author: Mr. Justice Burke

text:
    Mary Krajewski, Administratrix of Estate of Leonard Krajewski, Deceased, Appellee, v. Prudential Insurance Company of America, Appellant.
    Gen. No. 40,848.

      Denis E. Sullivan, P. J., dissenting.
    Heard in the third division of this court for the first district at the October term, 1939.
    Opinion filed April 10, 1940.
    Hoyne, O’Connor & Rubinkam, of Chicago, for appellant; Nathaniel Rubinkam and Ira W. Hurley, of Chicago, of counsel.
    L. A. Wescott and Lloyd T. Bailey, both of Chicago, for appellee; J. Theodore Kiggins and Joseph W. Bailey, both of Chicago, of counsel.
   Mr. Justice Burke

delivered the opinion of the court.

On September 15, 1932, Leonard Krajewski made three applications to defendant, each asking that his life be insured in the sum of $500. Although the applications were taken on September 15, 1932, the insurance agent, J. Kulczynski, filled in the dates as of the 15th, 16th and 17th of September. The applicant gave his residence address as 2325 Rice street, Chicago, his age at his next birthday as 38 years, and that he was born in Poland on September 18, 1894. In answer to the first part of interrogatory No. 17, “What is the present condition of health!” he answered “Good.” In answer to the second part of the same interrogatory, “When last sick!” he answered “Never.” In answer to interrogatory No. 18, “Does any physical or mental defect or infirmity exist!” he answered “No.” In answer to interrogatory No. 19, “Has life proposed ever suffered from . . i, cancer . . . !” he answered “None.”

At the bottom of one application, appeared the following statement, signed by the agent: “I Certify that I have this 15 day of Sept., 1932, collected 84 cents in advance and have personally seen the applicant herein named, who has been asked all the above questions and has answered as reported above, and I recommend the Company to accept the risk. The signature above was made by the applicant in my presence. ’ The certifications on the other two policies are the same, except that the agent filled in the date as of the 14th and 16th of September. On September 19, 1932, the defendant issued and delivered to Leonard Krajewski three life insurance policies, each in the sum of $500. Each called for a premium of 42 cents a week and on his death was payable to the executor or administrator. Each policy contained a provision which reads: “Preliminary Provision. — This Policy shall not take effect if the Insured die before the date hereof, or if on such date the Insured be not in sound health, but in either event the premiums paid hereon, if any, shall be returned.” The policies issued are known as “industrial policies” and no medical examination is required. The insured died on October 14, 1932, 24 days after the policies were issued. On September 17, 1935, Mary Krajewski, administratrix of his estate, filed her complaint against defendant in the superior court of Cook county and therein sought to recover $1,500, plus interest. On October 21, 1935, defendant filed its answer and admitted the issuance of the policies; that the insured died on October 14, 1932; invited attention to the clause that the policies shall not take effect if the insured “be not in sound health” at the time the policies were issued; averred that the policies were issued pursuant to applications purported to have been signed by Leonard Krajewski; asserted that by reason of the fact that Leonard Krajewski was not in sound health on the date the policies were issued, and that by reason of “misrepresentations made in the applications ’ ’ it was not liable in any sum, except for $10.08, which represented the premiurns paid on the policies and which amount it tendered the plaintiff. On December 15, 1938, while the cause was on trial, defendant was permitted to file an amendment to its answer, which declares that the applications were not signed by Leonard Krajewski, but were signed by someone else for the purpose of inducing defendant to issue the policies, and that the execution of the applications was a fraud upon defendant. The case was tried before the court and a jury, which returned a verdict against defendant in the sum of $1,950. At the close of all the evidence, defendant moved the court to direct; a verdict in its favor, which motion was overruled. The defendant also moved for a new trial, for a judgment notwithstanding the verdict and in arrest of judgment, all of which motions were denied. On December 16, 1938, the court entered judgment on the verdict, to reverse which this appeal is prosecuted.

The first point urged by defendant is that it was plaintiff’s burden to establish that 'the insured was in sound health on the date of the issuance of the policies, and that plaintiff did not sustain such burden. In support of its position, it cites the case of Sheets v. Metropolitan Life Ins. Co., 298 Ill. App. 631 (Abst.); Schmidt v. Prudential Ins. Co. of America, 287 Ill. App. 431; Daniels Motor Sales Co. v. New York Life Ins. Co., 220 Ill. App. 83. Plaintiff cites cases which she states support the proposition that the burden to prove that the insured was in sound health on the date of the issuance of the .policies was on defendant. In Swanson v. Prudential Ins. Co. of America, 271 Ill. App. 309, 310, this court said: “Defendant asserts that it was a condition precedent to recovery that plaintiff prove that the insured on March 23, 1931, was in sound health, citing certain supporting cases which seem to hold that the plaintiff has the burden of proving that the insured was in good health at the date the policy was issued. Dashner v. Federal Life Ins. Co., 259 Ill. App. 632 (Abst.); Dumara v. The Western & Southern Life Ins. Co., 268 Ill. App. 626 (Abst.). Plaintiff asserts that this is a matter of defense, citing Johnson v. Royal Neighbors of America, 253 Ill. 570; Fahey v. Chicago National Life Ins. Co., 263 Ill. App. 637 (Abst.), and other cases. We think the better reasoning supports this latter view. Manifestly, when an insurance company accepts a risk it will be presumed that it is satisfied with the physical condition of the insured. If it has been misled in this respect, this can be presented in defense.” See also Middleton v. North American Protective Ass’n, 260 Ill. App. 288. We are convinced that logic and justice support the rule that the burden is upon the insurance company to prove by a preponderance of the evidence that the insured was not in sound health on the date of the issuance of the policies. Hence, under the pleadings in the instant case, the burden was upon defendant to prove that the insured was not in sound health on the date the policies were issued. It is interesting to observe that during the trial defendant insisted on assuming the burden of proof to establish that the insured was not in sound health on the date the policies were issued, and also the right to open and close the argument to the jury. Defendant’s actions on the trial are inconsistent with its attitude in this court.

The second point urged by defendant is that the fraudulent misrepresentations of material facts which were made in the applications, rendered the policies sued on, void, and barred recovery by plaintiff. Defendant relies on Western & Southern Life Ins. Co. v. Tomasun, 358 Ill. 496, and United States Fidelity & Guaranty Co. v. First Nat. Bank of Dundee, 233 Ill. 475. Plaintiff repels the contention by stating that the materiality of alleged fraudulent misrepresentations must be alleged and proved; that statements made in the application (the application not being made a part of the policy) are not warranties and need be only substantially true, and that the question as to whether or not fraudulent misrepresentations of material facts were made by the insured and the question as to the state of health of the insured at the time of the signing of the applications and delivery of the policies, were questions of fact properly submitted to the jury. Plaintiff cites Luke Grain Co. v. Illinois Bankers Life Ass’n, 263 Ill. App. 576, and other cases. We have examined the pleadings and find that defendant’s answer does put in issue the proposition as to whether the insured was in sound health. The defendant’s answer also averred that the insured was afflicted with syphilis on September 19, 1932. There was no proof as to this averment. The amendment to the- answer charged that the applications were not signed by Leonard Krajewski, but were signed by someone else for the purpose of defrauding the defendant. There was no serious effort to establish the latter allegation. Defendant proved by two physicians connected with the University of Chicago clinic of the Billings Memorial Hospital, and by the records of the hospital, that the insured entered the clinic as a patient on August 1, 1932, and was discharged on August 9,1932, and that he was suffering from the ravages of cancer. An examination disclosed cancer lesions in his spinal cord, with evidence of disfunction of the legs due to lesions. One of these physicians testified that the insured had a fatal disease. The diagnosis was verified by X rays, which showed the tumors to be cancerous. Plaintiff, who is the widow, testified that her husband was always employed and that he worked until a week before his death. The testimony of the widow was corroborated by that of her daughter. The agent testified that when he delivered the policies to the insured, the latter “was healthy.” This agent certified that he saw the applicant and recommended acceptance of the risk. Another agent for the defendant testified that shortly before the instant applications were made, he was asked to write a policy covering the life of the insured, which he declined to do because he observed that the insured was sick. A physician who attended the insured, testified that- in June or July, 1932, the insured was suffering from lumbago and could not straighten up. Another physician testified that he saw the insured early in October, 1932, and found him to be a very sick man, confined'to his bed, and unable to use his legs. His diagnosis was that the insured was suffering from some wasting disease, and that he (the insured) was suffering from some malignant growth. A woman who lived nearby testified that she saw the insured in July, 1932, at which time he was lying in the yard of his home; that he looked sick; that “I thought he was already dead, he was so pale and dry.” She admitted that she was not on friendly terms with insured’s family. Counsel for plaintiff infer that the person who was in the Billings Memorial Hospital was not the insured. The hospital records show that the patient bore the same name as insured, lived at the same address; that the Christian name of his wife was the same; that his occupation was that of cabinet maker, which was the occupation which insured pursued; and that his family physician was Dr. Growtowski, the physician who testified he attended the insured. A perusal of the transcript of the testimony convinces us that reasonable men could not come to a different conclusion than that the Leonard Krajewski who was a patient in the clinic from August 1, 1932, to August 9, 1932, was the insured. In fact, no one makes any direct denial of that fact.

The following language from the case of Western & Southern Life Ins. Co. v. Tomasun, 358 Ill. 496, at p. 502, is applicable to the case at bar:

“In an equitable action for the cancellation of an insurance policy upon the ground that misrepresentations had been made as to facts material to the risk, it is not essential that the applicant should have wilfully made such misrepresentations knowing them to be false. They will avoid the policy if they are, in fact, false and material to the risk even though made through mistake or in good faith. . . .
“We thus find the authorities firmly established that it was not necessary to an avoidance of the policy that Mrs. Tomasun should know that her answers were untrue, altho that she did know them to be untrue we can hardly find room to doubt upon the record presented.”

