text:
    F. M. Grimes, Trading as Rockford Wholesale Candy and Tobacco Company, Appellant, v. Maryland Casualty Company, Appellee.
    Gen. No. 9,401.
    Opinion filed April 20, 1939.
    C. A. Pedderson, of Rockford, for appellant.
    Early, Carpenter & Early, of Rockford, for appellee.
   Mr. Justice Wolfe

delivered the opinion of the court.

The appeal in this case involves the construction of an insurance policy commonly called robbery insurance. F. W. Grimes, doing business as the Rockford Wholesale Candy and Tobacco Company, brought suit in the circuit court of Winnebago county, against the Maryland Casualty Company on an insurance policy for loss he claimed he sustained by a robbery. His contention is that the loss was covered by the insurance policy in question. The case was heard before a jury. At the close of the plaintiff’s evidence, the defendant made a motion for a directed verdict. The court sustained the motion and directed the jury to find the defendant not guilty. The jury so found by their verdict and the court entered judgment on the same. It is from this judgment that the appeal is prosecuted.

The appellant, Grimes, was engaged in the wholesaling of cigarettes, candy, tobacco, etc., in the city of Rockford. On August 11, 1937, the appellant instructed his employee, Charles Lindberg to take his truck and pick up certain cigarettes and tobacco at the Northwestern and Illinois Central Freight Stations, located in the city of Rockford. Lindberg secured the cigarettes and tobacco from the Northwestern Freight Station and put them into the truck and drove to the Illinois Central Freight Station. Lind-berg backed the said truck directly in front of the east freight door of the station. He turned off the ignition of the truck and walked a short distance on the platform and then went inside of the freight station to secure delivery checks for the cigarettes which he had planned to get. He then walked on the inside of the freight station, back towards where he had parked the truck and met Mr. Martin, one of the freight handlers and gave him the delivery slips and asked him to get the cigarettes and tobacco from the vault. Martin and Lindberg were standing near the freight door where the truck was parked. This door was closed. Martin opened the freight door and Lindberg discovered the truck was being* driven away and it was then approximately 125 feet away from where it had been parked. This was the first that Lindberg knew that the -truck had been stolen. It was being driven away at the rate of about 20 miles an hour. Later, the truck was recovered, but the cigarettes and tobacco which had been in the truck were never found. It is conceded the value of the stolen goods was $828.81.

The appellee denied liability under the policy of insurance, on the ground that the alleged robbery, from which the appellant sustained his loss, was not covered by the policy. The policy, under the provision “Definitions, ‘Robbery,’ Subdivision (c),” provides as follows: “Definitions, Robbery, . . . (c) by any other overt felonious act committed in the presence of such custodian or custodians and of which they were actually cognizant at the time, provided such act is not committed by an officer or employee of the assured.”

At the hearing of the case there was another question raised as to whether the insured had taken reasonable precautions to safeguard the property against loss by robbery, but this question is not presented on this, appeal. The question before this court is whether under the facts and circumstances as before stated, this robbery or theft of the appellant’s goods was committed in the presence of the custodian of the same. The appellant insists that a contract of insurance is always to be liberally construed in favor of the insured so as not to defeat, without a plain necessity, his claim to indemnity, and if the language of the insurance policy, which is prepared by the insurer, is reasonably susceptible of two interpretations, that interpretation which will not defeat the insured’s claim must be adopted. This is probably the correct rule of interpretation.

It is also true that the language employed in a contract, is to be given its commonly accepted meaning, applies to contracts of insurance; its qualification that ambiguous language is to be construed most strongly against the insurer does not authorize a perversion of language for the purpose of creating an ambiguity. Blume v. Pittsburgh Life & Trust Co., 183 Ill. App. 295; Buffo v. Metropolitan Life Ins. Co., 277 Ill. App. 366.

It seems to us that the only question for this court to decide is whether the theft of these goods was committed in the presence of the custodian. Our attention has not been called to any Supreme or Appellate Court case where the word, “presence” has been defined as pertaining to an insurance policy such as is involved in this case. In the case of Drury v. Connell, 177 Ill. 43, the court in discussing the attestation of a will and whether the same was done in the testator’s presence state: “The act of attestation of a will, to be in the testator’s ‘presence,’ within the meaning of the statute, must take place within the uninterrupted range of a testator’s vision.” In Calkins v. Calkins, 216 Ill. 458, the court was also discussing whether the attestation of a will had been done in the testator’s presence, and we find the following*: “An attestation is not in the presence of the testator, although the witnesses are in the same room and close to him, if some material obstacle prevents him from knowing of his own knowledge, perceiving by his senses the act of attestation. ’ ’ In Schofield v. Thomas, 236 Ill. 417 the court uses this language: “This court has frequently held that the attestation of a will, to be in the presence of the testator within the meaning of the statute, must take place within the uninterrupted range of testator’s vision; that the ‘presence’ of the testator means contiguity, with such an uninterrupted view between the testator and the subscribing witnesses that he could, if so disposed, see the act of attestation, whether in the same room or in an adjoining room.” Tested by these rules, it is plain that the theft of appellant’s goods was not in the presence of the custodian of them. There was a brick wall or a closed door between the custodian and the goods at the time they were stolen, and as before stated, the custodian was not aware of the theft until after the door was opened, and then the thief was 125 feet away and beyond the power of the custodian to stop him. No doubt the clause requiring the custodian to be present, was placed in the policy of insurance for the benefit of the company, so that if the custodian were actually present at the time of the theft, he could prevent it, or give an alarm so that the robbery could be prevented.

It is our conclusion that the words of the policy are not ambiguous and under the terms of the same there was no custodian present at the time the goods were stolen, and the company is not liable therefor, under the contract of insurance.

The judgment of the trial court will be affirmed.

Affirmed.


source: Caselaw Access Project

author: Mr. Justice Wolfe

license: Public Domain

text:
    Charles H. Albers, Receiver of Citizens State Bank of Watseka, Illinois, Appellee, v. John L. Smiley et al., Appellants.
    Gen. No. 9,409.

      Opinion filed April 20, 1939.
    Roscoe C. South, of Watseka, for appellants.
    W. S. Kay, of Watseka, for appellee.
   Mr. Justice Wolfe

delivered the opinion of the court.

Charles H. Albers, as receiver of the Citizens Bank of Watseka, Illinois, filed a bill in the circuit court of Iroquois county to set aside some deeds of conveyance made from John L. Smiley to his daughter, Feme S. Bechly and her husband Edward Bechly. The petition alleges, that the defendant, John L. Smiley was indebted to the bank for the sum of $1,237.63; that this amount was represented by a note payable from Smiley to the bank, dated October 28, 1931, for the principal sum of $1,000; that judgment was taken by confession, against the said Smiley in the circuit court of Iroquois county on March 14, 1932; that the said deeds from Smiley to the Bechlys, were without any other than nominal consideration and were made with the intent to defeat and defraud the plaintiff as a creditor of the defendant, John L. Smiley, and that the defendants Feme S. Bechly and Edward Bechly colluded and conspired with the defendant, John L. Smiley in the conveyance of the Watseka properties to the said Feme S. Bechly for the purpose of evading and voiding the payment of the debt due the plaintiff; that in equity and good conscience deeds to the properties should be set aside and the same declared void.

The defendants filed their answers to this petition and admitted the execution of the deeds to the property from John L. Smiley to Feme S. Bechly, but denied that the same was done with the fraudulent intent as charged in the bill of complaint. They averred that the transfers of this property were made for a good and valid consideration.

The case was heard before the court without a jury, who found the issues in favor of the plaintiff as to the property designated as the ‘Smiley business building,’ and entered a decree in conformity with his findings. It is from this decree that the appeal is prosecuted. The' appellants insist that they paid a full and adequate consideration for the property and that there was no fraudulent intent to defeat the creditors of John L. Smiley, or hinder them in the collection of their debt. The plaintiff, to maintain the issues in its behalf, introduced the note in question to show that judgment had been taken upon it. The various deeds of conveyance from John L. Smiley to Feme S. Bechly, also the mortgages on the various properties which were formerly owned by John L. Smiley and the deed to the farm from Smiley and Bechly to Anderson Jones, were also introduced in evidence.

John L. Smiley was called as a witness in behalf of the plaintiff and identified his signature to the note of $1,000, dated October 28, 1931. He stated that he had conveyed the property to his daughter on October 23,1931, and that he did not think he talked to any of the officers of the bank about the conveyance. George Gerdes testified that he was an officer of the Iroquois County Title and Trust Company which had made the loan and mortgage on the Smiley business building; that the same had been paid by Mr. and Mrs. Bechly and the mortgage had been released of record.

William E. Trotter testified that he was a real esta’te broker and that he thought he was familiar with the fair cash market value of property in and about Watseka; that he had been engaged in the brokerage business in 1931; that he was acquainted with the building commonly known as the Smiley business property on Walnut street in Watseka; that he was familiar with the value of the same in 1931; that the general condition of real estate at that time was not good; that in his opinion the value of the building at that time would be somewhere between three and four thousand dollars; that it would be pretty hard to give it exactly. This was all of the evidence offered on behalf of the plaintiff.

