text:
    Henry W. Austin, Treasurer of the Village of Oak Park, Appellee, v. James M. Feron et al., Defendants. Appeal of Michael J. Feron and Josephine Regenia Feron, Appellants.
    Gen. No. 39,221.

      Opinion filed March 30, 1937.
    Rehearing denied April 13, 1937.
    James K. Miller and McKinney, Folonie & Grear, all of Chicago, for appellants; George H. Grear, of counsel.
    H. L. Fearing, of Chicago, for appellee.
   Mr. Justice Friend

delivered the opinion of the court.

Henry W. Austin, treasurer of the village of Oak Park, Illinois, brought suit on a promissory note made by James M. Feron, Mary A. Feron, Michael J. Feron and Josephine E. Feron. Judgment by default was taken against James M. Feron and Mary A. Feron and the cause was continued as to the other defendants, who subsequently had a trial by jury resulting-in a directed verdict and judgment in favor of plaintiff for $13,157.02, from which Michael J. Feron and Josephine Feron have appealed.

The declaration contained three counts, the first upon the promissory note, dated March 10, 1931, in the principal sum of $10,408, the second consisting of the common counts, and the third for an account stated. Attached to the declaration was the affidavit of plaintiff’s counsel stating that the demand was for money due on a promissory note which was attached to the declaration.-

Michael J. Feron and Josephine R. Feron filed three pleas, one of the general issue, a special plea alleging no consideration for the note, and an affirmative plea that the consideration for the note was that the village of Oak Park, through its public officers, had caused an indictment to be returned in the criminal court of Cook county against James M. Feron, charging him with the crime of embezzlement, and that upon his promise to make restitution, partly in cash and the balance in the form of a note signed by his wife and the other defendants as co-makers, the village of Oak Park by its officers agreed to cause the felony charge against Feron to be dismissed and to allow him to plead guilty to petit larceny, and that the promissory note was therefore based on an illegal consideration and was wholly void. Accompanying these pleas was an affidavit of merits executed by each of the defendants, setting forth in detail the alleged agreement with the village of Oak Park for the dismissal of the felony charge and the probation of James M. Feron after a plea of guilty to the charge of petit larceny.

Plaintiff filed a similiter to the plea of the general issue, and two special replications to the special pleas. The first special replication took issue on the special plea of the defendants which alleged no consideration, and averred that there was a good and valuable consideration for the note. The second special replication to defendants’ third plea set up new matter, averring that upon an accounting and agreement between James M. Feron and plaintiff there was found to be due plaintiff the sum of $10,408, that the debtor requested an extension of the time for payment and agreed that in consideration thereof he would procure satisfactory parties who would become comakers upon the note, and that thereafter the consideration for the note was the granting of an extension in the time of payment of the amount then due. This special replication was accompanied by an affidavit of Eobert E. Cantwell, Jr., attorney for the village of Oak Park, in which he stated that he had full charge of the settlement between the village and James M. Feron, who had been a police magistrate of the village, and that the note was given for a balance of $10,408 owing by Feron to the village for fines and recoveries for violation of ordinances collected by him as police magistrate; that on an accounting Feron agreed that he owed $15,408, and thereupon paid in cash the sum of $5,000 and requested an extension of time for payment of the balance, and that by agreement between him and the village officers the balance of $10,408 was to be represented by a promissory note signed by himself and responsible comakers; that no agreement concerning the dismissal of any charge or indictment against James M. Feron in consideration of the giving of the note ever came to his knowledge.

Upon trial plaintiff introduced no evidence except the promissory note in question. Defendants introduced in evidence a certified copy of the indictment against James M. Feron, on the charge of embezzlement, and a transcript of the record of proceedings in the criminal court of Cook county March 4, 1931, and subsequent days up to and including the order showing that the felony charge in the indictment was waived, the withdrawal of the plea of not guilty by Feron, his plea of guilty to the charge of petit larceny and its acceptance by the court, and the order on March 19, 1931, admitting defendant to probation.

Eeversal of the judgment is sought upon the ground that the note was void because it was given in consideration for an agreement to compound a felony. This contention is based upon the proceedings had before the Honorable John Prystalski of the criminal court and discussions that ensued before the court in the presence of two attorneys representing the State, Robert E. Cantwell, Jr., for the village of Calc Park, Michael L. Carmody, attorney for James M. Feron, and the president and members of the board of trustees of the village of Oak Park.

The criminal court record and the stenographic record of proceedings had, show that when the case was called for trial on November 5, 1930, the State’s attorney, with the consent of the court, waived the charges of felony, the defendant pleaded guilty to a misdemeanor, and the State’s attorney made an agreed statement in open court in lieu of evidence to support the plea. The cause was then continued to March 19, 1931, pending an application for probation of the defendant. $5,000 was paid to the village on March 6, 1931, and the note in question was made March 10, 1931. March 19, 1931, Feron was placed on probation, and the proceedings in the criminal court were terminated.

Upon the trial of this cause defendants produced as witnesses for the defense Thomas J. Johnson, who represented the state in the hearing in the criminal court; Thomas J. Graham, a friend of James M. Feron, who acted as chairman of a committee to raise the $5,000 paid as part of Feron’s shortage; Josephine R. Feron, and Michael J. Feron, defendants, who testified in substance that they never had any business transactions with, and were not indebted to, the village of Oak Park, and there was also introduced in evidence a stenographic record of the proceedings had in the criminal court, including the discussion in Judge Prystalski’s chambers between the interested parties and the court, as well as proceedings had in open court resulting in the waiver of the felony, the plea of guilty to a charge of misdemeanor, the agreed statement of facts to support the charges, and the order continuing the cause pending the application for probation.

Feron was admittedly short in his accounts, and owed the village $15,408. He was evidently desirous of making restitution by paying part of the shortage in cash and giving the village a note, with responsible comakers, for the balance. When the matter came up for trial the parties met in the court’s chambers and discussed the terms upon which restitution should be made. By common agreement, and with the consent of the State’s attorney and court, the felony was waived and the state proved its charges of a misdemeanor, by an agreed statement of facts in lieu of evidence. Defendants argue that the proposal for restitution was initiated by Bobert E. Cantwell, Jr., village attorney, and that the village agreed to waive the felony and interpose no objection to probation, upon condition that Feron would pay $5,000 in cash and procure the note with responsible comakers for the balance. It is urged that this constituted the compounding of a felony or misdemeanor as a consideration for the note, and cases are cited to support the contention that such a consideration is illegal and the note void. Sec. 43, If 112, ch. 38, Illinois State Bar Stats. 1935; Jones Ill. Stats. Ann. 37.098, is relied upon as the basis for this contention. The section reads as follows:

‘ ‘Whoever takes money, goods, chattels, lands or other reward, or promise thereof, to compound any criminal offense, shall be fined ih double the sum or value of the thing agreed for or taken; but no person shall be debarred from taking his goods or property from the thief or felon, or receiving compensation for the private injury occasioned by the commission of any such criminal offense. ’ ’

The statute thus provides that a reward may not be taken to compound a felony, but there is nothing-in the statute to preclude the person whose goods or property have been taken, from receiving- compensation for the “ private injury occasioned by the commission of any such criminal offense.” The president and board of trustees of the village are charged with control of its finances and property (Cities and Villages Act, ch. 24, art. 5, ft 65, sec. 1, Illinois State Bar Stats. 1935; Jones Ill. Stats. Ann. 21.065). Under this statute it was their duty to collect all obligations owing to the municipality of which they were trustees, and they were in duty bound to collect from Feron the full amount of his shortage.

Plaintiff concedes that a reward cannot legally be taken from a criminal under sec. 43 of the Criminal Code, hereinbefore cited, and if so taken it can be recovered, or if a promise is given instead of payment, the promise is void. The victim of the embezzlement or theft may not suppress the evidence, stifle or stay the prosecution. He may, however, receive what is due him, and if he divulges all the facts pertaining to the crime to the officers of the law, stands ready to testify even though he may be willing that the guilty party should go unpunished, and does not conceal evidence or suppress or stifle the prosecution by any direct means or deceive the court and the law-enforcing officers, he cannot be held to have compounded a felony within the decisions of this and other States.

In the early case of Ford v. Cratty, 52 Ill. 313, Ford, an attorney, used money which he had collected from his client, Furch. A warrant was taken out for the arrest of Ford. The warrant was shown Ford, and he was told that he would be prosecuted if he did not “settle or secure” the claim. Ford thereupon gave the note in controversy to secure the claim, and no prosecution followed. When suit was instituted on the note Ford contended that it was given to compound a criminal offense. The court cited the statute in question, and commented thereon, as follows (pp. 315, 316):

“A number of authorities have been referred to, to establish the position that a note given to compound a criminal prosecution is illegal and void. The rule is well settled that such a note is illeg’al, but here the note was given, not as a reward for not prosecuting, but for a debt due from Ford to Furch, and that being the only and true consideration, it is not like a note given simply to prevent the prosecution for a misdemeanor or felony. That would be a different question ; . . . ”

In Tramblay v. Hyde Park State Bank, 336 Ill. 80, cited by plaintiff, security was given by Mrs. Tramblay, defendant’s wife, under circumstances showing that Mr. Tramblay was desperately involved in embezzlement of money from the bank. The court stated the rule applicable to the circumstances as follows (p. 90) :

“It is certainly not an agreement to stifle criminal prosecution for one party to make restitution, actuated partly or entirely by the- hope that the other party will refrain from prosecution, nor for the other party to accept restitution intending upon receiving it not to prosecute. Probably no guilty person ever so acted without such hope, and no injured person, unless especially severe, ever received amends without more or less willingness to show mercy. But there are no elements of an agreement in such cases. There is no meeting of the minds. What is agreed upon is a perfectly lawful transaction — the payment, without suit, of what a court of equity without reference to criminal prosecution would order to be paid. Failure to prosecute must be one of the things upon which the transaction is mutually based.” (Italics ours.)