A careful examination of the record establishes that at the time of the making of the applications and of the delivery of the policies, the insured was not in sound health. We are convinced that the verdict is against the manifest weight of the evidence. Therefore, the judgment of the superior court of Cook county is reversed and the cause remanded.

Reversed and remanded.

Hebel, J., concurs.

Denis E. Sullivan, P. J., dissents.


source: Caselaw Access Project

author: Mr. Justice Fulton

license: Public Domain

text:
    Nettie C. Nolan, Appellant, v. Anna Sloan and Julia Sloan, Appellees.
    Gen. No. 9,214.

      Heard in this court at the October term, 1939.
    Opinion filed April 15, 1940.
    Thomas Sweeney, of Taylorville, for appellant.
    Hershey & Bliss and Daniel H. Dailey, of Taylorville, for appellees.
   Mr. Justice Fulton

delivered the opinion of the court.

On the 26th day of March, A. D. 1926, Mrs. James H. Nolan and James H. Nolan made and executed a promissory note for the sum of $5,000, payable to the First National Bank of Morris onville, Illinois, due one year after the date thereof, with 7 per cent interest per annum, until paid, payable semiannually. Attached and made a part of the note was a power of attorney providing for the collection of same by confessing judgment thereon, and containing the usual provisions of an ordinary judgment note. On the back of the note was shown the following:

“For value received, the undersigned do hereby jointly and severally guarantee the payment of the within note at maturity or at any time thereafter, with seven per cent interest per annum from date, and agree to pay all costs, expenses and attorney’s fees paid or incurred in collecting the same from or in prosecuting any suit against any one or more of the makers, endorsers or guarantors of said note, and hereby waive any and all demand notice, protest and notice of protest and consent without notice to any extension of time by the holder. ’ ’ Then followed a similar warrant of attorney to that on the face of the note, providing for the collection of same by confessing judgment at maturity or at any time thereafter against any one or more than any one of the subscribers thereto. This guaranty was signed by Geo. Sloan, Mary Nolan Sloan, Anna Sloan (a defendant appellee herein), Julia Sloan (a defendant appellee herein) Wm. T. Sloan, Mrs. James H. Nolan and James H. Nolan.

On the 4th day of February, A. D. 1937, during the ninth year after maturity of said note, the plaintiff appellant, the then-owner of the note, entered a judgment by confession for the sum of $4,365.90, in the circuit court of Christian county against the defendants appellees, Anna Sloan and Julia Sloan. The confession was based upon the note above described to which the appellees were not makers or parties nor does the power of attorney attached to the note purport to be executed by either of them.

The defendants appellees, on June 3, 1937, filed a motion to set aside the judgment or to open up the judgment and for leave to plead, which was allowed and appellees given 10 days in which to plead. The defendants appellees then filed motion to strike the original complaint alleging that the cause of action was based on a promissory note, when in fact by virtue of the instrument attached thereto, any cause of action against the appellees must be based upon the guaranty upon the back of the said note, which was no part of the said promissory note itself. Also that there was no sufficient allegation in the complaint that the defendants ever became bound to pay said note because it failed to state that the note was not paid by the makers thereof at maturity. This motion was allowed by the court on January 10, 1938, and by the same order, plaintiff was given 10 days to amend complaint.

On February 1, 1938, the plaintiff appellant filed an amended complaint which sought judgment based upon the guaranty purporting to be signed by the defendants appellees. A motion to strike the amended complaint was filed by the said appellees, setting forth as grounds therefor that the statute of limitations had run against any action based upon the guaranty. The court sustained this motion and dismissed the amended complaint on December 12, 1938. Thereafter, leave of court first being obtained, the plaintiff appellant, on December 30, 1938, filed a second amended complaint seeking judgment on the guaranty found on the back of the said promissory note. The defendants appellees again filed a motion to strike, setting forth similar grounds to those already passed upon by the court in granting the motion to strike the first amended complaint, and which motion was sustained by the court, and the second amended complaint stricken. The defendants appellees then moved for judgment and plaintiff appellant asked for leave to amend the complaint. The court denied plaintiff’s motion for leave to amend complaint and then sustained defendants’ motion for judgment and entered the same in favor of the defendants appellees and against the plaintiff appellant for costs.

In prosecuting an appeal from that judgment the plaintiff appellant contends that the action of the court in granting the motion to strike the first amended complaint; the granting of the motion to strike the second amended complaint, the denying of plaintiff appellant’s motion for further leave to amend the complaint, and the entering of judgment for defendants appellees and against the plaintiff appellant are errors upon which she relies for reversal.

It is the theory of the appellant that because of the fact that the note was incorporated within the pleadings the guaranty on the back of the note was sufficient to inform the defendants of the claim or defense they were called upon to meet, citing the holding in Engle v. City of Chicago, 290 Ill. App. 604 (Abst.), which reads “Under Civil Practice Act, pleadings are to be liberally construed with view to doing substantial justice between parties, and no pleading is to be deemed bad in substance which shall reasonably inform opposite party of nature of claim or defense which he shall be called upon to meet.” and further contending that because of the principle established in the case of Metropolitan Trust Go. v. Bowman Dairy Co., 369 Ill. 222, and section 46 of the Civil Practice Act, the statute of limitations does not apply to a cause of action set out in the amended pleading which grew out of the same transaction or occurrence set up in the original pleading.

The question in this case, therefore, turns on the question of whether or not the subject matter of the amended complaints arose out of the same transaction as that stated in the original complaint. Our courts have held that a guaranty is an absolute undertaking, that the maker would pay the note when due, and by the default of the principal an immediate liability exists. Holm v. Jamieson, 173 Ill. 295. It was there stated that “the undertaking of the guarantor was an independent contract.” In Abbott v. Brown, 131 Ill. 108, it was held that “ ‘a guarantor cannot be sued with his principal, for his engagement is strictly an individual contract, and not an engagement jointly with his principal.’ . . . The liability of the maker of the note and the guarantor were separate and distinct. To enforce the liability of the maker an action should be brought on the note against him, while to enforce the liability of the guarantor an action could only be brought on the contract of guaranty.” In this case there is no evidence on the face of the instrument or otherwise that the execution of the note and the making of the guaranty were one and the same transaction.

The original complaint was based entirely upon the promissory note although directed against two of the guarantors. It was filed in apt time, on February 4, 1937, and before the 10-year period had expired since the maturity of the note on March 26, 1927. No complaint is made of the action of the court in striking the original complaint. Neither of the appellees had signed the note or the power of attorney to confess judgment. Both the first and second amended complaints were based upon the guaranty and were filed after the statute of limitations had run. The undertaking of the appellees as guarantors was an entirely separate and independent contract from that of the principal debtors, and makers of the note, and any complaint based upon the contract of guaranty was the statement of a new cause of action, and in our opinion barred by the statute of limitations. In the case of In re Estate of Whipple, 285 Ill. App. 491, it was held that a note for principal and another for interest involve distinct promises constituting different causes of action, and that a claim filed for money due on interest coupons cannot afterwards be amended when the one-year limitation statute has run to a claim based upon a principal note.

The plaintiff appellant never had any right of action against the appellees, except upon the contract of guaranty which obligated them to pay the note at maturity or thereafter if the same was not paid when due. She permitted 10 years to run before filing any complaint, based on the guaranty, and could not afterwards, by way of amendment to an entirely different cause of "action, be allowed to revive such claim.

We feel that the court correctly allowed the motions to strike the first and second amended complaints, and in denying further amendment.

The judgment of the trial court, based upon such rulings, is therefore, affirmed.

Affirmed.


text:
    Syble Adolph White, Appellee, v. Eugene Adolph, Appellant.
    Gen. No. 9,221.

      Heard in this court at the January term, 1940.
    Opinion filed April 15, 1940.
    F. R. Wiley, of Decatur, for appellant.
    L. E. Stephenson, of Decatur, for appellee.
   Mr. Justice Fulton

delivered the opinion of the court.

This is an appeal from an order or decree of the circuit court of Macon county entered July 25, 1939, finding the defendant appellant guilty of contempt of court and sentencing him to imprisonment in the county jail for a period of nine months because of his failure to comply with the decree of that court.

On April 14, 1939, the plaintiff appellee filed a petition in the circuit court asking for a rule on the appellant to show cause why he should not be adjudged in contempt of court for not paying support money for a minor child. The petition recites that she was granted a decree of divorce from the appellant by the said court of Macon county at the October term, A. D. 1928; that she has since remarried and that her name is now Syble Adolph White. The decree awarded her the custody of their child, Russell Lee Adolph, and ordered the appellant to pay $5 a week for his support. She alleges that in 1930, she cited defendant appellant into court for contempt for not making such payments; that she again cited him in for the same reason in 1935; that after a hearing on the latter petition, an order was entered by the court reducing the weekly payments to $1 per week; that the appellant at the time of filing the present petition was in arrears more than 150 weeks, and that he had only paid $17 since the payments were reduced to $1 per week. On July 12, 1939, the court set the case for hearing on July 17, 1939.

At the hearing the appellee testified that the appellant was in arrears a total sum of $2,010, and since the payments were reduced to $1 per week the sum of $177; that she was remarried and that her husband was a draftsman for the A. E. Staley Mfg. Co., in Decatur; that the child was 13 years of age and needed medical care and that she knew nothing whatever about her husband’s financial circumstances. The decree of divorce and the files in the case were also introduced in evidence.

