is, that there was an erroneous exercise of judgment and that a mistake was made. The writ of prohibition never was designed for the correction of such errors.”

While in the instant case the municipal court of Chicago has jurisdiction of the subject matter for recovery of moneys which may be due the plaintiff, still the defendant cannot by an action such as was instituted for the issuance of a writ of prohibition seek to prevent an excess of jurisdiction; nor could the writ take the place of a writ of error. The case in the municipal court has not been reached for trial, and we are not in a position to say that irregularities will take place in the proceedings, or that erroneous rulings will be made on questions of evidence.

The contention of the petitioner is that the action is one of accounting, but we cannot pass upon the rulings of the court at this time. If upon the trial the rulings are erroneous, an appeal may be taken, but as stated, we are not in a position to interfere by a writ of prohibition and correct errors or mistakes. The party aggrieved must be left to pursue the ordinary remedies for the correction of errors.

In view of the conclusions reached by us, we are of the opinion that the order of the court denying the petitioner the relief sought must be and is affirmed.

Order affirmed.

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


source: Caselaw Access Project

author: Mr. Justice Hebel

license: Public Domain

text:
    Nicholas Hoffman et al., Appellants, v. Chicago Laundry Owners’ Association et al., Appellees.
    Gen. No. 40,130.
    Heard in the third division of this court for the first district at the June term, ' 1938.
    Opinion filed November 30, 1938.
    John Ligtenberg and Cameron Latter, both of Chicago, for appellants.
    Jacobson, Merrick, Nierman & Silbert, of Chicago, for appellees; Lewis F. Jacobson and David Silbert, of counsel.
   Mr. Justice Hebel

delivered the opinion of the court.

This is an appeal by the plaintiffs from the order of dismissal of plaintiffs’ bill of complaint entered by the court upon the motion of the defendants, Chicago Laundry Owners ’ Association and others, to strike and dismiss the bill.

On December 22, 1937, the plaintiffs filed a bill of complaint against the Chicago Laundry Owners ’ Association, a voluntary organization, its president and secretary, and against two labor unions, and their presidents and secretaries, who were made parties to the litigation, wherein the plaintiffs prayed that an injunction issue restraining the defendants from interfering with the relation of employer and employee existing between the plaintiffs and the Monarch Laundry Company by imposing penalties on the Monarch Laundry Company by calling strikes or boycotts, or by any other form of coercion, and it was to this bill of complaint that the defendants filed a motion to strike. At the same time, on motion of plaintiffs the action was dismissed as to the International Brotherhood of Teamsters, Chauffeurs and Stablemen, Local No. 712, and Joseph Busch and Greorge Bendel, president and secretary of said Local 712.

The questions involved in the litigation were decided by the trial court upon the sole issue of sufficiency of the complaint, and, under the rule that a motion to strike and dismiss a complaint is an admission that facts well pleaded in the complaint are admitted, the plaintiffs submit that the pleadings, charge the following:

That the plaintiffs are laundry workers employed by verbal contracts of employment, terminable at the will of the parties thereto; that both the plaintiffs and their employer are satisfied and wish to keep the contract of employment in force; that labor conditions under these contracts of employment are more favorable to the plaintiffs than are the terms and conditions of employment elsewhere in the industry; that there is no strike or lockout, except that threatened by the acts of the defendants, existing at the plant of plaintiffs’ employer ; that the defendant, Chicago Laundry Owners ’ Association is a group of laundry owners in the vicinity of Chicago; that the ostensible objects of defendant, Chicago Laundry Owners’ Association, are the stabilizing of prices and labor relations in the industry ; that defendant union is a labor union of inside laundry workers; that the purposes of defendant, Laundry Owners’ Association, are to enforce excessive prices and to prevent competition, accomplished by means of fines and penalties levied on its members who break its rules; that in order to be more effectual in enforcing its regulation of the industry, defendant association has made a bargain with defendant unions, whereby the association agrees to maintain the “closed shop ’ ’ and the ‘1 check-off” system in the industry in exchange for the calling of strikes when needed to enforce its “regulation” of the industry; that the plaintiffs are and always have been strangers to the defendant, Laundry Owners’ Association, and are not and never have been members of either of the defendant unions; that the plaintiffs’ religious principles forbid their membership in the defendant union; that the union to which the plaintiffs belong is ready and willing to deal with the Monarch Laundry Company collectively regarding labor matters; that on October 15, 1937, the Monarch Laundry, plaintiffs’ employer, entered into a contract with the defendant, Local 46 (Union), providing for the discharge of the plaintiffs from the Monarch’s employ unless plaintiffs join the defendant union by December 31, 1937; that the contract was drawn by the officials of the union and the association and that the Monarch Company was required to enter into it as a condition of remaining in good standing as a member of the association.

And the plaintiffs state that unless enjoined as prayed for in the complaint, or unless the Monarch Company discharges the plaintiffs from its employ by December 31, 1937, if they do not sooner join the defendant union, the defendant, Laundry Owners’ Association, will compel the Monarch to discharge plaintiffs by:

(a) Imposing ruinous penalties on it.

(b) Suspending or expelling Monarch from membership in the association and causing its customers to boycott it.

(c) In conspiracy with defendant unions, by calling strikes of the members of the unions employed by Monarch.

(d) Preventing plaintiffs from getting employment in other laundries in Chicago by threatening similar action against such laundries which are members of said association.

It is further stated in their complaint that the defendant association through its officials and those of the defendant union, shortly after the date of the contract, directed the Monarch to see to it that plaintiffs join defendant union — that Monarch would gladly deal with the plaintiffs ’ union were it not for the threats of the defendants; that the defendants (association and union) have ordered the Monarch to discharge the plaintiffs and breach its employment contracts with them; that the defendants have threatened to call strikes of the members of the defendant unions, employed by Monarch, unless the plaintiffs are discharged by the Monarch; that the defendants will, unless restrained as prayed for, continue to threaten and will eventually call such strike to enforce the breach of plaintiffs’ employment contracts with the Monarch.

It is further stated by the plaintiffs in their complaint that certain of the defendants are insolvent; that the injury threatened the plaintiffs is irreparable, in that a long period of enforced idleness will deprive them of skill in their trade to a degree incapable of ascertainment and compensation at law.

The plaintiffs contend that a canse of action arises to the plaintiffs by reason of the matters stated in the complaint, and the charge made by the plaintiffs against the defendants is, that the latter, acting in concert and combination, threaten to, and will, unless restrained by the injunction sought in this proceeding, maliciously bring about the breach of a valid, subsisting contract of employment between the plaintiffs and their employer, the Monarch Laundry Company; and that dealing with the common law aspect of the question, upon an action for damages predicated upon acts done by a third party causing, maliciously, the breach of a contract of employment, terminable at the will of the contracting parties, the Supreme Court has answered this question in the affirmative, in the leading case of London Guaranty Co. v. Horn, 206 Ill. 493, wherein a judgment in tort against a party who, to coerce an employee into accepting an inadequate settlement for damages for injuries sustained in the course of his employment, brought about the termination of the employee’s contract of employment, was sustained. The court in that case — cited by the plaintiffs — followed the reasoning of the opinion in the earlier case of Doremus v. Hennessy, 176 Ill. 608, and affirmed its holding therein to the effect that: “No persons, individually or by combination, have the right to directly or indirectly interfere or disturb another in his lawful business or occupation, or to threaten to do so, for the sake of compelling him to do some act which, in his judgment, his own interest does not require.”

The defendant’s answer to the contention of the plaintiffs is that the complaint, after setting forth pages of irrelevant and scandalous allegations, in all probability the result of wishful thinking on the part of the plaintiffs, sets forth unsupported conclusions of an alleged conspiracy against them, alleged malicious acts purporting to interfere with alleged rights of the plaintiffs and alleged monopolistic practices; that only value of such unsupported conclusions is seemingly an attempt to incite a sympathetic ear of the court. Following this mass of surplusage we ultimately find the plaintiffs stating in their brief the substance of their complaint; and the defendant quotes from plaintiffs ’ statement as follows:

“It ought to be remembered, however, that primarily, plaintiffs are not complaining directly of this coqtract. They base their claim for relief upon the unlawful means about to be used by the defendants, acting in combination, to compel them, against their consciences and their desires, to join the contracting Union.