Feme S. Bechly testified in her own behalf that she was the daughter of John L. Smiley and grantee in the deeds of October 23, 1931; that at that time she was living in Champaign, Illinois, with her husband and their family; that at the time the deeds of the property were made from her father to her, the farm lands, the business building, home and other buildings were mortgaged for practically all they were worth; that the consideration for the transaction was that she should assume all of the mortgages on the property and cancel a note which she held of her father’s for $500 with interest for four years, amounting in all to $640; that her father owed the Christian church a note of $300 and she was to assume and agree to pay this note; that there were back taxes and special assessments on the property and she ivas to assume and agree to pay all of these; that the mortgage on the business house in question was $2,800 and on the residence $1,200 and on the farm $17,000; that the farm was not worth $17,000 and they conveyed it to a man named Jones; that the business property was worth very little or any more than $2,800, the amount of the mortgage; that she surrendered the note of $500 to her father; that she paid the note of $300 owed by her father to the Christian church; that she paid street paving and tax in the amount of $126.97 and another item for street paving of $119.98; that in all she paid nearly $6,000. Mrs. Bechly also testified that at one time her father collected $31 which was one month’s rent on the business property; that he was old and feeble and she furnished him with spending money and had agreed to look after him as long as he lived.

The defendants called two real estate men of Watseka and each of them testified that they had been in the real estate business for a number of years in Watseka, and were familiar with the price of property generally, and knew the property commonly called the Smiley building and were acquainted with it and its value in 1931; that it was hard or almost impossible to sell property at that time. They each stated in their opinion the value of this building was $3,000.

It is upon the foregoing testimony that the appellee attempted to establish fraud on the part of the defendants in conveying' this property. It is a well established rule of law that in suits to set aside a conveyance, as in fraud of creditors, the burden of proving such fraud is upon the one who alleges it. This rule is clearly stated in the case of McKennan v. Mikelberry, 242 Ill. 117, at p. 134.

“It has been repeatedly laid down by this and other courts that fraud will not be presumed, but must be proved, like any other fact, by clear and convincing evidence. (Union Nat. Bank v. State Nat. Bank, 168 Ill. 256, and authorities cited.) Something more than mere suspicion is required to prove allegations of fraud. The evidence must be clear and cogent and must leave the mind well satisfied that the allegations are true. (Shinn v. Shinn, 91 Ill. 477.) If the motives and designs of the parties charged with fraud or collusion may be traced to an honest and legitimate source equally as to a corrupt one, the former explanation ought to he preferred. (McConnell v. Wilcox, 1 Scam. 344.) Fraud is never presumed when transactions may be fairly reconciled with honesty, and if the weight of the evidence is in favor of an honest motive that conclusion should always be adopted.”

This rule has been followed in Beery v. Hurd, 295 Ill. App. 124; Wolf v. Lawrence, 276 Ill. 11; Duncan v. Dazey, 318 Ill. 500; Council v. Bernard, 319 Ill. 392; and Schiavone v. Ashton 332 Ill. 484. As before stated, the burden was upon the appellee to establish the fraud. It is uncontradicted that the business property was incumbered with a mortgage of $2,800 and some interest and taxes; that the appellant assumed and agreed to pay all incumbrances against the property and that they did do so. Two of the witnesses in estimating the value of the property at the time of the conveyance, say it was only worth $3,000. The other witness says, in his opinion, from $3,000 to $4,000. It appears to us that the preponderance of the evidence is in favor of the appellant that the property was not worth more than $3,000. If this is the correct value of the property, then John L. Smiley at the time he made the -conveyance to his daughter, had no equity in the property whatsoever, and Mrs. Bechly has paid all the property was reasonably worth and the bank could not have been damaged by the conveyance, because there is nothing that they could have reached by execution of any interest that Smiley had in the property at the time the conveyance was made.

The appellee insists that it was not a bona fide transaction between the defendants; that some secret agreement existed between the father and his daughter whereby he was to collect the rents, etc., of the business property during his lifetime. The only evidence to sustain this is that the father, on one occasion, during the six years that Mrs. Bechly owned the property, collected the sum of $31 or one month’s rent. ’Mrs. Bechly explains this that she permitted him to do it because he had nothing and she wanted to keep him in spending money. This evidence falls far short of being clear and convincing as required by law to establish fraud.

There is another feature of the case on which the plaintiff wholly failed, and that is to establish any fraud on the part of Mrs. Bechly. There is no evidence whatsoever, that she knew that her father was indebted to the bank at the time the transactions were made, but on the contrary she testified positively that she did not know her father was indebtéd to the bank, until shortly before this suit was started to set aside the deed. The question of consideration of the three properties, aside from the Smiley business building, is not involved in this appeal, as the court found that the consideration for these three properties was adequate, and that at the time of the conveyance, John L. Smiley had no equity in them.

From the record in this case, we find as a matter of fact that Feme S. Bechly paid to her father, John L. Smiley, an adequate consideration for the property known as the Smiley business property; that she had no notice of any indebtedness' from her father to the bank; that she was not guilty of any fraud in the transaction. We therefore hold that the trial court erred in decreeing that the appellees should have a lien upon this property and the decree is therefore reversed.

Reversed and remanded.


text:
    Parish Bank and Trust Company, Appellant and Cross Appellee, v. Uptown Sales and Service Company, Inc., Appellee and Cross Appellant.
    Gen. No. 9,426.

      Opinion filed April 20, 1939.
    V. A. Parish, for appellant.
    Vernon G. Butz, of Kankakee, for appellee.
   Mr. Justice Wolfe

delivered the opinion of the court.

The Parish Bank & Trust Company filed its complaint in the circuit court of Kankakee county, for the possession of a certain automobile which was held and claimed by the Uptown Sales & Service Company, Inc. The bank claimed the automobile by virtue of a conditional sales note, and contract conveying the said automobile to them. The defendants filed their answer and denied that the plaintiff was entitled to the automobile. The defendants tendered to the plaintiffs the sum of $170, the amount which was due under the sales contract, but the plaintiffs refused to accept the money. The case was tried before the court who found the issues in favor of the defendants and dismissed the suit at plaintiff’s costs.

The judgment was entered on March 9, 1938. On March 29, 1938, the plaintiffs filed their notice of appeal in said court. On April 1st, proof of service of notice of appeal was filed. On April 2, 1938, a praecipe for record and proof of service were filed in the lower court. On July 18, 1938, the defendants filed a motion in the trial court to amend the judgment of March 9th, by having the court order a writ of retorno habendo to issue. On August 31, 1938, the trial court entered an order that the judgment of March 9, 1938, be amended so as to order the return of the automobile and the issuance of a writ of retorno habendo. On November 28, 1938, plaintiffs filed a motion to set aside and vacate the order and judgment of August 31, 3938, amending the judgment of March 9, 1938. This motion was overruled.

The Parish Bank & Trust Company has appealed from the order of November 28, 1938, overruling its motion to set aside and vacate the order and judgment of August 31, 1938, and has also appealed from the order and judgment of August 31, 1938, amending the judgment of March 9, 1938, and from the judgment of March 9,1938, as amended.

The question presented on this appeal is, whether the court had authority on August 31, 1938, to amend its judgments of March 9, 1938. It will be noted that within the proper time the appellants filed notice of appeal in the trial court. Proof of service and all necessary preliminary steps were taken. The appellants failed to file the record in the Appellate Court. Evidently, the appellees did not discover that their judgment of March 9th was defective until after appellants had failed to prosecute their appeal. Then they made their motion to amend the original judgment.

The filing of notice of appeal by the appellants on March 29, 1938, was a jurisdictional matter and constituted an appeal from the circuit court. As soon as this was filed, the circuit court lost jurisdiction of the case and had no authority to change or modify the judgment which had been rendered. It was so held in the case of Danford v. Watkins, 337 Ill. 222. The amendment made by the court was not a formal matter, but was a substantial part of the judgment.

There is another reason why the court had no authority to amend the judgment in question. Under the old rule, before the new Practice Act became effective, after a term of court had elapsed at which the judgment was entered, the court was without power at a subsequent term on motion or petition, to vacate or modify its decrees or judgments, except as to matters of form or clerical errors, or where a decree is void for want of jurisdiction in the court entering the same. (Ernst Tosetti Brewing Co. v. Koehler, 200 Ill. 369; Sim v. Sim, 247 Ill. App. 321.) Section 50, subpar. 7, of the Practice Act [Ill. Rev. Stat. 1937, ch. 110, § 174; Jones Ill. Stats. Ann. 104.050] provides as follows: "The court may in its discretion before final judgment, set aside any default, and may within thirty days after entry thereof set aside any judgment or decree upon good cause shown by affidavit, upon such terms and conditions as shall be reasonable.” This section of the Practice Act does away with the old rule that a judgment shall become final at the end of term of court with which it was rendered, but the judgment now becomes final within 30 days after its rendition. The record shows that the judgment was amended more than 90 days after it was rendered. The court had no jurisdiction to make such amendment, as it was one of substance rather than form.

The appellees have filed a cross appeal from the original judgment of March 9, 1938. The appellants ' filed their motion to dismiss the same and suggestions in support of their motion. The appellees have not seen fit to file any countersuggestions. Rule 35 of the Supreme Court provides that, "Each appellee who desires to prosecute a cross-appeal from all or any part of the judgment, decision, order or decree, and each co-party who did not join in the notice of appeal but who desires to join as appellant or to prosecute a separate appeal, shall, within ten days after service of notice of appeal, serve a notice upon each party or attorney or firm of attorneys who signed the notice of appeal, and upon each appellee, or in case of a cross-appeal upon each co-appellee, and file a copy thereof in the trial court.” This rule for cross appeals contemplates an appeal from the same judgment that the appellants have appealed from. The judgment from which the appellees are attempting to take a cross appeal is a totally different judgment from the one on which this appeal is pending.