In the instant proceeding there was certainly no intention on the part of the trustees not to prosecute, for they did in fact prosecute the misdemeanor charge and defendant was convicted. It is true they showed a willingness to have the felony charges waived, if agreeable to the court and State’s attorney, but this did not amount to the compounding of a felony nor the suppression of evidence or the stifling of prosecution.

In Board of Education v. Angel, 75 W. Va. 747, 84 S. E. 747, the defendants signed a note as indorsers and interposed the plea that it ivas signed for an illegal consideration, namely, to suppress a criminal prosecution of a felony against F. T. Roberts, the maker. In holding that the plea was not sustained by the proofs, and that plaintiff was entitled to recover, the court, in discussing* the question of what constitutes compounding* a felony, said (p. 750):

“It is well settled law that, though criminal proceedings have been begun and be pending against the wrongdoer for the crime, one whose money or property has been embezzled, or fraudulently procured, may contract with such wrongdoer for re-payment or satisfaction of the loss, and take security therefor, without invalidating such contract, unless there be included therein and as part consideration therefor some promise or agreement, express or implied, that such prosecution shall be suppressed, stifled or stayed.” (Italics ours.)

In discussing the liability of the indorsers on the note, the court said (pp. 750, 751):

“The evidence is clear and convincing that as between Roberts, the offender, and maker of the note, and the board of education, and the sheriff, the nominal payee in the note, not a word of communication was had. No promise or agreement, written or verbal, was made between them, directly at least, in regard to the pending prosecution, or what was to become of it, on execution and endorsement of the note. The prosecuting attorney in charge of the prosecution, and representing the board of education, admits a conversation with the members of the board who were togetker conferring on the subject on the day the note was executed and endorsed, in which they indicated to him that so far as they were concerned, if Roberts would secure them by a note with good security, they would not insist on his being prosecuted. This conference and communication, however, was wholly private, and between the board and prosecutor, and was not communicated in any way, so far as the record shows, to maker or endorsers of the note, and the prosecuting attorney swears positively that he at no time made promises to Roberts or his endorsers that Roberts would not be prosecuted. ...”

Similarly, it may be said in the case at bar that neither Michael J. Feron, nor his wife, was induced to sign the note by anybody connected with the village. Feron procured the signatures of his comakers, and as between the village and the comakers there was certainly no promise made.

Defendants seek to interpret the proceeding's had in the court’s chambers as being an agreement on the part of the village not to prosecute if Feron would make restitution. No such interpretation can be placed on the discussions had. The village trustees were present, and Mr. Cantwell, speaking on their behalf, merely indicated that so far as they were concerned, if Feron would secure them by note with good security they would not insist on his being prosecuted on the felony charge. The court was the final arbiter of what should be done and it would of course be idle to argue that the court 'was a party to the compounding of a felony. Since the village trustees frankly disclosed all the facts to the court and received its sanction of the course pursued, they cannot be held to have been parties to any illegal act.

After a careful consideration of the facts and circumstances of the case, we find no evidence in the record to warrant the charge that the village of Oak Park did anything improper or illegal whatsoever. The trustees were in duty bound to collect from Feron the full amount of his shortage, and they were justified in taking the position that if the State’s attorney and court were willing to waive the felony that they would not insist on prosecuting Feron on the embezzlement charge. So far as the probation of Feron was concerned, that was wholly within the discretion of the court. The trustees interposed no objection to the motion, and were fully within their rights in taking that position. We are satisfied that the pleas interposed were not sustained by any competent evidence, and the court was fully warranted in directing* a verdict in favor of plaintiff. The judgment is therefore affirmed.

Affirmed.

John J. Sullivan, P. J., and Soanlan, J., concur.


source: Caselaw Access Project

author: Mr. Justice Friend

license: Public Domain

text:
    Warren Gearty, a Minor, by William P. Gearty, His Guardian, Appellant, v. The L. Fish Furniture Company, Appellee.
    Gen. No. 39,299.

      Opinion filed March 30, 1937.
    J. Kentner Elliott, of Chicago, for appellant.
    Miller, Gorham, Wales & Adams, of Chicago, for appellee; Edward E. Adams, Herbert C. De Young and William Simon, of Chicago, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

July 5, 1928, Warren Gearty, a child three years of age, was injured by a truck owned by L. Fish Furniture Company, defendant herein. Thereafter, December 20, 1928, Peter Keserich, his stepfather, was appointed guardian of the minor’s estate (his ward being designated in the proceeding as Warren Keserich), and the following day he filed a verified petition in the probate court alleging that the only asset of the estate was a cause of action against L. Fish Furniture Company for injuries sustained by his ward, that the furniture company had offered to compromise and settle the cause of action for $3,300, and praying for an order granting him leave to compromise and settle on that basis. An order was entered reciting that the court had examined the petition and was fully advised in the premises, granting the guardian leave to accept $3,300 in full settlement of the claim, that $590 thereof be expended for hospital bills, $1,002 for medical services, and $650 for attorney’s fees. Pursuant to the entry of the order, defendant paid Peter Keserich, as guardian, $3,300 in full settlement of the claim, and received a release signed by Peter Keserich, guardian of the estate of Warren Keserich, executed December 20, 1928, releasing it from “all claims, demands, actions, causes of actions or suits at law, for or because of any matter or thing done, omitted or suffered to be done by said L. Fish Furniture Company, its agents and servants from the beginning of the world to and including the day and date hereof, and especially on account of a certain accident resulting in injuries sustained by said Warren Keserich, a minor, on July 5, A. D. 1928 at or near 4012 W. Cullom avenue, Chicago, Illinois.”

Appellee- states in its brief, de hors the record, that Peter Keserich and the boy’s mother were lawfully married on May 27, 1926, more than two years prior to the accident. It appears from the order of the probate court that a substantial portion of the $3,300 received from defendant by way of settlement was to be used for hospital bills, medical attention and attorney’s fees. The balance was deposited in the Elston State Bank, where it remained on deposit until the bank failed.

More than four years after the settlement of this claim and the execution of the release, William P. Gearty, an uncle of the minor, petitioned the probate court to be appointed guardian of the estate of “Warren Gearty,” and letters of guardianship were issued to him, thus opening a new and another estate for said minor, bearing different docket, page and file numbers from those of the estate of “Warren Keserich.” May 25, 1933, without notice to L. Fish Furniture Company, as appears from the uncontroverted affidavit of Louis Ets Holán, its secretary, the newly appointed guardian procured an order from the probate court finding that Peter Keserich was not the father of the minor and not related to him by ties of blood or otherwise, and that said minor never lawfully bore the name of Keserich; that the minor was injured July 5, 1928, through the negligence of L. Fish Furniture Company; that letters of guardianship issued to Peter Keserich, and an order entered granting him leave to settle the minor’s claim for $3,300; that pursuant to ■ an order entered by the probate court the claim was so settled and compromised, and a release executed and delivered to L. Fish Furniture Company; that Peter Keserich was without authority or right to be appointed guardian of the estate of Warren Gearty. and to obtain from or through the probate court permission to compromise his claim for damages, and that his doings in that behalf were without right or authority and in derogation of the legal rights of the minor, and it was ordered that Peter Keserich show canse, within 15 days, why he should not be punished for contempt of court by reason of his acts and doings in securing the letters of guardianship, and that a citation issue in the usual form; that the compromise and release of the minor’s claim for damages against L. Fish Furniture Company, and the release thereof, be declared null and void as to Warren Hearty, and that said minor be restored to his legal right of action against L. Fish Furniture Company in like manner as if such compromise and release had never been made.

Subsequently the newly appointed guardian, William P. Hearty, instituted this proceeding against defendant in the superior court, and May 22, 1936, defendant moved to strike the complaint and to dismiss the suit pursuant to sec. 48 of the Practice Act, setting forth its release as a complete bar to the suit. Plaintiff replied by referring to the order of the probate court, setting the release aside, but the trial court held the release to be in full force and effect, sustained defendant’s motion to strike the complaint and dismissed the suit. This appeal followed.

After a careful examination of the authorities cited by defendant, we have reached the conclusion that the superior court properly dismissed the complaint for the following reasons: the jurisdiction of the probate court to issue letters of guardianship to Peter Keserich is unchallenged. Neither is there any contention that fraud was exercised by defendant in procuring the release. Under the circumstances the subsequent appointment of William P. Hearty, as guardian for the same minor and orders entered in that estate pursuant to Hearty’s petition, constituted a collateral attack on the prior order of the probate court, and under the decided weight of authority in Illinois and other jurisdictions this will not be permitted. It was so held in Balsewicz v. Chicago, Burlington & Quincy R. Co., 240 Ill. 238. In that proceeding suit was brought by the father of decedent, as administrator of his estate, against the defendant for damages resulting from the death of his son. Letters of administration had been issued to the plaintiff by the county court of Bureau county. Upon trial defendant offered in evidence a certified copy of letters of administration previously issued on decedent’s estate by the probate court of Cook county to one Wachowski. The evidence did not show on whose petition these letters issued, who Wachowski was, or any relationship that he bore to the decedent. He was in fact a stranger to the Balsewicz family. The trial court permitted the plaintiff to prove facts showing that the probate court of Cook county had no jurisdiction to grant letters of administration, and refused to instruct the jury that the release of the Cook county administrator was a defense to the suit. On appeal it was contended that the trial court had erred in admitting this evidence and in refusing the instruction offered with reference to the release. In discussing the question under consideration the court said (p. 247):

“ While there are decisions to the contrary, the decided' weight of authority is in favor of the proposition that the appointment of an administrator by a court of general probate jurisdiction is valid against collateral attack on the ground that the decedent was not a resident of the county. ... It was error to admit evidence to impeach the Cook county administration and to refuse to instruct the jury that the release was a bar to the action. ’ ’

In the Balsewicz case it appears that the probate court of Cook county did not in fact have jurisdiction to appoint Wachowski as administrator, because deceased was not a resident of this county. Nevertheless, the Supreme Court refused to permit a collateral attack on the appointment. In. the case at bar the minor lived in Chicago and the probate court of Cook county had unquestioned jurisdiction to appoint a guardian for his estate.

