author: Mr. Justice Matohett

text:
    Dennis Clifford, Appellant, v. Nettie Levin et al., Appellees.
    Gen. No. 38,199.
    Opinion filed November 12, 1935.

      John Laux, of Chicago, for appellant.
    Philip P. Sachs and Arthur E. Seelig, both of Chicago, for certain appellees.
   Mr. Justice Matohett

delivered the opinion of the court.

September 20,1930, complainant Clifford filed in the superior court of Cook county his bill to foreclose a trust deed executed by Ben A. Levin April 10, 1929, to secure an indebtedness due from Levin to Clifford for the balance of the purchase price of the premises conveyed. The bill alleged that because of defaults as stated therein, complainant had elected to declare the whole indebtedness due and payable, as the trust deed provided he might. The summons issued and was served on Levin April 23, 1931, and May 5, 1931, Levin entered his appearance and on the 26th answered.

October 16, 1931, complainant by leave filed his amended and supplemental bill, which averred that Levin had departed this life testate on June 5, 1931; that defendants West Side Trust & Savings Bank, Joseph H. Levin and Morris H. Levin, were co-executors and trustees under the will of Ben A. Levin and were acting’ as such. The amended and supplemental bill made the executors and trustees, with others, parties defendant and prayed that defendants might be decreed to pay the sum found due and that a sale and foreclosure might be had in case of nonpayment.

November 28, 1931, defendant executors filed an answer, neither admitting nor denying the averments of the amended bill, but denying that complainant was entitled to the relief prayed. The guardian ad litem appointed for certain defendants filed an answer in their behalf. The cause was put at issue and referred to a master, who filed his report February 10, 1933, finding the equities with complainant and that the sum of $14,074.06 was due. The report recommended a decree of foreclosure as prayed, which decree was accordingly entered May 24th. It directed that upon default of payment of the amount found due, the master should report any deficiency; that the court retain jurisdiction for the purpose, if desired, of appointing a receiver during the period of redemption, and that the court reserve the right to determine which “if any or either of the defendants herein shall be liable” in case of deficiency.

October 17, 1933, the master filed his report of sale and distribution disclosing a deficiency of $3,969.43. The report recommended that a deficiency decree be entered but did not name the defendants supposed to be liable. The executors and trustees objected to this report, questioning the right of complainant to a deficiency judgment against them. The court heard the evidence and February 15, 1935, complainant made a motion that a decree for the deficiency should be entered against the executors and trustees, the judgment to be paid in the course of administration out of the assets of the estate. The court heard evidence on the motion and denied it. Complainant has perfected this appeal, contending the court erred in denying the motion.

The question to be decided involves the construction of a portion of section 70 of the Administration Act (Ill. State Bar Stats. 1935, ch. 3, ¶ 71) which provides : “All claims and demands of whatever class not exhibited to the court within one year from the granting of letters as aforesaid shall be forever barred as to property and estate of the deceased which has been inventoried or accounted for by the executor or administrator.”

Upon the hearing of the motion it was made to appear that Levin died testate June 5, 1931, as already stated; that letters testamentary to the executors and trustees were issued June 29, 1931; that heirship was proved July 3, 1931, and the estate adjudicated September 7, 1931; that an inventory was filed in the probate court and approved June 27, 1932, and the final report of the executors filed December 12, 1932; that an order was entered approving the acts and doings of the executors, and it appearing’ that distribution of the estate had been made by them, the executors were discharged.

Complainant never filed a claim in the probate court and the executors, as they aver, never had notice that any claim would be made against the estate for any deficiency until the presentation of the master’s report to the chancellor. The contention of defendants is that complainant did not exhibit his claim against the estate within the time limited by statute, and that the claim was therefore barred by the provisions thereof. Complainant contends, on the other hand, that the joinder of defendants as parties to the foreclosure suit in the superior court was a sufficient exhibition of his claim; that the general prayer for relief gave sufficient basis to support a deficiency decree, and that the entry of such decree against defendants was under these circumstances mandatory. Both parties cite Roberts v. Flatt, 142 Ill. 485. In that case Morfoot, the holder of notes and mortgage, given by the deceased, within the time limited by the statute for presentation of claims in the probate court, filed his bill to foreclose and obtained a decree under which the premises were sold, and there was a deficiency of $1,489, as shown by the report of sale. No judgment was taken against the executors. After the expiration of the time limited, the administrator filed his petition to sell the real estate to pay this indebtedness. He had within the time limited filed a report in which he stated the mortgage indebtedness constituted an outstanding claim against the estate. Upon objection by the heirs his petition was dismissed, and the judgment was affirmed by the Appellate and Supreme Courts. The opinion of the Supreme Court stated that there was a marked distinction between knowledge of an administrator of the existence of a claim which might never be presented and the actual presentation of a claim, and that the decree of foreclosure was not to be regarded as “a judgment or decree for the payment of money against the administrator of the estate, which would entitle complainant in that decree to share with the other creditors in the assets of the estate.” The case seems to support defendants’ rather than complainant’s theory.

We have no doubt that the prayer for general relief in the amended and supplemental bill Was in that respect sufficient to authorize the entry of a deficiency decree, if the facts averred in the bill had been sufficient (Walker v. Converse, 148 Ill. 622; Wrlla v. Wrlla, 342 Ill. 31) and that upon a proper showing as to the pleadings and facts, the entrance of such decree is mandatory. (Townsend v. Wilson, 155 Ill. App. 303 ; Welfley v. Babb, 181 Ill. App. 54; Metz v. Dionne, 250 Ill. App. 369.) However, the controlling question here is not whether the prayer was sufficient, nor the deficiency decree mandatory upon a proper showing, but whether the pleadings in fact disclosed a sufficient exhibition of the claim within the time limited. In the determination of that question it is important to remember that a suit for foreclosure is essentially and fundamentally a proceeding in rem against the property. Karnes v. Harper, 48 Ill. 527; Mulvey v. Johnson, 90 Ill. 457; Kirby v. Runals, 140 Ill. 289; Kittredge v. Nicholes, 162 Ill. 410; Hughes v. Hoerich, 259 Ill. App. 158.

A careful reading of the pleadings fails to disclose allegations of fact from which these defendants should have been apprised that complainant was making a claim or intended to make a claim against the assets of the estate, other than those upon which the trust deed was a lien. The circuit or superior court, without doubt, has jurisdiction in appropriate cases to render judgments in actions brought against executors of an estate. The cases of Roberts v. Flatt, 142 Ill. 485; Howard v. Swift, 356 Ill. 80, so hold. The question here is not one of the jurisdiction of the court but of the sufficiency of the pleadings to exhibit the claim in such manner as to bar the limitation of the statute. Keeping in mind the essential nature of the proceedings as one in rem, as well as the fundamental nature of the only personal judgment which could have been rendered properly against the executors, namely, one to pay out of the assets of the estate in due course of administration, there is not a line in the pleadings prior to the expiration of a year from the date of the issue of letters to these executors and trustees which would inform them of the claim complainant now malíes against the estate. The court heard the evidence and was of the opinion that under such circumstances the motion for a deficiency decree against defendants to be paid in the due course of administration ought not to be granted.

For the reasons indicated, we are of the opinion that the ruling of the court denying the motion of complainant was right, and it is therefore affirmed. '

Affirmed.

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


source: Caselaw Access Project

author: Mr. Justice Matchett

license: Public Domain

text:
    Edward Solomon, Inc., Assignee of H. Wold, Trading as H. Wold and Company, Appellee, v. I. D. Padorr et al., Appellants.
    Gen. No. 38,206.
    Opinion filed November 12, 1935.
    Miller, Gorham, Wales & Adams and Wilson & Mc-Ilvaine, all of Chicago, for appellants.
    Alfred Lubin, of Chicago, for appellee.
   Mr. Justice Matchett

delivered the opinion of the court.

I. Defendant's Northern Trust Company, trustee, and Stanley Field are owners and Henrici, Inc., the lessee of the premises known as 209 South Wabash avenue, Chicago. They have appealed from a decree entered in favor of the complainant in a suit brought to foreclose a mechanic’s lien. The cause was heard upon exceptions of defendants to the report of a master. These exceptions were overruled and foreclosure granted, as recommended, for the sum of $2,255 found to be due.

January 31, 1929, the owners made a long term lease of the premises to William M. Collins, which was later assigned to Henrici, Inc. May 1, 1933, Henrici, Inc., subleased a portion of the premises to Visitors Tourists Service, Inc., a corporation, and others. May 24, 1933, II. Wold, doing business as H. Wold and Company, entered into a written contract with the Visitors Tourists Service, Inc., to furnish labor and material for laying cement floors and doing other work in the building on the premises. The work was done and material furnished as agreed. The claim of Wold has been assigned to Edward Solomon, Inc. The Visitors Tourists Service, Inc., failed to pay the amount due under the contract, and complainant thereupon took the necessary steps to perfect its claim for lien.