“Strictly speaking, in view of the state of this record, it is not necessary to a decision of this case, to determine whether, the contract entered into between plaintiffs’ employer and the defendant union, is in violation of the public policy of this state or not.” And then the defendant association states in its brief that it has no quarrel with the rule of law that malicious acts by third persons which interfere with the property rights of others are cognizable in a court of law. The real issues in this case at bar are: what acts come within this rule of law; does the bill allege any ultimate facts which, as a matter of law, are malicious acts and do the plaintiffs employed under a contract terminable at will, have a property right that equity will protect in the event their employer subsequently executes a “closed shop” agreement with a labor union to which such employees do not belong.

From the expressions used by the parties to this litigation it is evident that the plaintiffs may terminate this contract which was made terminable at will, and there is no feature of this case which would prevent the Monarch Laundry Company from entering into and executing a “closed shop” agreement with the labor unions to which such employees did not belong, and it seems from the allegations contained in the bill that this laundry company did enter into a contract with the defendant union, providing for a “closed shop.” It is true that there is an allegation that they entered into this agreement with the union providing for the discharge of the plaintiffs from the Monarch’s employ unless the plaintiffs joined the union by December 31, 1937, and this right to discharge at will is admitted by the plaintiffs in their bill when they state they are employed by verbal contracts of employment, terminable at the will of the parties thereto, meaning, of course, the plaintiffs as well as the Monarch Laundry Company.

It is to be noted that the Monarch Laundry Company is not a party to this lawsuit and at this time is not complaining of the acts charged by the plaintiffs. As previously stated, this company could have joined with the defendants for the purposes outlined in the bill of complaint. The only statement by the plaintiffs is that they were advised that they would be obliged to join the union by December 31, 1937, which would give the plaintiffs time within which to determine whether they desired to join the union or not.

In this connection it might be well to note that the attorney for the Chicago Laundry Owners’ Association stated in open court, when the cause was being heard on'oral argument, that three of the plaintiffs had joined the union and one had left the employ of the Monarch Laundry Company, and in considering the litigation from the angle presented to us by the plaintiffs it is largely a moot question in so far as it concerns the facts as charged against the defendant Laundry Workers’ International Union, Local No. 46, and its officers. This is apparent from the fact that the union did not join in the appeal before this court.

In the case of Carpenters’ Union v. Citizens Committee to Enforce Landis Award, 333 Ill. 225, the court held that while lawful competition which may injure, or even destroy, a person’s business is not actionable and may be a sufficient justification, in law, for procuring the discharge of another from employment, the justification of lawful competition does not apply to the efforts of strangers to a controversy between employers and employees to compel the action of either or to injure either for the purpose of compelling him to yield to the other the absolute right to manage his own business in his own way. It further held that every person has a legal right to full freedom of contract in the prosecution of a lawful business and in the disposal of his labor, no person or combination of persons has the right, directly or indirectly, to interfere with another in his lawful business and compel him to do some act which in his own judgment he does not approve, and losses caused by willful interference, without legal cause, with the relation of employer and employee or with their freedom of contract are actionable at law, and in a proper case an injunction may be obtained to restrain the wrongful interference.

Therefore the question in the instant case is whether the bill of complaint charges that the Chicago Laundry Owners’ Association committed acts such as would interfere with the performance of plaintiffs’ duties to the Monarch Laundry Company.

The charge made is that the plaintiffs never had any contractual or other relationship with the Chicago Laundry Owners’ Association and are not and never have been members of the defendant union, though they believe in and indorse the principles of “collective bargaining,” and then, that the plaintiffs are members of a religions organization which prohibits its members from joining or adhering to any secular organization which does not in its fundamental law or constitution recognize affirmatively the existence and omnipotence of Almighty God as the sovereign ruler of all affairs.

There seems to be no charge in the bill as presented to the court which would indicate that an effort was made to interfere with the rights of the plaintiffs to continue their employment with the Monarch Laundry Company, other than that threats were being made to force the Monarch Laundry Company to breach its contract with the plaintiffs and discharge them unless they joined the union by December 31, 1937, and that upon failure to act before December 31, 1937, a strike would be called; that because of these threats the Monarch Laundry Company informed the plaintiffs it would be compelled1 to discharge them unless they joined the union.

In Carpenters’ Union v. Citizens Committee to Enforce Landis Award, 333 Ill. 225, the court makes this observation: “A lawful purpose and a good motive do not, however, justify unlawful action in accomplishing the purpose. Any person had the right to advocate the reasonableness, propriety and justice of the Landis award or the contrary and to use whatever influence he possessed to secure or to defeat its observance, provided that in so doing he did not unlawfully interfere with the legal right of another. He could lawfully advise acceptance or rejection of the award, express and maintain his views by discussion, by writing and speaking, and by persuasion seek to have the award accepted and acted upon, or rejected, by contractors, by workmen, by the owners of buildings or by person contemplating building. If he were a contractor he could employ workmen only under the terms of the award and refuse to employ others. or he could refuse to employ workmen under its terms and employ others without regard to those terms, or if he were a workman he could refuse to agree to work under the terms of the award or otherwise than under its terms.”

This quotation is particularly applicable to the facts here, and, as previously stated, as there is no act alleged in the bill of complaint which would justify the issuance of an injunction, we are of the opinion that the court was justified in dismissing the bill upon the motion of the defendants.

For the reasons stated in this opinion the order of the court is affirmed.

Order affirmed.

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


text:
    Metropolitan Life Insurance Company, Appellant, v. Josephine Consento, Also Known as Josephine Consentino, Appellee.
    Gen. No. 40,168.

      Heard in the third division of this court for the first district at the June term, 1938.
    Opinion filed November 30, 1938.
    Hoyne, O’Connor & Rubinkam, of Chicago, for appellant; Nathaniel Rubinkam and William S. Allen, of Chicago, of counsel.
    Peter V. Fazio, of Chicago, for appellee.
   Mr. Justice Hebel

delivered the opinion of the court.

The case here on appeal was an action by the plaintiff company to cancel a life insurance policy on the ground that the plaintiff was induced to issue the policy through fraud and misrepresentations by the insured, and that under the incontestable clause in the policy it was necessary to file the bill to preserve the rights of the company before the contestable period expired. The defendant filed her answer and later filed a motion to strike. The trial court sustained the motion and entered judgment for the defendant, from which the plaintiff appeals.

The complaint filed by the plaintiff alleges that on October 9, 1934, Angelina Mengeno made a written application to the plaintiff for a policy on her life in the sum of $1,000, payable to the defendant, as beneficiary; that on October 16, 1934, the plaintiff issued its policy and delivered it to the insured and agreed, in consideration of the application attached to the policy and the payment of the premiums provided therein, to pay $1,000 to the defendant upon receipt of due proof of the death of Angelina Mengeno. The policy provides that it shall be incontestable after two years from its date of issue, and the application attached to the policy contains the questions and answers of Angelina Mengeno, and an agreement signed by the applicant that her statements and answers are correct and wholly true; that they constitute the basis for the policy and that she read the answers before signing; that they are correctly written as given by her and are full, complete and true and that there are no exceptions thereto except as therein stated.

Among the questions and answers contained in the application are the following:

“6. Present condition of health?”
Answer: ‘ ‘ Good. ’ ’
“7. (a) When last sick?”
Answer: “Hever. ’ ’
“8. Have you ever changed your residence or left your work for more than one month on account of your health? If yes, give date, duration and name of ailment. ■ ’
Answer: “Ho.”
“9. Any physical or mental defect or infirmity? If yes, give particulars.”
Answer: “No.”

Then follow a number of questions and answers of Angelina Mengeno, the applicant.

