author: Mr. Justice Friend Wilson, P. J.,

text:
    F. E. Thornton, Appellant, v. Nome and Sinook Company, Appellee.
    Gen. No. 34,120.
    Heard in the third division of this court for the first district at the February term, 1930.
    Opinion filed January 28, 1931.

      William D. Kerr, for appellant.
    Follansbee, Shorey & Sohupp, for appellee; Mitchell D. Follansbee, Clyde E. Shorey and Loren P. Oakes, of counsel.
   Mr. Justice Friend

delivered the opinion of the court.

This is an appeal from a judgment entered in favor of defendant in an action on promissory notes. The court sustained a demurrer to a replication to each of two pleas, and the plaintiff having elected to stand by her replications, judgment was entered for the defendant.

The undisputed facts disclose that four notes aggregating $12,000 and bearing interest at 6 per cent per annum were given by the defendant in 1903 and 1904, made payable at sundry dates in 1904. Plaintiff commenced her suit by filing a narr. and cog. July 22, 1925, on which judgment was entered by confession. Subsequently leave was given the defendant to plead, the judgment to stand as security.

The first amended plea sets up that both the maker and payee of the notes were Maine corporations; that defendant was at all times a nonresident of Illinois and that the causes of action did not accrue at any time within 10 years before the commencement of the suit.

The second amended plea after setting up the same facts with reference to the maker and payee, alleged that the causes of action, if any, arose in a State or territory out of this State and that action could not there have been maintained at the time of the commencement of this suit by r-eason of the lapse of time.

For a replication to the first amended plea the plaintiff said that the defendant at the time of the execution of the notes and at the time when the several causes of action accrued thereon was a resident of Illinois; that the articles of incorporation of defendant, when the cause of action accrued, provided that the main office of the company should be in Chicago; that when the notes were executed and when the several causes of action accrued thereon the defendant maintained its main office and principal place of business in Chicago; that the defendant was then and there doing business in Illinois; that the defendant then and there had an agent in Illinois; that in 1907, and within four years after the said causes of action accrued, the defendant company departed from Illinois, and from that time until the filing of the suit herein had continuously resided out of Illinois.

In her replication to the second amended plea, plaintiff set out the same facts regarding the residence of defendant, and stated further that the several notes herein • sued upon were all respectively executed in Chicago, Illinois, and that said notes were all respectively payable in Chicago, Illinois.

The defendant demurred to the replications to each of the amended pleas, the demurrer was sustained by the court and judgment entered for the defendant.

Section 16 of the Illinois Statutes of Limitations (chapter 83 Cahill’s Ill. Rev. St. 1929, ¶ 17) provides that action on promissory notes shall be commenced within 10 years next after the cause of action accrued. More than 20 years having elapsed between the maturity of the notes and the commencement of suit thereon, the principal question presented for decision is whether section 18 of the statute can be invoked by plaintiff to toll the running of the statute. Section 18 is as follows:

" Section 18. If, when the cause of action accrues against a person, he is out of the State, the action may be commenced within the times herein limited, after his coming into or return to the State; and if, after the cause of action accrues, he departs from and resides out of the State, the time of his absence is no part of the time limited for the commencement of the action. But the foregoing provisions of this section shall not apply to any case, when, at the time the cause of action accrued or shall accrue, neither the party against nor in favor of whom the same accrued or shall accrue, were or are residents of this State.” Cahill’s St. ch. 83, H 19.

Section 18 establishes two exceptions to section 16. The first exception is that if the person against whom the cause of action accrues is out of the State when the cause of action accrues, the period of the limitation will begin to run after his return to the State. The second exception is that if, after the cause of action accrues, such person departs from and resides out of the State, the time of his absence is no part of the time limited for the. commencement of the action. Plaintiff contends that section 18 is applicable to her case because the defendant was a resident of Illinois when the cause of action accrued, and that applying the second exception, the bar of the statute is raised by reason of the departure of defendant from the State within four years thereafter and its subsequent residence elsewhere.