II. The question for determination on this appeal is whether within the meaning of section 1 of the Mechanics’ Lien Act (Ill. State Bar Stats. 1935, ch. 82, p. 2012) the owner lessors, and Henrici, Inc., sublessor, are liable upon the theory that complainant contracted “with one whom such owner has authorized or knowingly permitted to contract for the improvements.’’ The master found that “by virtue of the terms of said ground lease and sublease” defendants “knowingly permitted said labor and material to be furnished and performed as aforesaid, and failed to object thereto.”

Unless knowledge can be inferred from the terms of the lease and the sublease, it has not been proved, since there is no other evidence tending to show lmowledge on the part of any defendant. Indeed, as to Henrici, Inc., there is affirmative evidence to the effect that there was no such knowledge.

By the ground lease it was agreed that nothing therein should “authorize the lessee to do any act” which would incumber the title nor subject the lessors’ estate to any claim for lien or incumbrance, whether by operation of law or by virtue of express or implied contract by the lessee, and that any such lien arising from any act or omission of the lessee should accrue only against the leasehold estate and be subject to the paramount title and rights of the lessors.

The ground lease further obligated the lessee to erect a building upon the premises and to rebuild it in case of destruction by fire. Apparently referring to this situation, it was provided that the lessee would not enter into any contract for labor or material “in connection with any building to be placed upon said premises or to be rebuilt thereon” where the contract involved an amount in excess of $5,000, unless there was a condition in the contract that no lien would be claimed, and unless the contractor should thereby waive any and all right of claim to a lien so far as the lessors’ interest was concerned. The lessee covenanted and agreed that he would cause waivers of lien as against the interest of the lessors in the demised premises to be duly executed “by the contractors furnishing labor, service or material in or about the erection or re-building of any such building,” the same to be furnished as soon as the contractors should enter upon the performance of work or the furnishing of material.

The ground lease also provided that upon the ex-pi ration of the lease the lessors would pay to the lessee 80 per cent of the increased value of the demised premises, by reason of the improvements then thereon.

The sublease from Henrici, Inc., to the Visitors Tourists Service, Inc., provided:

‘ ‘ 3. The parties of the second and third part (sub-lessees) agree at their expense to partition off in a manner satisfactory to the party of the first part that portion of the basement of the above described premises containing machinery, electrical equipment, and heating apparatus, and it is further covenanted and agreed between the parties hereto that the parties of the second and third part may make openings in the partition between the two (2) stores of the premises above demised and may re-surface the floors in the above demised premises; provided, however, that the parties of the second and third part shall before starting any such work deposit with the party of the first part sufficient money to cover the cost of making such improvements, including labor and material, and shall also deposit with the party of the first part waivers of mechanics’ lien claims executed by the contractors who are to do the work or furnish the material, and provided further that, upon the termination of this lease, the openings in the partition between the two stores above demised shall be closed at the expense of the parties of the second and third part.

“5. It is further covenanted and agreed between the parties hereto that the parties of the second and third part will not make any additions or improvements upon the premises hereinabove demised without the written consent of the party of the first part and without the first depositing with the party of the first part sufficient money to cover the cost of making such improvements, including labor and material, and without depositing with the party of the first part also waivers of mechanics’ lien claims executed by the contractors.”

The sublease also provides that in addition to rent, money shall be deposited by the sublessees with the sublessor sufficient to guarantee the vacation of the premises at the end of the lease, the restoration of the partitions between the two stores demised, the delivery of the premises in as good condition as when received, ordinary wear excepted, and the payment of all claims which might become liens upon the premises; further, that all improvements on the demised premises shall become the property of Henrici, Inc., at the termination of the lease.

III. The question to be decided requires the analysis of the provisions of the sublease and the proper interpretation thereof.

Complainant states the “main question that is pertinent to the issues in this case” in the form of question and answer. In substance, it asks, Does the sublease authorize the sublessees to make improvements and alterations 1 If the answer is “No,” it says, then there is no right to a lien; if “Yes” then there is such right. After quoting the language of the sublease only in part, it says that this lease did, by express and unequivocal terms, authorize the sublessees to contract for improvements and alterations and the resurfacing of the floors, and since the same was plainly authorized the lien must be allowed.

Notwithstanding language used in some of the cases which might seem to approve, we think this reasoning by complainant as applied here is fallacious. It is true the sublease by implication authorized the alterations and improvements which the sublessee agreed to máke, and to that extent the sublessor had knowledge, but the authorization was not unlimited or unconditional. There were provisions, in the paragraph concerning the alterations and improvements which amount, as it seems to us, to conditions precedent. These conditions were (1) the consent of the sublessor in writing, (2) the deposit by sublessees of sufficient money to cover the cost of making improvements, and (3) the deposit with the sublessor of waivers of mechanics’ lien claims executed by the contractors. Complainant says that these are not conditions upon which the authority to make the improvements was granted but only covenants upon which in case of default the sub-lessor might sue the sublessees. The language of the sublease, as above set forth, the circumstances under which it was made, the evident object for which the provisos were inserted in the sublease, preclude such construction. Construed merely as covenants between the parties these provisions would be meaningless and useless, since at all events the sublessees would be liable to the contractor, in the first instance, and, secondarily to the sublessor in case the sublessor was compelled to pay the contractor on account of the default of the sublessees. Moreover, on this phase of the case, since the question is whether a lien arises, the sublease will in that respect be strictly construed as against complainant. Decatur Lumber & Mfg. Co. v. Crail, 350 Ill. 319; Rohmeier Lumber Co. v. Knight, 350 Ill. 248; Alexander Lumber Co. v. Coberg, 356 Ill. 49. This construction, we think, is not inconsistent with the cases to which our attention has been called. Haas Electric & Mfg. Co. v. Springfield Amusement Park Co., 236 Ill. 452, upon which complainant much relies, is a case where the lease contained the written consent of the owner lessor, granting to the lessee (a park company) the. authority to make improvements, provided these should remain on the premises at the expiration of the lease for the benefit of the lessor. The permission to make improvements was not conditional and was not limited as to either extent or character. A lien against the leasehold was, of course, allowed.

. In Boyer v. Keller, 258 Ill. 106, there was a lease which gave permission to the lessee to make certain improvements, and the evidence justified a finding that these improvements were made pursuant to a joint enterprise of the landlord and the lessee. The evidence also showed that the landlord was actually in and about the premises while the improvements were being made. A lien was allowed.

In Loeff v. Meyer, 284 Ill. 114, the lease provided: “Lessees shall have the right, upon ten (10) days’ previous notice in writing to lessor, to make such changes or alterations as they may deem suitable, provided such changes or alterations shall not diminish the value of the building and shall be paid for by lessees, but all material alterations, except changing the front of the building, shall be first approved in writing by lessor.” It appeared that defendant landlord was present when the lease was signed and was at the building and saw the improvements while the same were in progress. It was held that the landlord waived the provisions in the lease to the effect that notice should be given to her, and a lien was allowed.

In Carey-Lombard Lumber Co. v. Jones, 187 Ill. 203, there was a clause in the ’ lease which obligated the lessee to build improvements, to cost not less than $6,000 according to specifications to be approved by the lessor, who was also to approve the plan in writing, the improvements to become immediately a part of the realty and to be delivered to the lessor at the termination of the lease. The lease granted to the lessor an option for the first year to terminate the term by paying a stipulated sum for the improvements. There was a provision in the contract that no mechanics’ lien should attach. The petition averred and the answer did not deny.that provisions of the contract as to specifications, plans, etc., had been carried out in constructing the building, and it was held that a lien would attach, notwithstanding the provision that it should not. The lien could have been allowed either on the theory of a joint enterprise or waiver.

In Provost v. Shirk, 223 Ill. 468, Clarke, the owner, entered into an agreement with Shirk to convey the premises for $100,000, $40,000 to be paid in cash and the balance from time to time as the work progressed on a building being constructed on the premises. This was for the purpose of aiding Clarke in the construction. Pursuant to the agreement, Clarke conveyed the premises to Shirk by warranty deed, Shirk giving back to Clarke a 99-year lease as agreed. The lease contained this provision:

“It is expressly understood and agreed, and notice is hereby given, that no transfer, assignment^ mortgage, judgment, mechanic’s lien or other lien shall in any degree or manner affect the lessor of said premises or his lien upon the interest of said party of the second part and his assigns in this lease, for the payment of the rent, and other sums to be taken as rent, that may accrue up to the end of this lease.” Thereafter Clarke made a contract with Provost who agreed to furnish labor and material to complete certain work upon the building. Other contracts of the same kind were made with other parties. The provision of the 99-year' lease to the effect that' no mechanic’s lien should affect the lessor, as above provided, was stated by way of dicta, on the authority of Crandall v. Sorg, 198 Ill. 48, to be invalid. As a matter of fact a lien was denied on other grounds.