Under similar circumstances it was held in Successions of Keller and wife, 39 La. 579, 582, that an order of a court of competent jurisdiction appointing a guardian cannot be collaterally attacked. That case is similar to the proceeding before us because, as here, the appointment of the guardian was challenged in the same court which had made the appointment, and it was held to be “one of the most familiar rules of our jurisprudence . . . that the correctness or regularity of a judgment of a competent court appointing a tutor cannot be collaterally reviewed or questioned, even by the court which has made the appointment.”

In Hodgdon v. Southern Pacific R. R. Co., 75 Cal. 642, it was held (p. 648) to be “well settled that a judgment, regular on its face, and rendered by a court having full jurisdiction to render it, cannot be attacked collaterally on the ground of fraud, collusion or other matter aliunde. The opposite rule would subject to the uncertain and insecure test of parol evidence those things to which the law attaches the utmost conclusiveness and stability, — judgments and judicial records. . . . And the appointment of a guardian by a probate court is a judgment to which the rule applies.” (Italics ours.) To the same effect is Swindle v. Rogers, 188 Ark. 503, 66 S. W. (2d) 630.

In the second guardianship estate the probate court entered an order declaring’ the release delivered to defendant to be null and void and of no effect. This order was predicated upon collateral representations contained in William P. Gearty’s petition for letters of guardianship. No fraud was charged and since defendant’s release was under seal we think that under the settled rule of law it could be set aside only in a direct proceeding or upon application to a court of equity having general jurisdiction. It was so held in Jackson v. Security Mutual Life Ins. Co., 233 Ill. 161, where the court said that a release under seal, alleged to have been procured through fraudulent representations as to collateral matters, could be set aside or reformed only in a court of equity. In Hartley v. Chicago & Alton R. Co., 214 Ill. 78, Mr. Justice Cartwright, speaking for the court, said that “if there is no fraud in securing the execution of the release it can only be avoided by a proceeding in equity.” To the same effect is Papke v. G. H. Hammond Co., 192 Ill. 631.

In attempting to set aside the release under seal the probate court was in effect adjudicating the rights of a third party, the L. Fish Furniture Company, over wliich it clearly had no jurisdiction. Defendant received no notice of the proceeding, and, therefore, the release, for which it had paid a substantial sum, was attempted to be invalidated without giving- defendant an opportunity to be heard.

While this appeal was pending defendant made a motion to dismiss the appeal on the ground that notice of appeal was not served within the 90 days required by sec. 76 of the Civil Practice Act (Illinois State Bar Stats. 1935, ch. 110, fí 204, p. 2449; Jones Ill. Stats. Ann. 104.076). While it is evident from the record that plaintiff failed to comply with this section of the statute, nevertheless his counsel by counter suggestions asks that we grant him leave to appeal under the one-year provision of the statute. Inasmuch as a showing is made that plaintiff did not have sufficient-funds to perfect his appeal within the 90 days, defendant’s motion to dismiss the appeal is denied, and plaintiff’s motion for leave to appeal is granted. However, it appears from the record that plaintiff is appealing from the order entered in this case June 26, 1936. Defendant’s motion to strike the complaint was made and sustained May 22, 1936, and plaintiff’s suit was on that date dismissed in the superior court. Plaintiff thereupon entered an oral motion to vacate the order, which was continued to June 26, 1936, apparently for the purpose of allowing plaintiff to file a petition in support of his motion. No such petition was in fact filed, and when the matter again came on for hearing June 26, 1936, in the absence of any petition or affidavits by plaintiff, the court had no alternative but to deny the motion to vacate the prior order of dismissal. Under the circumstances this appeal presents for consideration only plaintiff’s motion to vacate the order of dismissal of May 22, 1936, and the propriety of the court’s ruling in denying that motion. Since no showing was made by plaintiff in support of his motion, the court’s ruling was obviously proper. A similar situation was presented in Smith v. Brittenham, 88 Ill. 291, where the court said (p. 293):

“It is not perceived how the appeal, in this case, can bring before this court anything but the decision of the circuit court overruling the motion of defendant to vacate the decree in the cause, and for leave to answer to the merits of complainant’s bill. ’ ’

In National Ins. Co. v. Chamber of Commerce, 69 Ill. 22, the following quotation from the court’s opinion is also pertinent to the question under consideration (pp. 24, 25):

“It will be perceived that the first, third, fourth and fifth assignments of error question the propriety of the judgment as originally entered. Counsel for appellant seems to treat this as an appeal from that judgment. In this he is clearly mistaken. . . . This appeal . . . brings before us for review merely the propriety of the court’s ruling upon the motion to vacate the judgment and set aside the default.”

In Scanlan v. Wheeler, 51 Ill. App. 179, at p. 180, it was said:

“The appeal from the order overruling the motion to vacate the judgment does not bring up the question of the propriety of the judgment entered at the preceding term. . . .

‘1 The only thing brought to this court by this appeal, is the propriety of the order overruling the motion to vacate the judgment.”

Since plaintiff’s notice of appeal expressly states that the appeal is being taken from the order of J une 26,1936, and not from the order of May 22, 1936, and since no petition or affidavits were filed in support of the motion to vacate the order of dismissal, we think, under the foregoing authorities, the ruling of the court was correct; in fact, no showing was made which would have justified any other decision.

Reduced to simple terms the settlement of the minor’s claim was apparently regular in every way. Defendant acted in good faith, and no fraud is charged or shown. A substantial sum of money was paid to Peter Keserich, as guardian, pursuant to the order of a court which had jurisdiction to act. To hold that such a proceeding could be invalidated many years later by a collateral attack upon the order of appointment and the setting aside of a release given in good faith and pursuant to the court’s order, especially without notice to the Fish Furniture Company, would make it unsafe for any one to settle a minor’s claim, even with the approval of a court of competent jurisdiction.

For the reasons stated the order of the superior court dismissing the complaint should be affirmed, and it is so ordered.

Order affirmed.

J ohm J. Sullivax, P. J., and Scahlan, J., concur.


author: Mr. Justice Scahlah

text:
    Mark S. Remington, Appellee, v. Krenn and Dato, Inc., Appellant.
    Gen. No. 38,665.
    Opinion filed March 30, 1937.
    Rehearing denied April 13, 1937.
    WlLHARTZ, HiRSCH & ScHANFARBER, ROBERT J. HlLliard and Concannon & Dillon, all of Chicago, for appellant; Arthur Wolf arid Eugene H. Nirdlinger, both of Chicago, of counsel.
    Owens & Owens, of Chicago, for appellee; Thomas L. Owens and Vincent Gr. Rinn, of Chicago, of counsel.
   Mr. Justice Scahlah

delivered the opinion of the court.

In a trial by the court the issues were found for plaintiff and his damages were assessed at $14,638.40. Defendant appeals from a judgment entered upon the finding.

The declaration contained four money counts, but as the affidavit of claim states that there was due plaintiff from defendant the sum of $13,275.99 for money had and received by defendant at various times from August 6,1925, to December 5,1931, the one for money had and received is the only one that need be noticed. Plaintiff later filed an affidavit of assignment, which states that the cause is an action arising out of a certain instrument in writing dated August 6, 1925, between Albany Avenue Realty Trust, of which Chicago Title and Trust Company is trustee under Trust No: 15>065, and Max F. Schwarze and Rose Schwarze; that plaintiff is the actual bona fide owner of said chose in action, and that he acquired title to said chose in action on October 3,1932, under an assignment from Max F. Schwarze and Rose Schwarze. Plaintiff also filed a bill of particulars, which set up the written contract referred to in the affidavit of assignment. Defendant filed a general demurrer to plaintiff’s declaration and bill of particulars, and an order was entered overruling the demurrer, striking plaintiff’s bill of particulars, and granting him leave to file an amended bill of particulars within 20 days. Thereafter, defendant filed a plea of the general issue together with notice of special defenses and an affidavit of merits setting forth, in substance, that Edith Rockefeller McCormick, Edwin D. Krenn and Edward A. Dato, as trustees of the Edith Rockefeller McCormick Trust, bought and paid for the land, part of which was covered by the contract with the Schwarzes; that the said trustees, as such, adopted and did business under the trade name of “Albany Avenue Realty Trust, of which Chicago Title and Trust Company is Trustee”; that the contract with the Schwarzes was the contract of the said trustees; that all of the payments made by the Schwarzes on the contract were paid over and delivered to the said trustees; that defendant received payments on said contract merely as agent for the said trustees; that the Schwarzes defaulted in the terms of the contract and never became entitled to a deed thereunder, but vacated and abandoned the premises and never tendered the balance due on the contract; that, in any event, plaintiff could not recover for payments made prior to five years before the commencement of this action by reason of the statute of limitations. Plaintiff filed a general and special demurrer to the notice of special defenses and affidavit of merits, and stated as the special grounds of demurrer that the contract is void for lack of mutuality of obligation because the vendor is not a legal entity; that the statement that McCormick,' Krenn, and Dato organized the Edith Rockefeller McCormick Trust for certain purposes is not relevant; that the allegations in Paragraph 3 are conclusions which attempt to vary the terms of recorded deeds, and the trust agreement dated June 27, 1925, is inadmissible for that purpose and does not sustain the allegations of paragraph 3; that the fourth paragraph of the notice of special defenses and of the affidavit of merits, when read in conjunction with the Edith Rockefeller McCormick Trust Agreement and Declaration of Trust and with the trust agreement of June 27, 1925, does not show that there was a legal vendor who could sue or be sued; that the Edith. Rockefeller McCormick Trust agreement does not show any chain of title with the property in question by recording or otherwise, and that the statements that the three trustees of the Edith Rockefeller McCormick Trust employed the defendant, and that defendant was acting on their behalf in making the sale and entering into the contract, are contrary to other allegations in the pleadings and are not supported by the documents filed. Plaintiff’s special demurrer was allowed to stand as a motion to strike the special plea and affidavit of merits. The motion to strike was then sustained, and defendant was granted leave to file an amended plea, notice of special defenses and affidavit of merits within ten days. Thereafter defendant filed an amended plea of general issue, an amended notice of special defenses and an amended affidavit of merits, which defenses, set forth in detail, are, in substance, the same as were set forth in the original notice of special defenses and affidavit of merits.