If it is contended that the appellees are appealing directly from the judgment of March 9,1938, they have to comply with the Practice Act which governs such appeals. The section applicable in such cases is the first paragraph of section 76 of the act, Smith Hurd’s Annotated Statutes [Ill. Rev. Stat. 1937, ch. 110, § 200; Jones Ill. Stats. Ann. 104.076] which is as follows: “No appeal shall be taken to the Supreme or Appellate Court after the expiration of ninety days from the entry of the order, decree, judgment or other determination complained of; but, notice of appeal may be filed after the expiration of said ninety days, and within the period of one year, by order of the reviewing court, upon motion and notice to adverse parties, and upon a showing by affidavit that there is merit in appellant’s claim for an appeal and that the delay was not due to appellant’s culpable negligence.”

It will be observed that the statutory period for which appeals are allowed directly to the Appellate Court is 90 days, but an appeal may be filed after the expiration of 90 days by order of the reviewing court upon motion, etc. The appellees made no attempt to file an appeal from this original judgment until long-after the 90-day period had expired, nor did they attempt to get an order for appeal from the Appellate Court. The motion to dismiss the cross appeal is hereby sustained and the same is dismissed.

The appellees ask this court to enter a judgment so as to grant the relief to which they contend they are entitled and to give them possession of the car. The original judgment of March 9, 1938, is not before this court on appeal and we would have no authority to enter the judgment as requested by appellees.

The judgment of the trial court of August 31, 1938, amending the judgment of March 9, 1938, is hereby reversed and the cause remanded.

Reversed and remanded.


author: Mr. Presiding Justice Denis E. Sullivan

text:
    D. W. Evans et al., Appellees, v. Alvanley Johnston et al., Appellants.
    Gen. No. 39,978.

      Opinion filed April 26, 1939.
    Rehearing denied May 8, 1939.
    McNab, Holmes & Long and Theodore Schmidt, all of Chicago, and Horn, Weisell, McLaughlin & Lybarger, of Cleveland, Ohio, for appellants; Joseph T. Scott and Theodore Schmidt, both of Chicago, and C. E. Weisell, of Cleveland, Ohio, of counsel.
    Deneen & Massena, of Chicago, for appellees; Marshall A. Pipin and Charles S. Deneen, of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

This proceeding originated in a bill of complaint being filed and, with the exception of one or two minor amendments, it is agreed in the briefs that the following statement of the proceedings is correct.

Suit was brought by certain employees of the Pennsylvania Railroad, holding the rank of locomotive engineers, who had worked on that part of the Pennsylvania Railroad which runs from Chicago to Clarke, Indiana, hereinafter referred to as the Ft. Wayne Seniority District, said employment having dated prior to December 1, 1930. Said action was brought against the engineer employees on the Pennsylvania Railroad, who prior to December 1, 1930, had worked on that part of the Pennsylvania Railroad which runs from Chicago to Berenice, Illinois, hereinafter referred to as the “Pan Handle Seniority District,” nine Ft. Wayne engineers who did not join in the complaint, The Pennsylvania Railroad Company and certain officers and officials of the Brotherhood of Locomotive Engineers, individually and as representatives of the Brotherhood.

The plaintiffs sought to have declared null and void a certain merger agreement entered into between representatives of the general committee of adjustment of the Brotherhood of Locomotive Engineers, and the Pennsylvania Railroad Company, effective December 1, 1930, by which the engineers’ seniority rosters on the Ft. Wayne and Pan Handle Seniority Districts on the Chicago Terminal Division of the Pennsylvania Railroad were dovetailed as of the date of hire and a permanent injunction restraining' the defendants from following or recognizing said merger agreement in the employment of engineers on said Chicago Terminal Division of the Pennsylvania Railroad.

In the bill of complaint it is alleged that all of the complainants, amounting to between 100 and 200, with the exception of three of their number, are residents of Cook county in the State of Illinois, and that the three mentioned are residents of Valparaiso, Indiana; that all of these plaintiffs are now, were at the time of the acts complained of and for a long time prior thereto employed by the defendant the Pennsylvania Railroad Company, a foreign corporation admitted to do and doing business within the State of Illinois; that they are locomotive engineers or firemen, although all have seniority status and ranking as engineers; that the Pennsylvania Railroad Company is engaged in interstate and intrastate railroad business within the State of Illinois; that the defendants Fred Koehn and some 50 others are also employed by the defendant the Pennsylvania Railroad Company as locomotive engineers and firemen and were so employed at the time of the acts herein complained of; that all of the last named defendants except P. T. Reilly are residents of the county of Cook and State of Illinois; that said Reilly is a resident of Valparaiso, Indiana.

The bill of complaint further alleges that there is a voluntary unincorporated association and labor union known as the Grand International Brotherhood of Locomotive Engineers and said labor union consists of many thousands of members distributed over the United States of America; including many hundreds within the State of Illinois; that said Grand International Brotherhood of Locomotive Engineers commonly known as and hereinafter referred to as the Brotherhood, has for its declared purpose in the United States and Canada and within the State of Illinois the object of and is engaged in improving the conditions and terms of employment of and in advancing the interests of railroad employees and especially those employed as or having earned seniority status as locomotive engineers; that said Brotherhood was at the time of the acts herein complained of and for a long time prior thereto engaged in promoting said objects within the State of Illinois; that Alvanlev Johnston, a resident of Cleveland, Ohio, now is and was at the time of the acts herein complained of the grand chief engineer, which is the highest office and analogous to president of said Brotherhood; that the defendant John Binscliip is and was at the time of the acts herein complained of a member of the General Committee of Adjustment, Pennsylvania lines west, a subdivision of the Brotherhood and handles the relations of members of the Brotherhood with the defendant Pennsylvania Railroad Co.; that the other members of the General Committee of Adjustment, Pennsylvania Lines West, are nonresidents of the State of Illinois and not amenable to process of this court; that A. O. Smith is an assistant grand chief engineer and that he handled all Brotherhood matters within the State of Illinois and is the only officer of the Brotherhood within the State of Illinois; that there are many local and subordinate lodg’es known as divisions of the Brotherhood, which divisions are themselves voluntary unincorporated associations of many members; that division 231 is such a division of the Brotherhood and has for its members those of the Brotherhood who are employed by the Pennsylvania Railroad Company on those portions of the railroad herein concerned; that Herman Seibold is chief engineer which is the highest office of a division and is analogous to president, of Division 231, and John Binschip is local chairman of said division, which position is one of the principal offices of the division and its occupant handles grievances and other matters involving the relation of employer and employee with the defendant the Pennsylvania Railroad Company; that said S. W. Wesley is the first engineer or first vice president of said division; that L. Goss is second engineer or second vice president of said division; that Alvanley Johnston, John Binschip, Herman Seibold, S. W. Wesley and L. Goss are made parties defendant individually and as representatives of and to act for and on behalf of the said voluntary unincorporated association, the Grand International Brotherhood of Locomotive Engineers and all of the members thereof; that in addition to his personal and other representative capacities John Binschip is made a defendant as representative of the said General Committee of Adjustment, Pennsylvania Lines West; that in addition A. O. Smith is made defendant as representative of and to act with the other defendants for and on behalf of the Grand International Brotherhood of Locomotive Engineers and of all the members thereof; that Herman Seibold, John Binsehip, S. W. Wesley and L. Goss are made parties defendant individually and as representatives of and to act for and on behalf of the said voluntary unincorporated association, Division 231 of the G-rand International Brotherhood of Locomotive Engineers and of all the members thereof.

When the matter was at issue the cause was referred to a master who made a report which found that equity had jurisdiction over such seniority, the master finding:

1. That the merger agreement violated the rights of the plaintiffs under the 1928 schedule of regulations and rates of pay for the government of employees on the Pennsylvania Railroad between the Brotherhood and the railroad.

2. That decisions were made within the Brotherhood by the grand chief engineer and the Brotherhood in convention on the following points of Brotherhood law:

(a) that the general committee of adjustment did not lose jurisdiction to effect the merger with the railroad by the adoption by the local lodge 231 of the Brotherhood of a motion to withdraw the original merger resolution.

(b) that section 34 (c) of the standing rules of the Brotherhood providing for a two-thirds vote of the members affected by a merger did not apply to the merger on the Chicago terminal division because the section had been enacted after the merger matter had been submitted to the general committee.

(c) that section 35 (b) of the standing rules of the Brotherhood had no application to the merger, were arbitrary and unreasonable; that the counting and tabulating by the general committee of the appeal ballots to the system on the merits of the merger was illegal, and that actual fraud had been practiced and committed on the Ft. Wayne members of the local lodge by officers and tribunals of the Brotherhood.

Objections were filed by the defendants and also by the plaintiffs to the findings of the master which objections, by an order entered in the trial court, stood, as exceptions to the master’s report before the court.

In its decree the court (1) sustained the defendants’ exceptions to the fraud findings of the master and sustained the defendants’ exceptions to the findings of the master that decisions within the Brotherhood on the matter of the appeal ballots and section 35 (b) of the standing rules were arbitrary and unreasonable and overruled the balance of defendants’ exceptions, sustained plaintiffs’ exceptions three and four and overruled the balance of plaintiffs’ exceptions.