The complaint then alleges that the answers are not true; that in fact Angelina Mengeno was not in good health on the date of the application; that she was suffering from dementia praecox and was declared insane in April, 1935, and committed to the Lincoln State School at Lincoln, Illinois, where she remained until October 8, 1927; that she was suffering from a mental defect or infirmity on the date of the application for the policy, and was attended by Dr. George Halperin on September 22, 1934, who, after an examination found her mental development to be definitely arrested and recommended that she be placed in an institution; that on October 9, 1934, the date of the application, the mother of the insured, petitioned the court to commit said Angelina Mengeno to an institution, and on October 31, 1934, she entered the Kankakee State Hospital where she remained until her death, and the plaintiff alleges that the answers to said questions were made for the purpose of deceiving the plaintiff and were material to the risk.

It is further alleged that the defendant has not brought any action at law on said policy and threatens to wait until after the contestable period expires before bringing any action, and it is necessary to institute this action to cancel the policy before the incontestable period provided in the policy expires in order to preserve the rights of the plaintiff, and that unless the relief and injunction prayed for is granted the plaintiff will be deprived of its rights, contrary to the principles of equity and good conscience.

It is further alleged that no letters of administration or letters testamentary have been issued in the estate of Angelina Mengeno but the plaintiff is ready and willing to return the premiums paid on the policy and has heretofore tendered the premiums to the defendant, but that said premiums were refused and the plaintiff again offers to return the premiums to the defendant or the executor or administrator of the estate of Angelina Mengeno, if one is appointed.

The answer of the defendant admits the issuance of the policy but denies that Angelina Mengeno was not in good health on the date of the application, and denies that she was suffering from dementia praecox, and also denies that she was declared insane in April, 1925, or that the defendant petitioned the court to have her adjudicated insane on October 9, 1936.

After reference to a master in chancery, the defendant filed a motion to strike on the ground that plaintiff has an adequate defense at law under the provision of the policy as follows: “This policy shall be incontestable after it has been in force for a period of two years from its date of issue, except for non-payment of premiums, etc.”

The court allowed the motion and dismissed the complaint. A judgment for costs was entered against the plaintiff company.

Upon a hearing of defendant’s motion to strike, the court held that although the incontestable clause of the policy provides that the policy shall be incontestable after it has been in force for a period of two years from its date of issue, nevertheless, the statutory provision that a policy “shall be incontestable after it has been in force, during the lifetime of the insured, for two years after its date” controls, and that the company has an adequate remedy at law.

The plaintiff contends that under the incontestable clause of the policy the plaintiff company is required to take action in court and contest the policy within two years after its date, and that death within the two years does not stop the running of the time limit. It was error therefore for the trial court to dismiss the complaint since the plaintiff has no adequate remedy at law and would be deprived of its right if it could not resort to equity at this time. To this contention the defendant answers that the question of fraud and facts pertaining thereto are not material to the point raised on this appeal; that the one matter for determination is whether or not the plaintiff company is entitled to maintain its complaint in equity in view of the statutory provision (Cahill’s St. 1933, ch. 73, par. 375, sec. 3) governing and controlling the rights of the parties in a contract of insurance issued under the laws of this State. The defendant further contends that the plaintiff company has been protected by the provisions of the statute and having expressly reserved unto itself, by the terms and provisions of its policy, a set period of time, namely, two years, it was the intention of the legislature that this period of time should expire during the lifetime of the insured.

While it is true the statute provides the time after which a policy of life insurance shall be incontestable, it does not meet the situation before us because of the agreement of the parties that the policy shall be incontestable after a period of two years from its date. This agreement was advantageous to the insured, for no doubt the parties could have agreed by the terms of the policy to a one-year period, or that the policy would be incontestable from the date of its issuance, and, of course, the statutory provision would not apply. In this connection the plaintiff calls our attention to the case of Jefferson Standard Life Ins. Co. v. Keeton, 292 Fed. 53, which seems to apply to this case. There the court said:

“The appellants had the right to file their bills of complaint when and as they did. They had no adequate remedy at law. Before suing upon the policies the appellee could have waited until they were more than a year old and then appellants could have made no defense. ... It was said many years ago, there is no head of equity jurisdiction more firmly established than that which embraces the cancellation of instruments which are capable of a vexatious use after the means of defense at law may become impaired or lost or when they are calculated to throw a cloud upon the title or interest of the parties seeking relief.”

The petition alleges that if the plaintiff waits until the two-year period has passed to bring suit, the plaintiff would be without defense. That is true, for under its terms the policy is incontestable after this period has expired. From the admitted facts, it would follow from the motion to strike the statement, the facts that are well pleaded will control, and the only relief the plaintiff has is to file a bill such as it has filed. If plaintiff had waited until the two-year period had expired it would have been without remedy so far as the questions presented in the petition are concerned. While the statute would apply as to the fixing of the two-year period, the insurance company could not by its agreement with the insured fix the time at three years. The time limit fixed by statute is controlling but, as we have indicated in our opinion, this may be waived or the time may be fixed at one year, or the time limit omitted, and the insurance company would be bound by the agreement made when it entered into an insurance contract with the insured.

Our attention has been called to the case of Ramsey v. Old Colony Life Ins. Co., 297 Ill. 592, wherein it is suggested that the Supreme Court decided that under an incontestable clause worded substantially the same as the one in the case at bar (except that the period was one year in the Ramsey case) a company must contest the policy within the period provided and that death within the period does not stop the time from running.

In the case of Powell v. Mutual Life Ins. Co., 313 Ill. 161, the action was on four life insurance policies. Each policy contained the following clause: “This policy shall be incontestable after two years from its date of issue except for non-payment of premiums.” The plaintiff started suit on the policies and the company interposed a defense of fraud in the procurement of the policies and alleged that upon the death of the insured, which was within the contestable period, it discovered the fraud and rescinded the policies within the two-year period and that this action by the company of rescinding and canceling the policies on account of fraud and so notifying the beneficiary within the two years was a contest within the meaning of the clause. A demurrer was sustained to the answer and judgment was entered against the company. The court in discussing incontestable clauses, said: “The incontestable clause now in general use is to the effect that the policy shall be incontestable after a certain period, as one or two years, except for defenses recited therein. Such a clause is generally upheld as valid, because it gives to the insurer a reasonable time in which to discover fraud, if there be such, in the securing of the insurance contract. (Wright v. Mutual Benefit Life Ass’n, 118 N. Y. 237; Massachusetts Benefit Life Ass’n v. Robinson, 104 Ga. 256; Clement v. New York Life Ins. Co., 101 Tenn. 22; Bates v. United Life Ins. Ass’n, 68 Hun, 144; Murray v. State Mutual Life Assurance Co., 22 R. I. 524.) This clause amounts to an agreement between the insurer and the insured that after the expiration of such period the company shall be estopped from contesting the policy or setting up any defense, except such as may be reserved therein or such as is allowed on the ground of public policy.” So it would seem that under the circumstances the plaintiff in this case properly instituted this proceeding within the period fixed for the plaintiff to contest its liability under the policy, and we believe the court erred in sustaining the motion to strike. We quite agree with the interpretation of the statute called to our attention by the defendant, and believe that the provision thereof does not interfere with the right of the plaintiff to institute this proceeding.

The defendant makes the statement that a complaint in equity to cancel the policy for fraud cannot be maintained by the insurance company where the insured dies within the two years from the date of the policy. In view of the Amendment of 1921 adding the words “during the lifetime of the insured” to the provision of the Life Insurance Act (Cahill St. 1933, ch. 73, par. 375, sec. 3) stating that a policy of life insurance “shall be incontestable after it shall have been in force, during the lifetime of the insured, for two years from its date,” the insurer may contest the policy when the beneficiary files her suit thereon. So the question in this case is, did the plaintiff err in instituting suit at the time it was filed to cancel the policy of insurance. As we have indicated, the defendant contends that under the terms of the policy the insurer may contest the policy when the beneficiary files its suit to enforce the terms thereof.