Defendant’s theory is “that this case is identical with and controlled by the cases of Beilin v. Krenn & Dato, Inc., 350 Ill. 284, and Weissbrodt v. Elmore, 262 Ill. App. 1; that the contract in question is valid; that there was actually a vendor; that the vendor was the Edith Rockefeller McCormick Trust, doing business under the adopted trade-name of ‘Albany Avenue Realty Trust’; that even if the evidence did not sufficiently show that the Edith Rockefeller McCormick Trust was the vendor, this contract would not be void for want of a vendor, because in any event the vendor signing the contract would be Daniel F. Sullivan, who actually signed the contract, or Edward A. Dato, who was the ostensible beneficiary of the Albany Avenue Realty Trust. The' defendant also contends that in no event can the plaintiff recover from Krenn & Dato, Inc., because the evidence shows that Krenn & Dato, Inc., merely received, as agent for the McCormick Trust, the payments sued for, and in turn paid over all of such payments to the Edith Rockefeller McCormick Trust. The defendant also contends that in no event can the plaintiff recover the payments made by the Schwarzes more than five years prior to the filing of this suit.”

A written land contract, dated August 6, 1925, was entered into between Albany Avenue Realty Trust, of which Chicago Title and Trust Company is trustee, under Trust No. 15,065, party of the first part, and Max F. Schwarze and Rose Schwarze, husband and wife, party of the second part, for the sale by the former to the latter of Lot 3 in Krenn & Dato’s Re-subdivision of Lots 46 to 81, both inclusive, in Krenn & Dato’s Lincoln-Kedzie Addition to North Edge-water, commonly described as 6038 North Albany avenue, Chicago, together with improvements thereon. The contract was signed in the following manner:

“Albany Avenue Realty Trust, of which Chicago Title and Trust Company is Trustee

By: Daniel F. Sullivan,

Ass’t Manager.

First Party

Max F. Schwarze, (Seal)

Rose Schwarze (Seal)

Second Party”

It was stipulated that the total amount of the payments made by the Schwarzes under the contract was $13,332.95; that the last payment was on January 5, 1932, and that the sum of $6,577.05 was paid by the Schwarzes prior to June 6, 1928, being a date more than five years prior to the filing of the suit. When the case was called for trial and before any evidence was heard, counsel for plaintiff stated to the trial court that plaintiff based his right to recovery solely upon the theory that the vendor described in the contract is not a living person, partnership, corporation or any legal entity and that therefore the contract was invalid for want of a vendor. Counsel conceded that if the contract was valid plaintiff could not recover. The trial court stated that if the contract was a valid one plaintiff was “out of court.” The sole evidence introduced by plaintiff was the contract, the assignment, and the stipulated facts as to the payments by the Schwarzes under the contract. At the close of plaintiff’s evidence defendant moved for a finding in its favor, which motion was overruled. Defendant contends that plaintiff failed to make out a prima facie case and that therefore the trial court erred in overruling its motion. Before the hearing of evidence, the court stated that he was of the opinion that the contract was void and that therefore the defenses set up by defendant, save the one wherein it claims the contract was valid, could have no bearing in the case. It is clear that the court’s opinion was based upon the assumption that there was a want of a legal entity, as vendor. The trial court and counsel for plaintiff proceeded upon the theory that the rule that an undisclosed principal cannot sue or be sued on a contract applies to the instant case, but that rule does not apply where a trade name is used in the contract. In the late case of Beilin v. Krenn & Dato, Inc., supra, 350 Ill. 284, the court states (p. 290):

“The circumstances disclosed by the record do not bring this controversy within the doctrine relating to undisclosed principals. It has been held in cases where an agent entered into a sealed contract in his own name and there is nothing in the contract to indicate that any other person was interested in it as principal such undisclosed principal cannot sue or be sued on it. (Walsh v. Murphy, 167 Ill. 228.) The name of the principal in the contracts is stated to be the Devonshire Manor Realty Trust, a trade name adopted by the trustees of the Edith Rockefeller McCormick Trust. It is therefore competent to show the identity of the persons who adopted it. It is always permissible to show by parol evidence the identity of persons who have entered into a contract under a business or trade name, whether the instrument is a simple contract or under seal. (Daugherty v. Heckard, 189 Ill. 239; Northwestern Distilling Co. v. Brant, 69 id. 658.) ” See also Weissbrodt v. Elmore & Co., 262 Ill. App. 1 (certiorari denied by the Supreme Court, ib. p. xv), decided by this division of the court. There a land contract was signed by the vendor as “Elmore’s Westchester Realty Trust, of which the Foreman Trust and Savings Bank is Trustee,” by “H. W. Elmore, Manager,” and the plaintiff, as vendee under that contract, sought to recover on payments made by him pursuant to the contract, on the theory that the contract was void because there was no vendor. We held that the contract was valid because there was a vendor consisting of three persons who were doing business under a trade name and that they, as vendors, could sue and be sued on the contract in their own' names. If it were necessary, a number of decisions of sister states to the same effect might be cited.

Plaintiff, places reliance upon Gardner v. Shekleton, 253 Ill. App. 333. In that case there was no issue joined for trial, as defendants failed to plead, and the third division of this court held that the plaintiff was entitled “if the court saw fit to accord him that privilege, if he had asked it, of having a judgment as in the case of default on his affidavit of claim,” and that in the state of the record the defendants were not entitled to put in any defense except in mitigation of damages. The opinion further states that the evidence of plaintiff sustained his claim that the vendor in the contract was not a partnership, an individual, nor a corporation, and that there was no evidence in the record which would warrant any other conclusion. (See our comment on the Shekleton case in Weissbrodt v. Elmore & Co., supra, pp. 10, 11.) In view of the nature of the undisputed evidence in the Shekleton case, if there is language in the opinion in that ease that seems to support plaintiff’s argument, it must be considered as obiter. In any event, Beilin v. Krenn & Dato, Inc., supra, controls our decision. There the court distinguishes Walsh v. Murphy, 167 Ill. 228, cited in the Shekleton case.

Although the record shows that counsel for plaintiff, in the lower court, conceded that if the vendor was a legal entity plaintiff could not recover, in this court they seem to have abandoned the theory upon which they tried the case below and are attempting to advance new theories to sustain the judgment. It is the settled law of this State that a person cannot try a case on one theory in the trial court and on another in a court of review. (See Off v. Exposition Coaster, 336 Ill. 100, 108; Chicago Title & Trust Co. v. De Lasaux, ib. 522, 529.)

The trial court improperly sustained objections of plaintiff to certain evidence offered by defendant, but its evidence received shows that Edith Rockefeller McCormick, Edward A. Dato and Edwin D. Krenn, as trustees of the Edith Rockefeller McCormick Trust, bought and paid for certain land, part of which was covered by the contract with the Schwarzes; that the said trustees, as trustees, adopted and did business under the trade name of “Albany Avenue Realty Trust, of which Chicago Title and Trust Company is Trustee”; that the Schwarzes’ contract was the contract of the said trustees; that the defendant received payments on the contract from the Schwarzes merely as agent for the trustees and that it turned over all payments made by the Schwarzes on the contract to the three trustees. The material facts in the instant case are similar to those in Beilin v. Krenn & Dato, Inc., supra, and that case, in our judgment, is controlling on the sole issue upon which plaintiff tried this case, viz., as to whether or not this contract was void for want of a legal entity as vendor. In its opinion the Supreme Court said (p. 288):

“The facts convince us that the vendor was a legal entity. The vendor consisted of three living persons doing business under a trade name. They were Edith Rockefeller McCormick, Edwin D. Krenn and Edward A. Dato, as trustees of the Edith Rockefeller McCormick Trust. One may, if he desires, adopt for the transaction of his business a business name or style entirely different from his own proper name, and when he enters into any contract under such adopted name he will be bound as effectually as though he had used his own name. In such case the adopted name is equivalent, in law, to the actual name of the party. (Union Brewing Co. v. Interstate Bank, 240 Ill. 454; 1 Daniel on Neg. Inst. (4th ed.) p. 307.) There is no legal inhibition to the exercise of a like power by the trustees of a trust created for business purposes. Rand v. Farquhar, 226 Mass. 91; Venner v. Chicago City Railway Co., 258 Ill. 523.”

In the instant case the defendant contends that while " it is absolutely clear that the trustees of the McCormick Trust were the vendors in fact, trading under an adopted trade name, nevertheless, if it could be held that the evidence failed to show that the McCormick Trust was the vendor the contract would not be void for want of a vendor; that the vendor in that event would be Daniel F. Sullivan, who signed the contract as assistant manager of Albany Avenue Realty Trust. Plaintiff now questions, for the first time, the authority of Sullivan to sign the contract. He asserts that Sullivan’s authority to sign the contract should be evidenced by a writing. It is a sufficient answer to this contention to say that the trust agreement creating the Albany Avenue Realty Trust sufficiently shows the authority of Sullivan to execute the contract. However, if there was no such written authority the contract would not be void for lack of a vendor, as the vendor would then be Sullivan himself, or Dato, who is the ostensible beneficiary of the Albany Avenue Realty Trust. Where one signs a land contract as agent or manager of the vendor, he may be held personally liable by the purchaser for all ensuing damages, if it appears that he was without authority to sign the contract. See Weissbrodt v. Elmore & Co., supra, where we said (p. 13):

“Nor, in our opinion, is there any merit in counsel’s further contention that there is no one against whom plaintiff could proceed to compel a conveyance, or, if no conveyance were made, against whom plaintiff could proceed in an action for damages for failure to convey. If it should appear that Elmore, as agent and manager for the beneficiaries in the trust agreement, was without authority to sign the particular contract, he could be held personally liable for all ensuing damages. In Frankland v. Johnson, 147 Ill. 520, 525, it is said: ‘It is well understood that if the agent, either of a corporation or an individual, makes a contract which he has no authority to make, he binds himself personally, according0to the terms of the contract. ’ In Annes v. Carolan, Graham, Hoffman, Inc., 336 Ill. 542, 545, it is said: ‘Where an agent makes a contract for a principal who is wholly or partially undisclosed the agent is bound by the contract. ’ ’ ’

Plaintiff argues, as we understand it, that the trustees of the McCormick Trust could not be vendors in the Schwarze contract because the trustees did not have legal title to the property included in the Schwarze contract at the time the contract was made, or at any time thereafter. It is a sufficient reply to this argument to state that it is not essential to the validity of a contract for the sale of real estate that the vendors have the title at the time the contract is made.

