text:
    Samuel B. Wechsler, Appellee, v. Jacob Gidwitz and Community State Bank, Appellants.
    Gen. No. 32,673.

      Opinion filed October 3, 1928.
    Gallagher, Shulman & Abrams, for appellants; Vincent G. Gallagher and Meter Abrams, of counsel.
    Rosenberg, Braude & Zimmerman, for appellee; H. J. Rosenberg, Irving Zimmerman and Abraham Miller, of counsel.
   Mr. Presiding Justice Holdom

delivered the opinion of the court.

Complainant filed his bill to set aside the award of a board of arbitrators, composed of the Hon. Harry Fisher, a judge of the circuit court of Cook county, Charles S. Smith and William E. Nichols. The submission was in writing between the complainant and the defendants. The defendants answered, in the main denying the material averments of the bill, and filed a cross-bill praying for a decree dismissing complainant’s bill for want of equity, confirming the award of the arbitrators and that the award be ordered carried out and enforced. Complainant answered the cross-bill.

Beplications were filed by the complainant to def end-ants ’ answer and defendants (cross-complainants) filed a replication to the answer of complainant to the cross-bill.

There was a reference to a master who heard all the proofs and reported thereon his findings to the court and recommended that a decree be entered dismissing complainant’s bill for want of equity, and granting to cross-complainants the relief prayed in their cross-bill. To the report of the master complainant interposed objections which were overruled by the master. Exceptions to the master’s report were filed before the chancellor, which exceptions were sustained and a decree entered granting to complainant the relief prayed by him in his bill. Defendants bring the record here foi review by appeal.

Defendants, cross-complainants, argue for reversal, aside from the formal assignments of error, principally, that the chancellor erred in not dismissing complainant’s bill for want of equity and granting the relief prayed for in the cross-bill; also in finding that there was an oral agreement between the parties that no lawyers should participate in-the hearing before the arbitrators; that it was error to admit the testimony of arbitrators Nichols and Smith in an attempt to impeach the award.

The agreement of submission to arbitration between the parties contained the following as to the disputed matters submitted:

“The said Samuel B. Wechsler has filed a declaration against the Community State Bank,, a corporation, and the said Community State Bank, a corporation, filed certain counter claims and other defenses against said claims in case # 376135, Superior Court of Cook County, and the said Community State Bank, a corporation has filed an action in the Municipal Court of Chicago, Case # 859003 against the said Samuel B. Weehsler, and has filed a statement of claim in said action in the said Municipal Court and the said Samuel B. Weehsler has filed certain counter claims and other defenses in said action, and the said Samuel B. Wechsler having filed a declaration against Jacob Gidwitz in Case # 373315, Superior Court of Cook County, and the said Jacob Gidwitz having filed certain counter claims and other defenses against said claim, of the said Samuel B. Weehsler, and

“Whereas, certain other claims, demands and controversies and disputes exist between the said parties with reference to certain transactions heretofore had between them which said claims, demands, controversies and disputes are for moneys claimed to be due each from the other, and for other personal property with reference to certain-agreements, representations and obligations from and to each other.”

The submission clause makes it a statutory arbitration by direct reference to the statute and is in the following terms:

“It Is Further Agreed that the Award of said Arbitrators or the majority of them shall be binding and conclusive upon all the parties hereto; that the instrument of Submission to Arbitration and Award may be filed in the Superior Court of Cook County and shall be deemed to be a filing with the written consent of the parties to this submission; that Court shall thereupon take jurisdiction of the parties and subject matter of this submission without written pleadings; that a judgment or successive judgments of said Court shall be rendered upon any award or awards made pursuant to this submission, and that the judgment of said Court shall be final and that no appeal or writ of error will be prosecuted by each or either of said parties.”

Furthermore, in a subsequent clause the following appears: “Said arbitrator shall conduct proceedings in all things pursuant to the Arbitrations and Awards Act of the State of Illinois.” There is also a provision that the agreement and the award of the arbitrators, or a majority of them, may be filed in the superior court of Cook county, which court shall take jurisdiction of the parties and the cause- without written pleadings; that- a judgment or judgments of the court shall be rendered upon any award made pursuant to the submission, and that the judgment of the court shall be final, and no appeal or writ of error sued out therefrom.

It appears without contradiction that Nichols was selected by complainant as his arbitrator, and that Smith was selected by the defendants as their arbitrator,- that Judge Fisher was selected by Nichols and Smith as the third arbitrator or umpire. The evidence clearly demonstrates that Nichols and Smith were partisans for the respective persons who chose them, as above set out, and that Judge Fisher was the only impartial arbitrator who brought to the discharge of his duties an open and impartial mind and discharged the functions of his office with the utmost diligence and fairness, seeking for the right under the evidence heard and applying the law thereto as an ethical minded judge should do, and that he reached his conclusions after painstaking consideration of all thé evidence submitted, applying to such evidence correct legal principles.

The submission agreement is the contract of the parties solemnly entered into in writing and it cannot in any manner be varied by any parol agreements made either prior or subsequent to the execution and delivery of the written submission. By its terms the rights of the parties must be adjudged, without any reference to claimed contemporaneous verbal understandings. Such are in law merged in the executed contract. Clark v. Courier, 280 Ill. 590, and Podolsky v. Raskin, 294 Ill. 443, are decisive on this point, which limits the arbitrators in their decision to the particular matters submitted in the writing. Again the rule is correctly stated in Schmidt v. Glade, 126 Ill. 485, where the court said:

“Where the arbitrators recite in their award that they disposed of a matter, entrusted to their consideration, in the manner required by the agreement for submission, it cannot be shown by parol evidence, that they disposed of such matter in another and different manner.”

The master correctly held that no oral testimony of the arbitrators was receivable to impeach the award, although their evidence would be admissible to sustain it. The chancellor, in overruling this conclusion of the master, committed reversible error. What the court said in Stone v. Baldwin, 226 Ill. 338, hereinafter recited, is equally applicable to the instant situation:

“This testimony does not furnish legal basis for an attack upon the finding, as the testimony of an arbitrator showing that he alone has been guilty of misconduct will not be received to impeach an award. (Claycomb v. Butler, 36 Ill. 100; Seaton v. Kendall, 171 id. 410.)”

As there was no provision in the agreement of submission that none of the parties should be represented by counsel, it would have been proper if either of the parties desired so to be represented at the hearings. They had that right. In Stone v. Baldwin, supra, it was held either party had a right to be represented by counsel before the arbitrators.

It is the law that the award of arbitrators may be impeached for fraud. However, there is no evidence in this record of any fraud inherent in any proceedings before the arbitrators.

Complainant was so far discredited that the master was justified in disbelieving his testimony wherever it was met by contradiction in the evidence of other credible witnesses. The testimony of Judge Fisher sustains the award of the arbitrators in every essential particular. While Nichols refused to sign the award, he agreed to it, so that as a matter of fact the award met with the unanimous concurrence of all three of the arbitrators. Judge Fisher in his evidence fully and explicitly explains every challenged occurrence which in every substantial way is confirmed by the record.

In answer to the contention that the claimed misconduct of Smith as arbitrator is sufficient to impeach the award, we say that there is no misconduct proven against Smith, which in the slightest degree tends to impeach the award. If such contention was ever available to complainant, the point comes too late to be availed of by him for the reason that he admits he knew of Smith’s bias before the rendition of the award and so knowing did not make any complaint or raise any objection thereto until after the rendition of the award. Such objection comes too late to be availed of. As said in Seaton v. Kendall, 61 Ill. App. 289:

“It is manifest that appellant, being well aware of the conversation between the arbitrator and appellee, instead of revoking the submission as he then might, went on to a final hearing and finding by the arbitrators.
“We think that he cannot be permitted thus to experiment with the tribunal he had agreed in creating, to occupy the position that he would rest content with its judgment if in his favor, while he held in reserve a complaint he would make if he was not satisfied with the decision. His silence, after he became aware of what he now terms improper conduct, must be regarded as a waiver of such impropriety. Stampfoski v. Steffens, 79 Ill. 303.”

This opinion of the Appellate Court was affirmed in 171 Ill. 410.

If a party to an arbitration, upon trial, is cognizant of any irregularity in the conduct of one of the arbitrators and does not avail himself of the first opportunity to advise the arbitrators of such irregularity, the right to make it a ground of complaint must be held to be waived. Joseph Schlitz Brewing Co. v. Compton, 46 Ill. App. 34.

Max Schulman and Bernard Schulman were admittedly lawyers. Max Schulman was president of the defendant Community State Bank and appeared for the bank. The bank being a corporation must necessarily be in court by its president, or some other officer or agent. It was a party to the litigation and being an artificial person must appear by its officer or some agent. Bernard Schulman appeared at the request of the' arbitrators. This he had a right to do. No impropriety can be deduced from the participation of either of the Schulmans in the hearing before the arbitrators.