The United States Supreme Court in American Life Ins. Co. v. Stewart, 300 U. S. 203, a case somewhat in line with the one before us, said:

“The argument is made, however, that the insurer, even if privileged to sue in equity, should not have gone there quite so quickly. Six months and ten days had gone by since the policies were issued. There Would be nearly a year and a half more before the bar would become absolute. But how long was the insurer to wait before assuming the offensive, and how was it to know where the beneficiaries would be if it omitted to strike swiftly? Often a family breaks up and changes its abode after the going of its head. The like might happen to this family. To say that the insurer shall keep watch of the coming and going of the survivors is to charge it with a heavy burden. The task would be hard enough if beneficiaries were always honest. The possibility of bad faith, perhaps concealed and hardly provable, accentuates the difficulty. . . . ‘Where equity can give relief plaintiff ought not to be compelled to speculate upon the chance of his obtaining relief at law.’ Davis v. Wakelee, 156 U. S. 680, 688, 39 L. Ed. 578, 584, 15 S. Ct. 555. To this must be added the danger that witnesses may disappear and evidence be lost. A remedy at law does not exclude one in equity unless it is equally prompt and certain and in other ways efficient. . . . Here the insurer had no remedy at law at all except at the pleasure of an adversary. There was neither equality in efficiency nor equality in certainty nor equality in promptness. ‘The remedy at law cannot be adequate if its adequacy depends upon the will of the opposing party.’ Bank of Kentucky v. Stone, 88 Fed. 383, 391; cf. Lincoln National Life Ins. Co. v. Hammer, 41 F. (2d) 12, 16. To make a contract incontestable after the lapse of a brief time is to confer upon its holder extraordinary privileges. We must be on our guard against turning them into weapons of oppression.”

Accordingly, it would be an unreasonable rule to compel the plaintiff in this action to wait until the time had expired before maintaining a suit of the character filed in this case. It is the duty of litigants to act promptly in filing a bill for cancellation of a contract where fraud is charged in its execution, and this rule would apply to actions on life insurance policies where fraud enters into the making of the agreements such as would require the insurance company to act promptly in contesting the validity of the agreements because of fraud.

From our conclusions, we are of the opinion the trial court erred in sustaining the motion to strike and in dismissing plaintiff’s bill of complaint upon the ground that it had an adequate remedy at law.

For the reasons stated, the dismissal of the bill of complaint and judgment for costs is reversed and the cause remanded with directions that the court hear and determine the questions involved in plaintiff’s bill to cancel the life insurance policy.

Reversed and remanded.

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


author: Mr. Justice Denis E. Sullivan

text:
    Jules G. Eichenbaum et al., Plaintiffs, v. State and Quincy Building Corporation et al. Continental Illinois National Bank and Trust Company of Chicago et al., Appellees, v. Isa W. Kahn, Appellant.
    Gen. No. 40,052.

      Heard in the third division of this court for the first district at the April term, 1938.
    Opinion filed November 30, 1938.
    D’Ancona, Pflaum & Kohlsaat and Moses, Kennedy, Stein & Bachrach, both of Chicago, for appellant; A. J. Pflaum, Julius Moses and Seymour A. Greenblatt, of Chicago, of counsel.
    Campbell, Clithero & Fischer and Gardner, Carton & Douglas, both of Chicago, for appellees.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

A foreclosure proceeding was instituted on October 11, 1932, to foreclose a trust deed securing a bond issue of $2,300,000 on the leasehold estate on the Consumers Building located at the northwest corner of State and Quincy streets in Chicago, Illinois.

On November 29, 1937, the interveners, owners of the fee, obtained leave of court to intervene in this cause and thereupon filed their intervening petition, setting forth certain defaults in the payment of rent and taxes, and asked the court to forfeit the leases in question, declare the rights of the respondent Isa W. Kahn and others in said premises terminated and declare said interveners vested with an indefeasible fee simple title to the respective parcels of real estate described in said leases.

As near as we can gather from the contrariety of statements as set forth in the various briefs, as well as the oral arguments, the facts are substantially as follows:

The building located at the northwest corner of Quincy and State streets, known as the Consumers Building, was owned in fee by the intervening petitioners, Continental Illinois National Bank and Trust Company of Chicago, as trustee under indenture of trust of Eliza C. Hamill, dated December 16, 1920, known as Trust No. 4512; The Northern Trust Company as trustee under trust agreement dated June 20, 1928, known as Trust No. 7279; Emily Osborn Bliss and Mae O. Carothers, and was leased to the State & Quincy Building Corporation. On October 31, 1924, said State and Quincy Building Corporation having acquired said leasehold estate created by said leases, by its trust deed of that date conveyed such interest to G-reenebaum Sons Bank and Trust Company, as trustee to secure a certain indebtedness evidenced by bonds aggregating $2,300,000. Jacob L. Kesner was the guarantor. The bond issue was to be retired by annual instalments ranging from $35,000 to $60,000 and some annual instalments of interest. Defaults were made in the payment of 1928 taxes of approximately $13,000 and default in the payment of 1929 taxes of approximately $11,121.36. A decree was entered May 25, 1937.

On November 29, 1937, thereafter the lessors, appellees, filed by leave of court their intervening petition seeking the forfeiture of the leasehold, setting forth certain defaults since May 1, 1933. Jules G. Eichenbaum was successor trustee under the bond issue and filed his answer to a petition of the lessors, denying the right of petitioners to forfeit the leasehold estate, and claiming among other things that the lessors who had previously intervened and obtained the aid of a court of equity to apply the entire income on account to the default of taxes, were not in a position to declare a forfeiture without obtaining the sanction of the court which was possessed of the res. Also, that it was inequitable to permit lessors to obtain a forfeiture of the leasehold estate as well as the premises and that the two remedies were inconsistent. The said appellant further contended that before the lessors would be entitled to a forfeiture they would be required to do equity and apply the said money toward taxes. Appellant also contends that appellee banks filed a former intervening petition declaring a forfeiture on the whole leasehold on February 27, 1934, and that they subsequently filed another petition to forfeit the leasehold on November 7, 1936; that they were unsuccessful in both attempts and the court dismissed the last petition for want of equity on May 25, 1937.

It further appears that Isa W. Kahn, appellant herein, by a mesne conveyance and assignment, succeeded to the rights and interest of the original lessees heretofore referred to.

According to the provisions of the statute the court on October 22, 1932, ordered that Isa W. Kahn remain in possession and manage such property in lieu of obtaining a receiver.

On May 20,1933, a decretal order was entered, which reads: “that said Continental Illinois National Bank and Trust Company of Chicago as trustee and The Northern Trust Company as trustee are the owners of the fee title to the real estate described in Parcel A of the trust deed being foreclosed herein and the owners of the lessor’s interest in the lease therein described; that the said Emily Osborn Bliss and Mae Osborn Carothers are the owners of the fee title to the real estate described in Parcel B of the trust deed being foreclosed herein and the owners of the lessor’s interest in the lease therein described; . . . that Parcels A and B are improved with a twenty-one story store and office building known as the Consumers Building; that Parcel C is improved with a separate building except that it also contains an entrance to the basement of the said Consumers Building, which said entrance is used as a part of or in connection with said Consumers Building. . . .

“The court further finds that under the provisions of all of said three above mentioned leases, the lessors are entitled to a lien upon all of the rentals of the buildings situated on the premises demised by said respective leases to secure the payment of all taxes and assessments thereon.”

On July 15, 1937, on a motion made by the attorneys for plaintiff, the court denied the motion to remove Isa W. Kahn from possession, allowing and sustaining plaintiff’s motion to disallow the payment of 4 per cent from the gross income to said Isa W. Kahn, denying plaintiff’s motion to require Isa W. Kahn to surrender possession to the plaintiff, and denying plaintiff’s motion that no further payments be made on account of taxes and that the order directing the application of the income for the payment of taxes be vacated and such funds held until the further order of the court.