“It is sufficient if, when the specified time arrives, he is able to tender, and does tender, a deed as required by his contract.” (White v. Bates, 234 Ill. 276, 278.)

In Beilin v. Krenn & Dato, Inc., supra, the court said (p. 290):

“It is of no consequence that the leg’al title was in the Chicago Title and Trust Company, as Trustee.”

To the same effect is Weissbrodt v. Elmore & Co., supra. It is clearly shown by the evidence that the trustees of the McCormick Trust were the beneficial owners of the real estate included in the Schwarze contract at the time that contract was entered into and at all times thereafter. The purchase price of the property was paid by the Trust. It paid for all improvements in connection with this particular contract, it carried the real estate in question on its books and records as an asset of the Trust, and the mortgages which were on the property from time to time, as liabilities of the Trust.

The judgment of the superior court of Cook county is reversed.

Judgment reversed,,

John J. Sullivan, P. J., and Friend, J., concur.


author: Mr. Justice Scanlan

text:
    Arnold K. Marks, Appellee, v. Nicholas A. Pope et al., Appellants. Eva Browarsky, Appellee.
    Gen. No. 38,707.

      Opinion filed March 30, 1937.
    Rehearing denied April 13, 1937.
    Arnold D. McMahon, for appellants.
    Rosenberg, Toomin & Stein, of Chicago, for appellees; Benjamin Rosenberg and Philip R. Toomin, of counsel.
    Philip A. Weinstein, of Chicago, for appellee Eva Browarsky.
   Mr. Justice Scanlan

delivered the opinion of the court.

Defendants appeal from a decree in a foreclosure proceeding. The material parts of the bill allege, in substance, that on October 8, 1925, Nicholas A. Pope and Marie E. Pope, his wife, defendants (hereinafter called appellants), being indebted in the sum of $40,000 to the owners of the bonds described in the bill, executed and delivered their 58 bonds, in certain denominations, dated October 10, 1925, payable to the order of bearer at the maturity dates set forth in the bill; that the bonds bore interest at seven per cent per annum, payable semiannually and evidenced by interest coupons, principal and interest being payable at the office of Marks & Company; that to secure the payment of the bonds and interest coupons appellants conveyed to Arnold K. Marks, as trustee, certain real property; that bonds numbered 1 to 36, both inclusive, aggregating $18,000, with all interest thereon, had been paid, surrendered and cancelled; that the interest on bonds numbered 37 to 58, both inclusive, due on or prior to October 10, 1932, had been fully paid and the coupons surrendered and cancelled; that default was made in the payment of the principal of bonds numbered 37 to 58, aggregating $22,000 and maturing October 10, 1932; that Marks & Company had on hand the sum of $696.41 to apply on the indebtedness; that the trustee brings his bill to foreclose for the use and benefit of the owners and holders of the unpaid bonds; that there is due the sum of $21,303.59, with interest at seven per cent per annum from October 10,1932; “that Eva Browarsky and Arthur Feldman own some or all of the bonds secured by the mortgage herein sought to be foreclosed.” The joint and several answrer of appellants admits the execution of the bonds, interest coupons and trust deed; admits that bonds numbered 1 to 36 were paid, surrendered and cancelled, and that all interest coupons maturing on and prior to October 10, 1932, were paid; denies that $21,303.59 was due, and charges that because of the principal and interest already paid and the usury connected with the transaction, there was nothing due from appellants. The answer sets out parts of the Illinois statutes against usury and states that before the execution of the bonds and interest coupons it was unlawfully agreed between Louis Marks, Arnold K. Marks, Isaac Marks and Bessie Greenebaum, copartners, doing business under the firm name of Marks & Company (hereinafter called the copartnership), and appellants, that the copartnership should pretend to loan to appellants $40,000 and “should forebear the same for the period embraced between October 8, 1925, and until October 10, 1932, both inclusive,” but that the copartnership should deduct and retain out of the $40,000 loan evidenced by the bond issue an unlawful commission of ten per cent, that is, $4,000, which together 'with the further charge of seven per cent interest on the bonds constituted an exaction of usury contrary to the statute ; that the bonds and interest coupons were executed pursuant to such unlawful agreement and that the co-partnership kept said $4,000, but then and there received from appellants the said 58 bonds and interest coupons. The answer claims credit for all interest paid and alleges that appellants’ indebtedness has been overpaid in the amount of $1,348.25; avers that the premises sought to be foreclosed were obtained by appellants as assignees of a certain contract, set out in full in the bill, between Isaac Marks and Abraham L. Freeman; that the premises were the property of the copartnership and that the said bonds and interest coupons were delivered to the copartnership in payment of the balance due on the purchase of the real estate. No replication to appellants’ answer was filed by complainant, although the decree erroneously recites to the contrary. Eva Browarsky was defaulted on October 13, 1933. Arthur Feldman filed a short answer in which he states that “he has no knowledge of the allegations in the- "bill of complaint contained, save from a reading thereof, and therefore neither admits nor denies the same, but demands strict proof thereof; . . . denies that the complainant is entitled to the relief, or any part thereof . . . ”

In the hearings before the master to whom the cause was referred, appellants contended that they should be credited with the alleged usurious transaction, $4,000, and all interest paid by them. We shall hereafter refer to certain other credits claimed by appellants before the master. No question of estoppel in pais was raised by complainant before the master. The bill contains no allegation that Eva Browarsky and Arthur Feldman were tona fide, innocent holders of the bonds and the master made no finding in that regard. Upon the usury issue the master found that that defense had not been established by appellants. On April 3, 1934, the master’s report was submitted to the trial court, and the objections of appellants were allowed to stand as exceptions. On July 2, 1934, after a number of hearings, the trial court announced orally that the defense of usury had been established and that he intended to sustain the exceptions that related to that issue. At the request of complainant further hearing upon the report was continued to July 11, 1934. On that date Eva Browarsky, by leave of court, filed a petition setting up, inter alia, that she was the bona fide owner of $21,000 of the bonds; that she expected that complainant would protect her interests, and that she files the petition because she had just discovered that appellants had interposed the defense of usury and that if-such defense is sustained a substantial portion, if not her entire interest, would be barred, and that appellants should be estopped from interposing and prosecuting any such defense against her interest. She prays that the default entered against her be vacated and that she be given leave to file her petition, that all necessary parties be required to make answer thereto, and that there be a hearing upon her petition. All parties were ordered to plead, answer or demur to the petition. Appellants filed a general and special demurrer to the petition and the petitioner was then given leave to withdraw it; but, over the objection of appellants, the default entered against her was vacated and she was allowed to file her answer to the bill “without prejudice to the order of reference herein or to the report of the Master in Chancery.” In a very short answer she merely admits all of the allegations of the bill and prays that complainant be given the relief he asks.

The trial court did not enter a decree until November 1, 1935. In so far as it is material to this appeal, it found that the $4,000 constituted and was an usurious exaction from appellants by said Isaac Marks and Louis Marks, doing business as Marks & Company, but that because the bill was brought by the trustee for the benefit of Eva Browarsky and Arthur Feldman, two holders of bonds, who purchased them immediately after their issue for a valuable consideration, and because of the provisions of the trust deed, appellants and Charlotte S. Barton, the owners of the equity of redemption, were precluded from urging the defense of usury. The decree found that Arnold K. Marks, trustee, complainant, had been a member of the co-partnership' since 1926; that appellants owed :

“Principal amount of bonds 37 to 58, both

inclusive..............................$22,000.00

Interest on $22,000 at 7% per annum from October 10,- 1932 to October 26,

1935.................................. 4,681.33

Total $26,681.33” also master’s fees and certain additional costs, and the premises were ordered sold unless appellants paid to complainant, within three days of the entry of the decree, $28,927.68.

Appellants complain that the court erred in setting aside the default of Eva Browarsky. The latter is a sister of Isaac Marks, an aunt of complainant, and mother of William Browar, in whose name the copartnership originally took title to the premises. She kept money on deposit with the copartnership and made investments through it. The default against her, entered October 13, 1933, was set aside on January 22, 1935, over six months after the trial court had announced that he found that usury had been established. As appellants argue, the purpose in bringing her back into the proceeding is obvious. The trial court would have been justified, under the record, in refusing to vacate the default, but in our view of this appeal we do not deem it necessary to pass upon the question as to whether he erred in vacating it. It is true, however, as appellants argue, that after the petition of Eva Browarsky had been withdrawn, there was no pleading or showing before the court upon which to base the order vacating the default. It is also true, as appellants contend, that at the time the decree was entered there was nothing before the court upon which a finding could be based that Eva Browarsky and Arthur Feldman were bona ficle, innocent holders of bonds. The bill contains no allegation that they were. Arthur Feldman, in his answer, practically denied that he was the owner of any of the bonds. The bill alleges that the unpaid bonds aggregated $22,000 but that Marks & Company had $696.41 to apply on the indebtedness. Eva Browarsky, in her petition, alleged that she was the bona fide owner of $21,000 of the bonds, which would make her the owner of practically all of the unpaid bonds. In her answer she does not allege that she is a bona fide, innocent holder of the bonds. The bona fides of the two alleged bondholders was not made an issue in the cause, and no inquiry was made in respect thereto by the master or the trial court. Arthur Feldman was a brother of two stenographers employed by the copartnership, and the only reasonable inference from the record is that he was not the real owner of any of the outstanding bonds. It is significant that neither he nor Eva Browarslcy testified in the cause. It is admitted that Marks & Company was “the house of issue of these bonds.”