The master both heard and saw the witnesses, privileges denied the chancellor, and therefrom was the better enabled to judge of the credibility of the several witnesses than the chancellor or this court. The decision of the master under these circumstances would be disturbed with reluctance and not at all unless we are able to say that the master’s findings of fact are manifestly contrary to the probative force of the proofs found in the record. This we are unable to do after a careful examination of all the proofs. The findings of the master on controverted questions of fact are entitled to the same consideration as accorded to the verdict of a jury. Story v. De Armond, 179 Ill. 510.

In Hickey v. Barrett, 212 Ill. App. 86, this court promulgated such doctrine in the following words: “The master * * * saw the witnesses and heard them testify and the findings of facts made by him is entitled to consideration. Keuper v. Mette’s Unknown Heirs, 239 Ill. 586; Clos v. Larson, 138 Ill. App. 412.” And in Chicago Title & Trust Co. v. Central Trust Co. of Illinois, 312 Ill. 396, it was written “that the findings of fact by the master are conclusive in such a case unless a clear mistake or fraud is shown. ’ ’

It is the opinion of this court that the master was right in his conclusions of fact and law, and in his recommendations to the chancellor as to the decree properly to be entered, and that the chancellor erred in disagreeing with and in not following the master’s recommendations and in entering a decree contrary to the master’s report. For these reasons the decree of the circuit court is reversed and the cause is remanded to the circuit court with directions to dismiss the bill of complainant for Want of equity and to enter a decree granting defendants the relief prayed in their cross-bill, as recommended in the master’s report.

Decree reversed and cause remanded with directions.

Wilson and Taylor, JJ., concur.


source: Caselaw Access Project

author: Mr. Justice Taylor

license: Public Domain

text:
    State Bank of West Pullman, Appellee, v. Gregory H. Hovnanian, Appellant.
    Gen. No. 32,435.

      Opinion filed October 3, 1928.
    John T. Richards, for appellant.
    Kirkland, Fleming, Green & Martin, for appellee; Weymouth Kirkland, Joseph B. Fleming and Jay Fred Reeve, of counsel.
   Mr. Justice Taylor

delivered the opinion of the court.

On January 28, 1926, the State Bank of Pullman, as plaintiff, brought suit in assumpsit against Gregory H. Hovnanian in the circuit court to recover the amount of principal and interest claimed to be due from the defendant to the plaintiff on a promissory note, payable on demand, for the principal sum of $3,200. A declaration, containing the consolidated common counts and a count in the usual form on the note in question, payable to the order of the bank, was filed by the plaintiff. The defendant filed five pleas.: One of the general issue, one alleging want of consideration, one alleging that the note was made for the accommodation of the bank, one alleging that the note was made and delivered to the plaintiff on condition that it should not be a lawful obligation unless or until the note or the proceeds thereof should be required by plaintiff for use in payment of the depositors of the plaintiff bank in the event of a run on the bank, and that when plaintiff bank should become able to meet the demands of its depositors the note should be returned to the defendant without payment, one alleging that the note was given into the possession of the plaintiff by defendant upon and in consideration of the promise and agreement of the plaintiff with the defendant that defendant would not' be required to pay the same unless, by reason of a run on plaintiff’s bank, it should become necessary to require payment thereof in order to enable plaintiff to pay its depositors and that when the emergency passed without a run on the bank that the note should be returned to the defendant without payment of any part thereof; that the emergency has passed and that no run occurred after said note was delivered into the possession of the plaintiff.

A trial was had, before the court with a jury, and a verdict rendered on October 1, 1927, in favor of the plaintiff in the sum of $3,670. On October 8, 1927, judgment was entered in accord with the verdict. This is an appeal by the defendant therefrom.

1. The evidence shows substantially the following: In the fall of 1921, the defendant was a director and vice president of the plaintiff, the State Bank of West Pullman (hereinafter called the Bank).. A former cashier of the Bank, one Olson, had permitted, and, temporarily concealed from the knowledge of the directors, an overdraft by a depositor in the sum of, approximately, $55,000, for which the depositor, after making the overdraft, gave the Bank, approximately, $45,000 in amount, of uncollectible and worthless paper. The effect of the overdraft was an impairment of the capital stock to that extent. Shortly after that, one Tholen, in April, 1921, was made cashier in place of Olson. Tholen testified that he first found out about the $45,000- of worthless notes, and, accordingly, told the defendant about them. Owing, also, to the fact that there had been recent heavy withdrawals by some foreigners who drew their money to send to the old country, the Bank’s affairs did not look well.

Tholen testified that the defendant was concerned about the matter and asked him if an interview with the bank examiner could be arranged so that certain notes that were doubtful, and, also, the $45,000 of fictitious notes, could be sold.

Counsel for the defendant in his brief states that “A short time previous to this a run on the bank had been impending.” The defendant requested Tholen to arrange an appointment for him with the bank examiner. At that time the latter had made no complaint. A conference was held at the office of the bank examiner, Savage, at which all the directors and Tholen were present. At that conference Savage — who was State auditor of public accounts — told them that in case of a run on the Bank, it would not be able to meet the demands of its depositors and that they should do something for the protection of the depositors. Tholen testified that Savage called the attention of the directors to the notes in question and said he wanted them removed from the assets of the bank, and the question arose as to how they could be removed; that one of the directors — he thought it was the defendant — made the proposal that they, the directors give their individual notes for the notes in question; that Savage said that would be satisfactory to him, provided they would furnish him with a statement that their individual responsibility was satisfactory; that it would then be satisfactory to have the directors’ notes put in place of the notes in question; that then the question was asked as to how the directors were to recover those notes when the Bank was in a position to reimburse the directors for the amount of the notes; that Savage said that was not a question for the State department to answer, that it was entirely one for the directors .themselves; that if at some time in the near future the earnings of the Bank were sufficient to reimburse the directors, the State department had no objection to offer to that; that it was stated at the meeting that the purpose of the notes was to make good an impairment of the capital stock, which impairment was apparent at the time, and that no definite time was stated in which the notes were to be returned.

It is the evidence of Savage, “Examiner in Charge,” that there was a conference at his office about December 31, 1921; that those present, who were directors, were unanimous in the opinion that an assessment of capital stock on the stockholders would probably cause dissatisfaction and precipitate a run on the Bank; that it then became a matter of putting in cash or acceptable securities in place of those that were worthless; that it was agreed that the notes (the ones to be put in by the directors) were to be drawn up at the Bank, and the auditor’s office notified when they were put into the assets of the Bank, and the worthless assets removed; that the only knowledge he had as to whether or not the notes were carried as assets of the Bank was acquired through subsequent examiners’ reports and the statement of the cashier that they were there, and put into the assets of the Bank and the worthless assets removed; that he made no “deal” of any kind with the directors about their taking out their notes; that he could not have done so and carried out the purpose of putting them in; that it was stated at the meeting that the purpose of the notes was not merely to give the Bank the appearance of a solid front, but bring it about in reality; that there was something said about the final disposition of the notes, and whether the makers would ever be reimbursed for putting them in; that he told them that that could not be, but that the stockholders, subsequently, if they wanted to, and they only, could reimburse them out of the assets of the Bank; that the directors themselves could not do it. He testified that putting in the notes of the men composing the directorate prevented a run on the Bank and prevented an assessment. Pursuant to the understanding reached among themselves by the persons constituting the directors of the Bank, demand notes were made out and executed and delivered by each of them (except Tholen) to the Bank. Each note was for such a part of the $45,000 as the ratio between each director’s amount of capital stock and the whole (exclusive of Tholen). They were demand notes, and when later it was discovered by the bank examiner that they did not draw interest, new notes, drawing interest, were made out, signed and delivered to the Bank. The original note of the defendant was for $3,000. Subsequently, another note for $3,200 was put in its place, a mistake having been made in the computation of some one or more of the original notes. (The note sued upon and which was offered in evidence, does not appear in the Abstract of Record as an exhibit.) According to the testimony of Fiddelke, cashier of the Bank, the note sued upon was a renewal note, being the third that was given.

It is the evidence of Cockrell, of the Continental and Commercial National Bank, who had charge of the Bank and said he was as familiar with the Bank’s present financial condition as anyone could be, and who was called by the defendant, that he could not state its condition at the time (when he was testifying) in a few words, there were too many worthless assets still undetermined ; that he had occasion to examine the affairs of the Bank and it was not in a sound financial condition as he would term it as a banker; that the last statement to the State auditor showed a capital stock of $200,000, surplus of $40,000, and undivided profits of $10,000 to $15,000; that on the other side of the ledger these notes are shown that are being here contested, in the sum of $30,000, which if not good, would have to be taken out of the above figures as to capital, surplus and undivided profits; that the Bank is merely in a progressive state.