On November 29, 1937, an intervening petition was filed by the Continental Illinois National Bank and Trust Company of Chicago, as trustee, under indenture of trust of Eliza C. Hamill, dated December 16, 1920, known as Trust No. 4512, and The Northern Trust Company as trustee under trust agreement with Buth Dangler dated June 20, 1928, and known as Trust No. 7279, and Emily Osborn Bliss and Mae 0. Car-others.

The petition further sets up that as trustees they represent the real owners and that the State and Quincy Building Corporation acquired the lessees’ interest in said leasehold and thereafter transferred them to Jacob L. Kesner who thereafter conveyed said leaseholds to Central Trust Company of Illinois, as trustee; that the. last named company and its successor assigned said leasehold to Isa W. Kahn who claims to be the holder of said leasehold estates for the benefit of the Kesner Realty Trust; that thereafter on September 14, 1937, said Kesner appointed the Harris Trust & Savings Bank as successor trustee under said indenture dated May 1,1912, creating the Kesner Realty Trust; that the said Harris Trust & Savings Bank on September 14,1937, accepted in writing its appointment as such successor trustee; that on October 31, 1924, said State and Quincy Building having acquired said leasehold estate created by said leases by its trust deed of that date conveyed such interest to Greenebaum Sons Bank and Trust Company, as trustee, to secure a certain indebtedness evidenced by bonds aggregating $2,300,000, evidenced by 4114 bonds of various amounts, payable serially, on different semiannual dates from May 1, 1926, to November 1, 1939, inclusive, which deed was recorded; that because of the resignation of the trustee, Jules G. Eichenbaum was finally appointed successor trustee and is now so acting and “that the owners and holders of the outstanding bonds secured by said trust deed are numerous and widely scattered so that it is impracticable to make them parties respondent to this petition and . . . their rights and interests . . . are represented by . . . Jules G. Eichenbaum as successor trustee aforesaid”; that under the terms of the lease pertaining to Parcel No. 1 the lessee agreed to pay as rent the sum of $35,000 for each and every year of the term after May 1, 1926, payable in 4 equal quarter yearly instalments of $8,750 each in advance on the first day of May, August, November and February in each year, and agreed to pay as additional rent for said premises, before any sale or penalty for nonpayment thereof, all taxes, assessments, water rates and governmental charges which might be lawfully levied or assessed after 1905 upon the premises demised or any building or improvements thereon or which might be erected thereon before the expiration of said lease.

The petition further sets forth the default and failure to pay the rent and the obligation herein mentioned; that on the first day of the months of August and November in the year 1933, and on the first day of the months of February, May, August and November in the years 1934, 1935 and 1936, and on the first day of the months of February and May in the year 1937, there became due and payable as per the terms of said lease the quarter yearly instalment of rent, but said instalments were not then nor thereafter paid in full; that thereafter the said petitioner caused notices in writing dated June 16, 1937, of said defaults in the payment of rent, to be served on Isa W. Kahn, Jacob L. Kesner, State and Quincy Building Corporation, Kesner Realty Trust, Central Republic Trust Company, formerly named Central Republic Bank and Trust Company, as successor by consolidation to Central Trust Company of Illinois, as trustee under Trust No. 2450, Charles H. Albers, as receiver for Central Republic Trust Company, successor by consolidation to Central Trust Company of Illinois, trustee under Trust No. 2450, Jules G. Eichenbaum, successor by appointment to Greenebaum Sons Bank and Trust Company, as trustees; that such defaults continued after such service of notice for more than 90 days after July 8, 1937, and were not cured, and on October 15, 1937, said petitioners declared said lease terminated, canceled and annulled and on October 21, 1937, said notices were served upon said last named persons declaring the termination, cancellation and annulment and to quit and deliver up possession of said premises within 10 days, were served October 27,1937, upon the Harris Trust & Savings Bank, successor by appointment of Jacob L. Kesner, etc., and that in spite of such termination of said lease neither said Isa W. Kahn nor any of said parties surrendered said premises, and said Isa W. Kahn held possession of same; that in addition to the defaults in the instalments of the rents, the general taxes for the years 1928, 1929, 1930, 1931, 1932, 1933, second instalments of the years 1934 and 1935, inclusive, and certain instalments of special assessments were not paid when they became due and payable; that by notice in writing dated June 18,1937, by Emily Osborn Bliss and Mae 0. Carothers of such default in payment of rent and taxes was served on Isa W. Kahn, Jacob L. Kesner, State and Quincy Building Corporation, Central Republic Trust Company, formerly named Central Republic Bank and Trust Company, as trustee under Trust No. 2450, and having claimed interest in said property by delivering such notice to the parties therein mentioned and causing such notice to be conspicuously posted, commencing July 19, 1937, for five consecutive days, at the main entrance to and in front of the premises demised. by said lease; that such defaults continued after service of notice for more than 90 days and still continue and have not been cured; that on October 21, 1937, said petitioners declared the term of said lease ended and said lease terminated, canceled and annulled; that on October 21, 1937, in spite of such termination of lease neither said Isa W. Kahn nor any of said persons surrendered said premises and said Isa W. Kahn holds possession of the same.

The petition further states that pursuant to the order of October 22,1932, by which the court permitted Isa W. Kahn to remain in said premises in lieu of the appointment of a receiver, that said Isa W. Kahn was in possession of said premises; that on May 20, 1933, an order was entered by the court directing, among other things, that the net income from said premises should as from May 1, 1933, be applied from time to time toward the payment of unpaid general taxes levied against said property and improvements; that said order was entered without prejudice to the rights of any of the petitioners; that the said banks as trustee state that the said Isa W. Kahn is still in possession in lieu of a receiver, under the supervision of the court, but that the petitioners by reason of the premises are entitled to possession of said real estate and improvements under their aforesaid respective leases; that by reason of the termination aforesaid of said leases, all the right, title and interest of said Isa W. Kahn and Jules Gr. Eiehenbaum as successor trustee and of the owner or owners, holder or holders of bonds secured by said trust deed and of all other parties other than the petitioners, have terminated; and said petitioners are vested with an indefeasible fee simple title in and to the respective parcels of real estate described in said leases.

On November 29, 1937, an order was entered granting petitioners leave to file their intervening petition instanter and ruling all parties to answer or make a motion to strike the same within 10 days and setting the hearing thereof for December 16,1937.

The answer of Jules Gr. Eiehenbaum, successor trustee, charges that the order entered May 20,1933, which provided that the taxes should be paid out of income, was entered at the special instance and request of the interveners, as they had intervened in said proceeding and obtained affirmative relief and sought the aid of the court to apply the income of the property in payment of taxes; that interveners should not be allowed to use the arm of the court to enrich themselves through the guise of the payment of taxes and, at the same time, receive the premises free and clear wherein innocent persons represented by said respondent had invested in excess of two million dollars; that having obtained an order of court authorizing said Isa W. Kahn to remain in possession in lieu of a receiver, the possession of Kahn was the possession of the court and no forfeiture could be declared by the interveners and, before a court of equity should allow a forfeiture, the interveners should be required to refund to the estate all the income which had been applied toward the taxes at their instance and request and on the objection of the respondent; that the interveners have recognized the tenancy of Isa W. Kahn as owner in possession in lieu of the receiver and have invited the aid of the court to retain him in possession as officer of the court and to account to the court for his acts and doings and have received the benefits of the aid of the court by the application of the income toward the payment of the taxes which, in event of forfeiture, will inure to their exclusive benefit; that before petitioners were entitled to serve any notice of a forfeiture it was their duty to present an application to the court and obtain leave of court to do so and, having failed to do so, they are in contempt of court and the court should not lend its equitable powers to enforce a harsh remedy to persons who have failed to do equity; that as a prerequisite to the forfeiture the petitioners should be required to refund to respondent all the moneys wrongfully applied in payment of taxes, and that the petitioners are not entitled to the relief prayed for, and ask that the petition be dismissed.