It is stated in the first amended plea that both the maker and payee of the notes were Maine corporations and that both were nonresidents of Illinois when the causes of action accrued. The replication negatives the defendant’s nonresidence by the averments heretofore stated. Taking these averments as true, and they are so admitted by the demurrer, the immediate question raised is, whether under the facts stated, defendant can be said to have been a resident of Illinois within the meaning of section 18.

In support of her contention that defendant was a resident of this State, plaintiff relies chiefly on two very early decisions, Pennsylvania Co. v. Sloan, 1 Ill. App. 364, and Hubbard v. United States Mortgage Co., 14 Ill. App. 40. The first of these cases was aii action in tort brought by a resident of this State against the Pennsylvania Co., a foreign corporation, operating its lines in Illinois, having property within the State and maintaining offices and agents here upon whom process of service could be had. It appearing that more than two years had elapsed since the cause of action accrued, the question arose under the pleading’s whether the defendant was a resident of Illinois within the meaning of section 18, so as to toll the running of the statute. The court in its opinion affirmed the doctrine laid down by numerous decisions cited therein to the effect that a corporation must “dwell in the place of its creation, and cannot migrate into another sovereignty,” but qualified this proposition by saying that “the law of one State may have operation for certain purposes in another, by the comity or permission of the latter; and we see no insuperable difficulty in the way of such migration, provided the former does not positively forbid and the latter does positively consent,” and then concluded by saying, “but whether it be correct or not, the jurisdiction of the State over them (foreign corporations) is fully sustained by these authorities upon that of their consent, manifested by their engagement in business within it under its permission given upon condition of such consent. . . . Ability to obtain such service is the test of the running of the Statute of Limitations.”

The other case was a chancery proceeding filed by a resident of Illinois to foreclose certain bonds which he had purchased, secured by a mortgage on real estate. Facts admitted by a demurrer filed to the bill of complaint showed that more than five years had elapsed since the cause of action accrued and the question there also arose whether the complainant’s suit was barred by the statute. The court, following the doctrine laid down in Pennsylvania Co. v. Sloan, said that “it necessarily follows that it (defendant) is a resident of that State (New York), for as held in Bank of Augusta v. Earle, 13 Pet. 519, it must dwell in the place of its creation, and cannot migrate to another jurisdiction. It thus appears upon the face of the bill that while it is true that the complainant’s cause of action arose more than five years before the commencement of the suit, yet the defendant, at the time the cause of action arose, was, and ever since that time has been, a nonresident of this State, thus bringing the case within the exception provided for in the eighteenth section of the statute. True, if the corporation had been continuously doing business in this State by its agents during the entire five years, thus bringing itself during all that time within the jurisdiction of the courts of this State, the statute would, notwithstanding its corporate nonresidence, have run against it. Pennsylvania Co. v. Sloan, 1 Bradwell, 364.”

It will be observed that in both of the foregoing cases the party bringing suit was a resident of Illinois. In the instant case plaintiff was a resident of California. If it should therefore appear that the defendant in the instant proceeding was also a nonresident of this State, the exceptions provided by section 18 would, of course, under the express provisions of the statute, not be applicable.

All of the decisions before us, including the two foregoing cases, hold that a corporation can have but one residence, that being the State of its creation. This must necessarily be so for a railroad like the Pennsylvania Company operating in numerous places cannot be a resident of every State in which it owns property, maintains offices, and designates agents upon whom service may be had. Thompson on Corporations, section 565, says that:

“A corporation like a natural person must have a legal residence. . . . The first and prime rule is that a corporation is a resident, or has its legal domicile in the state or country by and under whose laws it was organized. As said by one court: ‘A corporation can exist only within the sovereignty which created' it, although, by comity, it may be allowed to do business in other jurisdictions through its agents. It can have but one legal residence, and that must be within the state or sovereignty creating it.’ The authorities are practically unanimous on this proposition. . . . The mere fact that a corporation has its principal office in a particular state, does not make it a resident of that state.”