Besides Cockrell and Tholen, called for the defendant, there was called on his behalf, Murphy and Sykes, two of the Bank’s directors, and he, the defendant, testified himself. The evidence of Murphy is that he was present at the meeting with Savage; that they concluded that they, the directors would put in their individual notes in an amount to satisfy the State auditor’s office, so that in the event of a run on the Bank the depositors would be protected; that there was nothing said about whether they should or should not be paid; that that was subsequently submitted to Savage, and something was said in relation to the notes being returned to the directors; that Savage said that was not a matter for the State department, that it was a matter to be decided among the directors; that after that, an informal or special meeting was called and the notes were drawn up and signed; that no minutes were kept of the meeting. On cross-examination, he testified that nothing was said about the notes being carried as assets of the Bank at the time they were given. The evidence of Sykes describes the conference with Savage. He testified that the question came up as to how the notes were to be returned in the event that there was or was not a run on the Bank; that Savage said he had no jurisdiction over that, as it was a matter to be decided among the directors; that when the Bank was on its feet the banking department was not interested in that matter. He further testified that Tholen and the directors said that the notes were simply to be placed in the Bank on a guarantee to the depositors, as an additional asset, and when the protection became unnecessary, and was not needed, the notes were to be returned. Whether the State auditor considered the notes still necessary, he stated that he did not know. In his opinion the Bank was, at the time of the trial, sound. On cross-examination, he testified that the purpose ' of putting up the notes was to put them in the assets and carry them as assets of the Bank; that at the conference the main part of the discussion was the protection of the depositors, and the fear that there might be a run on the Bank; that it was his and the directors’ understanding that the notes when put in were to be shown in the financial statements of the bank examiner, and so be shown to other banks, the public, to creditors, stockholders, and everybody, as assets of the Bank; that he knows of nothing in the minutes, or in writing, letter or otherwise, that shows that there was any qualification or condition to the notes.

The evidence of the defendant as to the conference is that he told Savage, at the conference, in the presence of the other directors, that he would be willing to give his note for his share of the loss “for the protection of the depositors in case of a run on the Bank, with the understanding that I will not be obliged to pay the note unless there is a run on the bank and the bank needs that money to pay the depositors, and, also, as soon as the bank can do without my note, it should be returned to me ’ ’; that after some further talk the other directors said they would do the same; that Savage said his department could make no agreement as to drawing their notes out, that they could put their notes in and whatever agreement they made among themselves would' be satisfactory to the department; that after that, about two or three weeks, they agreed among themselves that they would put up their notes for $45,000 for the protection of the depositors in case of a run on the Bank, and the Bank needed the money to pay the depositors, and that their notes would be returned to them as soon as the Bank could do without the notes; that the agreement was made between them and Tholen, the cashier; that Tholen was acting for the Bank; that at the meeting on December 31, 1923, there were present, besides himself, Cole (the president) and Sykes, Murphy, Lewis and Tholen;' that Tholen acted as secretary, but no minutes were kept; that the notes were made out by Tholen; that his, the defendant’s, was for $3,000; that five or six months later, as the original notes were not made to draw interest, at the request of the bank examiner, who said the notes must be kept good and collectible, new notes were made out because the first ones did not provide for interest; that again another change was made because of an erroneous computation as to the note of one of the directors and his, the defendant’s, note was finally made out for $3,200; that when made into a $3,200 note, it was changed to a collateral note; that he asked Tholen what that meant, and he said, “This is simply for my convenience in bookkeeping, but has nothing to do with you”; that he, the defendant, never saw the collateral mentioned in the note; that he saw the phrase, “Various notes as per list attached” in the note when he signed it; that the notes as per list attached were not taken out and turned over to the directors ; that Tholen acted as secretary of the meeting and kept the minutes, but nothing was put in'the minute book concerning the transaction because they were afraid it might leak out; that none of the $45,000 of worthless notes were delivered to him; that he had a personal account with the Bank on December 31, 1921, when his original $3,000 note was given, but did not know anything about whether his account was credited with the sum of $3,000 being the proceeds of that note; that he did not deposit $3,000 in that account that he remembered, and when shown a sheet from the bank ledger purporting to show his account with the Bank, he stated in relation to an item of $3,000 under date of December 31t 1921, showing a deposit of that amount on one side and debit of that amount on the other on the same day, that those transactions did not change the balance at all; that he did not remember anything about any such transaction; that they were not to take the place of or replace the $45,000 of worthless notes; that he did not know that the worthless notes were supposed to be taken out of the assets of the Bank; that their notes were not put in place of them; that when he signed his note, he saw the phrase, “Various notes as per list attached”; that those notes were not taken out and turned over to the directors; that he did not see any notes, or a list of such, attached, and when he asked Tholen, the cashier, what that meant, he said it was for his own convenience in bookkeeping; that on the renewal note of December 3, 1923, the one here sued on, he has paid interest for February, March and April, 1924; that at the time he gave his nbte he owned 20 shares of bank stock, but has since sold it. •

The evidence further discloses that some time after the spring of 1922, pursuant to a statement of the State auditor, a certain list of notes in the Bank amounting to $40,000, was in his judgment worthless and that he wanted them taken out; that the directors, accordingly, put in $40,000 in cash and took over the notes.

Later, in 1923, there was another transaction pertaining to $146,757.84 of objectionable paper which the auditor required the Bank to get rid of. In that case a syndicate was formed, and certain of the directors purchased from the Bank the $146,757.84 of securities, and paid into the Bank therefor the sum of $125,000. The members of the syndicate entered into a written trust agreement dated May 11, 1923. The parties to that agreement were the Bank, three trustees, and certain directors and stockholders. The syndicate agreement was offered in evidence by the plaintiff, but was ruled out by the learned trial judge; although it showed on its face that one of the notes taken out as bad was that of one Cole for $13,000, which had been given by him at the time the defendant gave his note as part of the $45,000. The evidence shows that, at the time of the trial, for the benefit of the subscribers, 30 to 40 per cent of the $146,757.84 had been collected.

As to the condition of the Bank at the time of the trial, Sykes, a director, stated that its financial standing was good, its condition sound. Cockrell testified that he was familiar with the then financial condition of the Bank; that it had too many worthless assets, which were still undetermined; that there were too many contingencies to permit him to state its. condition in a few words; that he had occasion to examine its affairs and that it was not in his judgment as a banker in a sound financial condition; that the last statement to the State auditor showed a capital stock of $200,000, a surplus of $40,000, and undivided profits of $10,000 to $15,000; that that statement showed on the other side of the ledger these notes now being contested in the sum of $30,000, and if they are not good they would have to be taken out of the above figures of capital stock, surplus and undivided profits; that he told the attorney for the defendant that he considered the Bank insolvent when he took hold of it; that if he is permitted to continue his services long enough he thought it would become an A1 institution; that it is in a progressive state.

2. It is claimed for the defendant that (a) as between the Bank and the defendant there was no consideration for his note; (b) that it was given for the accommodation of the Bank; (c) that evidence of the condition upon which the note was delivered was admissible ; (d) that the agreement between the directors and the cashier of the Bank was valid and binding on the Bank; (e) that it was shown by uncontradicted evidence that the note sued upon was delivered upon conditions which were not satisfied.

(a and b) As to consideration and accommodation. In the view we take of the case, no such questions properly arise. The Bank did not request accommodation. It was static in the matter. The directors, not as directors, bnt as individuals, voluntarily, for reasons and interests of their own, put into the assets of the Bank, to become part of the liquid assets of the Bank, that is without conditions, either precedent or subsequent, their personal demand notes, on which interest at once began to accrue.

The Bank did not borrow temporary, qualified credit. The Bank received, to comply with the law as involved in the rigid requirements of the bank examiner, liquid assets in the form of complete unconditional property rights. It was given certain notes by certain individuals which on their face evidenced without qualification promises to pay certain sums, with interest, on demand. Appropriate entries were then made in the books of the Bank showing that it owned those notes and that they, without condition, constituted part of its assets. As far as the Bank was concerned, it was in the nature of a gift, save that the individual makers of the notes took over, as Tholen’s testimony and the bookkeeping showed, the worthless paper that had caused the trouble. When the defendant was shown a sheet from the ledger of the Bank, purporting to show his account, he stated in relation to an item of $3,000 under date of December 31,1921, the date of his original note, which showed a deposit of that amount on one side and a debit of that amount on the other on the same day, that those transactions did not change the balance at all, and that he did not remember anything about any such transaction. Tholen testified that the defendant’s account was credited with $3,000, and a check for $3,000 was drawn against it, which the defendant signed, and that it was thus wiped out; that one entry offsets the other; that he drew up the check and had the defendant sign it; that the whole affair was a form of bookkeeping and was not a cash transaction. That evidence tends strongly to show that the Bank got the note outright as his unqualified! obligation, as on its face it states, and was such as to creditors, prospective depositors, the State banking authorities, and the Bank itself. Such being the facts, no question, as we have said, as to consideration or accommodation arises. But even if such a question did arise, in our opinion the evidence does not show that the Bank made any promise to receive the notes subject to any resolution of any kind by the Bank. The evidence of Tholen justifies the conclusion that by no legal act did the Bank authorize the receipt of the defendant’s note with a condition attached.