The trust deed in the instant cause contains the following provision (article 2, section 5):

“No bona fide innocent holder of any bond or bonds taken before maturity, shall be affected as to the benefit of this security by any equities or matters of defense which may exist in favor of any party in interest against any prior holder of the bond or bonds held by such bondholders.”

After the trial court found that the defense of usury was established by the evidence, the case of American Radiator Co. v. Walker, 276 Ill. App. 150, was submitted to him by complainant. Thereafter the court held that the above provision constituted a waiver and an estoppel against appellants, and they were therefore precluded from pleading the defense of usury. It is conceded that the final ruling was based upon a statement of law in the above case. Complainant insisted before the trial court, and insists here, that “since the decision in the case of American Radiator Co. v. Walker, the defense of usury is no longer available as against bondholders who purchased their bonds for value before maturity.” He contends that the rule of law stated therein controls our decision because the Supreme Court refused a certiorari in that case. The decision in the American Radiator Co. case was filed July 6, 1934. The statute then provided that an opinion of the Appellate Court should not be of binding authority in any cause other than that in which it was filed, and our Supreme Court has frequently held that a denial of a certiorari is merely an approval of the conclusion reached by the Appellate Court, being, in effect, an affirmance of the judgment, and not necessarily an approval of the reasons given in the opinion of the Appellate Court for its judgment. When the Supreme Court overrules important and long-established doctrines it always does so in a direct way.

In the American Radiator Co. case the trust deed contained a similar clause to the'one in question contained in the instant trust deed. Referring to that clause the Appellate Court for the Second District stated (p. 243):

“By the terms of the trust deed Mrs. Walker guaranteed that so far as she was concerned there was no defense to the payment of the same. By the provisions of this trust deed Mrs. Walker has waived all equities and matters of defense that may have existed in her favor as to any prior holder of the bonds or bond held by such bondholder. Under the circumstances in this case she is now estopped from setting up the defense of ultra vires or usury against such bona fide holders of these bonds.”

The opinion takes up approximately one hundred pages of the report, and the case differs in many particulars from the instant one. Its pleadings and evidence present an involved situation and the Supreme Court, in approving the conclusion reached, was not required to pass upon every statement of law made by the Appellate Court in its long opinion. But we are required to determine whether the Appellate Court of the Second District correctly stated the law as to the effect of the provision in the trust deed where the defense of usury is interposed. The court cites no case in support of its ruling, and none has been called to our attention that sustains it. With all due respect to the opinion of that court, we cannot agree that the provision should be construed as a valid and binding covenant that the defense of usury will not be interposed against an innocent holder of any bond or bonds taken before maturity. Usury has been regarded with abhorrence from the earliest times, and laws have been made to punish those who practice it.

“Usury is a moral taint wherever it exists, and no subterfuge shall be permitted to conceal it from the eye of the law; this is the substance of all the cases, and they only vary as they follow the detours through which they have had to pursue the money lender.” (27 R. C. L. 212.)

Illinois, like the other states, prohibits usury and fixes a penalty against the usurer. If we test the provision in question by its language alone, it appears that it does not refer to usury, and, as an agreement to waive usury is against public policy and void, it would be presumed that the parties did not intend, by the provision, to contract that appellants waived their right to assert the defense of usury. But if it were possible, because of the proof as to usury, to interpret the provision as broad enough to cover an agreement to waive that defense, it would avail complainant nothing. While it is true that the defense of usury is personal and may be waived by the debtor, it is not, in our judgment, the law that the parties to the usurious transaction may legally contract in the note, or in a trust deed executed simultaneously with the note, and in effect but a part of the same transaction, that the defense of usury will not be invoked by the debtor.

“Agreements involving waiver, which are contrary to public policy, for example, waiving a right in contravention of state policy or waiving illegality as a defense, are void.” (67 C. J. 308.)

In Union Nat. Bank of Chicago v. Louisville, N. A. & C. Ry. Co., 145 Ill. 208, where the right of the railroad company to interpose the defense of usury was involved, it having agreed to pay more than the legal rate of interest, the court held (p. 22,7):

“Where an act is expressly prohibited by statute, a contract to perform or in furtherance of the prohibited act is illegal and unenforcible. ”

Under the statute building and loan associations chartered under the law of this state may, under two conditions, make loans on mortgage security which would ordinarily be usurious, but unless one or the other of the conditions is followed a usurious loan of such an association is subject to all the consequences and penalties of the law against usury. In Anna Loan and Improvement Co. v. Dorris, 342 Ill. 567, 573, the court said:

“The appellant had no power to make the contract for the payment of a premium in excess of the maximum rate of interest fixed by general law, save in one of the two modes prescribed by section 19. The statute was wholly disregarded; the power to make the contract was wanting, and performance by either party would not give it validity. To sustain the contention would be to nullify the statute.”

In Trusdell v. Dowden, 47 N. J. Eq. 396, 398, the court said:

“The parties to a usurious contract can do nothing which will have the effect to validate it, so as to deprive the debtor of his right to defend on the ground of usury, except by expunging its usurious element.” In Clark v. Spencer, 14 Kan. 398, the court said (p. 404) that if a usurious loan accompanied by an agreement not to plead usury could be sustained it would amount to a very simple and effectual way of evading the law.

“The general statement is frequently made that, as usury is a personal defense, the borrower may waive it or ratify the usurious contract. But it is correct only as applied to executed waivers. . , . Qn the other hand, since the nsnry statutes are based on public policy, it has been held that a usurious contract is wholly incapable of confirmation while it is executory, and that the debtor cannot, by any agreement entered into either when the usurious agreement is made or afterward, waive the right to set up usury in defense, or validate the contract by ratification.” (66 C. J. 279, 280. Usury, sec. 258.)

In Bosler v. Rheem, 72 Pa. 54, Rheem. had executed a note for $500, payable to one Bosler, for one year with interest at eight per cent, and at the same time he signed and executed an agreement waiving and releasing all his rights, if any, to retain, deduct, or withhold from the amount of the loan, or to bring any action at law or in equity for the recovery of excessive interest over the legal rate that might be paid prior to the repayment of the loan. The law of Pennsylvania imposed a penalty on usurious contracts, and the question in the case was whether or not the agreement signed by Eheem was a waiver of the defense of usury. The court said (pp. 56, 57):

“We cannot, and perhaps never could, hold that this right to reclaim excessive interest may be waived in a note, or by a contemporaneous instrument. It would be better to repeal the provision altogether than this, for it would be resorted to in every case of loan or contract. We cannot allow public policy to be set aside in this manner.”

In Sturgis Nat. Bank v. Smyth, 9 Tex. Civ. App. 540, 30 S. W. 678, it is said:

“The contention of plaintiff that defendants are es-topped to plead usury is not well founded. . . . Had the makers of the usurious obligation, at the time of its execution, or afterwards, executed a separate obligation not to plead usury, we do not think it could be successfully urged as an estoppel. It would furnish too ready a mode for the evasion of the grave provisions of onr organic and statutory law.”

In Dupree v. Virgil R. Coss Mtg. Co., 167 Ark. 18, 267 S. W. 586, the mortgage contained the following clause:

“It is agreed that the rate of interest herein reserved and charged shall not in any event exceed the maximum legal rate permitted by the laws of Arkansas. If interest in excess of the maximum legal rate has been charged, it is through an error in computation, and it is agreed that any excess collected above the maximum legal rate shall be credited upon any amount, either principal or interest, remaining unpaid when such overcharge is discovered.”

The court said (p. 589):

“The contract is therefore usurious and void under the Arkansas law, unless saved by the clause in the mortgage to the effect that no usury was intended. This clause only related to errors in computation or calculation. No contention is made that the excess charge above the maximum legal rate of interest was the result of errors in computation or calculation. On the contrary, the testimony reveals that appellees intended to charge 7 per cent, per annum and deduct a $300 cash bonus. A clause of this kind cannot prevent the taint of usury attaching to a contract where there was no mistake of fact, but simply a mistake as to the legal effect thereof.”

In Ferguson v. Hamilton, 35 Barb. 427, 438-9, the court said:

“The doctrine of estoppel in pais is based on principles of morality and good faith. It can be invoked only as a means to prevent the consummation of a wrong or fraud, and it has been well said, can only be used as a shield — never as a sword. It can be employed by such only as themselves act in good faith. Is it therefore available to the usurer? But it is said the indorsee or vendee of a note made to raise money, to whom it is negotiated at an illegal discount on representations and assurances by the holder that it is business paper in his hands, becomes an unintentional usurer. Still the law pronounces him a usurer — a party to a corrupt agreement. Can such person bring to his protection a legal principle, based on moral considerations only, and thus give vitality to a transaction which the law pronounces immoral, and condemns % But the subject is not open to discussion in this court. It must be deemed here concluded by authority. The decisions are numerous, to the effect that an estoppel in pais may be urged against the defense of usury, as well as against other matters of defense which involve no idea of moral or legal turpitude in the party who invokes its protection. But the matter of estoppel must exist outside the face of the paper.” (Italics ours.) As our Supreme Court stated in Jenkins v. International Bank, 97 Ill. 568, parties to the usurious agreement will not be allowed to evade the statute.