The case of Hamilton v. North Pac. S. S. Co., 84 Ore. 71, likewise holds that:

“For most purposes and under most circumstances it is clear that a corporation resides only in the state where it is incorporated. If it transacts business in another state, it is properly held to be a resident of such other state for purposes of legal process. This rule is followed in order to prevent the intolerable injustice of authorizing the transaction of corporate business without the corresponding1 responsibility of answering within the jurisdiction for corporate contracts and torts. It follows, as a corollary, that a corporation transacting business within the state may plead the statute of limitations. These exceptions to the general rule are apparent rather than real. The word ‘resident’ in these authorities means ‘one found within the jurisdiction.’ . . . The word ‘resident’ as used in Section 26, is used in the same sense in which Congress uses it in statutes defining the jurisdiction of the federal courts.”

The object of the statute which makes foreign corporations amenable to service has, for obvious reasons, been declared by our courts to be designed for the protection of residents of this State. It being a protective statute favoring Illinois residents and aimed against those who reside in other States, no groundless presumptions should be indulged that outsiders permitted to operate here by comity were intended to be the beneficiaries. This proposition was aptly stated in Warren v. Clemenger, 120 Ill. App. 435, where the court said:

“It is clear that said section 18 was enacted to favor residents of this State as against residents of other States, territories and foreign nations, and to relieve them from the necessity of following their debtors into other jurisdictions under penalty of losing their debts by the running of the statute. Story v. Thompson, 36 Ill. App. 373.”

In conformity with these well established principles we are of the opinion that the two cases relied upon by plaintiff are authority for holding only that foreign corporations operating in Illinois and subject to process in this State, may be considered as residents of Illinois only in so far as they are amenable to service within the State the same as a domestic corporation, and that since process must be accepted by them, they also share the privilege with domestic corporations, of pleading the statute of limitations. To give any broader meaning to these decisions would result in the anomaly of holding that a corporation, doing business in numerous States may have a residence in every State where it operates, which is contrary to sound reason and the almost unanimous rule that a corporation can have but one residence, that being the State of its creation.

As was pointed out in Warren v. Clemenger, supra, at common law the rule was that a right of action never died, “but because time outlasts witnesses and wears away evidence of payment, it was early found necessary, for the protection of those who were once debtors, and to qniet titles, to enact a statute of repose fixing a time after the right of action accrued beyond which it could not be enforced. Accordingly, in every jurisdiction in which the common law prevails there is now to be found, in varying words, a statute of limitations prescribing a boundary to the right to bring an action at law. In this State the time thus limited is amply sufficient to permit a diligent creditor to enforce his claim. The statute affects the remedy merely and not the merits of the controversy. It is a statute of repose, and should be construed liberally so that the object for which it was enacted may be attamed.” The plaintiff, a resident of California, having had four years after the causes of action accrued in which to serve process of summons on defendant, while it was still doing business in Illinois and amenable to service here, and more than 20 years having elapsed since the notes became due, during which plaintiff could have sued the defendant in the State of Maine where it resided, we are constrained to interpret the statute with the liberal intendment which the legislature and the courts have prescribed.

We have considered the further contention of defendant that these actions were also barred by section 20 of the statute because they arose in Maine and were barred by the limitations statute of that State. In view of our conclusion, however, that section 18 does not operate to toll the running of the limitation period fixed by section 16, we deem it unnecessary to pass upon the remaining point.

For the reasons stated, the judgment of the trial court will be affirmed.

Affirmed.

Hebel, J., concurs.

Wilson, P. J.,

specially concurring: I join in the foregoing opinion and concur specially for the following reasons:

Judgment by confession was had July 22, 1925, on notes due in 1904. The defendant left the jurisdiction in 1907, and has not been within the jurisdiction of the State since. If the judgment by confession was good when entered, July 22, 1925, then why was it not possible to have taken the judgment at any time after the notes were due? Admitting this, then the statute began to run from the due dates of the notes. If judgment by confession could not be taken because of the absence of the defendant from the State, then how could it be taken July 22, 1925, as nothing new had arisen to give the right? The judgment was one by confession and not by personal service on the defendant after it had come back into the State. If plaintiff insists she has a valid judgment, then she could have taken it at any time after the notes became due, and there was nothing to toll the running of the statute of limitations.


source: Caselaw Access Project

author: Mr. Justice Hebel

license: Public Domain

text:
    Max Sugar, Appellant, v. Guiseppe Marinello, Appellee.
    Gen. No. 34,084.