In Hacken v. Isenberg, 288 Ill. 589, it appeared that Rollberg and his wife owned certain premises as joint tenants. They made a lease of same to Hacken for 10 years. Hacken made a contract with Isenberg and others to remodel'the building according to plans and specifications made by an architect. A clause in the lease provided:

“That the said party of the second part (Hacken) will keep said, premises in good repair, and will immediately replace all broken globes, glass or fixtures with those of the same size and quality as that broken.” Another clause of the lease provided that Hacken would not permit alterations of the demised premises except by written consent of the lessor, and that “all alterations and additions to said premises shall remain for the benefit of the lessor, unless otherwise provided in said consent.” Under these circumstances Isenberg sued to foreclose an alleged lien for work and material in remodeling the building and obtained a decree which was affirmed by the Appellate Court. This decree was reversed by the Supreme Court in an opinion holding that the lease did not authorize but forbade alterations and additions except by written consent of the lessor; that no such written consent was given, and that the same could not be made by the lessee until he was authorized to do so by a further writing. The opinion states:

“The interest of the lessor cannot be subjected to a mechanic’s lien for the subsequent construction.of alterations and additions to the building, in the absence of any showing that he or she authorized or consented to the same.”

In Love’s Ill. Mechanics’ Liens, p. 83, the author summarizes the classes of cases in which the estate of a landlord is subject to a lien in favor of the tenant’s contractor. They are said to be:

“1. When landlord lmows of the making of the contract for the improvements, or knows that the improvements are being made, and fails to protest: paragraph 35.

“(a) This is true even though the lease prohibits alterations by the tenant or seeks to exempt the landlord’s estate from liability for liens, which provision may be known to the contractor : paragraphs 35 and 36.

“2. When lease authorizes or requires alterations or improvements by the tenant and provides that the same shall remain the property of the tenant': paragraph 37.

“ (a) Same as ‘a’ above.

“ (1>) But mere requirements of ‘repairs’ by the tenant does not amount to authority to install ‘improvements’ or ‘alterations’; paragraph 39.

“3. When the making of the improvements may be deemed the joint enterprise of the landlord and tenant: paragraph 38.”

The author further summarizes the cases in which the landlord’s estate is not subject to such lien, as

“1. When neither situation ‘1,’ situation ‘2’ nor. situation'‘3,’ above described, is present.

“2. When improvements are trade fixtures, or other improvements, removable by the tenant at the end of his term: paragraph 41.”

This summary of classes where the lien in favor of the contractor is allowed does not include a case where, as here, the authorization to make the improvement is subject to conditions precedent.

For the reasons we have already stated we hold that the sublease here authorized the sublessees to make the improvements only upon the performance of conditions precedent, which were not performed; that there was therefore no authority in the sublessees to make the contract with respect to these improvements on which complainant seeks to bind the interest of owners and sublessors. For similar reasons the estates of the owners are not liable.

The decree of the circuit court is reversed and the cause remanded, with directions to dismiss the bill.

Reversed and remanded with directions.

.McSurely, P¡ J., and O’Connor, J., concur.


text:
    Chicago Title and Trust Company et al., Appellees, v. James F. Kearney et al., Appellants.
    Gen. No. 38,232.
    Opinion filed November 12, 1935.
    Rehearing denied November 26, 1935.

      Conoannon & Dillon, of Chicago, for appellants.
    Isaac B. Lipson and A. C. Lewis, both of Chicago, for appellees.
   Mr. Justice Matchett

delivered the opinion of the court.

I. This appeal is by James F. and Peter E. Kearney, personally and as executors and trustees of the estate of William L. Kearney, deceased, from a decree of foreclosure and sale entered January 21,1935. The cause was heard upon exceptions to the report of a master. The exceptions were overruled, and a decree finding a total sum due of $155,669.49, with costs, was entered. The decree directed that in default of payment of the amount found due the premises should be sold. Defendants ask the' reversal of this decree.

II. August 1, 1933, one of the complainants paid on account of taxes levied on the premises for the years 1928, 1929 and 1930, the sum of $31,363.16, which included the sum of $4,920.59 charged and paid for penalties. These penalties were included in the total indebtedness found due. The trust deed provides that the grantor should pay the taxes and assessments due on the first day of May in each year, and that the trustee or holder of the indebtedness may at any time, without inquiring into the validity thereof, pay any tax or assessment ‘ on said lands or redeem from any sale therefor, or purchase-any tax sale certificate or tax title, or other title, lien or claim adverse to the estate hereby granted, and expend such amount therefor as it may deem reasonable,” and make other disbursements as may be “necessary or proper for the preservation of the security hereunder”; that such sum expended shall form so much additional indebtedness “secured hereby.”

Defendants contend, on the authority of Webster v. Nichols, 104 Ill. 160, that it was the duty of complain ants to pay the taxes before, the penalties accrued; that it was negligence on their part not to do so. Penalties, it is said (truly enough), are not taxes but merely methods of enforcing the payment of taxes. Defendants cite cases such as Dixon v. Mayor, etc., of Jersey City, 37 N. J. L. 39.

The provisions of this trust deed are much broader than were the provisions of the lease construed in Webster v. Nichols, in that this trust deed gives to the holder of the indebtedness authority to redeem from tax sales. Redemption could not legally be made without paying penalties, and the authority to pay the penalties is therefore necessarily included in the authority to redeem. The same observation might justly be máde as to the authority to purchase a tax sale certificate, a tax title or a claim adverse, all of which are expressly given by the trust deed. The trust deed is also distinguishable from the lease in Webster v. Nichols, in that the objects and covenants are fundamentally different.

Moreover, the record discloses that while these defendants were in possession of the premises in lieu of the appointment of a receiver, an .order by agreement expressly directing that these penalties should be paid was entered by the court. ' Complainants by the terms of the trust deed were not obligated to pay these taxes and penalties at all. The trust deed merely gave to them the privilege of doing so at their election. We hold defendants’ contention in this respect without merit.

III. It is next contended that the decree should be reversed because the loan and the extension of it were usurious. The original loan was for the sum of $135,000, was for the term of five years and was to draw interest, payable semiannually, at the rate of 5% per cent. It was made March 24,1923, at the Foreman Trust & Savings Bank, and a commission of $1,250 was charged to and collected from the mortgagor. At the maturity of the note $35,000 was paid reducing the principal indebtedness to $100,000. May 1, 1928, an extension agreement was executed, whereby payment of the principal note was extended to May 1, 1933, upon condition that interest be paid during the extended period at 5% per cent per annum, payable semiannually, according to the tenor of 10 coupons representing the interest which would accrue until maturity. At this time the bank charged and collected a commission of $1,000 for the extension. The notes and trust deed provided, in substance, that if default should be made in the payment of any one of the interest notes when due, or in case of a breach of either of the covenants contained in the trust deed, then at the election of the holder and without notice, ‘ ‘ said principal sum, and all interest accrued thereon, shall at once become due and payable.” In other words, the holder of the indebtedness was given power to accelerate the payment date in case of a default or violation of a covenant. Defendants contend that this provision tainted the contract with usury, because (as we understand them) under it the lender, upon the contingency of a default in the payment of the first instalment of interest, might declare the whole loan due and recover the accrued interest, which together with the compensation paid for the use of the money paid by way of commission to the lender, would thus amount to more than the lawful rate provided by the statute. They cite cases holding that a commission charged by a lender and not paid to a broker is not a commission at all but an additional charge for the use of money which will be added to the interest charged as such, in determining whether the loan is in fact tainted with usury. Central Life Ins. Co. v. Sawiak, 262 Ill. App. 569; I. C. Bank & Trust Co. v. Geary, 274 Ill. App. 327. In the last analysis, the question involves a construction of section 5 of the Interest Act. (Ill. State Bar Stats. 1935, ch. 74, sec. 5, p. 1940.)

Defendants contend that the loan is usurious within the meaning of the statute where the contract of the parties is such that there is any contingency which may arise by which the lender may obtain more than the lawful rate of interest; that such contingency was possible under the terms of these notes and the trust deed and therefore under the provisions of section 6 of the interest statute, the sum of $66,600 being the interest paid on the loan and the extension thereof, plus the commissions paid, should be deducted from the principal amount of the indebtedness found due.