In the answer of Isa W. Kahn which was filed December 9, 1937, to the petition of the Continental Illinois National Bank and Trust Company of Chicago, as Trustee, and The Northern Trust Company, as Trustee, it is stated that this cause was instituted on October 11, 1932, to foreclose the lien of a trust deed from the State & Quincy Building Corporation to Q-reenebaum Sons Bank and Trust Company, dated October 31, 1924; that on October 22, 1932, an order was entered authorizing the said Kahn to remain in possession of the premises and manage and operate them, and that pursuant to said order and since October 22, 1932, said Isa W. Kahn has been and now is in possession, operating and managing said premises; that said Kahn admits that the mortgage in question was executed and that the bonds secured thereby were subsequently sold and delivered to various and sundry persons and admits that Jules Gr. Eichenbaum was appointed successor trustee under said trust deed, but denies that he represents the rights and interests of all the holders and owners of the bonds described in and secured by said trust deed, and admits the giving and service of the notices upon respondent; that the respondent Kahn claims that the petitioners are not entitled to possession but that the respondent is entitled to possession by an order of the court entered October 22, 1932.

Thereafter on December 17, 1937, the said Isa W. Kahn filed an amended answer claiming that the lease further provides as follows:

“The lessee further covenants and agrees that all policies of insurance upon the building now located on said premises and policies of insurance upon any new building which may at any time during the term of this lease be located or erected upon said premises, up to but in no event whatever exceeding the aggregate amount of Forty Thousand ($40,000) Dollars, shall provide that the loss, if any, shall be payable to the First Trust and Savings Bank, an Illinois corporation, as Trustee (hereinafter in this Article designated as Trustee), and said policies so payable to said Trustee shall be delivered to and held by the said Trustee, and all moneys due and payable thereunder shall be paid to said Trustee to be held and disbursed by it under the covenants and conditions of this lease. ’ ’

The amended answer further alleges that by reason of the clause in said lease relative to insurance and the First National Bank of Chicago having succeeded to the position as trustee for insurance, as provided in said lease, said bank has charged $10 a year for its services as such; that by reason of. such action by the First National Bank, the petitioners herein had waived their right to forfeiture and further that respondent had deposited with said trustee for insurance an insurance policy in the sum of $40,000, after the first policy for that amount had expired, which the bank accepted; that in the meantime the old building had been torn down and a new 22-story building, costing in the aggregate approximately $2,000,000 had been erected, and that it would unjustly enrich the petitioners to permit them to take said building.

Thereafter a hearing was had and on December 21, 1937, a decree was entered after considering the intervening petition and the answers of Eichenbaum and Kahn. Said decree, after finding in detail that the allegations of the intervening petition had been proved, found that the intervening petitioners were respectively entitled to immediate possession of the respective parcels of real estate in question of which they were the owners, and all of the right, title and interest, if any, of the lessees named in said indenture of lease and the said Isa W. Kahn and the said Jules G-. Eiehenbaum as successor trustee aforesaid, or of the owner or owners, holder or holders of bonds secured by the trust deed therein sought to be foreclosed and all persons claiming by, through or under them have terminated, and the intervening petitioners above named are seized and vested with an indefeasible fee simple title in and to their respective parcels of real estate, free and clear of any right, title and interest which might or could be vested in the lessees named in said leases.

The court in its decree further determined that the said lease had been forfeited, terminated and canceled and that said lease has now become and is null and void and the same ought to be and is hereby canceled, removed and expunged of record as a cloud upon the title to the premises and that all the parties claiming through the defendants herein named were perpetually restrained and enjoined from asserting any right, title or interest in or to said premises under or by virtue of the indenture of lease and that the said respondents were ordered and directed to deliver up, cancel and surrender to said intervening petitioners the original indenture of lease aforesaid, and that the petitioners are the owners of an indefeasible title in fee simple to the premises.

At the time of the entry of the decree the court further ordered that the motion to vacate the order to apply the net income of the premises in question on account of taxes, be denied; that the motion to direct the intervening petitioners to refund to the trust estate all moneys paid on account of taxes, as a condition precedent to the forfeiture of the leasehold, be denied, and that Isa W. Kahn be directed to file a final account within 15 days.

It is claimed by appellant that the owners of the fee proceeded on the theory that the trustee under the bond issue represented the numerous bondholders and bondowners; that the defaults had occurred in the payment of rents and taxes, required to be paid by the leases in question; that notices of such defaults and of termination were served on the necessary parties as required by the respective leases; that there was no waiver of the right to forfeiture or a recognition of the tenancy subsequent to the service of said notices of default and termination, and that, therefore, the interveners were entitled to the relief prayed.

It is claimed on behalf of the respondents, and on behalf of Kahn who was in possession of said premises under order of court as assignee of the leasehold in lieu of a receiver, that their defense is based upon the following:

1. After final decree the court did not have jurisdiction to entertain the intervening petition in question and the interveners’ right to intervene should have been denied.

2. A court of equity will not affirmatively enforce a forfeiture at the suit of a party entitled thereto, but will leave him to his legal remedies even though the case may be one in which no equitable relief would be granted the defaulting party against the forfeiture.

3. The successor trustee under the trust deed herein sought to be foreclosed, did not represent all the bondholders and they should have been notified (a) of the defaults; (b) of the termination of*the leases in question; and (c) of the filing of said intervening petition and all proceedings had subsequent thereto.

4. The respondent was entitled to retain possession of the premises in question under the order of court entered herein on October 22,1932.

5. The interveners waived their right to forfeit the leases in question.

6. If permitted to prevail, the interveners would be unjustly enriched at the expense of the respondent and of the owners and holders of the bonds secured by the trust deed herein sought to be foreclosed, in that they will have obtained a building worth in excess of $1,500,000, for an indebtedness of approximately $531,000.

The substance of the question raised by the contending parties is as follows:

Should a court of equity which has taken possession of the property during the period of foreclosure and is operating the same through a receiver, or one appointed under the statute in lieu thereof, permit the owner of the fee to appear and ask for relief ?

It is claimed on behalf of appellant that when the court of equity entered its final decree of foreclosure, there was no case pending; that said court had ceased to have jurisdiction and that if the petitioning parties desired relief they should have gone to a court of law. The abstract does not show any final decree entered as a basis for this objection. This contention is disposed of by the Supreme Court in First Nat. Bank v. Bryn Mawr Beach Bldg. Corp., 365 Ill. 409.

It is further claimed that the prayer of the fee owners for possession of the property being a common law action, a court of equity should not exercise any jurisdiction. It is a well-known principle that a court of equity once having acquired jurisdiction, will retain it for every purpose including the granting of purely legal remedies. In this case the court was still in possession of the premises and operating it for the benefit of all concerned. If an attempt had been made in a court of law to determine the right of possession, the owners would have been met by the defense that a court of chancery was then in possession of the property and there could be no interference until it had completed its administration. Gunning v. Sorg, 214 Ill. 616; Chicago Trust Co. v. 12-14 W. Washington St. Bldg. Corp., 278 Ill. App. 117. That being true, then why should not a court of chancery which is in possession of the property permit anyone who has an interest to come before the court and set up his claim and have said court in the exercise of its equitable powers adjust all claims? We think unquestionably that it was not only the right, but that it was the duty of the chancellor to allow petitioners to be heard and administer and pass upon the rights of all parties before it. Such is correct chancery practice. McDonald v. Bartlett, 324 Ill. 549.

It is further claimed that the court should not have decreed the trust deed to be a cloud upon the title and attempted to remove the same. With this we agree. The leasehold was the res that was being foreclosed; it was in default according to its terms and the lease had been forfeited and canceled by the fee owners and there was nothing left but to decree in accordance with the terms of said lease and place the rightful parties in possession. Lang v. Hedenberg, 277 Ill. 368; Harper v. Tidholm, 155 Ill. 370. The court did not declare a forfeiture but merely recognized what had already been done. McDonald v. Bartlett, 324 Ill. 549.