The appellant testified at the same hearing and stated that he had also remarried, and was still living with the second wife and that they had two children, one three and one seven years old; that he had no work during the last part of 1935, and none in 1936 and in 1937 and was on relief most of the time during that period; that in August 1938 he secured work as an extra truck driver at $5 per week; that in November 1938, this was raised to $15 per week and beginning January 1, 1939 to $20 per week; that he was obliged to pay his expenses out of such pay amounting to $1 to $1.25 per day; that he had no property, except furniture for three rooms, and no other source of income; that his wife had no employment and no property.

At the close of the hearing the appellant was found guilty of contempt for failure to comply with the decree of the court and sentenced to jail for nine months and ordered to pay the costs of the hearing.

The appellant complains of the order or decree because he says it does not set out any facts showing just how he wilfully disobeyed any decree of the court; because it makes no finding of how much he was in arrears in his payments nor how much he could have paid, and that it makes no provision as to how he can purge himself by making payment of arrearages and costs. Our courts hold that the power of a court of chancery to enforce its decree for alimony by attachment for contempt, and by the imprisonment of the defendant for such contempt is limited to a wilful and contumacious refusal to obey the order of the court. Mesirow v. Mesirow, 346 Ill. 219; Igney v. Igney, 303 Ill. App. 563. It is not a contempt of court to fail to pay money which one neither has nor can obtain and which he has not causelessly either put out of his hands or failed to receive. Schuele v. Schuele, 57 Ill. App. 189; Blake v. People, 80 Ill. 11.

In the Mesirow case, supra, the order provided that the defendant be committed to jail until he should have complied with the decree of the court respecting alimony. In the Igney case, supra, the defendant was found to be heavily in arrears, but the rule was discharged because the defendant was found to be not guilty of a wilful and contumacious refusal to obey the decree.

In the present case, the order merely provided that the appellant was guilty of contempt for failure to comply with the decree of the court and sentenced to jail, for nine months. From the proof, it is clear that he was entirely unable to pay all of the arrearages that had accrued under the original decree or even under the extremely modest order of $1 per week entered in 1935. After appellant’s pay had been raised to $20 per week early in 1939, we believe he could and should have met the weekly payment even though it be debatable as to whether or not he could have paid anything on the arrears.

We believe, therefore, that while it may have been perfectly proper for the court to find the appellant guilty of contempt, before he could imprison the appellant, he should have found that such failure to pay amounted to a wilful and contumacious refusal to obey the order of the court. We think such order should also provide the amount to be paid by the appellant, according to his ability to meet payment, and to have provided the terms upon which the balance due should be paid, so that by satisfying the order the appellant could purge himself of contempt and be discharged from jail.

The failure to include such essential elements in the order constituted defects which, in our opinion, did not warrant the commitment of the appellant to jail for nine months and the order of the trial court is therefore reversed.

Reversed.


text:
    Town of Elm Grove, Tazewell County, Illinois, Appellee, v. Town of Pekin, Tazewell County, Illinois, Appellant.
    Gen. No. 9,232.

      Heard in this court at the January term, 1940.
    Opinion filed April 15, 1940.
    C. I. Martin, of Pekin, for appellant.
    Dunkelberg & Rust, of Pekin, for appellee.
   Mr. Justice Fulton

delivered the opinion of the court.

On February 25, 1938, the Town of Elm Grove brought a suit at law against the Town of Pekin, seeking to recover money expended by the Town of Elm Grove in supporting certain paupers who were transferred by the supervisor of the Town of Pekin to the Town of Elm Grove. Both townships are located in the county of Tazewell, Illinois. The suit is based upon the provisions of sec. 16, ch. 107, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 98.18], said chapter being entitled, “Paupers.”

That section provides, in substance, that where a person shall become chargeable as a pauper within 12 months after moving into a town, who at the beginning of 12 months next preceding his becoming so chargeable resided in another town, it shall be the duty of the last-named town to take charge of the pauper on receiving notice specified in the act, and on refusal, an action shall lie against such town on behalf of the town wherein snch person became chargeable, to recover the reasonable costs and charges expended for snch panper.

There is no dispute as to the facts in the case. The appellant Town of Pekin admitting that the appellee Town of Elm Grove has expended the various amounts which it claims to have expended. There was a trial before the court, without a jury, and judgment entered in favor of the appellee and against the appellant for the sum of $344.75. It is from that judgment this appeal is taken.

The contention of the appellant is that its motion to dismiss the amended complaint should have been allowed by the court, and also that its plea in abatement, being the third paragraph in the answer to the amended complaint, was disregarded by the court. In the view we take of the ease, it will not be necessary to consider the overruling of the motion to dismiss the amended complaint. The plea in abatement contained in the answer of the appellant set forth that the plaintiff appellee was not authorized by the electors at the annual town meeting to institute the suit. The court did not hold a separate hearing upon the plea in abatement but heard evidence on the merits and on the plea together. As judgment was entered for the appellee, it is assumed that the court found the issues against the appellant on the plea in abatement.

The evidence shows that suit was instituted by the supervisor of Elm Grove township upon authority given at a special town meeting held on February 1, 1938. This special town meeting was regularly called and the electors present by resolution, duly adopted, voted to authorize and direct the supervisor to start this suit, and also voted to appropriate and levy sufficient funds to pay the expenses of the same. The evidence further disclosed that nothing was done concerning the suit at the annual town meeting in the Town of Elm Grove in April, 1937.

Under sec. 3, art. 4, ch. 139, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 133.039] the electors present at the annual town meeting are given express power to raise money by taxation for the prosecution or defense of suits by or against the town, or in which it is interested, and also the express power to provide for the institution, defense or disposition of suits at law or in equity in all controversies between the town and any other town, or any individual or corporation in which the town is interested.

At special town meetings the powers of the electors are defined by sec. 10, art. 6 of the same chapter, and briefly are: (1) To fill vacancies in offices of town officers ; (2) To raise money for highways and bridges in cases of emergency; (3) To act upon any subject within the power of the electors at any annual town meeting which may have been postponed for want of time at the preceding annual town meeting, to be considered at a future town meeting, and (4) To provide for raising money for the relief and support of all poor and indigent persons within the town. In the enumeration of the powers of electors at the special town meetings there is nowhere any power listed to authorize the institution of suits or to provide for the raising of funds to pay the expenses thereof, unless that particular subject matter has been postponed for want of time at the preceding annual meeting to be considered at a future town meeting. In this case there ivas no action concerning this suit taken at the annual meeting at all and no postponement to the special meeting.

The only power given to a supervisor to initiate suits is found in par. 3, art. 11, ch. 139, Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 133A05] where it is stated:

“He shall prosecute in the name of his town or otherwise, as may be necessary, for all penalties or forfeitures given by law to such town, or for its use, and for which no other officer is especially directed to prosecute, except as may be otherwise directed by the town meeting.” In the case of Town of Kankakee v. Kankakee & I. R. Co., 115 Ill. 88, it was held that if a bill in chancery be brought in the name of a town, without authority of the electors given at a town meeting, the court may properly dismiss the same on motion of the defendant. In Baltimore & Ohio S. W. Ry. Co. v. People ex rel. Wall, 156 Ill. 189, the court held that a town tax could not be legally levied at a special town meeting unless the subject of such levy was before the annual town meeting, and was by that meeting postponed to such special meeting. This proposition of law was adopted and approved in the case of People v. Louisville & N. R. Co., 350 Ill. 274, where it was stated: “A town tax can be voted by the electors of a township only at the annual meeting, or at a special Town meeting subsequently held when the matter of levying a town tax has been postponed from the annual town meeting.”

The raising of money by taxation for the prosecution or defense of suits by or against a town, or the institution, defense or disposition of suits at law or in equity in all controversies between the town and any other town can only he provided for at the annual town meeting. Section 3, art. 4, ch. 139, Ill. Rev. Stat. 1937. Such action at a special town meeting could only be made when those matters had been postponed from the preceding annual meeting, and otherwise such authority is not defined or implied by sec. 10, art. 6, ch. 139 [Ill. Rev. Stat. 1937; Jones Ill. Stats. Ann. 133.058]. In this case the record shows that no action of any kind was taken at the preceding annual meeting for such purposes, or that the same subject matter was postponed to a special meeting. Therefore, the first necessary steps for instituting the present suit were not properly taken.

Counsel for appellee urges that because the appellant failed to include in his motion to dismiss the amended complaint, the question of the authority of the appellee to bring the present suit, that it has waived such question and could not raise such issue in its answer. While there is some language supporting this contention in the opinion, of the court in Town of Big Grove v. Town of Fox, 89 Ill. App. 84, we believe the intent of that holding, as well as that in Sanderson v. Town of La Salle, 117 Ill. 171, to be that the question of an attorney’s authority to institute an action in the name of a town, cannot be raised for the first time in the Appellate Court. However, under par. 3 of sec. 43 of the new Civil Practice Act it is provided, that all defenses, whether to the jurisdiction or in abatement, or in bar, may be pleaded together, but the court may order defenses to the jurisdiction or in abatement to be tried first. It is our judgment that the appellant had a perfect right to include matters in abatement in the answer filed.

It is the opinion of this court that the appellee was not legally authorized to file this suit, not having received such authority from the electors of the Town of Elm Grove at the annual town meeting in April, and that the court committed error in finding the issues in favor of the plaintiff appellee.

The judgment of the trial court is therefore reversed.

Reversed.


author: Mr. Justice Hates

text:
    Edward Harper, Appellee, v. Lula May Sallee, Appellant.
    Gen. No. 9,227.

      Heard in this court at the June term, 1939.
    Opinion filed April 15, 1940.
    Mann & Stifler, of Danville, and Asa S. Chapman, of Champaign, for appellant.
    Rearick & Rearick, of Danville, for appellee.
   Mr. Justice Hates

delivered the opinion of the court.