(2) Enjoined the defendants from further enforcing or recognizing the said merger agreement.

(3) Reinstated the original, separate and independent seniority districts and rosters for the Ft. Wayne and Pan Handle seniority districts and decreed that the separate rosters be recognized and followed in the assignment of work for engineers on the Chicago terminal division.

(4) Taxed costs, including the master’s fees, against the defendants, jointly and severally.

No point is raised on the pleadings.

Plaintiffs’ theory of the case is as follows:

1. The schedule is a third party beneficiary contract between the Railroad and the Brotherhood for the benefit of the engineer employees and under it the plaintiffs and the other employees had individual as well as joint rights, including those of seniority.

2. While the schedule may be amended by the Railroad and the Brotherhood by virtue of the reservation therein, neither the Railroad alone nor the Railroad and the Brotherhood together may waive or disregard as to certain employees the application of the schedule, including regulation 3-D-l which applies to all consolidations.

3. Apart from the rights under regulation 3-D-l, if the seniority of members is adversely affected by action of Brotherhood officials which, as here, is either contrary to the laws of the Brotherhood or fraudulent, the members so affected are entitled to judicial relief.

4. The courts are not bound by interpretations placed by brotherhood officials on the laws of the Brotherhood which, as here, substitute legislation for interpretation, transgress the bounds of reason, common sense or fairness, or are arbitrary or are not made in good faith.

5. Regulation 7-B-l is not a reservation or delegation of authority to the general committee of adjustment as agent for the individual employees but the extent and limitation of the authority of the general committee to act for the engineer employees is found in the laws of the Brotherhood and in the limitations placed by the court on this type of agency.

6. The Railroad had the responsibility of ascertaining the authority of the general committee and further had notice of such facts as prevent it from holding the plaintiffs to the consolidation.

7. Equity will give relief because seniority is a property or other right of such a nature as equity will enforce and because if considered only as a contractual right the damages are unascertainable, continuing and irreparable.

Defendants’ theory of the case is:

1. That the railroad and the general committee of adjustment of the Brotherhood, as the original parties to the schedule, had full power and authority to adjust the seniority of the engineers on the Chicago terminal division by the merger agreement of November 10,1930, and that this authority had been expressly reserved to the general committee by regulation 7-B-l of the schedule and expressly granted to the general committee by sections 34 (b) and 36 (a) of the standing* rules of the Brotherhood.

2. That regulation 3-D-l of the schedule was not applicable to mergers of seniority districts not made at the management’s directions.

3. That Brotherhood law and procedure were followed in every respect in effecting the merger and that the acts and decisions of the grand chief engineer, the Brotherhood in convention, and the general committee of adjustment of the Brotherhood are binding* upon the court.

4. That the Railroad had no notice of the alleged violations of Brotherhood law or of the alleged restrictions on the authority of the general committee of adjustment to effect said merger.

5. That seniority is not such a property right as will be enforced or protected in equity.

It appears from the evidence that on November 10, 1930, an agreement between the representatives of the Brotherhood of Locomotive Engineers and the Pennsylvania Railroad Company was entered into by which the Ft. Wayne and Pan Handle seniority rosters on the Chicago terminal division were consolidated and provided that all engineers on the consolidated roster would rank thereon as of date of hire. It is this merger or consolidation which is the subject of the controversy in this case.

In the organization known as the Brotherhood of Locomotive Engineers, its supreme governing* body is known as the grand international division and is composed of the grand chief engineer and the other grand officers of the Brotherhood and delegates from the local lodges. The grand international division meets triennially in the convention and has legislative authority as well as authority to determine questions of appeal which are presented to it. The chief executive officer is known as the grand chief engineer. The Brotherhood is divided into subordinate lodges known as divisions, each with officers selected by the membership of the division. The chief executive officer of a local lodge is the chief engineer. Each local division of the Brotherhood elects a committee known as the local committee of adjustment. On each railroad or operating division of a railroad there is organized a general committee of adjustment, the members of which are the chairman of the local committees of adjustment from all the divisions on the railroad or operating districts. The general committee meets triennially and its chairman is the committee between sessions. The . general committee negotiates agreements with the carrier and in general is in charge of all matters pertaining to labor relations with the carrier.

Section 3 (a) of the constitution, provides:

“The G. I. D. (Triennial Convention) shall have exclusive jurisdiction over all subjects pertaining to the Brotherhood, and its financial activities, and its enactments and decisions upon all questions shall be the supreme law of the Brotherhood and all Divisions, and members of the Organization shall render true obedience thereto.”

Section 49 of the statutes, page 59, provides: “Should any member feel that any injustice has been done him by any decision of his Division, he may appeal to the G-rand Chief Engineer, making a written statement of his case, and file copy of same with the Division, except cases of seniority, rights to runs, or distribution of territory which belong to the General Chairman and General Committee of Adjustment, or the General Chairman, who is the Committee between meetings, and upon receiving such statement the Grand Chief Engineer shall procure a written statement from the Division, and, after duly considering each, and the facts and evidence as well as the law, render his decision, such decision to be final and is to be complied with unless reversed by the next G. I. D. Convention. ’ ’

Section 36 (a) of the standing rules, page 103, provides :

“The right to make and interpret contracts, rules, rates and working conditions for Locomotive Engineers shall be -vested in the regularly constituted Committees of the B. of L. E.”

Section 34 (b) of the standing rules, page 101, provides :

“The General Committee of Adjustment shall have full power to settle all questions of seniority and rights to runs and jurisdiction of territory that are presented to them, and their decision shall be final unless, on an appeal to the membership, their decision is repealed by a majority vote.”

■ Section 27, standing rules, page 99, provides: “Any action taken by a General Chairman or a General Committee of Adjustment on any system shall stand as law for all members and Divisions on said system until repealed by the General Committee, or in accordance with provision for appeals in Section 28 Standing Rules. . . .”

Section 28, standing rules, page 99, provides:

“An appeal may be taken from the decision of the General Committee of Adjustment or the Chairman to the members of the system, if made within ninety (90) days from the date of such decision, and a majority vote of members on said system shall be final; this vote to be taken in the same manner as in the election of Division officers. Such appeal may be taken by any member in good standing who may feel himself aggrieved, by making a full statement of his case, accompanied by a statement of the General Committee of Adjustment signed by the General Chairman and Secretary, and it shall be the duty of the proper officers of the Division to place the seal upon it and transmit it to the Divisions on the system and the Division must take the vote within thirty (30) days from receipt of notice of appeal.”

The schedule referred to in this cause is the 1928 schedule of regulations and rates of pay for the government of engineers in road and yard service on the Pennsylvania Railroad, which bears the signatures of the three general managers of the Pennsylvania Railroad and the three general chairman of the B. of L. E. The schedule was negotiated by representatives of the general committee of adjustment of the B. of L. E. and representatives of the management.

It further appears from the evidence that on September 6, 1929, at a regular meeting* of Division 231 of the Brotherhood, a resolution was adopted to consolidate the Pan Handle and Ft. Wayne seniority rosters, which reads in part as follows:

“Be it resolved by the action of Div. 231 to consolidate the P. C. C. & St. L. Roster with the P. F. W. & C. Roster a plan drawn up whereby the oldest man on the P. F. W. & C. R. R. would follow the youngest promoted man in 1918 on the P. C. C. & St. L. Roster and the oldest P. C. C. & St. L. engineer would follow A. J. Scott on the P. F. W. & C. Roster and all men promoted underneath that would be dovetailed in from the date of hire.”

The merger matter was sent to the general committee of adjustment of the Brotherhood on the Pennsylvania Lines West of Pittsburgh, and accepted by the general chairman on September 20, 1929. The executive committee of the general committee of adjustment met in Columbus on March 3 and 4, 1930, and considered the merger on the Chicago Terminal Division. After listening* to the respective arguments, the executive committee decided to hold the merger matter in abeyance until the next triennial meeting of the committee scheduled for October, 1930. On April 4, 1930, at a regular meeting of Division 231, plaintiff Kings-bury made the following motion:

“I make a motion that we withdraw the merger resolution adopted by the lodge.”

The Brotherhood met in convention during the summer of 1930 and enacted section 34 (c) to the standing rules providing for a two-thirds vote of members affected before a merger of seniority districts could be effected. The question then arose as to whether or not the section applied to a merger matter already in the hands of and accepted by a general committee. Grand chief Johnston was consulted and ruled that section 34 (c) was not retroactive and that the merger on the Chicago Terminal Division did not require a vote of the two seniority districts involved because the case had been submitted to the general committee prior to the enactment of the section.

The regular triennial meeting of the general committee was held in Columbus in the month of October, 1930. Plaintiff Dring appeared before the subcommittee and was given full and complete opportunity to make a fair presentation of the Ft. Wayne side of the merger controversy. A dovetail merger was approved by the general committee by a vote of 22 to 3, the defendant Binschip not voting. On November 10, 1930, local chairman Binschip, acting under the instructions of general chairman Enders, entered into an agreement with the superintendent effective December 1, 1930, by which the Ft. Wayne and Pan Handle seniority rosters on the Chicago Terminal Division were consolidated, all engineers on the consolidated roster to rank thereon as of the date of employment. The form of merger adopted is set forth as the “dovetail merger. ’ ’

Appeals were taken to the convention of the Brotherhood of Local Engineers, where a prior decision of the chief engineer’s ruling that the merger be sustained, was submitted and approved. These appeals were taken under the Brotherhood law and approved by the highest tribunal to which an appeal could be taken.