      Heard in the third division of this court for the first district at the February term, 1930.
    Opinion filed January 28, 1931.
    Levisohn & Levisohn, for appellant.
    / E. Leslie Cole and William H. Katt, for appellee.
   Mr. Justice Hebel

delivered the - opinion of the court.

This is an action by the plaintiff against the defendant to recover damages arising out of the defendant’s refusal to convey certain premises located at and known as 4892 Lipps Avenue, Chicago, and said action is based upon the following document:

‘ ‘ Chicago, September 19, 1925.

“Received of Julian Kazanowski $200.00 deposited on sale of property at 4892 Lipps Avenue. Balance $6800.00.

(Signed) G-uiseppe Marinello.”

To the declaration the defendant filed certain pleas, and the case was tried in the superior court of Cook county before a jury, which resulted in a verdict for the defendant, and a judgment was entered by the court upon said verdict after a motion for a new trial and in arrest of judgment was overruled. Thereupon the plaintiff appealed from said judgment and the case is now before this court.

The facts as claimed by the plaintiff are that the defendant Guiseppe Marinello was, on September 19, 1925, the owner of the premises known as 4892 Lipps Avenue, Chicago; that on that date Julian Kazanowski, a licensed real estate broker, with an office at 4864 Milwaukee Avenue, was agent for the plaintiff; that the principal’s name was not disclosed at the time Julian Kazanowski stated to the defendant that he wished to buy his property and he was told that the price for the property would be $7,000, if it were a cash deal, and $7,500, if sold on payments; that Kazanowski then advised the defendant that he did not know how his client would handle the property, whether on a cash or payments basis, but that he would find out and advise the defendant; that he then called the following day; that the defendant was not at home and he called again on Sunday, September 25, 1925, and stated to the defendant that his client would pay cash for the property, and paid him $200 as earnest money to apply on the purchase price, which was accepted and has since been retained by the defendant; that the defendant then told Kazanowski not to tell anyone for a couple of days that he had sold the property, and that thereupon the receipt, which is already fully set forth, was executed by the defendant. Shortly thereafter Kazanowski signed and executed an assignment, transferring to the defendant all his right title and interest in and to the said premises, which assignment is as follows:

“Chicago, September 19, 1925.

“Received of Julian Kazanowski $200 deposited on sale of property at 4892 Lipps Avenue. Balance $6800.00; together with the right to receive a conveyance of the property in said receipt described, located at No. 4892 Lipps Avenue, Chicago, Illinois, upon payment of the balance of the purchase price of $6800.00 as in said receipt set forth, together with all claim of the said undersigned, Julian Kazanowski, at law or in equity against the said Guiseppe Marinello for breach of said contract.

“Witness the hand and seal of the said assignor this 24th day of September, 1925.

Julian Kazanowski (Seal) ”

Sometime after the date of the signing of the receipt, the defendant told Kazanowski that he would not sell the premises. It also appears that the plaintiff on September 19,1925, was ready, able and willing to complete the purchase by paying the balance of the purchase price upon the defendant delivering to him a warranty deed to said premises, but that the defendant never performed.

The defendant insists that the facts are that he told Kazanowski that he could not sell the property; that he had given Milner & Katt an exclusive option and that it would not expire for three or four days; that the following Sunday, September 19,1925, when Kazanowski called again, he exhibited the option of Milner & Katt to him, and that Kazanowski then told the defendant he wanted the property, and to show that he was in earnest he would deposit $200 on the sale, and that the defendant could sign a receipt, and if Milner & Katt went through with their option he conld return the check and he would get the receipt; that the option was exercised by Milner & Katt, and thereupon the defendant went to the home of Kazanowski, tendered the check to him, asked for the receipt and was told that the receipt was at Kazanowski’s office. The defendant was asked to return, which he did that evening and again tendered the check to Kazanowski, asked for the receipt and was told that the plaintiff had it.