This is an appeal by appellant, hereinafter called defendant, from an order of the circuit court of Vermilion county, authorizing the master to issue a deed to the appellee, hereinafter called the plaintiff, for an undivided two-thirds interest in defendant’s farm, and ordering the sale of the remaining one-third interest so as to compel contribution by the defendant to the plaintiff for one-third the money paid, to redeem from a foreclosure sale of the farm in question.

•The farm, containing 72 acres, was originally owned by William L. Sallee, the husband of the defendant. On March 22, 1928, William L. Sallee and his wife, Lula May Sallee, executed a mortgage to secure three thousand dollars ($3,000.00), which became the property of the Mutual Benefit Life Insurance Company, by assigmnent. Afterwards, on January 3, 1931, William L. Sallee, and his wife Lula May Sallee, executed a deed to a third person, and the third person in turn conveyed an undivided two-thirds of said land to William L. Sallee, and an undivided one-third to Lula May Sallee.

Subsequently on February 2,1931, William L. Sallee and Lula May Sallee executed a second mortgage to secure a note for $6,885.25, which note was signed by William L. Sallee, and his son, Alva M. Sallee. This second mortgage was a lien upon the undivided two-thirds of the land owned by William L. Sallee only. Lula May Sallee joined in the junior mortgage to release her dower, but she did not sign the note.

After the junior mortgage was given, William L. Sallee died, and by his will devised all his property to Lula May Sallee, his widow (defendant), by virtue of which she became the owner of his undivided two-thirds of the land in question. The entire fee was covered by the first mortgage for three thousand dollars, and the undivided two-thirds which she acquired by the will, was also incumbered by the junior mortgage.

After the death of William L. Sallee, both mortgages fell into default. The Mutual Benefit Life Insurance Company instituted foreclosure proceedings on the first mortgage, cause number 21542, in the circuit court of Vermilion county. The Farmers’ State Bank of Rossville, Indiana, holder of the junior mortgage, had failed, but its receiver was made a defendant in the foreclosure suit. He filed an answer and also filed' a counterclaim, praying for foreclosure of the junior mortgage. A decree of foreclosure, under the first mortgage, was entered on the 23rd day of November, 1935, and on January 6, 1936, a sale was had thereon, at which sale the Mutual Benefit Life Insurance Company purchased said premises on a bid of three thousand dollars and received the usual certificate of purchase, bearing that date. On March 17, 1936, a decree was entered, foreclosing the junior mortgage upon the counterclaim, but no sale was ever had thereunder. The junior mortgage did not pledge the rents. The counterclaim did not pray for application of them and the decree made no disposition of them.

On January 4, 1937, Edward Harper, the plaintiff in this proceeding, who was not a party in the foreclosure suit and was not a creditor, obtained an assignment of the above mentioned unexecuted decree on the junior mortgage.

On January 5, 1937, the last day of the year subsequent to the sale above mentioned, he paid the sum of $3,180, the correct amount of the redemption money, to the master in chancery, and obtained a certificate of redemption, which was recorded. The holder of the certificate of purchase surrendered it and accepted the redemption money.

Edward Harper, having made the redemption, did not proceed to sell under the junior decree, but on the 18th day of May, 1937, he filed his complaint in this cause, making Lula May Sallee, party defendant, and prayed for an order directing the master in chancery to issue a deed to him for the entire premises covered by the certificate of purchase from which he redeemed.

The complaint set forth that the plaintiff was in possession of the premises in controversy. The defendant answered, admitting this averment, but averred that such possession was that of a trespasser. Defendant filed a counterclaim praying to be restored to possession and demanding an accounting from the plaintiff for all rents collected by him while withholding possession.

The court entered a decree holding that the redemption by Edward Harper did not destroy the legal effect of the master’s sale, and that he is subrogated to the rights of the purchaser at that sale, in the land covered by his junior decree, and that he is entitled to a deed for that two-thirds interest. ,

The decree also held that as to the one-third owned by Lula May Sallee, the redemption by Edward Harper, “did not destroy her equity of redemption — and that she is entitled to her one-third, provided she makes contribution to Edward Harper by paying one-third of the redemption money, with interest,” and provides for the sale of Mrs. Sallee’s one-third interest to make said sum, unless paid, in the usual form of foreclosure sales. The contribution money was not paid, and after the 30 days fixed in the decree, the master in chancery issued a deed to the plaintiff for the undivided two-thirds interest, and advertised and sold defendant’s one-third interest to make the contribution money. By her appeal the appellant seeks to have the order authorizing the master to issue a deed to appellee for the undivided two-thirds of her farm, declared to be null and void, as well as all acts performed under it, and seeks an accounting* for all rents collected by appellee during his possession on all the premises, and to have the decree reversed, which required her to contribute one-third of the redemption money.

Under our statute, redemptions fall into two classes,

(1) redemptions within 12 months after the sale, and (2) redemptions after 12 months after the sale, and within 15 months. The effect upon the title to real estate of these two classes of redemption is entirely different. The difference may be stated to be that by redemption within the 12-months ’ period, no matter by whom made, no title is acquired by the redemptioner, whereas by virtue of a redemption properly made and completed after the 12-months ’ period the redemptioner acquires the title to the property. The statute gives the right to redeem within the 12-months ’ period to “any defendant, his heirs, administrators, assigns or any person interested in the premises through or under the defendant.”

Where there is a redemption within one year, the statute provides such sale and certificate of purchase shall be null and void. Ill. Rev. Stat. 1939, ch. 77, sec. 18 [Jones Ill. Stats. Ann. 107.168]. The payment of the redemption money to the master in chancery and its acceptance by the certificate holder completely washed from the title the lien of the first mortgage, and the effect of the foreclosure and sale under the first mortgage. Hack v. Snow, 338 Ill. 28; Butter v. Brown, 205 Ill. 606. By his redemption the plaintiff acquired exactly what the mortgagor would have acquired by redemption. That was, the abatement of the lien. Morse v. Smith, 83 Ill. 396. The certificate and sale, then, having been made void and nullified by the redemption, thereafter no valid deed could be issued upon the certificate. Payment of the debt destroyed the lien. Haigh v. Carroll, 209 Ill. 576, 580, 581; Davis v. Dale, 150 Ill. 239.

When the lien of the prior mortgage was destroyed by redemption, then the decree of sale entered upon the junior mortgage became effective. Hack v. Snow, supra. It then became plaintiff’s right to proceed to make a sale under it, but there could be no sale under that decree without notice, and no conveyance after sale until after the period of redemption.

The plaintiff, in his brief, has confused the cases declaring the effect of a redemption after the expiration of one year from date of sale, with those cases dealing with redemption within one year. The sale on redemption after one year confirms the original sale, and substitutes the redemptioner to all the rights of the original purchaser. The cases cited in plaintiff’s brief,- — -Herdman v. Cooper, 138 Ill. 583; Sutherland v. Long, 273 Ill. 309; Lamb v. Richards, 43 Ill. 312; Keithley v. Interstate Bank & Trust Co., 154 Ill. App. 443,— apply to redemptions by a judgment creditor, after the expiration of one year, and are not authorities in this case.

The only rights the plaintiff had was by, under, and through the second mortgage. He was not a party to the suit and was not a creditor. He had a right to redeem from the sale under the first mortgage, within a 12-months ’ period, and had a lien on the premises for the amount of the redemption money, together with his rights under the decree of the second mortgage, and anyone redeeming from a sale under the junior decree would be required, not only to pay the amount due under the junior decree, but in addition the amount paid for the redemption. Clearly this did not give him a right to an immediate deed without notice; without a sale under the junior decree, and without waiting for the period of redemption to expire thereon.

When a decree of foreclosure is entered, the mortgage and all its covenants are merged in the decree, and the instrument can only be enforced through the decree and according to its terms. It cannot be the basis of a new independent suit. Wayman v. Cochrane, 35 Ill. 151; Lightcap v. Bradley, 186 Ill. 510; Schaeppi v. Bartholomae, 217 Ill. 105, 110.

The defendant did not sign the note in the second mortgage, and there is no contract liability requiring her to pay it, and up to the time of a sale under the second mortgage, there is no obligation on her part to pay the one-third redemption money. If the defendant redeems from a sale under the second mortgage decree, she will be required to pay the redemption money as well as the amount due under said decree, but she is not called upon to make her election on this until after the sale, and this is no ground for selling her property to force contribution prior to a sale under the junior mortgage decree.

Where the equity of redemption is owned by a person who is not liable to pay the mortgage debt, and the rents have not been pledged by the mortgage, the rents belong to the owner of the equity of redemption, and the mortgagee cannot take them. Standish v. Musgrove, 223 Ill. 500; Trustees of Schools of Township No. 27 v. Thompson, 298 Ill. App. 386; Clark v. Hall, 303 Ill. App. 1, 24 N. E. (2d) 394.

We are of the opinion that the court erred in ordering the issuance of a master’s deed for the two-thirds interest, and ordering the sale of defendant’s one-third interest for contribution to the plaintiff for the redemption money, and that the complaint of the plaintiff is without equity and should be dismissed; that the defendant is entitled, on her cross complaint, to an accounting of the rents from the plaintiff for the. time he has been in possession, and she is entitled to he awarded possession of the premises in question.

For the reasons herein indicated, the decree of the circuit court of Vermilion county is hereby reversed and cause remanded, with directions to dismiss the complaint of the plaintiff; cancel the master’s deed for the two-thirds interest; set aside the master’s sale; cancel the master’s deed for the one-third interest; grant defendant the relief prayed for on her cross complaint for an accounting of the rents, and award her possession of the premises.