One of the controlling questions in this case is whether or not any contract right of the plaintiff was violated by the dovetail merger of the Ft. Wayne and the Pan Handle seniority rosters. The agreement of November 10, 1930, between the representatives of the Brotherhood of Local Engineers and the Pennsylvania Railroad Company was entered into by which the Ft. Wayne and Pan Handle seniority rosters on the Chicago Terminal Division were consolidated and provided that all engineers on the consolidated roster would rank thereon as of date of hire. The trial court found as claimed by plaintiff that the agreement violated the contract right of the plaintiff under regulation 3-D-l, one of the seniority regulations of the schedule, which provides that in the event of a merger of two or more divisions, the seniority of the engineers then in service would be confined to the original territory on which they may have earned it, said engineers, however, to have seniority on the combined division over those engineers promoted or hired after the date of the merger, which said regulation provides that it shall also apply to the merging of seniority districts.

• We are inclined to believe that the parties to the schedule, the general committee of adjustment and the railroad, by regulation 7-B-l thereof, reserved to the general committee the authority to adjust with the management rights of the engineers of the Chicago Terminal Division by the dovetail merger of the Ft. Wayne and Pan Handle seniority rosters. Regulation 7-B-l reads as follows:

“The Engineers’ Committee will represent the engineers in all matters pertaining to rates, regulations and general grievances.”

If that contention were not true and the language above quoted did not govern the engineers or representatives and they would not be bound by it, then how little use there would have been in forming this committee of adjustment.

In Bergstein v. Popkin, 202 Wis. 625, it was said at 632:

“So far as we are aware, it has never been held that a third party for whose benefit a contract was made had any greater or more extensive right than existed by the terms of the contract, and it has been almost universally held that, if the original parties to the contract reserve by the terms of the contract the right to modify it or abrogate it, such a reservation is valid and enforceable.”

In Gabby v. Roberts, 237 Ky. 230, the question was raised as to what authority was conferred by a letter written by a principal to his agent, which read:

“I hereby authorize you to represent me at the Hugh French sale on September 17th, or whenever it is.” When the property was offered for sale, the agent bid the property in in his principal’s name and executed a bond for the purchase price. Suit was instituted on the bond. The court held that the principal was bound on the bond, saying:

“ ‘To represent’, in its ordinary usage, must be understood to mean ‘as standing in the place, or supplying the place, or performing the duties, or exercising the rights, of the party represented; to speak or act with authority on behalf of another.’ Webster’s New International Dictionary. The legal definition is the same. 34 Cyc. 1619. The authority conferred upon Travis was a very broad one, and we have no doubt that it was intended to, and did, vest in him, the right and power to bid upon the property and to execute the bonds therefor, when he became the successful bidder.”

In State ex rel. O’Connor v. McCarthy, 86 Mont. 100, 282 Pac. 1045, it was stated:

“. . . To ‘represent’ another in court means to conduct and control the proceedings ‘on behalf of’ that other (Carpenter v. Superior Court, 75 Cal. 596, 19 Pac. 174); to stand in the place of and act for the one represented (Plummer v. Brown, 64 Cal. 429, 1 P. 703; Chase v. Swayne, 88 Tex. 218, 30 S. W. 1049; 53 Am. St. Rep. 742).”

In National Furnace Co. v. Keystone Mfg. Co., 110 Ill. 427, the Supreme Court defined the term “general agent” as “one authorized to transact all of his principal’s business, or all of his business of some particular kind.” Halladay v. Underwood, 90 Ill. App. 130; Crain v. First Nat. Bank, 114 Ill. 516.

We believe this reservation of authority was binding upon the beneficiary to this contract and that the committee had full authority to represent them.

In Donovan v. Travers, 285 Mass. 167, which was a suit in equity, which sought an interpretation of an agreement between the Railroad and the Brotherhood. The defendants were the Railroad and members of the grievance committee of the Brotherhood of Railroad Trainmen. Under the schedule, grievances between the employees and the railroad were to be referred to and adjusted by the grievance committee. The court in that case said:

“. . . The substantial issue is whether the rights of the plaintiffs are fixed by the terms of the agreement between the Union and the railroad corporation as it stood when the several plaintiffs entered upon their service interpreted only in the light then available, or whether as the agreements changed from time to time, the modifications and possible changes in interpretation of terms agreed upon by the Union and the railroad corporation modified and affected the individual contracts of those already in the corporation employ. We think the latter to be the proper position. The transaction is an agreement between an employer and a labor union designed by the latter to benefit itself and those members who enter the employer’s service. The employee stands no higher than the union. If it modifies the agreement with the employer, the employee must acquiesce. In no correct sense is the union an agent. It is a principal.”

It seems to us that where a labor union, composed of employees of a company, whether the objector is a principal or an employee of a certain company, where the rights of the employees are in the hands of the union for the purpose of settling disputes or adjustments of their rights, or have under consideration collective bargaining of any kind, that when an agreement is made, no fraud having been shown, it is to be presumed that they have had a fair hearing before their union committees and presented their side. Under these circumstances the employees would be bound by the actions of the officers of their union.

In the case of Engel v. Walsh, 258 Ill. 98, the court said in part:

“In churches, lodges, labor unions, and other like voluntary associations, each person on becoming a member, either by express stipulation or by implication agrees to abide by all rules and regulations adopted by the organization. . . . Courts will not interfere to control the enforcement of by-laws of such associations, but they will be left free to enforce their own rules and regulations by such means and with such penalties as they may see proper to adopt for their government.”

In Gonzales v. Roman Catholic Archbishop of Manila, 280 U. S. 1, it was said: “In the absence of fraud, collusion, or arbitrariness, the decisions of the proper Church tribunals on matters purely ecclesiastical, although affecting civil rights, are accepted in litigation before the secular courts as conclusive, because the parties in interest made them so by contract or otherwise. Under like circumstances, effect is given in the courts to the determination of the judicatory bodies "established by clubs and civil associations.”

In the instant case exceptions were taken to the charges of fraud as contained in the master’s report, which exceptions were sustained by the court. Therefore, it seems to us that a mere difference of opinion between two contending bodies of men is the main contention. The body of men connected with the railroad companies who have the authority to decide such matters as have been presented here, have done so and their decision is controlling as to all.

In Oakes, Organized Labor & Industrial Conflicts, sec. 61, 65, it was said:

“The law relating* to labor unions in relation to interference by the courts as to membership and the enforcement of rules is the same as that applied to other voluntary organizations. By uniting with the union the member assents to and accepts the constitution and impliedly binds himself to abide by the decisions of such boards as that instrument provides for the determination of the disputes arising within the association.” . . .

See also George T. Ross Lodge No. 831 v. Brotherhood of Railroad Trainmen, 191 Minn. 373; Long v.Baltimore & Ohio Railroad, 155 Md. 265; Simpson v. Grand International Brotherhood of Locomotive Engineers, 83 W. Va. 355.

An injunctional order must be complete in detail as to its prohibition or direction so that what the court intends is easily discernible. In the instant case the language used in the injunctional order, namely, “take such steps as shall be necessary to reinstate said original separate and independent Fort "Wayne and Pan Handle seniority districts and rosters,” is not clear and definite as to what should be done by the defendant in order to comply with the court’s directions or prohibition.

Other .points are raised but we do not think it necessary to pass on them at this time.

We are of the opinion that the parties, as plaintiffs, were bound by the action of their committees. They had a full, fair hearing. No fraud intervened and we believe they are bound by the actions of the committee of their union whose action was reviewed by the highest tribunal of their organization which was created by them to review and adjust these differences.

For the reasons herein given the decree is reversed and the cause is remanded with directions to dismiss the bill of complaint for want of equity.

Decree reversed and cause remanded with directions.

Hebel, J., concurs, and Burke, J., takes no part.


text:
    John P. Immel, Appellee, v. The Travelers Insurance Company et al., Defendants. Appeal of The Travelers Insurance Company, Appellant.
    Gen. No. 40,020.

      Opinion filed April 26, 1939.
    Rehearing denied May 8, 1939.
    Kirkland, Fleming, Green, Martin & Ellis, of Chicago, for appellant; William H. Symmes, David Jacker and John M. O’Connor, Jr., all of Chicago, of counsel.
    Rathje & Connor and Franklin J. Stransky, both of Chicago, for appellee; Franklin J. Stransky, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

Defendant, Travelers Insurance Company, brings this appeal from a decree entered in the circuit court for $25,000 in favor of plaintiff and against defendant upon a policy of insurance issued by defendant company.

It appears that the beneficial plaintiffs in the original complaint and John P. Immel, as trustee, in the amended complaint base their rights on. the duplicate policy of insurance bearing date of May 24, 1922, executed by the defendant Insurance Company on the life of Robert Yolk, which policy of insurance was, with the written consent of the Insurance Company, assigned by said Robert Yolk to the Mont Clare Lumber & Supply Company, of which Yolk was president, and thereafter deposited by Robert Yolk as president of said Mont Clare Company, with John P. Immel, trustee, as collateral security for the payment of the $100,000 issue of bonds executed by the Mont Clare Company and sold to the public.