The plaintiff contends that by the defendant’s refusal to carry out his contract and convey the premises he is entitled to damages, being the difference between the sale price and the market value thereof at the time of the sale; that there is evidence in the record on the question of damages testified to by witnesses produced by both the plaintiff and the defendant.

The plaintiff is insistent that a principal can maintain an action on a written contract made by his agent in his name, notwithstanding the name of the principal is not disclosed. This is admitted by the defendant, except that the principal could not maintain his action if the receipt in question was not sufficient to take the case out of the provisions of the statute of frauds, and that in the case at bar the real party was the plaintiff and that his name does not appear in the receipt, and the receipt should not have been received in evidence for the reason that the plea of the statute of frauds had been interposed by the defendant. The reasonable construction of this instrument is that it is an agreement by the defendant to convey to Kazanowski the title to the premises upon the payment of the balance of the purchase price. Said agreements are assignable and carry with them the rights and remedies that exist in the assignor, and the plaintiff in this suit can maintain this action on this contract. Moore v. Gariglietti, 228 Ill. 143.

In Stein v. McKinney, 313 Ill. 84, cited by the defendant, the Supreme Court held that the agent Bradstreet could not bind his principal McKinney to sell to Stein when the written authority given by McKinney to Bradstreet was to enter into a contract to sell to a man by the name of Seyfarth. This opinion does not modify or change the rule announced in the case of Moore v. Gariglietti, supra, that contracts of the kind we have under consideration are properly assignable.

The plaintiff contends that the trial court erred in allowing evidence to be introduced by the defendant over the objection of the plaintiff, which plaintiff insists tended to vary the terms of the written instrument in evidence, by showing that the receipt would not be binding under certain conditions, which terms were not embodied in the instrument itself. The evidence of the defendant was to the effect that the delivery to Kazanowski was conditioned not to take effect until the exclusive option that the defendant had given to Milner & Katt had expired, and that if Milner & Katt exercised this option, upon the return of the $200 deposited by Kazanowski he would return the written receipt; that Milner & Katt did exercise said option and the defendant made tender of the $200, but that he did not receive said written instrument by Kazanowski, who stated that the plaintiff had it. The rule that evidence is not admissible to change or qualify an unconditional written promise by a contemporaneous parol agreement is a recognized rule, and is so generally established and universally recognized by the courts that it is not necessary to quote from or cite authorities upon that question; but evidence is admissible to show that a written document was not intended to take effect as a valid agreement until the occurrence of some future contingency, and is admissible between the original parties and between them and those taking with notice. Such evidence does not contradict or vary the terms of the writing, but tends to show that the document was never delivered as a present contract. The possession of a contract unexplained is presumptive evidence of its delivery. The Supreme Court in Bell v. McDonald, 308 Ill. 329, has established the rule that the delivery of a written document upon condition does not make it operative until the condition has been complied with. Evidence of such conditional delivery does not alter or vary the terms of a contract. We are of the opinion that the evidence offered is admissible and only tends to show a conditional delivery by the defendant to the agent of the plaintiff. In the case of Bell v. McDonald, supra, the Supreme Court in passing upon the question of conditional delivery uses this language:

“It is argued on behalf of the appellant that the statement in the pleas that the instruments were delivered only as collateral security for the stock powder to be sold and were to be held by the payee and surrendered when the amount for which the stock powder was sold was collected by the payee is only an attempt to change and qualify the unconditional written promises by a contemporaneous parol agreement, in violation of the general rule that an instrument absolute on its face cannot be shown by parol to be conditional. While this is a recognized rule of general application, yet evidence that the instrument was not intended to take effect as a valid obligation until the occurrence of some future contingency is usually held admissible between the original parties and between them and those taking with notice. Such evidence, it is held, does not contradict the terms of the writing or vary its legal import but tends to show that it was never delivered as a present contract. The possession of a contract unexplained may be presumptive evidence of its delivery, and under such circumstances no alteration of the terms of the contract could be shown, but until the delivery the writing is inoperative, and the delivery upon condition does not make it operative until the condition has been complied with. Evidence of such conditional delivery does not alter or vary the contract. ’ ’