Reversed and remanded with directions.


author: Mr. Justice McSurely

text:
    Wilhelm Rowoldt for use of Beulah Flanagan and Marjorie Flanagan, Appellant, v. Cook County Farmers Mutual Insurance Company, Appellee,
    Gen. No. 40,945.

      Heard in the first division of this court for the first district at the October term, 1939.
    Opinion filed April 17, 1940.
    Rehearing denied April 30, 1940.
    McKinley, Price & Quindry, of Chicago, for appellant ; William McKinley and Paul E. Price, of counsel.
    Erwin W. Roemer and Edwin D. Lawlor, both of Chicago, for appellee; Edwin D. Lawlor, of counsel.
   Mr. Justice McSurely

delivered the opinion of the court.

Beulah Flanagan and Marjorie Flanagan, hereafter called plaintiffs, brought suit against Wilhelm Rowoldt to recover damages suffered by them because of his negligent driving of his automobile; upon trial by a jury he was found guilty and Beulah Flanagan’s damages were assessed at $6,200, and Marjorie’s at $750, and judgments for these amounts were entered June 2, 1938. The present action is garnishment against the defendant insurance company, which had issued to Rowoldt its automobile liability insurance policy; after trial a judgment was entered against the garnishee defendant, assessing plaintiffs’ damages at $6,950 and interest; the court on motion granted a new trial, and on petition to this court leave was given to appeal from that order.

The trial court stated that his only reason for granting a new trial to defendant was that certain evidence offered by it should have been admitted. This evidence was to the effect that the judgment debtor, Rowoldt, had real estate in Cook county sufficient to satisfy the judgment. By our statute on Judgments, ch. 77, sec. 11 [Jones Ill. Stats. Ann. 107.161], it is provided that the person in whose favor execution is issued may elect as to what property shall be levied upon, provided personal property shall be last taken.

The affidavit for garnishment was filed November 16,1938, and answer to the interrogatory was filed ; an additional interrogatory was filed, and December, 1938, defendant filed its answer to this additional interrogatory. These answers in substance denied that it owed Bowoldt anything and any liability under its insurance policy issued to him. Four months later, that is, April, 1939, the appearance of the attorneys for the garnishee was withdrawn and that of another counsel, Erwin Boemer, substituted, and then for the first time there was an amendment to the answers tendered asserting that Bowoldt had real estate out of which the judgment might be satisfied; the trial court denied leave to file the amendment, except in one respect not involved in this appeal.

It is conceded that all the statutory conditions prerequisite to the issuance of a summons against the defendant garnishee had been complied with. The execution on the original judgment was delivered to the sheriff on July 12,1938, and an actual demand was made upon the judgment debtor and the return of “no property found” was made October 10, 1938. The return in due order recited a demand upon Rowoldt to satisfy the writ, the delivery of a copy to him with an indorsement that he must file a schedule of his property within 10 days, and that, “Being unable to find any property of the within named defendant in my County on which to levy this writ I therefore return the same no property found. ...” There is no claim that this return was made at the suggestion of plaintiffs or their counsel. Subsequently, counsel for plaintiffs filed an affidavit in garnishment reciting the judgment against Bowoldt, the issuance of the execution thereon and the return of “no property found” ; the affidavit further avers that defendant Rowoldt has no property within the knowledge of this affiant in his possession liable to execution, but the affiant has just reason to believe that the defendant insurance company is indebted to Rowoldt or has effects or estate of his in its hands.

Plaintiffs were not bound to make every possible effort to find property of their judgment debtor, and garnishment proceedings will not be defeated if it appears that they used reasonable effort to find it. If a judgment creditor, his attorney or the sheriff knows of the existence of such property prior to suing out garnishment summons, such information can not be ignored. The garnishee was summoned November 16, 1938, and interrogatories were filed on the same date and not until April, 1939, did the garnishee defendant assert that the judgment debtor had real estate.

We find no cases supporting the proposition that a garnishee may assert as a defense that the judgment debtor has real estate or other property sufficient to satisfy the judgment. If a garnishee has property belonging to the judgment debtor, of what concern is it to him that the judgment debtor has other property. As was said in Pine Tree Lumber Co. v. Central Stock & Grain Exchange, 238 Ill. 449, the garnishee is, theoretically, a disinterested stakeholder. He may deny any indebtedness to the judgment debtor or that he has any property or effects of such debtor, and upon showing these facts is entitled to be discharged. But, “If he owes the defendant or has property or effects belonging to him in his hands, it is a matter of indifference to him whether he pays the money or delivers the property to the defendant or- to the plaintiff in the ease, provided he is properly protected in making such payment or delivery. ... If a judgment is obtained against the defendant it is no concern of the garnishee that irregularities have intervened which the defendant may be willing to waive or fail or neglect to take advantage of.” In the instant case although demand was made upon Rowoldt, the judgment debtor, nearly four months prior to the affidavit in garnishment, he saw fit to waive his right to have the real estate first taken. How then can the garnishee avail itself of any irregularity which the judgment debtor apparently is willing to waive? Cases like Kelly v. Marks, 264 Ill. App. 402, are not in point, as there the return of the sheriff was made pursuant to directions of plaintiff or his counsel and the execution debtor moved to vacate the judgment against the garnishee.

In Zimek for use of Fieldcamp v. Illinois Nat. Casualty Co., 370 Ill. 572, it is said that the return of the execution by the sheriff “no property found” is prima facie evidence of the fact that the judgment debtor had no property in Cook county, and cited Chanute v. Martin, 25 Ill. 49, which held in substance that to defeat the garnishment it must appear there was real estate of which the sheriff, the plaintiff or his attorney had knowledge, or which, by the exercise of reasonable care, could have been discovered. Also, in the Zimek case it does not appear that the judgment debtor had any knowledge of the return or of the existence of the execution against him, thus distinguishing it from the instant case.

The trial judge stated in his opinion that leave should have been granted to defendant to file the special defense of the existence of real estate and that evidence in support of this should have been admitted, and for this error and for no other, reason the motion for a new trial was granted. For the reasons we have stated we hold that the court improperly ruled upon this point.

Both parties agree that this court is not confined to any particular ground or reason stated by the trial court for the allowance of a new trial but may examine the complete record for any other errors committed. However, we encourage the practice in the trial court of stating its reasons as an aid to this court. Bule 1 of this court; Rule 36 of the Supreme Court; Ill. Rev. Stat. 1939, ch. 110, par. 259.36 [Jones Ill. Stats. Ann. 105.36].

Defendant asserts that the liability insurance policy issued to Rowoldt provided that within five days after the happening of any alleged automobile accident he should give notice in writing to the secretary of the insurance company and that no such notice was given; that he did not immediately forward to the garnishee defendant any summons served upon him in any suit instituted against him as a result of the automobile accident. To this the plaintiffs reply that the requirement of written notice within five days was waived and the defendant garnishee was fully informed of the facts and through its counsel assisted in the trial of the action against the insured, Rowoldt.

The collision between Rowoldt’s automobile, driven by him, and the one in which the plaintiffs were riding happened July 12,1937; Rowoldt was arrested at midnight July 12th for leaving the scene of the accident; on the morning of July 14th he called at the home of August Geweke, president of the defendant insurance company and told him that he had been arrested for leaving the scene of an accident; that he did not know anything about an accident and denied that he had been involved in an accident; Geweke told him that the insurance policy which he carried with the defendant insurance company did not cover him in a criminal case but only for civil actions; he was advised to see the secretary of defendant company, which he did, and then saw Mr. Walsh, the company’s attorney, who also told him that the policy did not cover the criminal case but only a civil claim; shortly afterward he gave Mr. Walsh a letter which he had received from a Mr. Guerine, attorney for plaintiffs. July 26, 1937, Bowoldt came to Mr. Walsh’s office and admitted he had lied when he had said that he was not involved in the accident; that he was in the accident and wanted to tell the truth as to how it happened, whereupon a lengthy statement dictated by Mr. Walsh was taken in which Rowoldt changed his story and described in detail the accident in which he was involved; this was signed and sworn to by him; Mr. Walsh notified the secretary of the defendant company and told him in a general way the substance of the affidavit.

In August, 1937, Rowoldt received a summons in connection with the claims of plaintiffs and this was mailed to Mr. Walsh, who prepared and filed an answer on behalf of Rowoldt. Rowoldt testified to having various conversations with Walsh with reference to plaintiffs’ suit, Mr. Walsh advising how they might be able to get a cheaper settlement; Bowoldt testified that Walsh advised him to stick to his first story denying he was in the accident; this was denied by Walsh, but Mr. Walsh was present October 15, 1937, when Mr. Rowoldt in a deposition said he was not present at the time of the accident. There is further testimony as to conversations between Walsh and Rowoldt and Mrs. Rowoldt, who was riding with Rowoldt at the time of the accident. Subsequently, in February, 1938, Mr. Walsh withdrew his appearance in plaintiffs’ case and Rowoldt employed other counsel.

Although Rowoldt originally denied participation in the accident, less than two weeks thereafter he made a full, detailed statement to Walsh under oath in which he admitted his part in the accident. Defendant company did not do anything to deny its liability under the policy but permitted its attorney to enter his appearance in the plaintiffs ’ suit. The jury could properly find that even if there were a breach of the provisions of the policy, the defendant insurance company, with full knowledge of the facts, for several months permitted its attorney to represent Rowoldt who was continuously acting under the advice of defendant’s attorneys. In Brogdon v. American Automobile Ins. Co., 290 Mich. 130, it was said that “anything done by an insurance company after they learn the true facts that may be considered as a waiver, as a rule will be considered a waiver. ...”