There is no proof that complainant knew of the commission charged, but it seems to be conceded that if the defense of usury in fact existed as between the original parties to the transaction, such defense on foreclosure is as effectual against an innocent purchaser before maturity as it was against the original mortgagee. Central Life Ins. Co. v. Sawiak, 262 Ill. App. 569; Hirsh v. Arnold, 318 Ill. 28, 38. Defendants admit that the rule of law as to usury for which they contend has never been approved by our Supreme Court. They also admit that a contrary rule was expressed by this court in Chicago City Bank & Trust Co. v. Bremer, 189 Ill. App. 258. They urge, however, that the view for which they contend was not vigorously pressed in that case; that the decision was rendered more than 20 years ago, and say that while the Supreme Court has not definitely passed upon the matter, it has in other cases adopted the principle that a loan is usurious when there is any contingency which may arise under the contract, whereby the lender may obtain more than the lawful rate of interest. They cite to this point Kammer v. Glens, 118 Ill. App. 570; Union Nat. Bank v. Louisville, N. A. & C. Ry. Co., 145 Ill. 208. In the Kammer case the lender, in addition to the notes and mortgage, as part of the same transaction took an additional contract, which provided that the lender should have the dividends on certificates of stock in a corporation then being organized, which were deposited with the lender as additional security. In the Union National Bank case the borrower agreed to obtain a certain depositor for. the bank and in case of failure so to do agreed he would pay extra interest to the amount of 2% per cent on the loan. In the Kammer case the lender did not in fact, draw any dividends, nor in the Bank case did the bank collect the extra 2% per cent as agreed, yet both loans were held to be tainted with usury notwithstanding the usurious contract had not been in fact carried out. In both cases the agreement was clearly usurious. It is not claimed that the cases are controlling here.

Defendants rely very much upon Shropshire v. Commerce Farm Credit Co., 120 Tex. 400, 30 S. W. (2d) 282, certiorari denied in 284 U. S. 625, and urge .that careful attention be given to it. We have given consideration to it as well as to the annotation thereto which appears in 84 A. L. R. 1283. The annotator summarizes the law as being contrary to the decision there made, saying:

“By the great weight of authority it is held that the inclusion, in a contract to repay money, of a provision that, on default in the payment of the interest, or an installment of the principal, the entire indebtedness, including interest for the whole term or interest to the date of default, shall become due, does not constitute usury, though the amount of such interest. will exceed the legal rate. The excess interest, however, is penal, and can be neither collected nor retained.”

In Williston on Contracts, vol. 3, sec. 1696, the author states:

“The provision in a pecuniary obligation that on.default of the debtor in payment of either principal'or interest the entire indebtedness including interest for the full term, or a greater sum than legal interest to the time of default, shall thereupon become immediately payable, is not usurious, though recovery of any excess over legal interest is generally disallowed as penal. Similarly, a provision that on default by the maker an obligation shall thereafter bear a rate of interest higher than the legal rate, though it may be objectionable as penal if the rate is excessive, is not usurious. The principle applicable to these cases has been thus stated: ‘Wherever the debtor by the terms of the contract can avoid the payment of the larger by the payment of the smaller sum at an earlier date, the contract is not usurious but additional, and the larger sum becomes a mere penalty.’ The same principle should render valid a stipulation in the original contract of the borrower for compounding interest if net paid when due though the rate reserved was the full legal rate, and such is the more general rule; but in many States the provision is held, if not usurious, at least penal and unenforceable. After lawful interest has once become due, there seems no doubt of the validity of a contract express or implied from custom to pay interest thereafter upon the interest already matured.”

The Shropshire ease is, as it seems to us, distinguishable from the instant case in two respects. In the first place, there the acceleration clause provided that on default the debtor should be liable for the principal indebtedness and also for the interest which would accrue for the entire term. In this case, the acceleration clause does not require the payment- of interest which is unearned at the time of the exercise of the option by the holder of the indebtedness. The distinction seems to us vital. The possible contingency out of which usury might arise is in the Shropshire case proximate and probable; in this case it is remote and improbable. The distinction is important because of its bearing upon the intention of the parties, in particular the intention of the lender. In the second place, the usury statute of Texas (applicable in the Shropshire case) is distinguishable from that of Illinois, in that it includes among the items for which a charge may be regarded as usury the “detention” of money, thus seeming to preclude the application of the principle that an excess charge arising upon a contingency may be considered as in the nature of a penalty, for which a charge is not prohibited by the usury statute. However, if it had been made to appear in this case that the provision for acceleration was intended to be used as a device to collect an unlawful rate of interest contrary to the statute, we would not hesitate to hold it to be usurious. The evidence precludes the idea that it was used by the parties for any such purpose, or that such design was- within their contemplation.

The courts of this State have held that in the last analysis the question of whether a contract is tainted with usury is determined not by the form of the contract employed but by the intention of the parties. Curtis v. LeMoyne, 248 Ill. App. 99 ; Clemens v. Crane, 234 Ill. 215; Cooper v. Nock, 27 Ill. 301. Moreover, there are well considered cases which seem to sustain complainants’ contention,-namely, that where a commission is paid to the mortgagee for the negotiation of a loan, the transaction is not usurious where the interest for the period of the note, plus the commission when prorated over the length of time the note is to run, does not amount to more than the legal rate per annum. In McGovern v. Union Mut. Life Ins. Co., 109 Ill. 151, our Supreme Court said:

, “When this loan was made the-legal rate of interest was 10 per cent per annum when the contract provided for this amount. The loan in this case was for three years, at nine per cent interest. Now, the three per cent commissions only amounted to one per cent per annum, so that if the commissions are regarded as interest, and added to the interest at nine per cent, provided for in the note, the rate would still be only ten per cent, and not usurious. ”

' In National Life Ins. Co. v. Donovan, 238 Ill. 283, where the same contention was made, the court said:

“Deducting interest in advance is not usury,onor is the withholding of a commission for the loan, provided the total amount of interest charged, together with the commission, does not exceed 7 per cent for the length of time for which the loan was made.”

In the more recent case of Council v. Bernard, 319 Ill. 392, where a loan of $50,000 at six per cent for a term of five years had been made, with an agreed commission of $2,000 and the defense of usury was interposed, the court said:

“If Bernard made the loan for himself as mortgagee, using his own money, still the transaction would not be usurious, as the interest at six per cent for the entire five-year term, together with the charged commission of $2,000 spread over the same term, only amounts to a rate of interest of 6 8/10 per cent, while the legal interest rate that may be charged is seven per cent. It is not usury to withhold a commission for a loan, provided the total amount of interest charged, together with the commission, does not exceed seven per cent for the length of time for which the loan was made. Hence, it makes no difference whether the loan made Bernard for broker.”

Under these authorities, we think it must be held that neither this loan, nor the extension of it, may be said to be tainted with usury, in the absence of some evidence tending to show that the provisions of the contract were planned with the intent to evade the statute. There is no such evidence.

IV. Defendants contend that the decree should be reversed for the reason, as it is said, that the guardian ad litem appointed to defend the interest of one of the defendants, who was a minor, failed to give the necessary attention to the defense of the minor’s rights. It is pointed ont that the guardian ad litem appeared only once before the master, at which time he proved up his fees (which amounted to $50). It is also pointed out that he was absent when the exceptions to the report were argued before the court. The' interest of the minor in this litigation was that of one who held a beneficial interest in one-third of the premises, the title to which, however, was held in the name of the trustees, who are defendants and who have most vigorously defended this suit. His interest was identical with theirs. The attorneys for the trustees were solicitors of large experience and known ability. Cases are cited where the decree has been reversed because no guardian ad litem was appointed for a minor, or where the conduct of the guardian ad litem was such as to amount to a fraud upon the court. There is nothing in the facts appearing in this record to bring the cáse within these rules. The guardian ad litem seems to have carefully examined the record, and if he performed this service intelligently he must have discovered that every possible defense had been presented in an able ánd competent manner". He is to be commended for refraining from performing a large number of useless services which would have resulted in an exorbitant and needless bill against the estate. The solicitor owes a duty to his client not to incur unreasonable and unnecessary expenses for legal services.

We find no reversible error in the record and the judgment is therefore affirmed.

Affirmed.

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


text:
    The People of the State of Illinois ex rel. Oscar Nelson v. Roseland State Savings Bank. Walter C. Senne, Intervening Petitioner, Appellee, v. William L. O’Connell, Appellant.
    Gen. No. 38,243.
    Opinion filed November 12, 1935.
    Stephen A. Malato, of Chicago, for appellant.

      Kirkland, Fleming, Green & Martin, of Chicago, for appellee; Emil F. Meier, of Chicago, of counsel.
   Mr. Justice Matchett

delivered the opinion of the court.

This is an appeal by the receiver of the Roseland State Savings Bank from an order granting the prayer of petitioner, Walter C. Senne, for the allowance of an offset in the sum of $4,674.80 against the obligation of petitioner and one Welsh on a promissory note. The petition was filed November 9, 1933. The receiver answered. The matter was referred to a special commissioner, who filed h report recommending the allowance of'the offset, and the matter was heard upon exceptions of the receiver to the report of the commissioner. A decree overruling the exceptions and allowing the prayer of the petition was entered April 4, 1935.