The defendant knew that he could not put his note in with a condition attached. He admits the bank examiner told him so. It is true the bank examiner told him that among themselves, meaning, necessarily as individuals, that they could agree as they liked, but not with the Bank. They may have agreed among them-, selves as individuals that they would put in their notes with certain conditions attached, but that would not bind the Bank, which was not a party to it. This is a suit at law and not in equity, and they certainly have no defense, to a suit by the Bank, on the ground of want of consideration, or that they were accommodation notes.

It may be said, further, on the subject of consideration, that even if one were necessary, we think that bringing about the solvency of the Bank and the consequent expected “release from liability from an assessment on his stock was a valid consideration.” Liberty Trust Co. v. Price, 259 Mass. 596, 156 N. E. 749; Farmers’ Equity Co-Op. Ass’n of Dresden v. Tice, 122 Kan. 127, 251 Pac. 421; Queensboro Nat. Bank of City of New York v. Kelly, 220 App. Div. 515, 221 N. Y. Supp. 703. In the latter case the court said: president of the bank, had in its success or continuance in business was in and of itself a sufficient consideration for the giving of his note for a one-twenty-first proportion of the total of the bank’s impaired assets. It is apparent from the defendant’s testimony that the ruling of the federal bank examiner was that these ‘doubtful assets’ or ‘losses’ could not be carried as bank assets. Moreover, the testimony expressly shows that these directors ‘would take up the losses, with the distinct understanding that they would be reimbursed either from one or two sources; that is, liquidation of the bad accounts or from other resources of the bank or earnings as they came in.’ It was the clear intention of all of the makers that their notes were to be looked upon by the bank’s depositors as well as the public as live and liquid funds, and that these note makers were to be regarded as creditors of the bank out of specific sources, namely, when the ‘bad accounts ’ were, liquidated or the resources or earnings of the bank would permit of reimbursement. The notes were not only-good but were based upon a fair legal consideration.

“The contention that this note was without consideration cannot prevail. The vital interest which this appellant, as principal stockholder, director and

“Moreover, I think that, under well-settled authority, this arrangement of the directors, assuming it to have been made and further assuming it to be entitled to the dignity of being called as agreement, was illegal.” Whiteman v. Bishop, — Tex. Civ. App. —, 289 S. W. 730; First Nat. Bank v. Henry (Kan. App.), 202 S. W. 281.

In our judgment, Higgins v. Ridgway, 90 Hun. 398, 35 N. Y. Supp. 944; Garfield Nat. Bank v. Colwell, 57 Hun (N. Y.) 169; Straus v. Citizens State Bank of Elmhurst, 164 Ill. App. 420, and Ruvenacht v. German-American Bank of Gridley, Illinois, 212 Ill. App. 68, are quite distinguishable from the instant case.

(c) Was evidence admissible that the note was given on condition? Section 16 of the Negotiable Instruments Law, Cahill’s St. eh. 98, ¶ 36, provides as follows :

“As between immediate parties, * * * the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the instrument. ’ ’

The evidence pertaining to delivery, succinctly stated, is as follows:

The note was, on its face, an unqualified promise to pay on demand; interest began to accrue on it at once and interest was paid on it from time to time; it was shown in the Bank’s statements as an asset; it was put in to remedy the impairment of the capital stock; it was put in to avoid an assessment on the capital stock; it and the other notes were put into the assets of the Bank and worthless assets removed; Tholen, the cashier, testified that at the meeting with Savage when the question arose as to how the worthless notes were to be taken out of the assets of the Bank, that the defendant proposed that they, the directors,- give their individual notes for the notes in question;.that Savage said that it would be satisfactory to put their notes in place of the worthless ones, provided they would give him a satisfactory- statement of their individual responsibility; the ledger of the Bank showed in the defendant’s private account with the Bank, that at the time he executed and delivered the original note his account was credited with $3,000, and contemporaneously a check for $3,000 was drawn and signed by him, which wiped out the credit of $3,000, one entry offsetting the other; Tholen, the cashier, opened a directors ’ account on the books of the Bank and credited that account with the $45,000 of objectionable paper; the defendant’s and the other directors’ notes were collateral in form, with a collateral clause referring to various notes as per list attached’ ’;'«Tholen testified that when the bank examiner called his attention to the fact that the notes did not bear interest, he, Tholen, told the directors to include it; that the reason he did was because a note that does not bear interest is not a liquid asset; and in 1923 the $13,000 note of Cole, which had a similar history as the note of the defendant was taken out of the Bank as bad, the other notes of the directors being allowed to remain as good assets of the Bank.

In our judgment, with the evidence as it is, the only claim that the defendant can plausibly make is that there was a manual delivery of the notes to the Bank, with an understanding among the directors as individuals, and an intention on their part that they, their individual notes, should then at once become binding-obligations on them, the makers, to the Bank, and that it was contemporaneously understood and orally agreed among them as individuals at that time that if at some future time, not specifically designated, the Bank did not need them to maintain its solvency, they should be returned; and in our judgment, it is the law, as claimed by counsel for the Bank, that all evidence as to the oral condition alleged to have been agreed upon among the directors as individuals was inadmissible.

The claim of the defendant is that the note qua note never became binding, enforceable obligation which could be collected by suit, and that the evidence introduced was to that effect. In our opinion, however, the delivery of the note was consummated and intended to be not only manually, but as immediate legal evidence of a present obligation; and any oral agreement or agreement that its payment — it was payable on demand and drew interest — was to depend on whether at some uncertain times in the future there was a run on the Bank and the Bank needed the proceeds of the note to pay its depositors, being an effort merely to affect the question of when if at all it should be paid, was inadmissible. Wigmore on Evidence (2nd Ed.), vol. 5, §§2410, 2444; Handley v. Drum, 237 Ill. App. 587. Counsel for the defendant, referring to the defendant’s note, says, “It had some immediate effect as security but not as an effective instrument. ’ ’ With that limitation we cannot agree; the evidence is overwhelmingly to the contrary.

(d) As to the alleged agreement being binding on the Bank. We are of the opinion that it was not. As we have stated above, no legal act of the Bank is shown which hound it to any such conditions.

(e) In view of what we have already said, it makés no difference whether the Bank, since the receipt of the notes, has needed them for the benefit of its depositors and to maintain its solvency.

- (f) As to errors in instructions. We find none of any substantial import.

Considering what the record discloses: that the trial court permitted all the evidence to go to the jury; that no error was committed which was prejudicial to the defendant; that the" jury was instructed to the obvious advantage of the defendant; that the jury found for the plaintiff, we are not justified in overriding the verdict or in reversing the judgment. For the reasons stated the judgment is affirmed.

Affirmed.

Holdom, P, J,, and Wilson, J., concur.


text:
    The C. J. DeWit Company, Appellee, v. Central Lime and Cement Company, Appellant.
    Gen. No. 32,442.
    Opinion filed October 3, 1928.
    Joseph H. Hinshaw, for appellant.
    George D. Anthony and Goodnow, Allaben & Snewind, for appellee; Max F. Allaben, of counsel.
   Mr. Justice Taylor

delivered the opinion of the court.

This is an appeal by the Central Lime and Cement Company, the defendant, from a judgment of .the superior court in favor of The C. J. DeWit Company, the plaintiff, and against the defendant, for $1,650, entered upon a verdict of a jury in an action on the case brought by the plaintiff against the defendant on account of the death of Nuncio DeCinto, an employee of the plaintiff, caused by the negligence of an employee of the defendant whereby the plaintiff, on account of its liability under the Workmen’s Compensation Act, Cahill’s St. ch. 48, f 201 et seq. (both plaintiff and defendant being subject to that act), became liable to pay, and did pay the sum of $1,650 to the dependents of Nuncio DeCinto.

The declaration contained five counts, all of which were dismissed except the first. It was .therein alleged that both parties were under the Workmen’s Compensation Act; that DeCinto (the deceased), an employee of the plaintiff, while in the exercise of due care, was killed through the negligence of the defendant; that the plaintiff was compelled to pay $1,650 because of DeCinto’s death; and that the plaintiff was subrogated to the rights of DeCinto, deceased, against the defendant, under section 29 of the Workmen’s Compensation Act, Cahill’s St. ch. 48, jf 229. The declaration was not-verified. The defendant pleaded only the general issue.

The evidence showed that on the afternoon of. July 15, 1925, DeCinto, while employed as a building laborer by the plaintiff, and while working in an alley between Forty-Sixth and Forty-Seventh' ..Streets, in Chicago, was run into and killed through the negligence of a driver of a truck belonging to the defendant.

No claim is made here that the finding of the jury that the defendant was guilty of negligence was erroneous ; nor is any claim made that DeCinto, as an employee -of the plaintiff, and the defendant were not on the day in question working under the provisions of the Workmen’s Compensation Act.