And in its opinion the court quotes the language used in Jordam v. Davis, 108 Ill. 336, as follows:

“Delivery of a written contract is indispensable to its binding effect, and such delivery is not conclusively proved by showing the placing of the paper by the alleged contracting party in the hands of the other. Delivery is a question of intent, and it depends whether the parties at the time meant it to be a delivery to take effect presently.”

Complaint is made by the plaintiff that the court erred in giving to the jury the following instruction:

“The Court instructs the jury that a contract for the sale of land must definitely point out the land to be conveyed or furnish the means of identifying the land with certainty, and if you believe from the evidence that the following contract: ‘Chicago, September 19, 1925. Received of Julian Kazanowski $200 deposited on sale of property at 4892 Lipps Avenue. Balance $6800.00. (Signed) Guiseppe Marinello, ’ fails in either of these respects, you must find the defendant not guilty,” and it is contended that the instruction left to the jury the question of the construction of a written instrument, which is a question of law for the court. It is for the court to instruct the jury what the law is that applies to the facts to be considered by the jury, and it would be erroneous to leave it to the jury to determine what the circumstances were which would entitle the party to recover, and thereby pass upon questions of law, as well as of fact. Ellwood Mfg. Co. v. Faulkner, 87 Ill. App. 294.

This instruction first tells the jury that a contract for the sale of land must definitely point out the land to be conveyed or furnish the means of identifying the land with certainty; and second, that if the jury believe from the evidence that the contract fails in either of these respects the jury must find the defendant not guilty. This instruction leaves it for the jury to determine whether the contract is sufficiently specific to be an enforceable one, which the jury is to gather from the facts and to determine under what circumstances the defendant is or is not guilty.

This instruction is bad in that the jury is to pass upon both questions of law and of fact. It is for the court to construe the contract, and if the contract is not sufficiently specific to be enforceable this must be decided by the court as a question of law.

There are other questions in this record, but in view of the conclusions that we have reached it will not be necessary for us to determine those questions, but reverse this case upon the ground w'e have indicated. The judgment of the trial court is reversed and the cause remanded.

Reversed and remanded.

Wilson, P. J., and Friend, J., concur.


author: Mr. Presiding Justice Shurtleff

text:
    James Buttitta and Dominick Buttitta, Appellees, v. G. W. Lawrence and C. F. White, Appellants.
    Gen. No. 8,350.

      Heard in this court at the October term, 1929.
    Opinion filed January 26, 1931.
    Green & Palmer, for appellants; Henry I. Green, George E. Martin and Oris Barth, of counsel.
    Boyd & Leonard, for appellees.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

The appellees, James and Dominick Buttitta as plaintiffs, brought suit against the appellants, Lawrence and White, in an action for fraud and deceit.

The first two counts of the declaration substantially charge that the plaintiffs, the Buttitta brothers, employed the defendant C. F. White to sell or exchange a property on Stoughton Street in Urbana, Illinois, for them; that the defendant White entered into a conspiracy with the defendant G. W. Lawrence to defraud the plaintiffs, and that pursuant thereto the defendants offered to exchange or trade with the plaintiffs for their Stoughton Street property, a vacant lot belonging to the defendant Lawrence, known in the record as the Poplar Street lot, and $1,992.53 worth of notes; that the defendants, Lawrence and White, to induce the plaintiffs to make such exchange, falsely and fraudulently represented and stated to the plaintiffs that the said notes were good and collectible and the makers thereof solvent and responsible; that such statements were false and were known to the defendants to be false, and oh the faith of such statements the plaintiffs, relying thereon, deeded their property to Doris G. Lawrence, a daughter of the defendant Lawrence, and as part of the conspiracy and to lull any suspicions of the plaintiffs, the defendant Lawrence told the plaintiffs he would indorse the notes so that he would be liable upon them; that after Lawrence got the deed to the Stoughton. Street property he gave the notes to the defendant "White to give to the plaintiffs, and that the plaintiffs did not get the notes or see them until after Lawrence had placed his deed of record; that the plaintiffs, being unable to read the notes or to understand their legal effect, thereafter took them to an attorney and then learned for the first time that $586.55 of said notes were outlawed or barred by the statute of limitations, that the remainder of the said notes were worthless and uncollectible, because of the insolvency of the makers, and that all of the notes were worthless and were indorsed without recourse by the defendant Lawrence; that immediately upon learning these facts they went back to the defendant Lawrence and offered to return to him the notes and deed to the Poplar Street lot. Lawrence refused to do this, and the suit was then brought for the loss occasioned by the fraudulent misrepresentations in regard to the value of the notes.