In answer to the claim of John P. Immel, as trustee, the defendant Insurance Company in its amended answer and in its answer to the amended complaint admitted the execution and delivery by it of the duplicate policy dated May 24, 1922, the assignment of the contract of insurance represented by said duplicate policy by Robert Yolk to the Mont Clare "Company, and the consent of the Insurance Company to such assignment, and admitted that the Mont Clare Company was from April 26,1920 (the date of the original policy of insurance) to October 1, 1928, the assignee of said policy and entitled to all the benefits accruing under said contract of insurance on the life of said Robert Yolk.

The defendant Insurance Company further contends that after the death of Robert Yolk, it rightfully paid the amount of the insurance in question to the Noel State Bank, trustee, which predicated its rights on the second policy dated November 26, 1926.

It further appears from the answer of said Insurance Company that the said assignment of the policy of November 26, 1926, executed by Robert Yolk, as president of the Mont Clare Company, assigned to himself, individually, all right, title and interest of the Mont Clare Company in the second duplicate policy of insurance bearing date as aforesaid, November 26, 1926.

In order to keep in mind the successive events in this transaction, we deem it advisable to set them forth in sequence as disclosed by the pleadings and the evidence. They are as follows:

On February 6, 1922, the Mont Clare Lumber & Supply Company offered for sale to the public its bonds in the aggregate amount of $100,000, pursuant to a certain trust deed of that date, said trust deed being filed for record in the recorder’s office of Cook county, Illinois, as Document No. 7,401,126, and to secure the same executed a deed of trust covering certain real estate owned by it. John P. Immel, plaintiff in this case, was named therein as trustee. Said trust deed conveyed to said John P. Immel, trustee, certain real estate, and as further security provided that said Mont Clare Lumber & Supply Company would at all times place and keep in reputable companies insurance in the sum of $25,000 on the life of the said Robert Volk and that said policies would be deposited with the Immel State Bank upon its request.

A policy of insurance for the sum of $25,000 was issued by the defendant company upon the life of Robert Volk bearing date of April 1,1920, which policy was thereafter assigned to the Mont Clare Lumber & Supply Co. for the purpose of complying with the provisions of the trust deed which provided that in addition to the real estate enumerated therein as security, that a policy of insurance for said sum would be deposited with the trustee named in said trust deed as additional security. Later it was claimed by Volk that the policy was lost and could not be found.

On May 15,1922, Robert Volk, president of the Mont Clare' Lumber .& Supply Co. presented to the Rock-wood Badgerow Company, the Chicago representative of the defendant, an affidavit on the regular form of the Travelers Insurance Company, which in effect stated that the said policy of insurance issued by the Travelers Insurance Company and bearing date of April 1, 1920, had been lost or destroyed, and requested the Rockwood-Badgerow Company to procure another policy from the defendant Insurance Company to take the place of the one so represented in said affidavit to have been lost or destroyed.

' On June 1, 1922, the Rockwood-Badgerow Company of Chicago, having sent to the home office at Hartford, the affidavit of loss of the said original policy, and having received from the defendant insurance company a duplicate policy dated May 24, 1922, and in lieu of the one represented by said Volk to have been lost or destroyed, sent the said duplicate policy dated May 24, 1922, to Robert Volk with a letter which stated:

“Re-610745 Life policy

“We are enclosing herewith, duplicate of the above indicated policy which is to take the place of the one that has been lost.” There was also attached to the said last issued policy dated May 24, 1922, a photostatic copy of the assignment of the original policy dated April 1, 1920, executed by Robert Volk to the Mont Clare Lumber & Supply Company.

The first duplicate policy of insurance dated May 24, 1922, with the assignment of said Robert Volk to the Mont Clare Lumber & Supply Company attached thereto, and said deed of trust were deposited with said John P. Immel, trustee, in accordance with the provisions of said trust deed. The bonds secured by the trust deed were sold generally to purchasers with the representation that the Mont Clare Lumber & Supply Company was carrying a life insurance policy on the life of Robert Volk in the amount of $25,000 as further security for the bond issue. The trust deed, the policy of insurance, and a number of unissued bonds of the Mont Clare Lumber & Supply Company, issued pursuant to said trust deed, were deposited by John P. Immel, trustee, in the Immel Safety Deposit Box Company. The documents in question remained exclusively under the control and in the possession of John P. Immel, trustee, until the Immel State Bank, of which the Immel Deposit Company was a wholly owned subsidiary, closed its doors. The safety deposit boxes in the Immel Safe Deposit Company were then taken over by the receiver of the Immel State Bank. The trust deed and said insurance policy dated May 24, 1922, with the photostatic copy of the assignment by Robert Volk to said Mont Clare Lumber & Supply Company of the original policy of April 1,1920, thereto attached, remained in the custody of the receiver of the Immel State Bank until June, 1932, when they were turned over by the representatives of the receiver to the counsel for plaintiff representing the holders of bonds issued by the Mont Clare Lumber & Supply Company under its deed of trust dated February 6, 1922. The duplicate policy of insurance dated May 24, 1922 was introduced in evidence by counsel for plaintiffs.

During the time the duplicate policy of insurance dated May 24, 1922, was in the possession of John P. Immel, trustee, as aforesaid, the following transaction occurred without the knowledge of John P. Immel, trustee, or of the holders of the bonds of the Mont Clare Lumber & Supply Company.

In the latter part of 1926, there was presented to one Annie E. Johnson, a representative of the Travelers Insurance Company, in the Insurance Exchange Building, 175 West Jackson boulevard, Chicago, by a person unknown to her, an envelope containing a partially burned insurance policy of the Travelers Insurance Company, No. 610,745, on the life of Robert Volk, in the sum of $25,000, and said unknown person asked to have another policy of insurance issued in.lieu thereof.

Miss Johnson testified that this transaction was very unusual; that she casually examined the partially burned policy so presented and ascertained that it was a policy of the Travelers Insurance Company, No. 610,745, in the sum of $25,000, on the life of Robert Yolk, but did not pay any attention as to whether it was an original or a duplicate policy. Without making any further examination defendant’s representative sent the parts of the burned policy to the home office of the Travelers Insurance Company at Hartford, Connecticut, where a second duplicate policy was issued without having* ascertained whether the burned policy was the original policy, dated April 1, 1920, which the records of the Insurance Company showed had been lost or destroyed, or whether it was the duplicate policy bearing date of May 24, 1922.

The second duplicate policy dated November 26, 1926, was received at the branch office of the defendant. This policy next appeared in the possession of Noel State Bank, which bank had received the same through. James M. Hurst, its trust officer, who obtained it from Robert Yolk.

The second duplicate policy bearing date of November 26, 1926, was not sent to the defendant Insurance Company to have attached thereto the purported reassignment by the Mont Clare Lumber & Supply Company to Robert Yolk. Hurst retained the second duplicate policy in his possession and he attached to the second duplicate policy a copy of the purported assignment by the Mont Clare Company to Robert Yolk and a copy of change of beneficiary.

On October 1, 1928, Robert Yolk executed, as president of the Mont Clare Lumber & Supply Company, to and in favor of himself, individually, an assignment of all right, title and interest of said Mont Clare Company in said policy of insurance dated November 26, 1926. George W. Crowell, the secretary of the Mont Clare Company, signed the instrument as secretary of that company without knowing anything about the transaction and solely because Volk, his employer, instructed him to do so. This assignment by the Mont Clare Company to Robert Volk was not authorized by the directors or stockholders of that company, and the evidence does not show that the Mont Clare Company actually received any consideration for such assignment, although the assignment recites a consideration. At the time it was executed and forwarded to the Rockwood Company, defendant’s Chicago representative, it did not have attached thereto the corporate seal of the Mont Clare Company, nor was any inquiry made as to its validity. Hurst, acting for the Noel State Bank, arranged with.someone to have the corporate seal attached sometime after the reassignment was executed.

On October 22,1928, Volk executed a change of beneficiary, changing the beneficiary of said policy dated November 26, 1926, to Noel State Bank, trustee, which change of beneficiary was consented to by the Insuranee Company.

On January 23, 1930, the beneficiary, of which the Noel State Bank was trustee, was changed by some irregular unexplained method by Hurst and Robert Volk from the estate of said Volk to certain preferred creditors of Robert Volk mentioned and described in said Insurance Trust No. 589. Consequently, the status of the Noel State Bank, as trustee, under the last will and testament of Robert Volk, was changed to that of trustee for the creditors of the Robert Volk Real Estate & Improvement Company under said Insurance Trust No. 589, which did not come into existence until January 23, 1930.

Twenty-four days after said Insurance Trust No. 589 was executed and said change in the status of said Noel State Bank, trustee, was made, Robert Volk committed suicide.

Thereafter on February 18, 1930, said James M. Hurst, vice president and trust officer of defendant, Noel State Bank, trustee, executed under oath and forwarded to the Insurance Company an affidavit showing that five policies of insurance on the life of Robert Volk, including said policy bearing* date November 26, 1926, were held under said Insurance Trust No. 589, between said Robert Volk and the Noel State Bank, as trustee.