In the course of the trial the defendant offered to prove that the plaintiff had a policy of insurance issued by the London Guarantee and Accident Company, Limited, by which the latter company agreed to pay to the plaintiff any amount it, the plaintiff, was called upon to pay under the Workmen’s Compensation Act by reason of injury to any one of its employees; and also offered to prove that the insurance company certified to the Industrial Commission of Illinois that the plaintiff was insured by it, the insurance company, in accordance with the Workmen’s Compensation Act. It was urged for their admission that they showed that the insurance company was subrogated to all the rights of the plaintiff, and that the.insurance company should have brought suit in its own name. The learned trial judge, however, rejected the proffered evidence on the ground that it was immaterial.

It was admitted by both sides, in the absence of the jury, that the insurance was paid by the insurance company to the plaintiff.

It is contended for the defendant that the suit should have been brought in the name of the insurance company, or in the name of the assured for the use of the insurance company. On the other hand, it is urged by the plaintiff that where an employee who is subject to the Workmen’s Compensation Act is killed through the negligence of an employee of a third party, who is also subject to the terms of the Workmen’s Compensation Act, and compensation is paid- by the employer, the employer may bring a suit in his own name, and, further, that no pleading oath is required supporting the declaration.

Cahill’s St. eh. 48, jf229, provides as follows:

“Where an injury or death for which compensation is payable by the employer under this Act, was not proximately caused by the negligence of the employer or his employees, and was caused under circumstances creating a legal liability for damages in some person other than the employer to pay damages, such other person having also elected to be bound by this Act, or being bound thereby under section three (3) of this Act, then the right of the employee or personal representative to recover against such other person shall be subrogated to his employer and such employer may bring legal proceedings against such other person to recover the damages sustained in an amount not exceeding the aggregate amount of compensation payable under this Act, by reason of the injury or death of such employee. ’ ’

It is provided by section 18 of Chapter 110, Cahill’s St. ch. 110, ¶ 18, that

“Any proceeding or suit at law or in equity hereafter brought under or by virtue of the subrogation' provision or provisions of any contract or under or by any subrogation by operation of law shall be brought either in the name of, or for the use of the subrogee: Provided the subrogee shall in his pleading oath, or by his affidavit, where pleading is not required, allege that he is the actual bona fide subrogee and set forth how and when he became the subrogee. ’ ’

This suit was brought under paragraph 229, supra, and, in our judgment, properly so. It was not brought, and it was not necessary that it should be brought, by virtue of any “subrogation provision,” and so section 18, supra, was not in any way applicable.

Even though a suit by the insurance company as subrogee, or by the plaintiff for the use of the insurance company, might have been brought, it does not follow that the plaintiff did not have the right to avail itself of the power given by paragraph 229, supra, and expressed in the words, “such employer may bring legal proceedings against such other person to recover the damages sustained in an amount * * * of compensation payable under this Act, by reason of the injury or death of such employee.” From the foregoing it follows that as section 18 does not apply, it was not necessary that the plaintiff’s declaration should have been verified by an oath.

In our judgment, the court properly excluded the policy of insurance and also the certificate to the industrial commission. They were both immaterial. They might be evidence of some equity on the part of the insurance company, but the insurance company was not a party to the suit, and they did not in any way tend to show that the plaintiff had extinguished its right to sue by reason of the power given it under paragraph 229, supra.

It is urged for the defendant that the trial judge erred in permitting a witness for the plaintiff to testify that a certain amount of “money” was paid. The witness was asked how much money was paid and counsel for the defendant objected that the question ought to be limited to “currency because it is not the best evidence.” The witness answered, “$1,650.00.” In our judgment, the objection as stated was untenable.

Objection is made that error was committed in regard to three instructions, two of which were given for the plaintiff, and one of which was refused. We have examined all the instructions and find no errors that would justify a reversal.

For the reasons stated the judgment will be affirmed.

Affirmed.

Holdom, P. J., and Wilson, J., concur.


author: Mr. Justice Wilson

text:
    Arnt Johnson, Plaintiff in Error, v. J. V. Fowler, Defendant in Error.
    Gen. No. 32,607.
    Opinion filed October 3, 1928.
    Webster & Holmgren, for plaintiff in error; Elmer N. Holmgren, of counsel.
    Edward W. Rawlins, Hendrik Folonie and Hans L. Howard, for defendant in error.
   Mr. Justice Wilson

delivered the opinion of the court.

Plaintiff, Arnt Johnson, filed his declaration charging the defendant, J. V. Fowler, a physician and surgeon with carelessly, negligently and unskilfully performing certain acts and operations upon the plaintiff, as a result of which the plaintiff sustained unnecessary pain and his injuries were augmented and greatly increased.

The action is one for malpractice and, from the facts charged in the declaration, it appears that on April 10, 1921, the plaintiff retained the defendant as his physician and surgeon and continued under his care and received treatments therefor until the 13th day of June, 1922. The declaration in the cause was filed March 25, 1924, and to this declaration a demurrer was filed, which was sustained.

June 13, 1924, plaintiff filed an amended declaration to which a general and special demurrer was filed and again sustained. November 1, 1924, plaintiff filed his second amended declaration to which a general and special demurrer was filed and sustained. December 27, 1924, plaintiff filed his third amended declaration to which defendant filed pleas of the general issue and special pleas, setting up the statute of limitations. To these pleas plaintiff filed replications to which demurrers were interposed and sustained. Amended replications were then filed to these pleas and, on November 26, 1926, the demurrers of the defendant to these replications were again sustained and plaintiff elected to stand by his amended replication and judgment of nil dicit was then entered against the plaintiff and in favor of the defendant for defendant’s costs. From this judgment plaintiff prayed an appeal to this court which was allowed but not perfected and the matter is now here on a writ of error.

Only one question appears to be involved and it is well stated in the brief filed herein by counsel for plaintiff in error, in which on page 11 appears the following statement:

“As stated above, the final declaration filed in this cause on to-wit, the 27th day of December, 1924, differs only from the declaration filed on June 13,1924, in that the latter declaration negatives contributory negligence of the plaintiff, while the earlier declaration did not, * * *.”

The Supreme Court of this State in the case of Walters v. City of Ottawa, 240 Ill. 259, in its opinion says:

“A declaration in an action to recover for injuries received through negligence which does not aver due care on the part of the plaintiff when he was injured, and does not contain any averment in regard to his conduct or the circumstances surrounding him from which due care on his part may be reasonably inferred, does not state a cause of action, * * * .”

The precise question involved in this case appears to have been passed upon in a malpractice case which was before the Appellate Court, fourth district, in a case entitled, Wesley v. Allen, 235 Ill. App. 322. From the facts in that case it appears that it was heard on a demurrer to a plea of the statute of limitations. The declaration charged negligence in general terms, but failed to aver due care on the part of the plaintiff or such facts and circumstances from which due care could be reasonably inferred. The court in its opinion said:

“Tested by the rule the original declaration in the case at bar did not state a cause of action. So far as its averments are concerned appellant may have been guilty of negligence which was an active and efficient contributing cause of the injury due to the alleged malpractice. To state a cause of action it was necessary to aver that appellant was in the exercise of due care in that regard. It has been held that a plaintiff, in an action for malpractice, must allege in his declaration his freedom from negligence of that character. Peters v. Howard, 206 Ill. App. 610; Decatur v. Simpson, 115 Iowa 348, 88 N. W. 839; Lower v. Franks, 115 Ind. 334. One test in determining whether different counts are for the same or different causes of action is whether the same evidence would support a judgment upon either. Carlin v. City of Chicago, 262 Ill. 564.”

The demurrer was overruled.

It appears to be the rule in this State that an averment of due care on the part of the plaintiff is a necessary averment in a declaration where the question of negligence is involved and is an essential allegation, without which the declaration does not state a cause of action.

In view of the apparent recognition of this rule by the Supreme Court of this State, we are constrained to hold that the trial court did not err in sustaining the demurrer to the replication to the pleas filed in said cause.

Counsel for plaintiff in error, in their reply brief, seek to modify the. statements contained in their original brief, by showing that in the original declaration there was an allegation of due care, but an examination of that declaration shows that the allegation was to the effect that the plaintiff exercised due care in the selection of the defendant, but does not allege due care on the part of the plaintiff during or after the time of the acts committed by the said defendant in his employment. This allegation was unnecessary and without effect. The due care required of the plaintiff was such care on his part as was to be exercised after the employment and at the time of and after the operation and treatment complained of on the part of the defendant.

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

Affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    The People of the State of Illinois for use of Math Gitzen et al., Trading as Standard Electrical Supply Company, Appellee, v. Bernard W. Snow, Bailiff of the Municipal Court of Chicago, and Maryland Casualty Company, Appellants.
    Gen. No. 32,624.
    Opinion filed October 3, 1928.

      Robert P. Rollo, for appellants; George V. O’Connell, of counsel.
    Robert C. Baumgartner, for appellee; William R. Wiley, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

The declaration in this cause is for debt and is brought in the name of the People of the State of Illinois for use of Math Gitzen, Lester B. Merrefield and Fred T. Gitzen, doing business as the Standard Electrical Supply Company, plaintiff, against Bernard W. Snow, as bailiff of the municipal court of Chicago and the Maryland Casualty Company, a corporation, defendants, and charges that on the 19th day of November, 1924, the said Snow, as principal, and the Maryland Casualty Company, as surety, did jointly and severally acknowledge themselves to be firmly bound unto the plaintiff in the sum of $50,000, which obligation was in writing and which obligation required that the said Snow, as bailiff of the municipal court, should faithfully discharge all of the duties required of him while acting as such officer.