There is practically no dispute as to the facts. Petitioner Senne is a member of the firm of Kirkland, Fleming-, Green & Martin, who are engaged in the practice of law in Chicago. Prior to the appointment of a receiver in 1931 the firm had performed legal services for the Roseland State Savings Bank. June 3, 1931, Senne and Welsh being indebted to the bank in the sum of $8,250 made and delivered to the bank their promissory note of that date and for that amount, due 30 days after date, with interest at 6% per cent per annum and with interest at 7 per cent per annum after maturity until paid. The note read: “For value received the undersigned promise to pay to the order of The Rose-land State Savings Bank, at its office, in Chicago, Ill.” etc. Certain collateral was deposited as security for the note, and the note contained a power to confess judgment.

June 10th, after the execution of the note, the bank was indebted (for legal services and money advanced in the sum of $3,674.80) to the law firm, of which Senne was a member. The bank was also indebted to Senne for money then deposited in the bank to his credit in the sum of $1,000. On that day Mr. Kirkland, the senior member of the law firm, executed and delivered, in its behalf, to Senne a writing in and by which for value received he assigned the sum due on the account against the bank. A copy of this written assignment was sent to the bank on that date by registered mail. The bank thereafter having been closed by the State Auditor, the note of Senne and Welsh passed into the hands of the receiver, and Senne claimed an offset as against the note to the amount of his personal deposit in the bank, plus the amount of the account of the law firm against the bank which had been assigned to him. The receiver prosecutes this appeal, contending that the note is a joint obligation against which a several obligation may not be set off; that the statement in the note to the effect, “the undersigned promise to pay,” etc., compels the construction that the obligation evidenced by the note is a joint obligation, and not several, and in support of that theory cites First Nat. Bank v. Southworth, 215 Ill. 640; Torrance v. Third Nat. Bank, 210 Fed. 806; In re Evans, 235 Fed. 635; National Bank v. Gallagher, 243 Ky. 740. The receiver also argues, citing Alpaugh v. Wood, 53 N. J. L. 635, and other cases, that a promise or undertaking is presumed to be joint, and not joint and several, unless a different intention is affirmatively disclosed. In the cases cited the courts considered the effect of this clause in connection with the provisions in the notes with reference to the deposit of collateral security, and the phrase, “For all other present and future demands of any and all kinds of the said bank against the undersigned,” was held to create a joint liability with respect to the collateral security. As petitioner points out, these opinions cited interpret not the promise made in the note but only the clause in the note respecting the security. This latter clause is not controlled by the statute of this State, which we shall presently consider. The cases cited are from other jurisdictions where the statute upon which petitioner relies is not applicable. The determination of the question here presented for decision (namely, whether Senne can set off his individual deposit in the closed bank, plus the claim of the law firm against the bank, which has' been assigned to him, against the note of Welsh and himself held by the receiver of the bank) seems to depend on the construction to be given to certain Illinois statutes. The law of set-off in this State seems to be purely statutory, and it must be conceded that at common law a joint claim may not be set off against the claim of only one joint obligor. Morton v. Bailey, 1 Scam. 213.

The statute (Ill. State Bar Stats. 1935, ch. 76, sec. 3, p. 1951) provides, however:

“Except as otherwise provided in this Act, all joint obligations and covenants shall be taken and held to be joint and several obligations and covenants.”

By section 2 of the Negotiable Instruments Act (Ill. State Bar Stats. 1935, ch. 98, sec. 2, ¶ 6) it is provided, in substance, that persons severally liable upon bills of exchange or promissory notes, payable in money, may all or any of them severally be included in the same suit at the option of plaintiff. Other sections of the act provide for severance in case of a suit brought upon such an obligation and for the entrance of several judgments thereon, the plaintiff, however, to be limited to one satisfaction. The procedure by way of set-off was very much enlarged by an amendment in 1929 to section 47 of the Practice Act of 1907 (Smith-Hurd’s Ill. Rev. Stats. 1933, ch. 110, sec. 47, page 2162) which-provides:

“The defendant in any action now pending or hereafter brought upon any contract or agreement, either express or implied, having claims or demands against the plaintiff in such action, may plead the same, or give notice thereof, under the general issue or under the plea of payment, and the same, or such part thereof as the defendant shall prove on trial, shall be set off and allowed against the plaintiff’s demand, and a verdict shall be given for the balance due. . . . If it shall appear that the plaintiff is indebted to the defendant, the jury shall find a verdict for the defendant and certify to the Court the amount so found, and the Court shall give judgment in favor of such defendant, with the costs of his defense.”

The remedy by way of set-off has been still further enlarged by section 38 of the Civil Practice Act, which repealed the above section. (Ill. State Bar Stats. 1935, ch. 110, sec. 38, ¶ 166, p. 2443) which provides:

“(1) Subject to rules, any demand by one or more defendants against one or more plaintiffs, or against one or more co-defendants, whether in the nature of set-off, recoupment, cross-bill in equity or otherwise, and whether in tort or contract, for liquidated or unliquidated damages, or for other relief, may be pleaded as a cross-demand in any action, and when so pleaded shall be called a counterclaim.

“ (2) The counterclaim shall be a part of the answer, and shall be designated as a counterclaim.

(3) Every counterclaim shall be pleaded in the same manner and with the same particularity as a complaint, and shall be complete in itself, but allegations set forth in other parts of the answer may be incorporated by specific reference instead of being repeated. ’ ’

Section 22 of the same act (Ill. State Bar Stats. 1935, ch. 110, sec. 22, 150) provides that the assignee and owner of a non-negotiable chose in actio.n may sue thereon in his own name, etc. Section 23 provides for the joinder of plaintiffs in whom any right of relief in respect of or arising out of the same transactions, or series of transactions, is alleged to exist, whether jointly, severally, or in the alternative. Section 25 provides that any person may be made a defendant who, either jointly, severally or in the alternative, is alleged to have or claim an interest in the controversy. The briefs assume that section 47 of the Practice Act of 1907 as amended is applicable here.

It is apparent that under either of these statutes the limitations heretofore existing upon the right of set-off have been largely removed and the right much extended. In Heiple v. Lehman, 272 Ill. App. 513, decided December 6, 1933, it appeared a bank made a loan to Lydia King and Edward Lehman, taking their note therefor. The bank was closed by the State auditor before the note ivas paid. At the time the bank was closed Lydia King had on individual deposit in it $1,965.01. The receiver of the bank confessed judgment on the note against the makers. The judgment was opened up and leave given to plead. In one of the pleas defendants averred their right to set off the individual demand of Lydia King an account of her deposit in the bank against the joint note sued upon by the receiver of the bank. The receiver filed a replication denying this right, and thereupon the defendants interposed a demurrer, which was sustained. The ruling of the court on this demurrer was questioned upon appeal. The ruling of the trial court was sustained by the Appellate Court for the Second District in an opinion by Mr. Justice Huffman, which gives a careful review of the law applicable to the subject. After pointing out that a set-off due to a principal is also available to a surety (a question which also arose on the pleadings in that case) the opinion, citing Hayden v. Alton Nat. Bank, 29 Ill. App. 458, and Merchants Nat. Bank v. Maple, 65 Ill. App. 484, states that “it has been held that a bank possesses the right of set-off nnder similar circumstances to which appellees (defendants) now plead same,” and that there are no later holdings to the contrary; that it has long been held in this State that where the contract is joint and several, its legal effect is double and equivalent to independent contracts, and that distinct remedies may be pursued until satisfaction is obtained, — citing People v. Harrison, 82 Ill. 84; Joyce v. Spafford, 101 Ill. App. 422. The opinion states:

“The availability to a set-off or counterclaim in favor of one of several defendants against a joint liability is a right that in this State has been denied such defendant. Formerly the great weight of authority, throughout most jurisdictions, was against a set-off of this character, There has been, however, a growing tendency both in legislation and court decisions, to afford a settlement in one action of as many controversies among the parties as may be accomplished without injustice or injury to the rights of others. As a result, the availability to a set-off of a claim of one codefendant has gradually been given a broader recognition. ’ ’

After calling attention to section 38 of the Civil Practice Act, the opinion further states:

“. . . where two or more defendants are joined in an action to which they are severally liable and in which a separate judgment may be had against them, a cross-demand in favor of one of the defendants against the plaintiff comes within a fair construction of the requirement of mutuality, and such defendant should be permitted in the ends of justice to assert his cross-demand; and especially should this be so where the plaintiff is an insolvent bank, in the process of liquidation, and with such defendant having on deposit in said bank more than enough money to pay the obligation upon which the bank is seeking to recover, and which deposit the bank refuses to consider and is endeavoring to compel such defendant to pay the entire amount of the note, and sacrifice her right of set-off or cross-demand against the bank, on the grounds that mutuality is lacking. Mutuality exists as between the appellant and Lydia King, and where the plaintiff is an insolvent, unusual and extraordinary conditions arise, and public justice demands that such defendant, being severally liable, should be protected in her right of set-off.”