Moreover, the rights of the insurance company were not prejudiced by the failure of Rowoldt, the insured, to file the written notice or truthfully to inform the company of the facts in the first instance. Similar facts were under consideration in Pacific Indemnity Co. v. McDonald, 107 F. (2d) 446, 450, where the insurance company made the claim that the false statements of the insured “ipso facto breached the insurance policy.” The court held that “The prompt withdrawal of the falsehood cured the default in the absence of some showing that the company was prejudiced by the delay in telling the truth.” To the same effect is Harrison v. United States Fidelity & Guaranty Co., 255 Ill. App. 263, and other cases.

Counsel for defendant make a savage attack on Rowoldt, calling him deceitful and a perjurer and asserting that the verdict in the plaintiffs’ case was obtained by fraud and collusion between Rowoldt and the plaintiffs in that case. This was a question properly submitted to the jury. The fact that Rowoldt was present but did not testify at the trial of plaintiffs’ suit is not sufficient to support the claim of collusion. If the facts were as given in the sworn statement of Rowoldt, his liability to respond in damages was clear.

It is said that the remarks and arguments of counsel for plaintiffs were improper and prejudicial. Some of these remarks were unnecessary but do not compel a new trial. As was said in the very recent case of People v. Billings, 372 Ill. 433, 441, “A trial should be conducted without prejudicial conduct of counsel and with the dignity and solemnity that is required in passing upon the question of a defendant’s guilt or innocence. While the facts shown as to such conduct are not to be commended, but deserve criticism, they do not show that defendant did not have a fair trial. ’ ’

The closing argument of plaintiffs’ counsel is severely criticized, but the argument which counsel for defendant made has been entirely omitted from the report of the proceedings at the trial.

In Metropolitan Life Ins. Co. v. Banion, 106 F. (2d) 561, 568, the court said: ‘‘Ordinarily a, judgment will not be reversed on the ground of improper argument where all arguments are not in the record so that it can be determined whether the parts drawn in question were provoked or made in response.”

It was not error to permit the introduction of the complaint and answer of Rowoldt in plaintiffs ’ suit and the answer of the garnishee defendant in the garnishment suit. The garnishee had answered denying that it had any notice or knowledge of any automobile accident in which Rowoldt was involved, except by the garnishment proceedings, and had no knowledge and received no summons concerning the automobile accident. It was competent to show that the answer on behalf of Rowoldt in plaintiffs’ suit was filed by the same attorneys who filed the answer of the garnishee in this suit for the purpose of showing that defendant had admitted liability by assuming the defense in the plaintiffs’ case. Allen v. United States Fidelity & Guaranty Go., 269 Ill. 234.

Other points are made but none of them are of sufficient importance to require the allowance of a new trial, although counsel for defendant have indulged in their brief in some heated remarks.

The trial court was in error in granting a new trial on the ground of the refusal to admit evidence of the ownership of real estate by the judgment debtor.

For the reasons above indicated, the order granting a new trial is reversed and the cause remanded with directions to enter judgment upon the verdict rendered,

jReversed and remanded with directions.

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


author: Mr. Justice Scanlan

text:
    Henry W. Farnum et al., Surviving Partners of the Copartnership Formerly Trading as Farnum, Winter and Company, Appellants, v. American National Bank and Trust Company of Chicago, Successor Trustee, et al., Appellees.
    Gen. No. 40,051.

      Heard in, the second division of this court for the first district at the April term, 1938.
    Opinion filed April 23, 1940.
    Rehearing denied May 7, 1940.
    * Wilson & MoIlvaine, of Chicago, for appellants; J. F. Dammann, Charles T. Freeman and Sidney K, Jackson, all of Chicago, of counsel.
    Poppenhusen, Johnston, Thompson & Raymond, Anan Raymond, William R. Swissler and Robert Z. Hickman, all of Chicago, for appellees.
   Mr. Justice Scanlan

delivered the opinion of the court.

Plaintiffs, as creditors of Knowlton L. Ames, deceased, filed their bill to set aside, as in fraud of his creditors, a certain insurance trust made by Ames. The American National Bank and Trust Company of Chicago, as Successor Trustee, etc., and all of the other defendants, save the insurance companies, the Trustees of Princeton University, and “Unknown Owners” demurred generally and specially to the amended bill of complaint as finally amended. The trial court sustained the general and special demurrer to the amended bill as amended and entered a decree dismissing the bill for want of equity. Plaintiffs appeal.

The verified amended bill of complaint, filed February 11,1937, alleges, inter alia, that Knowlton L. Ames carried a brokerage account with plaintiffs for many years prior to December 2,1930, the date of the insurance trust agreement in question; that on that date he was indebted to Farnum, Winter & Co. in the sum of $410,285.77; states, upon information and belief, that at the time the trust was made, Ames was insolvent; that his general indebtedness, which included some $3,000,000 in debts on account of notes and accounts payable in addition to the indebtedness to Farnum, Winter & Co., exceeded his assets by more than $1,000,000; that he was also subject to various contingent liabilities growing out of guarantees and endorsements in the amount of approximately $2,500,000; that he carried a large amount of life insurance, represented by some 33 policies issued by nine companies and of the total face value of $1,441,000; that on said date he was the owner of and retained the beneficial interest in the entire insurance covered by the policies referred to; that the trust agreement executed on December 2, 1930, and the amendments executed April 2,1931, and June 25, 1931, are attached to the amended bill and made parts thereof as Exhibits I, II and III, respectively; (here follow certain allegations as to the provisions of the trust as modified and amended, all of which sufficiently appear from the opinions of this court and the Supreme Court in the case of Gurnett v. Mutual Life Ins. Go., 268 Ill. App. 518, 356 Ill. 612) that none of the beneficiaries of the trust gave anything of value in consideration for the gifts, conveyances and trusts provided for in the trust agreement, as so modified and amended; that said trust agreement, modifications and amendments thereto, between Ames and said trustee, were executed by Ames with intent to deceive and defraud his creditors, including plaintiffs, of their said claims, and the trust agreement, modifications and amendments thereof, and all of the beneficial interests and gifts created and given thereby are fraudulent and void as to plaintiffs; alleges that the insurance companies which are or were indebted to the trustee under the trust agreement, as so modified and amended, by reason of the insurance contracts referred to in said trust agreement, modifications and amendments, the dates and numbers of the insurance contracts, and the face amounts of said contracts, are as set forth in Schedule “A” attached to Exhibit I; that prior to the execution and delivery of said trust agreement dated December 2,1930, the beneficiary in each of the policies designated in Schedule “A” attached to said agreement, and in each of which policies Ames had reserved the right to change the beneficiary named therein, was the Central Trust Company of Illinois, as trustee under a trust agreement dated November 29, 1927, between said trust company and Ames; that on December 2,1930, prior to the execution and delivery of the trust agreement of that date, Ames, in accordance with the provisions of the trust agreement dated November 29, 1927, revoked and terminated the trust agreement of said last mentioned date in its entirety and thereby directed Central Trust Company of Illinois, as trustee, to deliver all of said insurance policies above mentioned to him; that thereafter, on December 2, 1930, Ames deposited said policies with said trust company as trustee under and pursuant to the trust agreement dated December 2, 1930, and subsequently, while insolvent as aforesaid, changed the beneficiary in each of said life insurance contracts to Central Trust Company of Illinois, as trustee under and pursuant to said trust agreement, retaining and reserving unto himself the right to change the beneficiary in each of said policies; that said trust company, as trustee under the trust agreement dated December 2,1930, remained the beneficiary under each of said policies thereafter until and after Ames’ death, on December 23, 1931; states, upon information and belief, that on December 23, 1931, Ames shot and killed himself; that on or about April 2, 1931, Ames, while still insolvent and indebted to plaintiffs as aforesaid, modified and amended the trust agreement dated December 2, 1930, as shown by Exhibit II; that on or about June 25, 1931, Ames, while still insolvent and indebted to plaintiffs as aforesaid, further modified and amended the provisions of the trust agreement dated December 2, 1930, shown as Exhibit III. As to the exhibits attached to the amended bill: Exhibit I recites the trust agreement of December 2,1930, which sufficiently appears from the opinions of the Appellate and Supreme Courts in the Gurnett case. Exhibit II recites a certain modification and amendment of the trust agreement, which also sufficiently appears from the said opinions in the Gurnett case. Exhibit III relates to a modification and amendment of the trust agreement executed by Ames on June 25, 1931. The amended bill further alleges that Ames left a will, which was admitted to probate by the probate court of Cook county in January, 1932, and the claim of plaintiffs, in the sum of $379,561.65, was allowed by the probate court on February 27, 1933; that the estate appealed to the circuit court, where the claim of plaintiffs was allowed in the sum of $411,816.89; that the estate then appealed to the Appellate Court (Ames v. Farnum, 285 Ill. App. 97), where the order of the circuit court was affirmed on April 22, 1936; that no appeal was prosecuted therefrom; that the estate of Ames was insolvent; that his liabilities exceeded his assets at the time of his death by approximately $5,000,000. The prayer of the amended bill seeks to have the trustee and the beneficiaries under the trust state the amount of money, etc., received by them or either of them from the insurance policies in question; that the trust agreement of December 2,1930, as modified and amended, be declared null and void, and that any funds received by the trustee from the said policies be paid to plaintiffs in satisfaction of their claim; that the interest in the trust of Mrs. Ada Howell Ames be declared null and void to the extent of the premiums paid on the policies and that the amount of said premiums so paid be paid to plaintiffs on account of their claim and judgment. The last amendment to the bill, made on July 16, 1937, alleges that .while Ames was so indebted and insolvent on December 2, 1930, and prior thereto and until the time of his death, with intent to defraud his creditors, including plaintiffs, he paid to the various insurance companies on account of insurance premiums on the policies in question sum in excess of $100,000, that such premiums were in fraud of and to the prejudice and damage of plaintiffs, and that such payments contributed to the insolvency of Ames.