Appellants concede that a party may be estopped from urging the defense of usury against a bona fide holder of the usurious obligation, but they contend that the estoppel must arise by subsequent act, misrepresentation or conduct upon which the doctrine of estoppel in pais might be invoked. The authorities support this statement of the law. In the instant case appellants made no statements, agreements, or stipulations after the bonds and trust deed were executed and delivered to Marks & Company upon which the doctrine of estoppel in pais could be based, and the sole ground urged for the application of that doctrine is the provision in the trust deed. All of the cases cited by complainant in support of the ruling of the trial court involve an application of that doctrine. To briefly refer to them: In Casler v. Byers, 129 Ill. 657, the mortgage being foreclosed was executed in 1876. Byers secured the note after its maturity but at the time he bought it Casler executed a statement in writing that there was $4,500 due on the note. As Byers acted upon this statement the doctrine of estoppel in pais applied and defendant was not allowed to claim that the said sum was not due at the time Byers purchased the note. In Nixon v. Haslett, 74 N. J. Eq. 789, as the assignee of a mortgage took from the mortgagor, at or about the time of the assignment, a declaration that he had no set-off against the mortgage debt, the same doctrine applied. A like situation was present in Smyth v. Munroe, 84 N. Y. 354. Complainant cites only a part of the text in 21 C. J. 1143-4, where there is a discussion of estoppel by representation as applied to negotiable instruments, omitting the following very important statement:

“However, to render this rule operative the representations must be outside of the face of the obligation, and even though they are thus disconnected, if they are made simultaneously with the execution of the obligation, so that there is in effect but a single transaction, no estoppel will arise.” (Italics ours.)

2 Jones on Mortgages does not aid plaintiff. In section 1063 (p. 485) the author states that the rule in Illinois is that the assignee of a mortgage takes it subject to all equities existing between the original parties. In section 792 the author says (p. 77):

“A mortgagor may be- estopped from setting up usury by reason of having executed, after the making of the mortgage, a covenant or certificate under seal that the mortgage was a valid and subsisting lien upon the premises described, especially if an innocent third party is thereby induced to buy the mortgage relying upon the statement.”

In several cases cited by complainant usury was not involved: Phoenix Mfg. Co. v. Bogardus, 231 Ill. 528, was a suit in assumpsit upon a guaranty contract by which Bogardus undertook to be responsible for certain notes given by one Nielson in the purchase of machinery. Bogardus’ demurrer to the declaration was overruled and he elected to stand by the demurrer. It was held that, whatever the terms tif the original contract were, under the allegations of the declaration the appellant had induced the company, by his subsequent representation, to part with its property. In Smith v. Newton, 38 Ill. 230, complainant filed a bill to remove a mortgage as a cloud on title, on the ground that it was given without consideration. The original mortgagee, Dickinson, was defaulted. Smith answered that he was the owner of the note and mortgage, which had been assigned to him by Dickinson, and that before he purchased them, complainant represented to him that he was the owner of the land, subject to the mortgage, that the mortgage was all right and valid, a lien upon the premises, and that the complainant would pay the same. It was held that if the suppressed testimony of Dickinson had been admitted by the trial court it would have established such facts as would amount to an estoppel in pais against the defense interposed. Hefner v. Dawson, 63 Ill. 403, was a suit in assumpsit on a promissory note, wherein one of its makers, by his plea, verified by affidavit, denied the execution of the note by him. The proof showed that defendant had stated that the note was ‘1 all right, ’ ’ and that if plaintiff would “hold still” he would pay him, and it was held that he thereby knowingly and designedly induced the plaintiff to omit taking any measures to collect the same of the other maker when he was solvent, until after he left the country, and that because of his acts and assurances defendant was es-topped from denying the fact of the execution of the note. In International Bank v. Bowen, 80 Ill. 541, there were statements and representations made to the bank upon the strength of which it was induced to loan $5,000. The decision is based upon Smith v. Newton, supra. McIntire v. Yates, 104 Ill. 491, is not similar to the instant case and the decision turned upon the application of the old doctrine that a principal is bound by the act of his agent within the scope of his authority. Clarke v. Newton, 235 Ill. 530, merely holds that the prima facie case made by introducing- a note in evidence is not overcome by showing want of consideration, where the proof does not show that the plaintiff had notice thereof or that he purchased the note after maturity.

The doctrine of the case of Olds v. Cummings, 31 Ill. 188, has not been overruled by the Supreme Court. In Connor v. Wahl, 330 Ill. 136, the Supreme Court adhered to that doctrine but called attention to the fact that in the Olds case no question of estoppel arose, and that the doctrine of that case did not apply to a proceeding where the debtor by his conduct had defeated or curtailed his right to interpose the defense of usury against an innocent assignee. In the Olds case it was decided that in a bill to foreclose a mortgage or trust deed given to secure the payment of a negotiable instrument, the defense of usury is just as available against the bona fide holder of the instrument as it would have been against the original mortgagee. The Olds case has been followed in numerous cases. To cite a few: Schultz v. Sroelowitz, 191 Ill. 249; Pittsburgh Plate Glass Co. v. Kransz, 291 Ill. 84; Hirsh v. Arnold, 318 Ill. 28; Firebaugh v. Seegren, 265 Ill. App. 381. We hold that the trial court erred in ruling that appellants were estopped from invoking the defense of usury.

Complainant argues that “defendants have failed to establish their defense of usury by the clear and convincing weight of the evidence,” and that the trial court erred in finding that such defense had been established. As complainant failed to comply, in any way, with Buie 35 of the Supreme Court, he is in no position to now question any part of the decree. Complainant concedes that he did not prosecute a cross-appeal from any part of the decree. However, if he.had complied with the rule, we would hold that the trial court did not err in finding that the defense of usury had been established.

Appellants claim that the court erred in not allowing them a credit of $890.40 because of extortion in a tax matter; that the court erred in not giving them credit for $1,000 on account of rent collected by the copartnership in November, 1925, and January, 1926; and that the trial court erred in not allowing them a credit of $40 because the copartnership fraudulently added that amount to a printing bill paid by them. We have considered the evidence bearing upon these three claims and we are not satisfied that the record sustains appellants ’ contentions.

Under the statute, usury works a forfeiture of all interest, and principal alone can be recovered. Appellants are, therefore, entitled to the following credits: (1) $4,000, the amount of the usury exacted from appellants by the copartnership at the time the loan was made; (2) Interest paid by appellants upon the bond issue, $15,505. The decree finds that there was due and owing from appellants at the time of the entry of the decree, principal, $22,000, and “interest on $22,000 at 7% per annum from October 10, 1932 to October 26, 1935, $4,681.33.” This interest amount must be deducted.

A motion of complainant to dismiss the instant appeal was reserved to hearing. As it is without merit it is denied.

The decree of the superior court of Cook county, in the particulars just stated, is reversed, and the cause is remanded with directions to the trial court to modify the decree so as to conform with this opinion.

Decree, in particulars stated, reversed, and cause remanded with directions.

John J. Shhlivan, P. J., and Friend, J., concur.


author: Mr. Justice McSurely

text:
    Consolidated Hair Goods Company, Appellant, v. Adams Clark Building Corporation and Albert J. Horan, Appellees.
    Gen. No. 39,236.
    Opinion filed April 5, 1937.
    Barney L. Hollowicic, of Chicago, for appellant.
    Louis I. Shapiro, of Chicag’o, for appellee Adams Clark Building’ Corporation.

      Mayer Goldberg, of Chicago, for appellee Albert J. Horan.
   Mr. Justice McSurely

delivered the opinion of the court.

Plaintiff brought an action in trover, alleging the conversion by defendants of property worth $500; upon trial by the court defendants were found not guilty, and plaintiff appeals from the judgment on the finding.

Plaintiff’s rights rest upon a chattel mortgage, and it sa;/s that defendants sold the chattels by virtue of a judgment against the mortgagor, in defiance of plaintiff’s rights as mortgagee.

Salvatore DeCaprio conducted a beauty shop in the building owned and operated by defendant Adams Clark Building Corporation; he had executed a chattel mortgage to the plaintiff conveying chattels like chairs, hair dryers and other equipment used in his beauty shop, to secure $1,400, payable in monthly instalments beginning June 15, 1932, the final payment maturing May 15, 1934.

December 23,1933, the building corporation obtained a judgment against DeCaprio for $227.50, and execution was issued and delivered to defendant Horan as bailiff of the municipal court of Chicago; under direction of the attorney for the building corporation the bailiff on January 25, 1934, levied upon all the right, title and interest of DeCaprio in and to the chattels, and on February 5th sold the property at public vendue to Joseph Gordon for $72.50, he being the highest and best bidder at the sale.

Mr. Sam S. Muller, an attorney and vice president of the plaintiff company, testified that while the bailiff was in possession under the levy he, the witness, telephoned Mr. Shapiro, who represented the building corporation, advising him of the chattel mortgage and that same was in default. Muller also testified that the latter part of January he was in the office of the bailiff of the Chicago municipal" court and spoke to a man inside the g-ate, showed him the chattel mortgage and asked him if he could take up the question of the levy with him; he was told to take up the matter with the attorney for the building corporation; Muller did not know the name of the person with whom he talked; he also sent a letter to Mr. Shapiro dated February 2, 1934, in which he expressed regret that they had been unable to meet to “straighten out this DeCaprio matter,” but “merely as a matter of record” he notified Shapiro that his client owned a chattel mortgage maturing May 15, 1934, which was in default.

The chattel mortgage contained the usual provisions that in case of default in payment of any of the instalments or if the mortgagee should feel insecure or unsafe, the total amount of the notes secured by the mortgage should, at the option of the mortgagee, immediately become due and payable. Muller testified that the instalments due in November and December, 1933, and January and February, 1934, had not been paid.