A further appeal having been taken to the Supreme Court, the judgment of the Appellate Court was affirmed in Heiple v. Lehman, 358 Ill. 222. The opinion of the court there is based upon the provisions of section 47 of the Practice Act of 1907 (Smith-Hurd’s Ill. Rev. Stats. 1933, ch. 110, sec. 47, p. 2162) already quoted. The Supreme Court said:

“Appellant in his brief has cited many early cases in this court holding that a separate demand is not a proper subject matter of set-off as against a joint liability. An examination of these authorities discloses that the plaintiff sued upon a joint demand against the defendants, and that the court was applying the law with reference to an unquestioned joint liability and held that separate liabilities could not be off-set. We are able to distinguish all of the authorities cited from this case, on the basis that the liability here asserted by appellant is a joint and several liability of appellees.”

The court then points out that one of the special pleas averred that Edward Lehman was only a surety for Lydia King and, citing Himrod v. Baugh, 85 Ill. 435, holds that under such circumstances Lehman was entitled to have the claim of Lydia King allowed as an offset. The court further said:

“Mutuality exists as between appellant and Lydia King, and, where the plaintiff is insolvent, justice demands that such defendant, being* severally liable, should be protected in the right of set-off, and that the mutual liability between the parties should be so adjusted that a true balance may be ascertained and judgment- had accordingly.”

In view of these decisions and the purpose of the statutes which they construe, and in view of the fact that these statutes are remedial in their nature and are to be liberally construed, we think it must be held that petitioner Senne had the right, as against the claim of the bank upon his joint and several note executed with Welsh, to offset the several liability of the closed bank to himself on account of his deposit and the claim of the firm which had been assigned to him.

The assignment of the firm to Senne was executed, as the evidence shows, by Kirkland, the senior member of the firm, in behalf of the firm, and the receiver contends that there is no proper proof of the authority from the partnership to execute the assignment. The evidence is clear and uncontradicted to the effect that the assignment was made for the benefit of the firm in order that the money due to it might be collected. We are disposed to hold that the collection of fees and advances due from a client is within the scope of the authority of the members of the partnership engaged in the practice of the law. 47 Corpus Juris 859, secs. 331 to 336.

It is also urged that a decree for the balance due to the bank should have been entered in favor of the receiver upon granting the relief prayed for by petitioner. The report of the commissioner so recommended, but the receiver does not seem to have insisted on the insertion of this provision in the decree. The set-off, however, will become effective only on the payment by the petitioner of the sum of $3,575.20, together with interest, as provided by the decree, and we think that the receiver is amply protected in that respect.

For the reasons indicated the decree is affirmed.

Affirmed.

McSurely, P. J., and O’Cohhor, J., concur.


text:
    William B. Ratner et al., Trading as Ratner, Chapman & Ratner, Appellees, v. Edith Bartholomee, Also Known as Edith Bailey, Appellant.
    Gen. No. 38,272.
    Opinion filed November 12, 1935.
    Irving Breakstone, of Chicago, for appellant; William Rosenthal, of Chicago, of counsel.
    No appearance for appellees.
   Mr. Justice Matchett

delivered the opinion of the court.

Plaintiffs, copartners in the practice of law, sued defendant in the municipal court for an alleged balance claimed to be due in the sum of $150 for legal services rendered in an action for divorce brought by defendant against her husband in the superior court of Cook county. The statement of claim averred that this sum was allowed in full of attorney’s fees in a decree entered in the divorce proceedings. The summons issued March 14, 1935. Defendant entered her appearance with demand for trial by jury on March 25th. By reason of the small amount of the claim under the rules of the municipal court the cause was assigned to the small claims calendar. An affidavit of merits was therefore unnecessary.

Plaintiffs made a motion for a summary judgment in their favor. The motion was based upon the theory that the provisions of the Civil Practice Act with reference to judgments of that character was applicable. (Ill. State Bar Stats. 1935, ch. 110, sec. 57, p. 2446.) The affidavit of William B. Batner, to which was attached substantial portions of the record of the superior court in the divorce proceeding, was offered in support of the motion. The affidavit discloses that the services were personally performed in behalf of plaintiffs’ firm by the affiant; that the services were the usual ones in such a proceeding and included the preparation and filing of the bill, the obtaining of an order for alimony and solicitor’s fees pendente lite, the entry of an injunction restraining the husband from transferring his property, and conferences with his attorney with reference to the proceeding; that the cause came on for hearing and “after a conference with the Judge and opposing* counsel,” it was agreed to allow Mrs. Bailey an uncontested divorce and leave the matter of alimony to the discretion of the court after hearing the various witnesses; that such decree was entered, and a copy of it was attached; that it ordered:

“That the defendant pay to Ratner, Chapman & Ratner with the consent and direction of the plaintiff, the sum of $150 as additional attorneys ’ fees in the following manner: The sum of $75 upon the date of the entry of this judgment and the balance of $75 not later than sixty days from the entry of this judgment.”

The affidavit further set up that on the next day, defendant, having procured the services of another solicitor, whose appearance was substituted for that of affiant, made a motion before Judge David to vacate the decree; that Judge David continued the matter to be heard before Judge Desort, by whom the original decree was entered; that defendant in the divorce case filed a motion for a change of venue from Judge Desort, which was granted by him, and the cause was reassigned to Judge Allegretti, who insisted that a motion by defendant to modify the decree should be heard by Judge Desort; that Judge Desort refused to hear the motion; that Judge Allegretti then set the cause for hearing, struck defendant’s original petition to set aside the decree as scurrilous, whereupon defendant filed an amefided petition; that the hearing thereon was continued from time to time until February 28, 1935, when after hearing defendant’s testimony Judge Allegretti denied the prayer of her petition and ordered that the original decree entered July 16, 1934, stand; that the husband of defendant delivered to her a check for $100 in full payment of attorney’s fees as provided by the decree; that Mrs. Bailey refused to pay the fees to plaintiffs, whereupon Mr. Davis, attorney for Mr. Bailey, appeared before Judge Allegretti to obtain an order directing to whom payment should be made; that the motion was continued by agreement “in an endeavor to obtain” defendant’s consent; that when the matter came up again she still refused to pay plaintiffs’ fees, whereupon the court entered an order impounding the check “in Mr. Davis’ hands, directing same to be held by the Clerk of the Superior court of Cook county and ordering the plaintiffs herein to institute immediate suit for the collection of said fee; that the defendant herein has no meritorious defense to this suit and is justly indebted to these plaintiffs in the sum of $150, no portion of which has been paid to them; that there are no just deductions, credits or set-offs against this claim.”

In response to this affidavit defendant filed an affidavit of defense denying the jurisdiction of the municipal court to enter a summary judgment. She admitted that plaintiffs were her solicitors in the divorce suit; that another attorney was substituted; averred that she was not properly represented by plaintiffs; that plaintiffs failed to secure payment of temporary alimony, of which she was in need; that she was compelled to collect the alimony without the aid of plaintiffs; that when she complained to plaintiffs of their laxity she was informed by them that they had been promised some business from her estranged husband’s ex-father-in-law, and that they feared to press her action with vigor lest they might jeopardize this new contract for future business; that on July 10, 1934, William B. Ratner appeared in court with defendant and one of Mr. Bailey’s counsel also appeared; that thereafter the attorneys retired to the judge’s chamber and agreed upon the terms of a decree without consulting her and considering her best interests in the divorce proceedings ; that it was not proper for plaintiffs to agree that no alimony should be paid to her when they knew of her dire need, she being ill; that they did not attempt even to obtain the furniture which had been purchased with her money; that plaintiffs did not “represent this affiant with the usual skill, care and duty that is exercised by the ordinary attorney practicing in these several courts. ’ ’ The affidavit of defense went on to state:

“Therefore, this affiant denies that she is indebted to the plaintiffs herein in the sum of one hundred fifty ($150.00) dollars, or in any other sum, whatsoever.

“This affiant . . . states the fact to be that the defendant in the divorce action did pay to the plaintiffs herein court costs, so the plaintiffs herein retained the sum of sixty-nine ($69.00) dollars, which rightfully belongs to this affiant, and affiant further denies that she has no set-off against the plaintiffs herein for she states the fact to be that due to the fact that she was not properly represented, she is entitled, to the return of all sums advanced by her to the plaintiffs herein.”

The question whether the municipal court of Chicago is authorized to make use of the summary judgment method prescribed by the Civil Practice Act is interesting, but this record does not, in our opinion, present a question concerning the jurisdiction of the court but rather a question of the practice in the court.