Further charges that the said Snow has not faithfully discharged all the duties required of him by law, but, on the other hand, failed to so do. Further charges that the said plaintiff on the 4th day of December, 1922, obtained a judgment in the municipal court of Chicago for the sum of $224.24, as damages against one George A. Hill, defendant in said proceedings. Charges that pursuant to said judgment the plaintiff sued out a certain writ of execution directed to the said defendant, Snow, as bailiff of the municipal court, commanding him to seize certain lands and chattels of the defendant.

Charges that the said defendant Hill obtained possession of certain real estate (describing it) situated in the city of Chicago and took possession of the same , and that the said defendant Snow was directed by the plaintiff to levy upon all right, title and interest of said Hill in and to said premises.

Charges that the said defendant Snow levied upon said property, but did not cause the moneys due the plaintiff to be made out of said levy, but, contrary to the direction of the plaintiff, released the said levy and returned the writ of execution no part satisfied.

The declaration consisted of four counts differing somewhat in detail and, in support of the declaration, there was filed an affidavit of the amount due, setting up the fact that the sum of $276.90 was due and that payment of said amount would act as a satisfaction of judgment.

To this declaration a plea was filed to which a demurrer was sustained and a second amended plea was filed to which a demurrer was again sustained and a third amended plea was filed to which a demurrer was again sustained. Thereupon, upon leave of court, plaintiff filed his fourth amended plea, to which a demurrer was interposed and sustained by the trial court and defendant elected to stand by his plea, and judgment was entered in favor of the plaintiff and against the defendants in the sum of $50,000 to be satisfied upon the payment of the amount of the original judgment with interest amounting to the sum of $276.80. Further ordered that upon the payment of said, damages, said debt was to be discharged.

It is urged as a ground for reversal that, while the bailiff should obey all proper instructions given him in regard to an execution, it is, nevertheless, not his duty to levy upon property not belonging to the defendant against whom the execution issues. It is further urged as a ground for reversal that the bailiff was entitled to demand an indemnity bond from the plaintiff and that the failure of the plaintiff to provide the bailiff with this indemnity bond relieved him of the obligation of levying upon the real estate in question.

The Municipal Court Act, Cahill’s St. eh. 37, H 389 et seq., in regard to the duties and obligations of the bailiff of the municipal court, defines them to be practically the same as the duties and obligations of the sheriff.

Cahill’s St. 1927, ch. 77, ¶ 44, provides as follows:

“If there is a reasonable doubt as to the ownership of the goods, or as to their liability to be taken on the execution, the officer may require sufficient security to indemnify him for taking them. ’ ’

It is urged on behalf of plaintiff that the word “goods” does not apply to real estate and, in support of their contention, cite 28 C. J. 721. Under the pleadings we are not called upon to decide this question.

Where a levy is made by an officer, he is under a different situation than where he refuses to make the levy in the first instance. In the case at bar defendant had made a levy, and, afterwards, released it over the objection of plaintiff and, consequently, the rule appears to be that the burden is upon the bailiff to show that the property was not the property of the defendant in the original judgment. 35 Cyc. 1831; Albany Belting & Supply Co. v. Grell, 67 App. Div. 81, 73 N. Y. Supp. 580.

The plea in the case at bar contains no allegation that the real estate in question was not the property of Hill, the defendant to the original judgment, nor does it set up any facts showing that the real estate in question was not the property of Hill. The plea admits that the levy was made and admits that the defendant Snow refused to consummate the levy by the sale of the property. The only allegation that appears to be in the plea from which it could be inferred that Hill was not the owner of the property is an allegation to the effect that after the levy the defendant, Snow, informed the plaintiff that the said Hill had no right, title or interest in the property in question. This is not a direct allegation of the essential fact and the demurrer was properly sustained. It might be true that the defendant, Snow, informed the plaintiff of that fact but, nevertheless, the fact itself, viz, that Hill was not the owner, might hot be true.

The objection to the amount of the damages found by the trial court is not well taken. In an action such as this, the amount of the judgment is prima facie the amount of the damages. Gilbert v. Watts-DeGolyer Co., 66 Ill. App. 625.

Upon the trial of the case the defendant, Snow, would have a right to show facts in mitigation of the damages, but, on demurrer, the amount of the judgment is prima facie the amount of the damages.

We see no reason for differing with the ruling of the trial court. For the reason stated in this opinion the judgment of the superior court is affirmed.

Judgment affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    Stephen P. Kazwell, Appellant, v. Samuel J. Reynolds, Appellee.
    Gen. No. 32,657.

      Opinion filed October 3, 1928.
    Rehearing denied October 16, 1928.
    Cattell & Waldron, for appellant.
    Cochrane & George, for appellee.
   Mr. Justice Wilson

delivered the opinion of the court.

This is an appeal from an order of the circuit court sustaining a demurrer to the amended bill of complaint and dismissing said bill for want of equity.

The amended bill charges that Stephen- P. Kazwell, complainant, and Samuel J. Reynolds, defendant, entered into a written contract on or about May 21,1926, for the purchase and sale of a 10-acre tract of land located in the village of Palos Park; charges that the complainant stated to the defendant on several occasions that he intended to use the real estate as a sandwich shop or restaurant and to install on said premises a gasoline station. Charges further that the defendant stated that there were no restrictions on said premises except those appearing of record in the recorder’s office of Cook county; charges that one Cochrane, a lawyer representing the defendant, referred to the abstract of title in the presence of plaintiff and read therefrom the restrictions which appeared of record and assured the buyer that there were no other restrictions as to the use of said property. Charges that after the payment of $1,000 earnest money, the buyer caused a survey of said real estate to be made and learned for the first time that the premises were restricted, in that they were subject to a certain zoning ordinance of the village of Palos Park, a copy of which ordinance was attached to said bill; charges that neither the plaintiff nor the defendant knew of the existence of such zoning ordinance until.after the earnest money was paid and the contract had been signed; charges further that the value of the premises, subject to the zoning ordinance, was considerably less than the amount of the purchase price; charges that the contract was entered into by reason of a mutual mistake of fact and that the defendant now refuses to enter into a new contract based on a new consideration.

Prays that the said contract be declared null and void and that the defendant be ordered to return the earnest money, together with interest thereon.

From the allegations of the amended bill it appears that there was no fraud nor circumvention practiced by the defendant in the sale of said property, but, on the other hand, it is positively averred that both parties were ignorant of the Zoning Law in force in Palos Park where the premises were located. The rule of caveat emptor applies to a sale of real estate as well as a sale of personalty.

The Zoning Act, Cahill’s St. ch. 24, ¶ 521 et seq., of this State became effective July 1, 1921, and by its enactment it conferred powers on cities and villages in the State to regulate and limit the height and bulk of buildings thereafter erected, and to regulate and limit the intensity of lot areas and to regulate and restrict the location of trades and industries and to specify certain districts for residential purposes, etc.

The village of Palos Park, acting under and by virtue thereof, appears from the bill of complaint to have passed such an ordinance and to have included within the area designated by the ordinance as residential district, the property involved in this proceeding.

The only question before us on this appeal appears to be whether or not ignorance of such an ordinance is a mistake of fact or a mistake of law; or, whether it is neither a mistake of fact nor a mistake of law.

As a general rule it is a well-known maxim that ignorance of law will not furnish an excuse for any person either for a breach or for an omission of duty: Ignorantia legis neminem excusat. And this is as well established in equity as in law. Equity recognizes certain exceptions such as a fiduciary relationship, but the case at bar' comes within none of these exceptions. Story’s Equity Jurisprudence, vol. 1, § 173.

If individuals were permitted to void solemn obligations because of ignorance of existing laws in force at the time of the execution of said instrument, then such existing laws would become useless and of no value. Story’s Equity Jurisprudence (14th Ed.), vol. 1, § 173.

The ordinance in question was a matter of record in the village where the property was located and was easily ascertainable by both plaintiff and defendant. If, as alleged in the bill of complaint, neither party knew of that fact, then it becomes the duty of the purchaser to have advised himself as to whether or not such an ordinance was in existence. The existence of a law in a State is a matter concerning which" everyone is supposed to have knowledge. The only instance where a law may become a question of fact is where it is a foreign law and has to be proven. In such cases the law may recognize a mistake of fact where a person is misled by a foreign law in existence at the time of the execution of the instrument. The rule is well stated in Story’s Equity Jurisprudence (14 Ed.), vol. ¶ 221, where it is stated:

“A like principle applies to cases where the means of information are open to both parties, and where each is presumed to exercise his own skill, diligence, and judgment in regard to all extrinsic circumstances. In such cases equity will not relieve.”