The general and special demurrer to the amended bill as amended filed by American National Bank and Trust Company of Chicago, as successor trustee, and other defendants, contains, in addition to a general demurrer, 25 special grounds of demurrer.

In the view that we have taken of this appeal it is necessary for us to refer to only one of the special grounds urged, viz: “The proceeds are not available to creditors for the reason that the policies were at no time, by the allegations of the amended bill itself, assets of the deceased or payable to him, his executors or administrators. ’ ’ In support of this special ground of demurrer the defendants demurring cite Gurnett v. Mutual Life Ins. Co., 268 Ill. App. 518; id., 356 Ill. 612. After a careful consideration of the important question involved in this special ground of demurrer we have reached the conclusion that the special ground of demurrer is a meritorious one, and that the trial court was justified in dismissing the bill for want of equity upon that ground alone. At the time of the argument of the general and special demurrer to the amended bill as amended the parties entered into written stipulations that the defense of res judicata might be considered-at the demurrer stage of the proceedings, and that the pleadings and the opinion of the Appellate Court in the Gurnett case and also the opinion of the Supreme Court in that case should be considered as if in evidence under a special plea. The amended bill in the Gurnett case was filed by complainants “on behalf of themselves and any and all creditors, claimants, legatees and heirs of the said Knowlton L. Ames as their respective interests in the effects of the estate . . . may, from time to time, appear . . . .” In that bill it was alleged: “1. That the plaintiffs had been creditors of Ames since 1928, and that they were creditors on December 2, 1930, and that on said date they began an action at law against Ames. 2. That on said date of December 2,1930, the date of the alleged transfer, Ames was insolvent. 3. . . . ‘that in and about the month of December 1930, while the said Knowlton L. Ames was insolvent, that is to say, while the debts due and owing from the said Knowlton L. Ames to various and sundry individuals were grossly in excess of the assets of the said Knowlton L. Ames, the said Knowlton L. Ames caused many of the said policies to be made payable to the Central Trust Company of Illinois as Trustee under a trust agreement dated December 2,1930, and which is known as Trust No. 10069. ’ [This is the same trust agreement that is involved in the instant proceeding.] 4. ‘. . . and your orators hereby specifically waive any primary lien that they have or may have upon the proceeds of said insurance policies. . . .’ 5. That the bill was filed ... ‘on behalf of themselves and any and all creditors or claimants, legatees and heirs ... as their respective interests in the effects of, the estate . . . may appear and who wish to join in this suit.’ ” The bill further alleged that the trust agreement of December 2, 1930, and amendments thereto did not conform to the legal requirements for the disposition of property inter vivos, because there was no disposition by Ames during his lifetime of any interests in the life insurance policies to the trustee; that there was no actual corpus of the trust while Ames lived, as the result of which the trust failed, and that the proceeds of the policies rightfully belonged to the executors and should be impressed with a resulting trust in favor of the estate. To quote from the opinion of the Supreme Court (p. 614): “The relief prayed for was: (1) to have the trust agreement and the amendments thereto entered into by Knowlton L. Ames and the Central Trust Company of Illinois, as trustee, declared void; (2) to enjoin the two named insurance companies from paying to the trustee the proceeds of certain policies they had issued; (3) to restrain the trustee from disposing of the proceeds of other policies paid to it, and (4) to order the trustee to hold the proceeds of the several policies under a resulting trust in favor of the estate of Ames and to pay such proceeds to the executors of his will.” To further quote from said opinion (pp. 618, 619): “Ames, the creator of the trust assailed, made his insurance policies payable to a trustee and contemporaneously executed a trust agreement providing for the administration and disposition of the proceeds of the policies. The trustee promised to perform the duties of administering the trust according to the provisions of the agreement, and the policies were placed in its possession. The policies were contracts between the insured and the insurers for the payment of stipulated sums by the latter to the trustee as the nominee of the insured upon the happening of a certain contingency, namely, the death of Ames. (I Biddle on Insurance, p. 5; 1 Joyce on Insurance, (2d ed.) sec. 7). The premiums paid by Ames constituted the consideration for the promises made by the insurers. Their obligations to pay and the right of the trustee to receive the proceeds of the policies, upon the happening of the contingency specified, were determined when the companies noted upon the face of the policies the exercise, by the insured, of his right or privilege to change the beneficiaries. The date of the death of the insured merely fixed the time when the obligation of the insurers to pay and the right of the beneficiary to receive the proceeds of the policies became enforcible. (Frick v. Lewellyn, 298 Fed. 803). The trust agreement and the change of beneficiaries, however, became effective during the lifetime of the settlor. The continuing right to receive the proceeds of an insurance policy is not impaired by the unexercised right or privilege of the insured to designate another beneficiary. (Richards on Insurance, (4th ed.) p. 565; Tyler v. Treasurer, 226 Mass. 306). The designation of a beneficiary in a policy of life insurance creates an inchoate gift of the proceeds of the policy, which, if not revoked by the insured in his lifetime, vests in the beneficiary at the time of the former’s death. (Travelers’ Ins. Co. of Hartford v. Fancher, 26 P. (2d) (Cal.) 482). A policy of life insurance is not deemed an asset of the estate of the insured unless it is made payable to him, his executors or administrators. The mere fact that the insured may change the beneficiary does not make the policy or its proceeds a part of his estate. Neither the policies nor their proceeds constituted a part of the estate of Knowlton L. Ames, deceased. Since his death the trust agreement is merely evidence of the trustee’s contract under which it must collect the policies and hold the proceeds for the purposes of the trust.” The Supreme Court cites a number of cases in support of its ruling. To further quote from said opinion (pp. 622, 623): “The reservation of the power to revoke an entire trust does not invalidate the agreement presently creating it or render it testamentary. (People v. Northern Trust Co., 289 Ill. 475; Kelly v. Parker, 181 id. 49; Mayer v. Tucker, 102 N. J. Eq. 524; Dolan’s Estate, 279 Pa. 582). The plaintiffs in error concede the validity of the provision reserving power to the settlor to terminate the trust agreement in whole or in part. Naming new beneficiaries in one or more of the policies would have produced precisely the same effect as the termination of the trust with respect to such policies. The power to designate another beneficiary in an insurance policy is a privilege personal to the insured. The powers and privileges reserved do not affect the obligations of the insurers to pay the proceeds of the policies to the trustee upon the death of the insured. ” The complainants in the Gurnett case alleged that the estate was insolvent and the suit was prosecuted for the benefit of the creditors of Ames. The ultimate object of the bill in that case was to obtain a holding that the proceeds of the policies in question rightfully belonged to the Ames estate and that the trustee should be ordered to pay the proceeds to the executors of that estate. The Supreme Court decided in the Gurnett case that neither the policies nor their proceeds constituted a part of the estate of Knowlton L. Ames, deceased, and that after his death the trust agreement is merely evidence of the trustee’s contract under which it must collect the policies and hold the proceeds for the purposes of the trust. The title to the proceeds of the policies in question in that case — the same policies that are involved in the instant case — was definitely fixed by the Supreme Court ruling. In our judgment the decision in the Gurnett case is adverse to a contention raised by plaintiffs that the payment of premiums on the insurance policies in question by Ames, while he was insolvent, was in fraud of his creditors and that, in any event, the proceeds of the policies should be available to the creditors to the extent of the premiums paid by Ames on the policies while he was insolvent.

The position of plaintiffs in the instant case, that because their bill is a creditors’ bill, pure and simple, the Gurnett case does not affect their right of action, is, in our judgment, without merit. The ultimate purpose of the instant bill is the same as the ultimate purpose of the bill in the Gurnett case, viz., to have the proceeds of the policies made available to the payment of Ames’ debts. Betten v. Williams, 277 Ill. App. 353, involved a creditors’ bill brought by the executors and residuary legatees of the divorced wife of a deceased husband to impress with a trust for the payment of an amount owing to the wife under the decree of divorce the proceeds of life insurance carried by the husband and payable to his daughter. The trial court dismissed the bill for want of equity. The plaintiffs in that case charged that the payment of premiums on the life insurance was fraudulent as to the deceased’s wife and that the proceeds of the insurance became impressed with a trust in favor of plaintiffs for the payment of the amount owing to the wife under the decree of divorce. The Betten case, also the Gurnett case, was decided by the First Division of this court. In the opinion of this court in the Betten case it is said (p. 363): “The opinion in the recent case of Gurnett v. Mutual Life Ins. Co., 356 Ill. 612, is against plaintiffs’ position. lit that case Knowlton Ames procured life insurance policies on his life the proceeds of which were to be held in trust for his heirs at law; certain creditors by bill sought to have the proceeds of these policies impressed with a resulting trust in favor of the estate of Ames, to be paid out by the executors of his will. The court held against the creditors. The opinion says: ‘A policy of life insurance is not deemed an asset of the estate of the insured unless it is made payable to him, his executors or administrators. The mere fact that the insured may change the beneficiary does not make the policy or its proceeds a part of his estate. Neither the policies nor their proceeds constituted a part of the estate of Knowlton L. Ames, deceased.’ In the light of this opinion plaintiffs cannot maintain their bill. The chancellor properly dismissed the bill, and for the reasons above indicated the judgment is affirmed.” The interpretation of the decision in the Gurnett case by the First Division coincides with our own. The Supreme Court denied a petition for leave to appeal in the Betten case (277, Ill. App. xiv).

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

Decree affirmed.