We think that in the decree it was unnecessary to remove the lease as a cloud upon the title, for the reason there was no dispute as to the ownership of the fee and tenants were in possession of the premises by virtue of said lease. In the case of Hill v. 1550 Hinman Ave. Bldg. Corp., 365 Ill. 129, at page 134, it was said: “ . . . that a lessee is bound to admit his landlord’s title, and the general rule is well settled that a valid lease cannot be a cloud upon a title. It has been frequently pointed out by us that to constitute a cloud there must be a semblance of title which is, in fact, unfounded and which casts a doubt upon the validity of the record title.”

In the instant case, however, the evidence shows the lease is in default according to its terms and the same has been canceled by the owners of the fee by proper notice and in compliance with the terms of said decree. That portion of the decree which ordered the leases removed as, a cloud upon the title, is mere surplusage and may be disregarded.

No suggestion is made as to where the owners should go in order to have their rights passed upon and to obtain relief if they were unable to obtain relief in a court of equity. Hartzell v. Hungate, 223 Ill. App. 346. All the parties were before the court which had ample jurisdiction and their various interests were justly determined.

It is claimed the fee owners in some way forfeited their rights to relief when the court ordered the rent receipts applied to the payment of taxes. This was done no doubt to save a further default by appellees and in payment of their debt according to their lease. The court was right in doing this. Other points are raised but we do not think they are controlling.

In considering the decree entered by the trial court, we think that court was justified in entering the decree it did and, in fact, it would have been inequitable for it to have done otherwise.

For the reasons herein given the decree of the circuit court is hereby affirmed, excepting that part of the decree wherein the court finds and removes the said lease as a cloud upon the title and as to that part of the decree, the same is reversed.

Decree affirmed in part and reversed in part.

Hall, P. J., and Hebel, J., concur.


text:
    Mollie Revzen, Appellee, v. Gertrude Brown et al., Defendants. Appeal of August Stiewe et al., Appellants.
    Gen. No. 40,081.

      Heard in the third division of this court for the first district at the April term, 1938.
    Opinion filed November 30, 1938.
    Daniel Roberts and Newell Mecartney, both of Chicago, for appellants.
    Pritzker & Pritzker, of Chicago, for appellee; Nicholas J. Pritzker, Richard Weinberger, and Wesley Tegtmeier, all of Chicago, of counsel.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

The complaint in this cause is for partition of the premises described therein and located in Chicago, Illinois, and was filed in the circuit court, to which answers of certain defendants were also filed. The court entered a decree defaulting “unknown owners” of notes secured by trust deeds on the premises and ordered the sale of the premises. Defendants appellants held $11,500 of said notes and petitioned the court and obtained leave to appear and answer. They set up that their notes and trust deed were in foreclosure in the superior court and a receiver of said court was in possession of the entire premises and that a tenant had leased said premises and was occupying the same. Their motion to vacate the decree and dismiss the complaint was denied and their answer was dismissed on motion, from which order they bring this appeal.

It is quite evident from an examination of this record that this decree must be reversed.

When this suit was commenced no summons or notice appears to have been given to those in possession of the real estate.

It further appears that although it was necessary for the plaintiff to amend her bill several times in order to have the proper parties before the court, $300 was allowed as plaintiff’s solicitor’s fees.

It further appears from the decree that the intervening parties defendant, whom the court permitted to answer, claimed that the sale price of the property was too low; that the property was under contract of sale for $8,000, but that it was sold for only $2,525; that other lots in the same block sold for $400 per front foot and that this property was worth in excess of $40,000; that the mortgages on said property were in excess of $30,000.

The decree contained a very unusual provision, namely, that after sale and the payment of costs, the master should retain the balance of the money for one year and if the mortgagees did not come to claim it during that time and make adequate proof of claim, the money should be turned over to the owners of the fee.

The court should not have dismissed the petitions or answers of the defendants but should have determined their rights or the absence of such and should have entered a decree in relation thereto. Further, the court should not have approved the sale of the premises at such a low price, in view of the facts as set up in the petitions as to the value of the premises, and in compliance with the provisions of the following statute.

Chapter 106, pars. 14 and 15 of the Partition Act, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 109.462, 109.463], provides as follows:

“14. Interpleader.] §14. During the pendency of any such suit any person claiming to be interested in the premises to be assigned or aparted may appear and answer the complaint, and assert his or her rights, by way of interpleader; and the court shall decide upon the rights of all persons appearing as aforesaid, as though they had been made parties in the first instance.

“15. Judgment.] §15. The court shall-ascertain and declare the rights, titles and interest of all the parties to such suit, the plaintiffs as well as the defendants, and shall give judgment according to the rights of the parties.”

Other errors appear in the record, but as they may be corrected when the case is retried we shall not advert to them at this time.

For the reasons herein given the orders dismissing the answers and petitions of the defendants, as well as the decree entered in said partition suit, are reversed and set aside and the cause is remanded to the circuit court with directions to hear all parties as to their rights and interests in the said premises in pursuance with the terms of the statute.

Decree reversed and cause remanded with directions.

Hall, P. J., and Hebel, J., concur.


text:
    Hiram B. Loomis and Russell L. Wise, Appellees, v. James B. McCahey et al., Appellants.
    Gen. No. 40,127.

      Heard in the third division of this court for the first district at the June term, 1938.
    Opinion filed November 30, 1938.
    Rehearing denied December 16, 1938.
    Richard S. Folsom and Kirkland, Fleming, Green, Martin & Ellis, both of Chicago, for appellants; Frank S. Righeimer and Joseph B. Fleming, of Chicago, of counsel.
    John E. Northup, Cameron Latter and John Ligtenberg, all of Chicago, for appellees.
   Mr. Justice Denis E. Sullivan

delivered the opinion of the court.

This is an appeal from a decree of the superior court, wherein an injunction was issued on the amended complaint of plaintiffs as citizens, residents and taxpayers, restraining the hoard of education and its officers from continuing in employment certain principals of schools who had been appointed after examination, and invalidating the eligible list prepared as a result of such examination. The trial court found for the complainants, and defendants bring this appeal.

The amended bill filed in this cause, after eliminating many unnecessary allegations, charges in substance that the examination conducted by the board of education was invalid and that the principals of the schools who had been appointed to their positions as such, pursuant to said examination, illegally held their offices and that the payment to them of their respective salaries was an unwarranted and illegal expenditure of public moneys and revenues of this school district and that the complainants, as taxpayers, residents and citizens, were injured because of this illegal expenditure.

A motion was made by defendants to strike the bill, which was overruled and defendants elected to stand on same and the chancellor issued an injunction, a part of which was mandatory in character, enjoining the school board from continuing the principals in its employment and from paying their respective salaries. In substance preventing the board of education from conducting the schools with these principals in charge thereof until some different kind of examination could be had. All this was done without a hearing and based on the allegations of the bill. Many of said charges in said complaint were alleged to have been made on information and belief, without disclosing the source of said knowledge.

Disregarding the immaterial allegations of the bill— relating to political matters which are impertinent and irrelevant and have no place or connection with the issues which are presented to us for consideration — we have before us the question as to the action of the trial court in issuing an injunction after the motion to dismiss had been overruled and the defendants had elected to stand by said motion. The questions presented by the bill and the motions are very voluminous, so much so, in fact, that the complainants required five printed pages in which to present their theory of the case.

The first question which we shall consider is: Were the complainants detrimentally affected by the actions of defendants %

Plaintiffs, as taxpayers as well as in their other capacities, say in their amended bill of complaint that if these principals are paid their salaries — salaries which plaintiffs claim are illegal — that plaintiffs as such taxpayers, will have to replenish the funds from which the money is taken, on the theory that where a cle facto officer is paid a salary and it is later shown that a de jure officer should have filled that office and drawn the salary in connection therewith, that, as a consequence both salaries would have to be paid. Equitable jurisdiction over official action is based on the theory that a taxpayer has an equitable interest in public funds which it is charged will be expended for an illegal purpose, thus incurring a liability on the taxpayer to replenish the treasury. Dudick v. Baumann, 349 Ill. 46; Moran v. Bowley, 347 Ill. 148. Of course it follows that as citizens and residents as distinguished from taxpayers, the plaintiffs in this case could not invoke the jurisdiction of a court of equity. Plaintiffs do not differentiate as to their status.