Section 19 of the Municipal Court Act provides that with certain specified exceptions, the practice is to be as near as may be that which may from time to time be prescribed by law for similar cases and proceedings in the circuit courts, and that the municipal court is to be the sole judge of the applicability to the proceedings of the court of the rules of practice prescribed by law for similar cases in the circuit courts. The act further provides that the decisions of the municipal court in respect thereto are not to be subject to review upon appeal or writ of error, except when such review is necessary to prevent a failure of justice. Section 20 of the same act gives the judges power to adopt rules in addition to or in lieu of the provisions of the act prescribing the practice. The order of the judges of the municipal court entered November 1, 1933 (Book of Civil Practice Bules and Forms, p. XXXIV) does not state whether the rules are to be in lieu of or to be in addition to the circuit court rules. We presume, however, that they should be regarded as additional rules unless the contrary plainly appears from the rules themselves as adopted. Buie 308 expressly declares that the Civil Practice Act provisions are applicable, unless they are inconsistent or in conflict with the rules. They are not inconsistent or in conflict if they can be given effect without rendering the rules adopted by the judges inoperative, or permitting the court to take steps which the rules either expressly or impliedly forbid. In order to determine whether there is inconsistency or conflict, a comparison of these rules with the Civil Practice Act provisions is necessary.

Buie 111 provides for a judgment by default in the case of a claim for a debt or liquidated demand when the plaintiff’s claim is verified by affidavit, other than one on information and belief, where defendant’s defense is not verified. This is summary judgment procedure, although it is not called by that name in the rule. The Civil Practice Act (section 57) does not purport to prohibit such method of procedure, but simply provides for additional method by which a judgment can be obtained without delay when the defendant is unable to state and verify, by affidavit or otherwise, a good defense, upon full opportunity given to do so.

Some force must be given to the provisions of section 19 of the Municipal Court Act, which makes the court the exclusive judge of whether circuit court rules are applicable in the municipal court when the decisions do not result in injustice. The rules do not purport to nullify that provision nor the provision of section 52 that if the method of procedure in any case within the court’s jurisdiction is not sufficiently prescribed by the act, or by any rule of court adopted in pursuance thereof, the court may conduct and dispose of the same as the court may deem proper for the just determination of the rights of the parties. Moreover, Rule 307 forbids the setting aside of a judgment on account of any departure from a rule of practice when it clearly appears that no injustice has resulted therefrom to the party complaining. The legislature by adopting section 57 of the Civil Practice Act has, in effect, declared that its provisions for summary judgment are not such as will operate unjustly in other courts. There seems to be no reason why. these rules should be held to operate unjustly in the municipal court.

The question of whether the municipal court is authorized to make use of the summary judgment method prescribed by the Civil Practice Act is not, as we have already said, a question of jurisdiction, but one of practice. The use of the method is hot expressly forbidden by the Municipal Court Act, nor forbidden by or inconsistent with any of the rules adopted by the judges of the court. Such use therefore is subject to review only in case it has resulted in an unjust judgment.

"While the court was not without jurisdiction, it must be held that, in view of the facts averred in the affidavits, it was error for the court to enter a summary judgment. The averments of fact to the effect that a settlement was made of defendant’s case without consulting defendant, the averments as to the manner in which her interests were, as she says, neglected, the averments to the effect that she paid money to plaintiffs on account, together with her denial under oath that she was indebted to them, raised an issue of fact which, under section 57 of the Civil Practice Act, required the cause to be submitted to the jury. The fees allowed by the divorce decree belong to defendant, not to plaintiffs, although they were her solicitors. Anderson v. Steger, 173 Ill. 112. She was not obligated to turn these over to plaintiffs or to pay the amount thereof to plaintiffs unless she was in fact indebted to them. She denied that she was indebted and stated facts which if true would have raised a question for the jury.

We express no opinion, of course, upon the merits of this controversy. We are aware that the rendition of services by solicitors in cases of this kind create difficult 'and delicate situations, and that in connection therewith solicitors are often unjustly blamed. However that may be, the affidavit submitted in this case disclosed an issue of fact, with demand for a trial by a jury, which could not properly be ignored by the trial court. We may add that plaintiffs have not appeared in this court to support the judgment.

For these reasons the judgment is reversed and the cause remanded.

Reversed and remanded.

McSurely, P. J., and O’Cohhor, J., concur.


author: Mr. Justice O’Connor

text:
    The People of the State of Illinois ex rel. Edna O. Dahlin, Appellee, v. Horace I. Lepman et al., Appellants.
    Gen. No. 38,184.

      Opinion filed November 12, 1935.
    Otto Keener, Attorney General, for appellants; Wm. C. Clausen and Joseph R. Munizzo, Assistant Attorneys General, of counsel.
    Arthur L. Israel, of Chicago, for appellee.
   Mr. Justice O’Connor

delivered the opinion of the court.

Edna O. Dahlin filed her petition praying that a writ of mandamus issue directed to Horace I. Lepman, Superintendent of Foods and Dairies, Walter W. McLaughlin, Director of Agriculture, W. Emery Lancaster, John V. Clinnin and Ernest Hoover, members of the Illinois State Civil Service Commission, Edward J. Barrett, Auditor of Public Accounts, and John C. Martin, State Treasurer, commanding them to expunge certain records so as to show that she was an employee of the State in the classified civil service as Food Chemist in the Department of Agriculture, and for certain- other relief. The respondents filed a special and limited appearance contesting the jurisdiction of the superior court of Cook county, where the suit was brought, on the ground that the suit should have been brought in the circuit court of Sangamon county, and moved the court to quash the service of summons. The motion was denied, the respondents elected to stand on their limited appearance, judgment was entered awarding the writ of mandamus as prayed for, and the respondents appeal.

We think the special and limited appearance of the respondents properly raised the question whether the superior court of Cook county had jurisdiction. Nicholes v. People, 165 Ill. 502; Louisville & N. R. Co. v. Industrial Board, 282 Ill. 136.

An action against a public official for acts of omission or commission in the conduct of his office was transitory at common law. 40 Cyc. 87. Both parties seem to take the position that the venue of the instant case is determined by the provisions of sec. 7 of the Civil Practice Act, par. 135, ch. 110, Ill. State Bar Stats. The pertinent portion of that section provides that “every civil service action shall be commenced in the county where one or more defendants reside or in Avhich the transaction or some part thereof occurred out of which the cause of action arose.” And counsel for respondents contend that “Neither the transaction nor some part thereof occurred in Cook County out of which the cause of action arose so the court did not have jurisdiction”; and further, that all necessary and proper parties, viz., McLaughlin, Director of Agriculture, Barrett, Auditor of Public Accounts, and Stelle, Avho has succeeded Martin as State Treasurer, are all located at Springfield in Sangamon county.

The record discloses that the respondents Lepman and Clinnin were served by the sheriff of Cook county; Hoover by the sheriff of Christian county; McLaughlin, Barrett and Martin by the sheriff of Sangamon county, and Lancaster by the sheriff of Adams county.

Counsel for the respondents say that the basis for petitioner’s suit is predicated on the charge that her title as “Food Chemist” was wrongfully changed to “Chemist in Charge of the Springfield Laboratory”; that this was done in respondent McLaughlin’s office at Springfield, and therefore no part of the transaction (which is the basis for plaintiff’s suit) occurred in Cook county. And the argument appears to be that the petitioner has not brought herself within the provision of sec. 7 of the Civil Practice Act above quoted. Counsel for respondents further say that respondent Lepman, who is “Superintendent of Foods and Dairies,” is employed in the Chicago office of the Department of Agriculture; that nowhere in the statute is such superintendent given any specific powers or duties, but that he is merely a subordinate employed in the Department of Agriculture, and acts under the direction of the Director of Agriculture, McLaughlin, and therefore Lepman was not a necessary or proper party.

It is further argued that respondent Clinnin, who together with Lepman was served by the sheriff of Cook county (and who it seems to be conceded resides in Cook county) is not being proceeded against individually, but in his capacity as a member of the Civil Service Commission, which is located at Springfield as required by sec. 17 of the Civil Service Act, ch. 126a.

Sec. 3 of ch. 24a creates the Department of Agriculture. Sec. 4 provides that each department shall have an officer at its head who shall be known as a Director, who shall execute the powers and discharge the duties fixed by law in his department. Sec. 5, in addition to the director of the department, creates in the Agriculture Department the position of “Superintendent of Foods and Dairies,” and the section provides that the Superintendent shall “be under the direction, supervision and control of the Director . . . and shall perform such duties as such Director shall prescribe.” And by sec. 17 of the Act it is provided that “Each department shall maintain a central office in the capítol building at Springfield, in rooms provided by the Secretary of State. The director of each department may, in his discretion and with the approval of the Governor, establish and maintain, at places other than the seat of government, branch offices for the conduct of any one or more functions of his department.” By section 17 of the State Civil Service Law, ch. 126a, it is provided that “The Secretary of State shall cause suitable rooms to be provided for said commission at the capítol at Springfield. It shall be the duty of the officers of the State, or of any civil division thereof, at any place where examinations are directed by the commission, or by its rules to be held, to allow the reasonable use of public buildings and rooms” for holding such examinations, and that the commission shall meet at Springfield at least once in each calendar month except August.