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


text:
    Frank P. Burnett, Appellee, v. West Madison State Bank et al., Defendants. John F. Novak, Appellant.
    Gen. No. 40,490.
    Heard in the second division of this court for the first district at the December term, 1938.
    Opinion filed April 23, 1940.
    Howard D. Moses and Campbell, Clithero & Fischer, all of Chicago, and Le Forgee, Samuels & Miller, of Decatur, for appellant; Thomas W. Samuels and Delbert A. Clithero, of counsel.
    Louis David Friedman, Fred Albert and Sol R. Friedman, all of Chicago, for appellee; I. S. Friedman and John C. DeWolfe, both of Chicago, of counsel.
   Mr. Justice Scanlan

delivered the opinion of the court.

On August 27, 1937, a suit in equity was brought by plaintiff, a creditor of the West Madison State Bank, a banking corporation, on behalf of himself and other creditors against former and final stockholders of the bank, to enforce the superadded constitutional liability of the stockholders. Defendant Novak filed a verified motion to strike the amended complaint and dismiss the cause of action as to him. The motion was overruled, he elected to stand by it, and an order was entered taking the complaint as amended as confessed by him and judgment was entered against him for the sum of $500. Novak appeals.

The facts alleged in the complaint that are material to the decision of the instant appeal are: West Madison State Bank, a banking corporation, was organized under the laws of Illinois in 1923. On November 12, 1929, a certificate of organization of Garfield State Bank was issued by the auditor of public accounts of the State because of the consolidation of West Madison State Bank with Garfield State Bank, a State bank, and the consolidation was duly effected. Garfield State Bank (the consolidated bank) carried on a banking business until June 11, 1931, when it was closed by said auditor and prohibited from further carrying on the business of a bank. The auditor appointed a receiver, who took possession of the assets and business of the bank. On August 19,1931, the auditor filed a bill in the circuit court of Cook county against the bank praying for its dissolution, etc., and an order was entered confirming the appointment of the receiver, who entered upon the discharge of his duties, is still acting as such receiver, and said court is proceeding with the administration of the assets of the bank through the receiver. On June 11, 1931, West Madison State Bank, “whose existence as a bank was terminated on November 12, 1929, was indebted to various persons, firms and corporations ... in an amount of approximately $800,000 to depositors and creditors, ’ ’ and its liabilities exceeded the actual value of its assets by more than $600,000. John F. Novak, defendant, owned five shares in the West Madison State Bank during the period from February 10, 1925, to February 9, 1928. The complaint further alleges that on June 11,1931, West Madison State Bank “was and now is indebted to the plaintiff in the sum of $745.34 for moneys deposited in said bank from time to time, over and above all deductions, setoffs, and counterclaims, except to the extent of 44% dividends paid by the said receiver of said bank [Garfield State Bank] to general creditors of said bank including the plaintiff herein; that said indebtedness to the plaintiff and other like indebtedness owing to other persons for whose benefit this suit is brought, accrued from time to time, while said persons hereinbefore named in Paragraph Eighth hereof [one of whom was Novak, defendant], as stockholders of said West Madison State Bank, . . . remained such stockholders, and no part of said items of indebtedness due to the plaintiff and no part of the several items of indebtedness due to the other creditors of said bank on behalf of whom this suit is brought has ever been paid by said bank, or by any of said stockholders above named, but the same remain due and unpaid, except to the extent of dividends paid, as aforesaid, and amounts thereof due to the plaintiff and such other creditors constitute liabilities of said bank, for which said liabilities said stockholders named in Paragraph Eighth hereof, are liable to the plaintiff and such other creditors to an amount equal to the shares of the capital stock of said bank held by said respective stockholders during the time said respective items of indebtedness to the plaintiff and such other creditors accrued, all in accordance with the provisions of Article XI, section 6 of the Constitution of the State of Illinois”; that “the amounts which may be collected from said stockholders of said bank on account of their liabilities to the creditors of said bank, should, in equity, be applied to the common benefit of said creditors in satisfaction of the liabilities of said bank to its creditors severally accruing to each creditor during the respective time or times said stockholders remained stockholders of said bank”; and the complaint prays that the court ascertain and declare who were the stockholders of West Madison State Bank on November 12, 1929, as well as what other persons had from time to time prior to said date been stockholders thereof and the extent of the liabilities of the present and former stockholders respectively to the creditors of the bank “under Section 6 of Article XI of the Constitution of this State.”

The motion filed by defendant Novak to strike the complaint and dismiss the cause of action as to him sets up a number of grounds in support of the motion, but in the view that we take of this appeal it is only necessary to pass upon one, viz: The Five-Year Statute of Limitations of the State of Illinois bars the right of action in this case asserted against the defendant, John F. Novak. The complaint avers that the existence of the West Madison State Bank as a corporation was terminated on November 12, 1929; that on June 11, 1931, Garfield State Bank was closed by the auditor of public accounts and prohibited from further carrying on the business of a bank, and that since that date it has wholly ceased to do business; that its liability to its creditors was over $1,600,000 in excess of the actual value of its assets. The complaint in the instant case was not filed until August 27, 1937. If the five-year statute of Limitations applies to plaintiff’s action it is unnecessary to determine whether the statute commenced to run on November 12, 1929, or on June 11, 1931, as more than six years elapsed between the last-mentioned date and the commencement of the instant suit.

Paragraph 16, section 15, of the statute of Limitations of the State (Ill. Rev. Stat. 1937 [Jones Ill. Stats. Ann. 107.275]) reads: “Actions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within five years next after the cause of action accrued.” Paragraph 17, section 16, [Jones Ill. Stats. Ann. 107.276] reads: “Actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing, shall be commenced within ten years next after the cause of action accrued . . . .”

Plaintiff concedes that a suit by a creditor of a bank to enforce the superadded constitutional liability of the stockholders may be barred by the statute of Limitations, but contends that the Ten-Year Statute of Limitations is the one applicable to such suit.

The answer to the question presented by defendant Novak’s contention that the five-year statute of Limitations of the State bars the instant right of action against him is determined by the nature of plaintiff’s cause of action. Heine v. Degen, 362 Ill. 357, decides the nature of a cause of action like the instant one. In that case certain creditors filed their bill on behalf of themselves and other creditors to enforce the liability of stockholders of a certain bank under section 6 of Article XI of the Constitution of 1870, and “An Act to revise the law with relation to banks and banking,” approved June 23,1919. The court held (p. 379): “The [stockholders’] liability is a primary one imposed by the constitution and the statute, and is read into the contract of purchase, by operation of law, whenever a share of stock is bought.” A right of action based upon a contract raised by implication of law is barred in five years. The nature of an action to enforce the superadded liability of a bank stockholder imposed by the Constitution precludes the theory of a written contract between the creditors and the stockholders. In support of plaintiff’s contention that the ten-year limitation applies, Schalucky v. Field, 124 Ill. 617, and Palmer v. Wood, 48 Ill. App. 630, are cited. In each of these cases the action was based on the provisions of a special charter issued to the bank prior to the adoption of the Constitution of 1870, and the cases, in our judgment, have no bearing upon the question before us. Plaintiff also refers to certain language in Golden v. Cervenka, 278 Ill. 409, and certain language in Sanders v. Merchants State Bank, 349 Ill. 547. These two cases were carefully analyzed in the Heine case, supra, and it was pointed out that the language contained in the Golden case, and the language contained in the Sanders case, (relied upon by plaintiff) was obiter dictum. Plaintiff also cites Cohen v. North Avenue State Bank, 291 Ill. App. 558. That case does not support plaintiff’s contention. There the court, following the rule laid down by the Supreme Court, held that the cause of action of the creditors of an insolvent bank against the stockholders does not accrue until the bank suspends business and refuses to pay its depositors. In that case the creditors brought suit within a year after the bank closed and it was held that their action was not barred by the statute of Limitations. In the instant case, as we have heretofore pointed out, plaintiff did not bring his action until more than six years after the consolidated bank closed.

Upon the oral argument plaintiff contended that because of certain allegations in paragraph “Ninth” the ten-year limitation applies. The allegations relied upon are, “all of which liabilities were and are evidenced by passbooks, or certificates of deposit, or bank books, or other evidence of indebtedness in writing.” In this connection plaintiff calls attention to the following language in paragraph 17, section 16, of the statute of Limitations: “or other evidences of indebtedness in writing, shall be commenced within ten years next after the cause of action accrued.” We find no merit in the contention. The allegations of the complaint and the language of the prayer show conclusively that plaintiff’s cause of action was based solely upon section 6, Article XI, of the Constitution of 1870. Plaintiff’s brief states that his action is “the claim of a depositor to enforce super added liability against a bank stockholder, ’ ’ under section 6 of Article XI of the Constitution. It would be idle to argue that plaintiff had any contract in writing with defendant Novak, and his suit is not, and could not be, based upon a passbook, certificate of deposit, bank book, or other evidence of indebtedness in writing. Defendant’s liability was created by the Constitution, and, as we have heretofore stated, the nature of the liability precludes the theory of a contract in writing between plaintiff and defendant Novak within the meaning of paragraph 17, section 16, of the statute of Limitations. In view of the ruling in the Heine case, heretofore quoted, it is unnecessary to further consider the instant contention. The present action, in our judgment, falls within the comprehensive language of paragraph 16, section 15, which provides that “all civil actions not otherwise provided for, shall be commenced within five years next after the cause of action accrued.”

Our conclusion is that the five-year statute of Limitations of the State applies to the instant action and that under the facts alleged in the complaint plaintiff’s right of action is barred. In view of this conclusion we deem it unnecessary to pass upon several other contentions raised by defendant Novak, and strenuously argued.

The judgment of the circuit court of Cook county is reversed and the cause is remanded with directions to the trial court to sustain defendant Novak’s motion to strike the complaint and dismiss the cause as to him.

Judgment reversed and cause remanded with directions to the trial court to sustain defendant Novak’s motion to strike the complaint and dismiss the cause as to him.

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