The evidence shows that the defendant company made no inquiry as to the facts surrounding* the suicide of Volk and made no examination of its records to trace the history of the policy of insurance on which the Noel State Bank, as trustee, based its claim, or to discover the facts and circumstances under which said second duplicate policy came into existence or to discover the facts and circumstances surrounding the execution by Robert Volk, as president of the Mont Clare Company, to himself, individually, of the right and title of said company in said insurance. It did not ask for proof as to whether any person or corporation, other than the Noel State Bank, as trustee, had any interest or claim in said insurance, and within 10 days after the suicide of Volk paid the total amount of insurance claimed by said Noel State Bank, as trustee, including $25,000 the face amount of said policy, without any policy of insurance, duplicate or otherwise, being* turned over to it by the claimant, or anyone in its behalf.

The evidence further shows that the suicide of Volk was 43 days before the 10-year-term policy in question would have expired in accordance with its said terms.

The evidence further shows that James M. Hurst, vice president and trust officer of said Noel State Bank, had actual knowledge previous to the time said the Travelers Insurance Company paid said $85,000 to said Noel State Bank, as trustee, and prior to the execution on January 23, 1930, by Volk to Noel State Bank, trustee, of Insurance Trust No. 589, that said Mont Clare Lumber & Supply Company had an outstanding unpaid bond issue.

The evidence further shows that Mr. Smithson, a representative of the Insurance Company, who had charge of the matter of examining proofs of the death of Robert Volk and the payment of said sum of $85,000 to said Noel State Bank, as trustee, previous to the time of paying said $85,000, did not consult with any member of the Rockwood Company, the Chicago representative of the Travelers Insurance Company.

The evidence further shows that said Rockwood Company had full knowledge and information with reference to the issuance of the first duplicate policy No. 610,745, bearing date of May 24, 1922, and that the first duplicate policy bearing date of May 24, 1922, was issued under the supervision of said Rockwood Company.

The evidence further shows that said Rockwood Company, was never informed by the Travelers Insurance Company as to the facts and circumstances under which the second duplicate policy bearing date of November 26, 1926, was issued.

Plaintiff’s theory of the ease is based upon the contentions that the Travelers Insurance Company was negligent, after the issuance of the first duplicate on May 24, 1922, in issuing the second duplicate on November 26, 1926; that the defendant was negligent in not investigating the surrounding circumstances ; that the assignment from the Mont Clare Lumber & Supply Company to Robert Volk was presumptively fraudulent; that John P. Immel obtained the first duplicate by way of a pledge from the Mont Clare Lumber & Supply Company and that no notice of his holding this duplicate policy was necessary to be given to the Travelers Insurance Company; that this first duplicate was the only subsisting policy, the second duplicate having been obtained by fraud, and that the payment by the Travelers to the Noel State Bank was payment to the wrong person; that the maxim “where one of two innocent parties must suffer he who made it possible for a fraud to be committed will be held liable” is applicable so as to hold the Travelers liable; and that plaintiff was not guilty of laches.

Defendant’s theory of the case is that it is not liable for the reasons that the provision of the policy in regard to assignment was not complied with; that it never had any knowledge or notice that John P. Immel, as trustee, claimed to be holding* the first duplicate ; that it had no knowledge of the trust deed of February 6, 1922, or of article 16 thereof; that even if it had had notice of the trust deed, article 16 which provided for indorsement on the policy to the trustee was never complied with; that the defendant never had any notice whatsoever, actual or constructive, of any interest of plaintiff in the contract of insurance; that no circumstances existed which would put the Travelers upon notice; that the assignment from Mont Clare Lumber & Supply Company to Robert Yolk was a valid assignment; that payment to the Noel State Bank was payment to the beneficiary under the policy and was not a payment to the wrong party; that the second duplicate was not obtained by fraud; that the maxim “where one of two innocent parties must suffer he who made it possible for a fraud to be committed will be held liable” is not applicable so as to hold the Travelers liable as the plaintiff did not prove, as he had alleged, that there was any fraud; and that the plaintiff was guilty of laches.

The abstract in this case contains a statement of facts and of law applicable thereto which was filed by the trial judge as his reasons for his decision and by authority of Rule 36 as contained in ch. 110, par. 259.36, subpar. (c) Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 105.36].

As was said in Hadley v. White, 367 Ill. 406, at page 409:

“We have long adhered to the rule that when a chancellor has heard the testimony- in open court, has had an opportunity to see the witnesses and listen to their testimony from the stand, we will not reverse his findings of fact unless we are able to say that they are palpably contrary to the weight of the testimony. (Cook v. Wolf, 296 Ill. 27; Moore v. Moore, 335 id. 517; Hall v. Pittenger, 365 id. 135.) ”

From a review of the entire record we are in accord with the finding of facts and the conclusions of the trial court. We think the evidence clearly shows a fraud was perpetrated by Volk upon the beneficial owners of these bonds and deprived them apparently of the security to which they are entitled. The transfer of the policy of insurance from the Mont Clare Lumber & Supply Company to Volk, who was its president, was a presumptive violation of a fiduciary relation existing between Volk and the company he controlled, and this action was of itself sufficient to put the Insurance Company on inquiry as to Volk’s right to make this transfer and also as to what was the consideration paid by the transferee Volk and who would be injured by such an unusual action on the part of Volk.

We are of the further opinion that this fraud was made possible through the carelessness of the company Avho issued the policies and said company should not now be permitted in equity to claim that they having wrongfully paid others, the same should be charged against plaintiffs. It is our opinion that the Insurance Company obligated itself by its policy of insurance to pay the money to Immel, the trustee, for whom it was intended and to whom it rightfully belonged. The issuing of the subsequent so-called duplicate policy was the Insurance Company’s responsibility and did not in any way affect the rights of plaintiff or preclude their recovery on the policy placed with plaintiff as security for the bond issue.

For the reasons herein given the decree of the circuit court is affirmed.

Decree affirmed.

Hebel, J., concurs, and Burke, J., takes no part.


text:
    Frank C. Hughes, Appellant, v. Ednyfed H. Williams, Administrator with Will Annexed of the Estate of Mary H. Hughes, Deceased, et al., Appellees.
    Gen. No. 40,347.

      Opinion filed April 26, 1939.
    Hubert E. Page, of Chicago, and Louis H. Joss, for appellant.
    Maurice S. Weinzelbaum, of Chicago, for appellee.
    Orville J. Taylor, of Chicago, for certain other appellee.
    Poppenhusen, Johnston, Thompson & Raymond, of Chicago, for certain other appellees; Floyd E. Thompson, Samuel W. Block and C. Lyman Emrich, Jr., all of Chicago, of counsel.
   Mr. Presiding Justice Denis E. Sullivan

delivered the opinion of the court.

Frank C. Hughes filed a complaint in the superior court to contest the will of his mother, Mary H. Hughes, deceased, and to compel an accounting by his brothers, Edmond A. Hughes, George A. Hughes, and William V. Hughes, and his sister, Helen Hughes Dulany, for property which he alleged belonged to his mother at the time of her death and should have been inventoried as part of the assets of her estate by the administrator.

One of the defendants, George A. Hughes, incorporated in his answer a motion to strike the complaint on the ground that it did not tender an issue which defendant should be required to answer and that it improperly joins a proceeding to contest the will of Mary H. Hughes, of which the superior court has jurisdiction, with a proceeding to set aside certain transactions alleged to have occurred outside the State of Illinois between Mary H. Hughes and Edmond A. Hughes some 20 years ago, and to require said Edmond A. Hughes to account for property alleged to have been obtained through said transactions and now held in trust for the estate of said Mary H. Hughes, over which said court has no jurisdiction. Edmond A. Hughes filed a special and limited appearance and motion to quash service by publication with respect to that separate cause of action alleged in the complaint which relates to transactions wholly unrelated to the execution and publication of the will of Mary H. Hughes. Edmond A. Hughes also filed an answer to that part of said complaint which alleges grounds of contest of the will of Mary H. Hughes and exceptions and motions to strike other parts of the complaint. William V. Hughes and Helen Hughes Dulany filed answers which substantially adopt the answer and motion to strike of George A. Hughes. The motion of Edmond A. Hughes to quash service was overruled and he filed his answer to the paragraphs relating to matters other than the contest of the will. The motions to strike were overruled.

The court entered an order separating for trial the causes of action alleged in the complaint and ordered that the single cause of action contesting* the will of Mary H. Hughes, deceased, be first tried. The proof received at the trial, the arguments of counsel, and the instructions of the court were limited to this single issue. No other issue was decided.

Being* dissatisfied with the rulings of the court in permitting the admission of certain evidence, the verdict of the jury finding the will in question was the last will and testament of Mary H. Hughes, deceased, and also being* dissatisfied with the judgment of the court sustaining* said verdict as well as the allowance of $300 as attorney’s fees to defendant, these points are brought before us for review.

It is contended by plaintiff that the deceased Mary H. Hughes, at the time she made her alleged will on October 7, 1930, was mentally incompetent to dispose of her property and that the will, as a result thereof,, was not her last will and testament and also that she was subjected to undue influence by the defendant Edmond A. Hughes.

It is further claimed that at the time the alleged will was made, the said Mary H. Hughes was a woman upwards of 80 years of age and that she had considerable wealth which amounted to over a million dollars, with its attendant difficulties, and that in the latter years of her life she maintained a household although she was in the care of nurses and unable to carry on the duties incident thereto.