Three persons may be appointed by the Governor as Civil Service Commissioners (sec. 1, ch. 126a). The Auditor of Public Accounts and the State Treasurer are constitutional officers who are required by sec. 1 of Article 5 of the Constitution, to reside at the seat of government during their term of office and to keep public records, books and papers, and to perform such duties as may be prescribed by law.

The petition alleges that the respondent, McLaughlin, as Director of Agriculture, has assigned to respondent Lepman the duty of preparing and signing pay rolls for petitioner’s salary, which pay rolls must be approved by McLaughlin. Lepman is in charge of a branch office in Chicago.

Sec. 31 of the State Civil Service Law, ch. 126a (Ill. State Bar Stats.) provides that “It shall be unlawful for the Auditor or any other fiscal officer of the State to draw, sign or issue . . . any warrant on the Treasurer, ... to pay any salary or compensation to any officer, clerk or other person in the classified service of the State, unless on an estimate, pay roll or account for such salary or compensation, containing the names of the persons to be paid and a statement of the amount to be paid, and the matter on account of which the same is to be paid, shall be filed with him, bearing the certificate of the State Civil Service Commission that the persons named in such estimate, pay roll or account, have been appointed or employed, ... in pursuance of this act.”

The petition alleged that Lepman was required to make out the pay rolls for petitioner’s salary and prayed that the defendants be commanded to make out new vouchers for paying the petitioner her salary for certain months. This could not legally be done until and unless the pay roll was made out and then certified to by the Civil Service Commission.

We think all the parties were proper and necessary parties to the proceeding.

From the provisions of the statute above mentioned it clearly appears that some of the duties required of the Agricultural Department are authorized to be performed in such places in the State as the director of the department may specify; and it appears that a branch office is maintained in Chicago, where some of the duties of his department are performed. It also appears that the duties of the Civil Service Commissioners are not performed solely in Sangamon county but they may go to any part of the State to hold examinations and perform other duties required by law.

In these circumstances, taking into consideration also the fact that two of the defendants reside in Cook county, the action might properly be maintained in the superior court of Cook county, because sec. 7 of the Civil Practice Act provides that a civil action may be commenced where one or more of the ‘‘ defendants reside. ’ ’

In support of respondents’ position the cases of People ex rel. Town of Brighton v. Williams, 129 N. Y. S. 457; State of Floriday. Parks, 94 Fla. 91; and Mason v. Willers, Secretary of State, 7 Hun 23, are cited.

The Williams case was a petition for mandamus to compel the State Comptroller to approve an assessment pay roll of certain lands as the statute required. The suit was brought in Franklin county where the land was located, but the court held the action would not lie but should have been instituted in Albany county, in which the capital of the State was located. The court there said (p. 459): “The ownership of the lands in question is not involved, in this proceeding. The statute requires the Comptroller to approve all the rolls, but only after a hearing of the assessors and the forest, fish, and game commission, if they should so desire. It is clear that that hearing is to be had not in Franklin County but in Albany, the official home of the Comptroller. It is clear that his approval is there to be made. . . . All the acts which he is required by this writ of mandamus to perform are there t'o be performed, and, if any alternative writ were required to be issued the issue made thereby would be triable in Albany county. Moreover, if the matter be one of doubt, that doubt should be resolved in favor of the State", to the end that public business may be expedited. ’ ’

In the Parks case (94 Fla. 91) a writ of mandamus was sought to command the State board of law examiners to receive the application of one Baker to" permit him to take the examination of the board and to issue to him a license if he should successfully pass the examination. The court held that such action could only be brought in the county where the capital city was located. The court there said that the duties of the respondents in that case were required to be performed at the capital city and not elsewhere, and said (p. 94): “An action by mandamus against the Board to coerce the performance of those duties is therefore not transitory, as was the case in King v. Kentucky Board of Pharmacy, 162 S. W. 561, where no place was fixed by law for the meetings of that Board or for the performance of its official duties. ’ ’ We think that case is not in point. The civil service commissioner may perform duties throughout the State as may be determined by officials of the Department of Agriculture, and section 7 of the Civil Practice Act provides that an action may be brought where a defendant or some of them reside. .

In the Willers case (7 Hun 23) the petition for mandamus was filed against the. Secretary of State in Kings county to require him to file in his office at Albany a certain certificate whereby the petitioners proposed to create a corporation, and it was held that under the statute of New York this action would lie only in the courts of Albany county where the office of the Secretary of State was by law located.

Since the enactment of the Civil Practice Act in New York in 1920, suits for the reinstatement of State employees have been brought in counties other than Albany county where the capital was situated (Davis v. Seyer, 200 N. Y. S. 135; Williams v. Pyrke, 252 N. Y. S. 801; Whaley v. Perkins, 248 N. Y. S. 65) although the point in question was not discussed.

Similarly, an action for mandamus was brought in the superior court of Cook county seeking reinstatement of certain State civil service employees in People v. Burdett, 283 Ill. 124. Burdett was a civil service commissioner and resided in Cook county. So also mandamus actions have been brought against the Department of Registration in Cook county. Bodenweiser v. Dept. of Registration, 347 Ill. 115; Schireson v. Walsh, 354 Ill. 40; and a case involving the sales tax of this State was brought against the Auditor of Public Accounts in the circuit court of Madison county (Winter v. Barrett, 352 Ill. 441); and a case against the Director of the Department of Finance was brought in the circuit court of Kane county. Chicago Motor Club v. Kinney, 329 Ill. 120. In each of these cases the venue was fixed by the residence of one of the defendants.

In King v. Kentucky Board of Pharmacy, 157 Ky. 52, 162 S. W. 561, a writ of mandamus against the State Board of Pharmacy and its members to compel the issuance of a certificate to permit one to practice his profession in the State was held to be a transitory action by virtue of a provision of the statute which required actions whose venue was not established by other sections of the statute, to be brought in the county where the defendants or one of them resided or was summoned. The suit was brought in Jefferson county, while Franklin county was the seat of the State capítol. The court there said (p. 562): “There is no special provision of law as to the venue of actions against, or service of process upon, the Kentucky Board of Pharmacy. . . . This action is a transitory one under Section 78 of the Civil Code and may be brought in any county where process is executed upon the members of the board or any one or more of them. . . .

“It will be noticed that this action is brought, not for the enforcement of contractual rights and obligations, but to coerce the performance of ministerial duties. It is an action against the individuals comprising the Kentucky Board of Pharmacy; its object being to require the individual officials upon whom devolves the performance of a duty, to execute the same. And these officers must be sued by name in order that the court may determine whether or not they are the proper persons to perform such duty, and in order that it may command them to perform it.”

In Gregory v. McInnis, 140 S. C. 52, 134 S. E. 527, the Supreme Court of South Carolina held that an action to compel the State Board of Veterinary Examiners to issue a license would lie in the county where the cause of action arose although none of the members

of the board resided in the county where the suit was brought.

In R. R. Commission v. Palmer Hardware Co., 124 Ga. 633, an equitable petition was brought against the road commissioners of the State and certain railroad companies claiming that the commissioners had fixed freight rates which were discriminatory. None of the commissioners lived in Chatham county in which the suit was instituted, but in other counties of the State. The court there said (pp. 647, 648): “If this equitable proceeding cannot properly be brought in Chatham county, in what county should it be brought! It is urged by counsel for plaintiffs in error that it must be brought in Fulton county [where the capital of the State is located]. This argument is based upon the Civil Code, sec. 2186, which among other things declares that ‘the office of said commissioners shall be kept at Atlanta. ’ It is argued that this creates an official residence or domicile where suit must be brought. All suits must be brought against some person, either natural or artificial. . . . Only a person can be a party. In fixing the venue of a suit against the railroad commissioners of this State, it must be determined whether the commission as a body is a corporation, and therefore an artificial person which can be made a party, or whether it is simply an aggregate body composed of the individual commissioners, and they are the parties to the action. The law of this State nowhere declares the commission as such to be a corporation, or to have power to sue or be sued in that name. On the contrary, it more frequently speaks of the commissioners than of the commission. . . . A mere declaration that the office of the commissioners shall be kept at Atlanta does not create a corporation. . . . The commission not being a body corporate, if the venue of a suit is to be fixed with reference to the commissioners, it follows, under the constitutional provision already quoted, that it would be in the county where one or more of the commissioners reside.” The holding in this case was followed in State Highway Department of Ga. v. Marks, 167 Ga. 397, which was a suit brought against the highway commissioners. "

In view of the provision of section 7 of our Civil Practice Act and under the other sections of our statutes and authorities above referred to, we hold that since two of the necessary and proper parties resided in Cook county, the superior court of Cook county had jurisdiction; therefore the judgment appealed from is affirmed.

Judgment affirmed.

McSurely, P. J., and Hatchett, J., concur.