From the early case of Beach v. Derby, 19 Ill. 617, it has been held that until there is a breach in the condition of the mortgage the mortgagor holds a contingent interest in the mortgaged property that is liable to levy and sale on execution. If the property is levied on and there is default in payment under the mortgage the mortgagee may at once possess himself of the property by a writ of replevin, or if he fail to do so and it is sold he may recover it from the purchaser. Pike v. Colvin, 67 Ill. 227. Where the mortgage debt is not due and the mortgagor is in possession, his interest in the property is subject to levy and also to sale upon execution, and an officer is not liable for making a levy and sale. People v. Dickson, 65 Ill. App. 99. In Durfee v. Grinnell, 69 Ill. 371, the mortgaged property was levied upon by a judgment creditor; thereupon the mortgagees, feeling unsafe or insecure, brought replevin and secured possession of the property through the writ; it was held that they were entitled to this, but the court further said that the mortgagees could have permitted the sale under the levy to be made, subject to the mortgage, and the purchaser would acquire no more rights than those of the mortgagor; that where there has been a breach in the conditions of the mortgage entitling the mortgagee to possession of the property, a sale under the levy can be held only with the permission ‘ ‘ or by the non-action of the mortgagees. ...”

In the instant case the mortgagee had the option, on default of the payment of the instalment due November, 1933, to declare the entire amount of the mortgage debt due, and also had this option under the insecurity clause in the mortgag-e. But it was not bound to exercise the option and could elect to wait until the whole debt was due. Plaintiff did not exercise this option and took no steps to foreclose the mortgage. Woodward v. Donovan, 167 Ill. App. 503, 514. Other cases touching on this same subject are Simmons v. Jenkins, 76 Ill. 479, Second Nat. Bank v. Gilbert, 174 Ill. 485, Barchard v. Kohn, 157 Ill. 579, and Martin v. Duncan, 156 Ill. 274.

These and many other cases which might be cited hold that where the mortgage debt is not due and there is no breach of the conditions of the mortgage and no insecurity clause, the interest of the mortgagor is subject to levy and sale without interference from the mortgagee; that where there is a default or breach in the conditions of the mortgage, or there is an insecurity clause, the mortgagor’s interest may be levied upon, but the mortgagee may declare the entire amount of the mortgage debt due and, upon demand upon the officer making the levy and his refusal to deliver possession of the property, may obtain possession by replevin; that if no demand is made and no replevin writ issued, the non-action of the mortgagee will be considered as a permission to proceed with the sale under the levy, such sale being only of the interest of the mortgagor in the chattels. ,

Applying these rules to the facts in the present case leads to the conclusion that plaintiff cannot maintain its action. Muller, representing plaintiff, made no demand either on the bailiff or on Shapiro for the return of the goods and commenced no proceedings to recover them. True, he notified the bailiff and also Shapiro that plaintiff held a chattel mortgage on the goods, but this told defendants no more than they already knew, constructively, from the recording of the instrument. Muller seems to have been under the apprehension that the only thing he had to do to protect the mortgagee’s rights was to apprise the bailiff and the building- corporation of the existence of the mortgage. Plaintiff’s brief in this court seems to proceed upon this same misapprehension as to the law. Merely to call attention to the mortgage was not enough, and by its non-action in preventing the sale plaintiff must be held to have permitted the sale to go on.

The bailiff of the municipal court levied upon and sold the right, title and interest of DeCaprio, the mortgagor, in the property. Horan, bailiff, is not liable, and neither is the Adams Clark Building Corporation.

The judgment of the trial court was proper and it is affirmed.

Affirmed.

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


text:
    In re Estate of Peter A. Schriver, Deceased. Helen D. Schriver, Appellee, v. Oak Park Trust and Savings Bank, Executor of the Last Will and Testament of Peter A. Schriver, Deceased, Appellant.
    Gen. No. 39,348.
    Opinion filed April 5, 1937.
    Michael M. Newman and. Joseph F. Kula, both of Chicago, for appellant.

      Teed, Kammermann & Johnson, of Chicago, for appellee ; Hugh E. Johnson and Clarence Kammermann, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Helen D. Sehriver, widow of Peter A. Sehriver, deceased, filed her claim against his estate in the probate court, which was disallowed; she appealed to the circuit court where the claim was allowed for $3,966.73, and defendant, the executor, appeals.

The claim arises out of litigation between Helen D. Sehriver and her husband. September 20, 1927, she filed her suit for separate maintenance, charging that her husband deserted her January 10, 1927; he was ordered to pay her $125 a month for temporary support and maintenance; this order was complied with for a time but thereafter default was made, and on March 12, 1934, an order was entered finding that he was $3,596.84 in arrears and judgment was entered in her favor for this amount; by July, 1934, he was in arrears in the amount of $3,966.73, which is the amount of her claim filed in the probate court.

Twelve days before the separate maintenance bill was filed Sehriver created an irrevocable trust in the principal sum of $65,000 with himself as sole beneficiary of the income, which provided that no part of this trust fund should ever go to his wife Helen.

In the spring of 1934 claimant learned that her husband had in Ms possession a policy of life insurance in the John Hancock Company in which she was named as beneficiary.

Both parties, through their respective attorneys, entered into negotiations for the settlement of their differences; it was agreed, substantially, that if Peter Sehriver would turn over this policy to claimant she would accept it in full payment of all claims against him for support or maintenance and alimony, past and future, and would file an amended and supplemental bill of complaint asking for a divorce. Schriver, in his answers filed in the separate maintenance suit and by his testimony in that case, represented that his only property and income was from his interest in the $65,000 trust estate and claimant says that she agreed to take the insurance policy in full settlement in the belief that Schriver’s representations as to his property were true and that further attempts to collect support and maintenance from him would be useless.

In July the life insurance policy was turned over to Frank Teed, attorney for Mrs. Schriver, and on An-gust 2nd she filed her amended and supplemental bill of complaint asking for a divorce; evidence was heard upon this supplemental bill by Judge Lewe of the superior court. A decree of divorce was prepared by Mr. Teed, which included the terms of settlement. Mr. Lowenthal, the attorney for Peter Schriver, testified that he wrote his O. K. on the original decree and returned it to Teed.

August 6th Peter Schriver died and the decree was never presented to the court or entered; the policy was never assigned by Peter Schriver, and after his death she collected from the John Hancock Company $3,000 on the policy.

When the inventory in the Peter Schriver estate was filed it was then learned, so claimant asserts, that the representations of poverty by Peter Schriver were untrue, and she filed her claim for the amount in arrears allowed to.her for support and maintenance by the order of the superior court, which claim on appeal to the circuit court was there allowed.

As we have indicated, when Peter Schriver died on August 6, 1934, he owed to claimant on the separate maintenance order $3,966.73; she had in her possession, by her attorney, an insurance policy on Peter Sehriver’s'life for $3,000 in which she was the sole beneficiary; the parties had agreed to the terms of settlement and a decree of divorce, but before the settlement was consummated Peter Sehriver died.

In Bushnell v. Cooper, 289 Ill. 260, it was held that the death of one of the parties to an action for divorce abates the action “for the reason that death has settled the question of separation beyond all controversy and deprived the court of jurisdiction, both over the persons of the parties to the action and of the subject matter of the action itself. For this reason the courts are almost unanimous in holding that the death of either party to a divorce proceeding, before final decree, abates the action.” In Dietz v. Speybroeck, 225 Ill. App. 133, after a trial there was a verdict of the jury finding the husband guilty of repeated cruelty and habitual drunkenness; he filed a motion for a new trial which was taken under advisement by the court; subsequently the court made a memorandum in his docket of his holdings as to the disposition of the property of the parties; Emma Grhys, the wife, also filed a motion to set aside the finding of the court with reference to alimony and property rights; this motion was heard and taken under advisement; before the court passed upon the motion the wife died, no decree having been entered upon the verdict of the jury; it was held that although the trial judge made docket entries awarding certain real estate to the wife, no decree was formally entered and after her death the court was powerless to do so, citing Bushnell v. Cooper, supra.

Upon the death of Peter Sehriver the proceedings in court abated and the respective parties stood, with respect to the divorce proceeding, as if no supplemental bill seeking a divorce had been filed.

There was no right reserved in the John Hancock insurance policy to change the beneficiary. The general agent of the John Hancock Insurance Company testified that there had been no assignment of the policy. It follows, therefore, that the interest of Helen Schriver in the proceeds of the policy vested upon the death of Peter Schriver, the insured. Freund v. Freund, 218 Ill. 189, 205.

When the proceedings for divorce abated, Peter Schriver was in arrears under the order entered in the separate maintenance suit. It thereupon became a proper claim against his estate.

Claimant in this court makes the additional point that no valid decree of divorce could have been entered in the superior court divorce proceeding. The original bill for separate maintenance was filed September 20, 1927 and charged desertion January 10, 1927, which was a period of eight months’ desertion when that bill was filed; the amended and supplemental bill seeking a divorce on the ground of desertion was filed August 2, 1934 and this charged desertion January 10, 1927, as did the bill for separate maintenance; the supplemental bill also charged that desertion had continued from this date down to the date of the filing of the supplemental bill; the supplemental bill was filed upon the theory that the time the separate maintenance suit was pending could be counted in the statutory period of one year of desertion. However, in Floberg v. Floberg, 358 Ill. 626, it was held that the time consumed by litigation, either for separate maintenance or for divorce, cannot be reckoned in the calculation of the statutory period of divorce. The opinion says the time consumed by the litigation is “time out. ’ ’ The point that no valid decree of divorce could have been entered upon the supplemental bill filed in this case seems to have merit.

The record in this case shows that Peter Schriver wab continuously representing that he was without any income or property wherewith to comply with the orders for temporary support and maintenance. The inventory of Ms estate filed in the probate court tends to contradict these representations. It is in evidence that one of the motives inducing1 the proposed settlement was the belief that Schriver was unable to make these payments. Under these circumstances there is force in claimant’s contention that the proposed settlement was not based upon a full disclosure of material facts.

The claimant testified in the circuit court and it is claimed that she was incompetent. Examination of her testimony, however, shows that she added nothing to what was already in the record by the testimony of her attorney, Teed. Even where incompetent evidence is admitted the judgment will not be reversed if there is other competent evidence in the record sufficient to support the finding of the court. Scholz v. Commissioners of Lincoln Park, 264 Ill. App. 409; Roxburgh v. Roxburgh, 162 Ill. App. 364.

We hold that the trial court correctly found for the claimant and the judgment is affirmed.

«Affirmed.

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