Several doctors and nurses who had attended the deceased during* the latter part of her lifetime were produced as witnesses at the time of the trial and much of their testimony was in sharp conflict. Some of them in testifying relative to her competency stated that she did not have sufficient mental capacity to plan the disposition of her property. Other witnesses who apparently had an equal opportunity to know of her condition testified as to the brilliancy of her mind and her understanding* of everything* she did and that she was fully able and capable of providing* for the distribution of her property and that the will she made on October 7, 1930, was her last will and testament.

It is claimed that error was committed by the court in permitting George A. Hughes and Helen Hughes Richards to testify as they were disqualified by the provisions of section 2 of the Evidence Act [Ill. Rev. Stat. 1937, ch. 51, § 2; Jones Ill. Stats. Ann. 107.068].

We do not see any force to the claim that it was error to call George A. Hughes and Helen Hughes Richards as witnesses in support of the will. They were not named in the will and were not beneficiaries therein. They were not called as witnesses in their own behalf and inasmuch as they testified to uphold and support said will, we cannot see how they could be considered as interested parties testifying in their own behalf, as mentioned in the statute.

We do not think the evidence shows that these witnesses will gain or lose as a direct result of this suit. What might happen in the future is too speculative for the court to consider or pass upon, therefore, we must confine ourselves to the direct result of this suit in compliance with the terms of the statute as construed by the courts.

We do not think the record in this case shows any direct interest in the subject matter involved in this law suit which would disqualify these parties from testifying as witnesses. As was said in Brownlie v. Brownlie, 351 Ill. 72, at page 76: “The test of interest which determines the competency of a witness in a will contest is whether he will gain or lose as the direct result of the suit, and the interest must be certain, direct and immediate. (Wetzel v. Firebaugh, 251 Ill. 190). The interest that disqualifies a witness is the actual interest, and not his belief, understanding or feeling in regard to such interest. (Pyle v. Pyle, 158 Ill. 289).” See also Britt v. Darnell, 315 Ill. 385.

It is next contended by plaintiff that the evidence shows that Edmond A. Hughes controlled his mother’s actions to such an extent that he caused her to make the will in his favor. The evidence before us shows that the will was made at a bank and trust company, the will having been drawn up by an attorney for the trust company; that employees of the trust company and of the bank who were present and witnessed the will stated that Mary H. Hughes was a woman of mature years, but that she was in a normal state of mind; that she came there and the will was drawn and that all the preliminaries in accordance with the law were observed; that Edmond A. Hughes was not present and that the will was executed as her free and voluntary act and that there was no want of testamentary capacity exhibited at the time the will was executed.

The question of undue influence charged to a certain member or members of a family, where a will is contested, is not a new question in jurisprudence. Children are often charged with having influenced their parents to make a will in their favor and the courts have passed upon such charges many times. The mere fact that a child is living with a parent does not establish a fiduciary relationship and the influence which is charged must be shown to have existed and was directly operative at the time of the execution of the instrument.

A case somewhat similar to the one at bar is that of Cunningham v. Dorwart, 317 Ill. 451, wherein at page 452 it is stated:

“Proponent, George F. Dorwart, and his sister, the testatrix, had for thirty or more years prior to the time the will was made, conducted a grocery store in Jacksonville, Illinois, as equal partners. For a long time they lived in the upper story of the building* their grocery store was conducted in. When they began the business contestant was a young child and lived with his mother and her brother, who was a bachelor. When contestant grew to manhood he married and left the home of his mother. Testatrix and her brother from time to time purchased inexpensive property from the profits of their grocery business, and title was taken in the name of the brother and sister to all property so purchased. Their bank account was in their joint names and neither of them ever kept a separate bank account. About 1903 they sold their grocery store and purchased a residence in Jacksonville, to which they moved and where they resided at the time of testatrix’s death. Their partnership relations in owning and managing their properties, renting* them and collecting rents, continued as they had before they sold the grocery store. There ivas no great difference in their ages. Proponent was most active in the management of the business of renting and collecting rents and testatrix kept house. Sometimes, in the absence of proponent or when it was convenient, testatrix would collect rents. Their relations were always pleasant, and there is no evidence of any differences between them on account of property, or anything else. On the 14th of January, 1920, the brother and sister went together to the office of the attorney who had been advising them about their property and business for some years and told him they each wanted to make a will in favor of the other. Testatrix said she wanted to give her son $3000, to be paid him within a year after her death, and wanted to give the remainder of her estate to her brother. Proponent said he wanted to make a will giving* $3000 to brothers and sisters and the remainder of his estate he wanted to give to testatrix. After taking a memorandum of the names of persons to whom property was to be given, they left the attorney’s office and he afterwards prepared the two wills. The next day they returned to the attorney’s office and executed the wills. Neither was in the room where the other executed his or her will.

“The total value of the partnership property was approximately $60,000. The proof showed the testatrix was an intelligent woman, of sound mind and many years of business experience. The jury found she was of sound mind and disposing memory at the time she made the will, and this finding is not disputed by contestant.

“Appellant contends the evidence is wholly insufficient to justify setting aside the will on the ground of undue influence; that there was no evidence that proponent exercised any undue influence over testatrix at any time or that any such influence was operating at the time the will was made; that there is no evidence of coercion, restraint, duress, domination, or any wrongful act of proponent over testatrix during all the years they lived together and conducted their partnership business, down to the time of the death of testatrix. Appellant also contends the court erred in giving instructions for contestant and refusing instructions for proponent. Appellee contends that the evidence on the subject of undue influence supports the verdict and decree, and that no other question is to be considered in the decision of the case.

“We are of the opinion the evidence was not sufficient to warrant the verdict and decree and that they are contrary to the manifest weight of the testimony. The proof shows testatrix was a woman of intelligence and business experience. By the efforts and co-operation of herself and appellant they accumulated considerable property. They were many years in doing this. During all that time they worked in harmony, and, so far as the proof shows, their relations were amicable and there were no bickerings or disagreements. They consulted and advised with each other about investments. To all appearances they were considerate of and devoted to each other. Appellant was a bachelor and younger than testatrix. His hearing was defective, and when he was called to the telephone by persons wanting to talk to him about business matters, testatrix would answer the telephone and make an appointment for him to meet the party wanting to talk to him. Testatrix had pneumonia in 1917, and during the later years of her life her health was not good and she was not as strong as formerly. She and appellant spent four or five winters in the South. The arrangement for railroad tickets for these trips were usually made by testatrix, because, as she said, appellant could not hear well. She enjoyed these trips with appellant, and on her return would tell her friends where they had been and how they enjoyed the trip. There is an entire absence of testimony to indicate that testatrix was subject to the dominance and control of appellant

So, in the instant case, we cannot find any evidence which purports to show that at the time the will was executed Edmond A. Hughes influenced his mother in the disposition of her property. On the contrary, the evidence shows a normal, considerate, happy family and we cannot find anything which would indicate any desire on the part of one member of the family to overreach the others. As heretofore stated, the mere fact that a will is made by a parent in favor of a child, who at the time is living with that parent, raises no presumption that the will is the result of undue influence.

A reading of the will discloses that prior to the making of her will Mary II. Hughes had disposed of all her property to all her children and the will further recites that if Edmond A. Hughes is not living, at the time of her death, then the property so bequeathed should go to her remaining children share and share alike. We have been unable to find in this record the slightest indication that this mother intended to do otherwise than divide her property as she wished among her children and did not intend to discriminate against any of them. It must also be remembered that the property devised and bequeathed was the property of the decedent and she also had the right to give it to whom she wished.

As was said in the case of Huffman v. Graves, 245 Ill. 440, quoting from the syllabus:

“No presumption that a will made by a parent in favor of a child was procured by the child’s undue influence arises from the mere fact of their relationship, in the absence of evidence that a confidence was, in fact, reposed in the child; nor do the mere facts that the child procured the attendance of the attesting witnesses and had a disagreement with another child over the matter raise any such presumption. ’ ’

Although we have discussed the question of undue influence, we do not find such question was submitted to the jury. Instruction No. 11, although not marked “given,” is in a series which the abstract sets forth as given. A portion of that instruction reads as follows : “The only question in this case for you to decide is whether this instrument is the will of Mary H. Hughes and whether she, at the time of executing the same, was of disposing mind and memory and understood the particular business in which she was then engaged.” This instruction was apparently intended to and did eliminate the question of undue influence.

Complaint is made that the court erred in allowing $300 attorney’s fees, as costs for taking- the deposition of a witness, which deposition was not used. The deposition was taken in pursuance with Rule 19 of the Supreme Court. An examination of the record fails to disclose any report of the proceedings wherein this subject was considered by the court. The report of the proceedings fails to include a certificate of the trial judge that it contained all the evidence that was heard. Consequently, we must presume that sufficient evidence was heard to support the decision in this regard.

Other points are raised but we do not think they are in any sense controlling. As before stated, this is a case where some score of witnesses were heard and their testimony was about equally divided in favor of plaintiff and defendants. Many of the witnesses were doctors and nurses and much of their testimony was in direct opposition. This created a situation which was particularly one for a jury to determine they having seen the witnesses, observed their demeanor while upon the witness stand, were in a better position to judge as to their credibility and to decide wherein lies the preponderance of the evidence than is a court of review.

Having carefully reviewed the entire evidence, however, we are not prepared to say that the evidence does not preponderate in favor of the proponents of the will or that its weight is in favor of the contestants.

We think the evidence fully supports the verdict of the jury and for the reasons herein given the judgment of the superior court is hereby affirmed.

Judgment affirmed.

Hebel and Burke, JJ., concur.