The Zoning Act of this State was in full force and effect on the statute books of Illinois and "the zoning ordinance of the village of Palos Park appears to have been duly passed and became an existing ordinance of the village where the property was located. The fact as to whether there was a Zoning Law in force where the property was located was easily ascertainable and equally open and accessible to both parties, and, under the rule, courts of equity will not relievé in order to make a new contract for the parties.

Ignorance of the law is defined to be the want of knowledge or acquaintance with the laws of the land in so far as they apply to the act, relation, duty, or matter under consideration.

Under the facts as charged in the bill of complaint and as we have the facts on this appeal, the situation is not one of mistake of law or fact, but comes within the rule, ignorantia legis neminem excusat.

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

Affirmed.

Holdom, P. J., and Taylor, J., concur.


text:
    Caroline Lederer, pro se and as Trustee under the Last Will and Testament of Samuel Lederer, Deceased, Plaintiff in Error, v. Ben Rosenston, Defendant in Error.
    Gen. No. 32,764.

      Opinion filed October 3, 1928.
    Schein & Beckwith, for plaintiff in error; George L. Schein and Fred W. Bentley, of counsel.
    Sherman C. Spitzer, Thomas J. Hoban and Rathje, Wesemann, Hinckley & Barnard, for defendant in error; Thomas J. Hoban and Francis E. Hinckley, of counsel.
   Mr. Justice Wilson

delivered the opinion of the court.

The complainants, Samuel Lederer and Caroline Lederer, husband and wife, filed their bill of complaint in the superior court of Cook county, charging that they were the owners in fee simple, as tenants in common, of certain premises located in the city of Chicago, known as 7735-57 Sheridan Road. Edward Zeitz, Eugene L. Garey, Ben Rosenston and Kurt R. Beak were made parties defendant to said bill; charging further that at the time they took title to said property there was a certain trust deed of record for the sum of $49,333 and subject also to a second trust deed for the sum of $26,600; charging further that in 1922 they negotiated with Beak, one of the defendants herein, for the purpose of having him procure a first mortgage upon said premises for the sum of $80,000 and to issue bonds secured by said trust deed and, out of the proceeds, retire the said first and second trust deeds already upon the property; charges further that pursuant to said agreement, said Beak undertook to and did market bonds and procure the issuance of the trust deed securing the same and paid the indebtedness secured by the two trust deeds previously of record; charges that on December 28, 1922, the defendants Beak and Zeitz caused to be placed on record in the recorder’s office a document purporting to be a warranty deed from the plaintiff to the defendant, Zeitz, conveying the property in question and charging that said warranty deed was not acknowledged before a notary public by the complainants and that the signatures of the complainants were obtained by fraud; charging further that said warranty deed was held by said Beak for several months and recorded on the 8th day of December, 1922, by reason of a conspiracy between Beak and Zeitz to defraud complainants and that said instrument was not their free and voluntary act; charges that on March 24, 1923, a certain warranty deed from Zeitz to your orators, bearing date of January 19th of the same year, was recorded of record in the recorder’s office of Cook county; charges further that on December 9, the defendants Beak and Zeitz caused a certain second trust deed to be executed herein to one Geary, defendant herein, who was named trustee, securing the payment of 12 certain notes executed by Zeitz, payable to his order and by him indorsed ; charging that one Rosenston, defendant herein, is the holder of said notes, but that he is not a holder in good faith nor for value and that he ac■quired said notes and purported mortgage without investigation of the ownership of the premises described in said trust deed; charges that said Rosenston threatens to take possession of said property under his alleged trust deed and apply for the appointment of a receiver for said premises; prays that the said Rosenston be enjoined from starting any such proceeding and that.the warranty deed from Lederer to Zeitz be canceled and held for naught, and that the deed from Zeitz to Lederer be canceled and the trust deed to Rosenston removed as a cloud on the title.

To this bill the defendant Rosenston filed an answer denying the allegation of fraud and charging further that he made a thorough and careful investigation as to the ownership of said premises before accepting the notes and trust deed and that he paid a valuable consideration and had no knowledge of any fraud on the part of Beak or Zeitz, if any fraud there was.

The defendant Rosenston filed his cross-bill in said cause asking for a foreclosure of the trust deed securing the notes in question and to this cross-bill the complainants filed their answer as cross-defendants, setting up in effect that they had never parted with the ownership or the possession, but had been continuously in possession of said premises and that the cross-complainants knew of the fraud practiced upon them in the procurement of the warranty deed from them to Zeitz.

The cause was referred to a master who found that the complainants had made, executed and delivered their warranty deed conveying the premises to Zeitz and appeared before the notary and acknowledged the same, and recommended that the original bill of complaint be dismissed for want of equity and that the trust deed proceed to foreclosure.

The report of the master was approved by the chancellor and a decree was entered dismissing the original bill for want of equity and directing a sale of the property to satisfy the indebtedness claimed under the cross-bill. From this decree an appeal was taken to the Supreme Court of this State where it was held that the complainants were the owners of the property and that the question of title was not involved and the cause was transferred to this court for the purpose of its consideration of the rights of the cross-complainant to a foreclosure under his cross-bill. Lederer v. Rosenston, 329 Ill. 89.

It appears that during the pendency of the proceeding, Samuel Lederer died and the proceeding continued in the name of Caroline Lederer, pro se, and as trustee under the last will and testament of Samuel Lederer.

It appears from the testimony that Beak had been for some time engaged in the real estate business in the city of Chicago and had been engaged with Lederer in certain real estate operations other than the one in question. Lederer’s wife, complainant herein, appears to have placed complete reliance in her husband and frequently affixed her signature to blank papers which he used in handling certain real estate transactions. The notary public who took the acknowledgment of the deed to Zeitz testified positively that- Caroline Lederer and Samuel Lederer signed and acknowledged said instrument before her, as a notary public, and wu see nothing in the record that would cause us to disregard her testimony.

The rule is well recognized that the burden of proving fraud is upon the party alleging it. There appears to be no such evidence in the record connecting Bosenston with the transaction as would authorize a court of equity to hold that he had participated in any fraud or had such knowledge of it as would warrant the invalidating of his notes and trust deed. The only allegation in the bill, so far as Bosenston is concerned, was that he had not made a sufficient investigation as to the ownership of the premises. We doubt whether or not any investigation was necessary, but it does appear from-his testimony and it is uncontradicted that, before accepting the trust deed and notes, he made an investígation of the record and found that there was no deed from Lederer to Zeitz of record; that he thereupon communicated this fact to Beak and was informed by him that the deed had been recorded by him that morning. It appears that he thereupon made another investigation of the record and found that to be the fact and, thereupon, paid by check for said notes the sum of $12,646.44. It appears further that he had purchased these notes for a client by the name of Goldberg who, in turn, had paid him for them. It appears further from the evidence that Beak continued to collect the rents from said premises during the time that the title was in Zeitz and that the notes, as they matured, were paid by Beak & Company- and charged to Lederer. Two principal notes, Nos. 1 and 2, together with the interest thereon, were so paid by Beak.

On January 9, 1924, Lederer gave his check to the order of Rosenston for the payment of the principal and'interest falling due on that date, but refused to pay any other notes and, subsequently, in March filed his bill of complaint in this cause, his wife joining as co-complainant.

It is urged on behalf of counsel for complainant that the solicitor’s fees were exorbitant and that the additional sum of $500 allowed by the master and approved by the chancellor in the event of an appeal was a penalty, but we do not agree with this contention, but believe that it was within the province of the court to provide the additional solicitor’s fees in the event that further litigation should be necessary.

Counsel for the defendant and cross-complainant asks that the cost of the additional abstract of record filed in said cause be taxed as costs against the complainant, and with this we agree. The additional abstract was helpful in the consideration of the case by this court and contained considerable matter not found in the original abstract which was material and important in the decision of the case.

For' the reasons stated in this opinion the decree of the chancellor of the superior court will be affirmed, together with interest thereon from the date of said decree at the rate of 5 per cent per annum, and the cost of the additional abstract will be taxed as costs.

Affirmed.

Holdom, P. J., and Taylor, J., concur.


author: Mr. Presiding Justice Jones

text:
    Adolph Schaefer, Defendant in Error, v. August Dippel, Plaintiff in Error.
    Gen. No. 7,914.

      Opinion filed September 20, 1928.
    George W. Hunt, for plaintiff in error.
    Charles W. Helmig and Butters & Butters, for defendant in error.
   Mr. Presiding Justice Jones

delivered the opinion of the court.

Adolph Schaefer brought a suit in assumpsit against August Dippel for contribution and recovered a judgment for $5,674.49. The cause was tried by the court without a jury and was referred to the master in chancery, as referee, under an agreement that objections and exceptions to the master’s report should be deemed propositions of law tendered to the court.