No showing appears from the plaintiffs’ bill — except by the allegation of a conclusion — as to any added expenditure which plaintiffs would have to make and thereby increase their tax bills. The taxes they claim to have paid, or which they will have to pay, are not set forth in their complaint, so that it is impossible for us to estimate or even presume the amount of the increase alleged to have been made. Nor is it shown that there would be an increase in the outlay of public revenue or the amount of same with regard to the examiner’s costs. Under the statute, the board of examiners consists of the superintendent of schools and two other persons, one of whom, the superintendent, has already been paid for his time by the board of education and this added work calls for no additional compensation according to the allegations of the complaint.

The right of a taxpayer to maintain a suit of this kind has recently been decided by the Supreme Court in the case of Ryan v. City of Chicago, 369 Ill. 59, which is a case parallel to the instant case. In the Ryan case plaintiff, a taxpayer, filed a bill for injunction on behalf of herself and other taxpayers similarly situated, wherein she sought to restrain the discharge of certain policemen and firemen pursuant to an ordinance which provided that policemen and firemen should be compulsorily retired when they had reached the age of sixty-three, said ordinance having been passed pursuant to an amendment to section 12 of the Civil Service Act for cities and villages [Ill. Rev. Stat. 1937, ch. 24%, § 14; Jones Ill. Stats. Ann. 23.014], effective July 12, 1935. In that case plaintiff contended that the amendment to the Civil Service Act was illegal and that "consequently the discharge of the policemen and firemen was illegal since it was based on an ordinance authorized by this illegal amendment to the Civil Service Act. The Supreme Court in that case, said:

“Counsel for appellant say that in this case the motion to strike admitted the allegations of fact, among which were that the city would expend large sums of money to conduct civil service examinations and to pay salaries to those policemen and firemen appointed to fill purported vacancies. While it is a rule of law that facts well pleaded are, for purposes of a demurrer or motion to strike, taken as true, yet it is clear that where conclusions of law rather than specifications as to facts are made, and the court can see that such conclusions are not well founded, the defendant moving to strike for want of equitable jurisdiction can scarcely be said to have admitted such conclusions, and the rule referred to can necessarily have no application. Otherwise, all cases of this kind must first come to a hearing to determine whether a court of equity has jurisdiction. In other words, as applied to this case, if the court can see that, under the law, the city would not incur additional expense in the payment of salaries to new appointees, even though the act be invalid, and if the court can also, as a matter of law, see that the allegations of expenditure of large sums of money for conducting examinations cannot, in the nature of the purpose alleged, be true, it can scarcely be said that a motion to strike a bill alleging such conclusions, admits such conclusions to be correct.

“First, as to the allegation that salaries paid to new appointees must also be paid to the old incumbents if the act is invalid, the law is that the payment of salaries to appointees to fill purported vacancies is the payment to de facto incumbents, and the de jure policemen and firemen cannot compel the city to make a second payment of salaries to them. Hittell v. City of Chicago, 327 Ill. 443; O’Connor v. City of Chicago, id. 586; People v. Burdett, 283 id. 124; People v. Schmidt, 281 id. 211.

“Nor can it be said that appellant will be financially affected by the conduct of examinations. The discharge of the duty to conduct such examinations is placed upon the civil service commission by provisions of the act not complained of. Where the expense of conducting such examinations is too trifling to constitute an injury to a taxpayer, such expenditure does not afford a basis for an equitable proceeding. In Payne v. Emmerson, 290 Ill. 490, it was sought to restrain the submission of certain public policy questions to the voters, and the assistance of equity was sought on the ground that it involved the expenditure of public funds. While that case also involved the right of a court of equity to enjoin an election, it is not unlike the case before us. The election at which the public propositions were to be submitted was a regular election provided for by valid law, just, as the conduct of civil service examinations is required by provisions of the act not here attacked. The gist of the supposed basis for equitable jurisdiction in the Payne case was the expense of preparing and submitting the ballots on the public policy question. This expense was, in that case, held to be too trifling to amount to an injury to a taxpayer. McAlpine v. Dimick, 326 Ill. 240, is not, as supposed, authority for appellant’s position. In that case it was sought to enjoin an election provided by an act claimed to be invalid. Such an election involved the expenditure of large sums of money which would not be expended if the act was invalid as no election would be held. Such is not the case here. The civil service commission will continue to function and to hold examinations regardless of the validity or invalidity of the amendment to section 12 of the act, and the additional expense occasioned by additional examinations is too trifling to be reflected in appellant’s tax bills.”

The averments contained in the amended bill of complaint do not furnish a basis upon which this suit could be maintained in a court of equity as said averments were in many instances conclusions of law as well as fact. Payne v. Emmerson, 290 Ill. 490; Price v. City of Mattoon, 364 Ill. 512; Koehler v. Century of Progress, 354 Ill. 347; McCormick v. Chicago Yacht Club, 331 Ill. 514.

From the allegations as contained in the amended bill we cannot see wherein the complainants would be injured in a monetary sense.

We are further of the opinion that the decree was erroneous in that all the necessary and interested parties were not included in the suit. The effect of the order of the trial court was to destroy the eligible list. There were some 100 school teachers remaining on the eligible list after the first 100 had been appointed to positions. These parties were interested parties as they had passed the examination and they should have been heard before the list which bore their names was held invalid. The trial court required only those who had been selected as principals from this eligible list to be named in the suit and refused to require that the others named on said eligible list be included.

In the case of People ex rel. Voss v. O’Connell, 252 Ill. 304, the petition alleged that the civil service commissioners had maintained three separate lists, one for desk sergeants, one for detective sergeants and one for patrol sergeants; that plaintiffs had taken promotional examinations, some for one type of sergeant and some for another and had been certified and ranked; that thereafter the lists were consolidated and the rankings were consolidated and appointments made from the consolidated list; that the result was to put others before the petitioners in the consolidated list and thus delay and prevent the appointment of petitioners. Petitioners made parties defendant to that action the city of Chicago, civil service commissioners, the superintendent of police and city comptroller and various policemen who had been appointed ahead of them. The petitioners asked to have the consolidated order set aside and applicants appointed to the separate categories of detectives from the separate lists, In the lower court the petition was dismissed as to the policemen appointed from the consolidated list and made parties defendant and the writ was then issued. The appointed officers against whom the petition had heen dismissed then sued out a writ of error to the Appellate Court for review of the mandamus proceedings. The Appellate Court dismissed the writ of error on the ground that they had no interest in the suit and were not affected by the suit. On appeal, in reversing the judgment of the Appellate Court, the Supreme Court, at pages 309, 310, said: “The appellants are as much interested in the subject matter of this suit as the petitioners, the interest of the petitioners being to set aside the consolidation and the interest of the appellants being to maintain it. The right of the appellants to hold their positions depends upon the success of the defense. They are the only ones having any valuable or substantial interest in maintaining the consolidation.”

So, in the instant case, the one hundred school teachers remaining on the eligible list were also interested in maintaining this list as well as the principals who had been appointed therefrom, and said teachers who passed the examination and were on the list should have been made parties to this suit and heard before the decree was entered.

We are of the opinion that in the instant case in view of the holding of the Supreme Court which is controlling and under the allegations as contained in the bill, that the plaintiffs did not sustain any injury and a court of equity could not grant relief. Therefore, it will be unnecessary for us to pass upon the various other contentions advanced by said complaint. The trial court should not have granted the injunction and committed error in so doing.

Many other questions are presented by the plaintiffs but inasmuch as we are of the opinion that the plaintiffs, as taxpayers, have not made out such a case as by their amended complaint would entitle them to maintain this suit we shall not discuss such questions further.

For the reasons herein given the decree is reversed and cause remanded.

Decree reversed and cause remanded.

Hall, P. J., and Hebel, J., concur.