The facts were stipulated and are substantially as follows: On April 27, 1920, Schaefer and Dippel purchased, as tenants in common, a farm in Indiana from The Northern Indiana Land Company for $58,233.76. The Northern Indiana Land Company was a subsidiary of The Straus Brothers Company. Payments for the land were made in the following manner: (1) A “cash” or “down” payment of $16,500. This payment was made by Schaefer who mortgaged a farm he owned in Minnesota for that amount to The Straus Brothers Company. Dippel furnished no part of this payment. His only obligation on account of it was to Schaefer for one-half of said sum or $8,250; (2) Notes signed by Schaefer and Dippel for $27,000 and secured by a first mortgage on the Indiana land; (3) A note for $14,733.76, secured by (a) a second mortgage on the Indiana land executed by the purchasers and their respective wives, (b) a second mortgage on Schaefer’s Minnesota land and (c) a second mortgage on land in Ohio owned by Dippel.

Foreclosure proceedings were threatened against Dippel’s Ohio land by the holders of a first mortgage thereon and in order to settle the matter, he conveyed the land to The Straus Brothers Company. The grantee assumed the payment of the first mortgage, taxes, judgment, and other liens against the land and paid Dippel a small cash consideration. The second mortgage on the Ohio land was released by The Straus Brothers Company, but the transaction did not in any way reduce the indebtedness of Schaefer and Dippel to The Straus Brothers Company.

On account of default in the payment of interest, foreclosure proceedings were started in Indiana against the land purchased by Schaefer and Dippel. Personal service was had on Schaefer and service by publication was obtained against Dippel. A defense was interposed by Schaefer, but a decree for foreclosure was entered and the premises were sold under execution in that proceeding. The sale failed to realize the amount of the debt, interest and costs due, and a personal deficiency judgment for $10,025.20 was rendered against Schaefer. No personal judgment was rendered against Dippel.

Suit was also brought in Minnesota to foreclose the first mortgage on Schaefer’s land for $16,500 and also for the balance due on the second mortgage, which after the sale of the Indiana land was $10,025.20. During the pendency of this suit in Minnesota, a proposition of settlement was made by The Straus Brothers Company and accepted by Schaefer and Dippel. The substance of it was that Schaefer and Dippel should convey to Abe Ackerman, a member, of The Straus Brothers Company, all their interest in the Indiana lands; Schaefer should also convey to Ackerman his Minnesota land; both Schaefer and Dippel should refrain from going into bankruptcy for four months after the date of the recording of the deeds of conveyance; they should assign their interest in certain policies of fire insurance, and if said agreement was complied with, both debtors were to be fully released and discharged from all liability to The Straus Brothers Company. The agreement further provided that Schaefer could occupy 100 acres of the Indiana land by paying to The Straus Brothers Company $500 as rent.

The agreement was fully performed by the parties, and Schaefer claims that in this settlement he paid out on the joint obligations more than was paid thereon by Dippel. The first count qf the declaration avers that Schaefer paid $5,012.10 more than Dippel in satisfaction of the above-mentioned indebtedness. The second count is for $8,250, being one-half of the above mentioned “cash” or “down” payment. Three pleas were filed, one of the general issue, one of accord and satisfaction, and one of the statute of limitations as to said claim of $8,250. The trial court found that the right of action for the said sum of $8,250' (being one-half of the “down” payment) accrued more' than five years prior to the bringing of this suit and was therefore barred by the statute of limitations. That holding was correct. Dippel did not promise in writing to pay any portion of the $16,500 note. His obligation to Schaefer on account of that transaction was not evidenced by any written instrument and, therefore, it is now barred by the statute of limitations. Nor can the doctrine of contribution apply to the “cash” or “down” payment made by Schaefer. He raised that money on his individual obligation. Dippel did not promise to pay The Straus Brothers Company any part of that indebtedness. The only person Dippel owed on account of it was Schaefer. The relation of debtor and creditor existed between him and Schaefer, but there was no relation of co-obligors between them; hence there is no right of contribution.

But the trial court found that Schaefer was entitled to contribution from Dippel for a sum equal to one-half of the said deficiency judgment, together with interest thereon amounting in all to $5,674.49. Judgment for this sum and costs was rendered against Dippel and he has taken an appeal to this court.

Before one is entitled to contribution from his coobligor, the evidence must disclose that he has paid more than his just proportion of the joint indebtedness and it must also disclose what that excess is. (Harvey v. Drew, 82 Ill. 606.) An analysis of the facts shows that in making the settlement with The Straus Brothers Company, Dippel contributed (1) his interest in the Indiana land, (2) his interest in certain fire insurance policies and (3) his agreement not to go into voluntary bankruptcy. Schaefer contributed the same things as Dippel, and in addition thereto, he contributed his interest in the Minnesota land. In other words Schaefer’s contribution toward the payment of the joint indebtedness exceeded Dippel’s contribution to the extent of the value, if any, of Schaefer’s interest in the Minnesota land. If that interest had any value, Schaefer is entitled to contribution. If it had no value, he is not entitled tó any contribution.

Upon the rendition of the deficiency judgment in Indiana, Schaefer and Dippel were indebted to The Straus Brothers Company in the sum of $10,025.20 as joint obligors. As between them they were equally liable. If that indebtedness became reduced by payments made by them jointly, their liability for contribution was correspondingly decreased. If the interests in the Indiana land, the interests in the insurance policies, and the agreements not to go into bankruptcy, had any money value, then such value must be deducted from the amount of the deficiency judgment in determining the amount of contribution which might be required. Dippel could not be liable for more than one-half of the amount of the deficiency judgment after deducting whatever value such joint contributions had.

We will first consider what, if any, money value Dippel’s contributions had. As to his interest in the Indiana land, the record shows that the land was offered for sale at public vendue and failed to bring the amount of the indebtedness against it by $10,025.20, and that a deficiency judgment was rendered for that sum. Under the circumstances we must assume that the land was worth no more than it brought,' unless, as Dippel claims, he and Schaefer possessed an equity of redemption, such as is allowed in Illinois, and that it had a money value. It is argued that in the absence of anything in the record showing to the contrary, the law in Indiana with relation to the right of redemption must be deemed to be the same as in Illinois. It is true that courts of this State will presume that the common law of England is in force in other jurisdictions unless the contrary appears, but a different rule of law prevails as to existence of statutes in other States. In Shannon v. Wolf, 173 Ill. 253, on page 260, it is said: “It is a well established doctrine, that no court will take judicial notice of the laws of a foreign country or State, but that the same must be averred and proved as facts.” To the same effect are Leathe v. Thomas, 218 Ill. 246, and Julius Levin Co. v. Rosenfield, 230 Ill. App. 126. The right to redeem as it exists in this State is purely a statutory right. We cannot assume what the right of redemption is in Indiana or that the right exists at all. The written proposal of The Straus Brothers Company makes no mention of such a right, and since the record does not disclose its existence, it would be impossible for us to say that it did exist or that it had a money value. It appears from the proposal that Schaefer was permitted to occupy only a portion of the land and was required to pay rent for it. There is evidence in the record which tends to show that so far as Schaefer and Dippel are concerned, there was nothing of value in the land remaining to them after the sale.

As to the value of the fire insurance policies assigned, the record is silent. All it shows is that Dippel and Schaefer assigned the policies on the Indiana property and Schaefer, alone, assigned a policy on his Minnesota property. Under the circumstances of this case, we are inclined to apply the maxim de minimis non curat lex, the law does not notice or concern itself with trifling matters. The same can be said about the agreement not to go into bankruptcy. The trial court was justified in acting upon the theory that these contributions were of no real or money value.

The next question to be determined is whether or not the interest of Schaefer in the Minnesota lands had a money value, and if so, to what extent. From a consideration of the whole record, we are forced to the conclusion that the entire debt due The Straus Brothers Company was paid in full. It therefore follows that if the above-mentioned joint contributions made by Dippel and Schaefer were of no real or money value, then the deficiency judgment was settled wholly out of the value remaining in Schaefer’s Minnesota land. Such being the case, he became entitled to contribution from his co-obligor of one-half of the amount of the deficiency judgment, with interest thereon. Such was the judgment of the trial court.

Considerable discussion appears because the debt of Schaefer was merged in the decree and judgment of the Indiana court, while the nature of the indebtedness as to Dippel was left in its original form. We can see no force in such discussion. The relation between Schaefer and Dippel remained the same at all times. Excepting the $16,500 Minnesota mortgage, they were co-obligors as to the entire indebtedness. All of it was a lien on the Indiana lands and an obligation against both Schaefer and Dippel. It makes no difference that the indebtedness was evidenced by a judgment against one and a note against the other, or judgments against both or notes against both.

Counsel for Dippel maintain that there was an accord and satisfaction between Schaefer and Dippel, but we cannot agree with that contention. There was an accord and satisfaction between The Straus Brothers Company on the one part, and Schaefer and Dippel on the other, but there was no accord and satisfaction between Schaefer and Dippel.

The views we have expressed dispose of the contention of plaintiff in error relative to certain propositions of law, which were refused by the trial court. Those views are in harmony with the holdings of the trial judge, not only as to the law applicable to the case, but as to the facts as well.

The judgment of the trial court was correct and is affirmed.

Judgment affirmed.