The only plea was a plea of general issue. The case went to the jury upon the issues raised by the first and second counts of the declaration and the plea of not guilty thereto.

The testimony shows that the plaintiffs did not come to this country until after they were 18 years old. They could not read or write English, except to sign their names. They had worked hard since coming to Urbana in 1920 and were engaged in the shoe repairing business in Champaign. They owned their home at 607 West Stoughton Street, Urbana, which is involved in this deal, had bought a lot in the Chamber of Commerce Addition in Champaign and had each bought a lot on which they were building separate houses at the time of this transaction. They had also purchased about four other properties, but had never sold or traded for any property.

The defendant C. F. White was a real estate dealer who had had many other transactions with the defendant Gr. W. Lawrence, who was engaged in the furniture business, selling furniture on instalment payments in the City of Urbana, Illinois.

It is undisputed that the plaintiffs were to trade their Stoughton Street homestead on which the Prudential Insurance Company was placing a $5,000 mortgage at the time of this transaction, subject to said mortgage, for the vacant lot on Poplar Street belonging to Lawrence, and approximately $2,000 worth of notes. The only disputed question of fact in the case was whether Lawrence and White conspired together, and, pursuant to this conspiracy, made fraudulent misrepresentations in regard to these notes.

There was no evidence offered by the defendants in regard to the solvency of any of the makers of the notes, or in regard to the value of the notes, although those facts were placed directly in issue by the pleadings and were facts peculiarly within the knowledge of the defendants, from their long possession of the notes. It is the contention of the plaintiffs that the evidence is ovewhelming and practically undisputed that the notes were worthless.

The facts, as shown by the record, are as follows: James Buttitta testified in substance that some time in July the defendant White was in his office on other business and asked him if he could sell their Stoughton Street property for them. Within a day or two of this time he came back and James Buttitta testifies he said: “I believe I got somebody will trade for the house, with a lot on Poplar Street and $2,000 of good notes.” Jim asked, “What kind of note is it?” and White replied: “It is judgment note and good note, and the lot is worth $2,000 in a good location, in a good place.” White then asked him to look at the lot and told him it was the lot of the defendant Lawrence. They went to talk to Mr. Lawrence about it the next day and again quoting from the record James Buttitta testified: “When we saw Mr. Lawrence I told Mr. Lawrence what the kind of notes it was. He said what kind of notes he wanted to trade is some notes, $2,000 worth of notes, was a bunch of notes, and I told him, what kind of note it is? He said, ‘Boy, it is a good note, that is a customer’s note.’ Jim asked, ‘Can’t you let me see them, look at it?’ He answered, ‘Well, boys, I can’t do it. I don’t want to show the customers I have sold his notes. I can’t do that.’ ” All this occurred prior to August 3, 1927. On that date the plaintiffs testified that White came to James Buttitta alone at the shop with two pieces of paper. White handed the two pieces of paper to Jim to sign, and he told him, “before he signed it if he wanted to know what it was. ’ ’ Jim testified that White read it to him, but he read so fast that he couldn’t understand it, and he asked White to explain it to him and White said: “That is the agreement between you and Mr. Lawrence, you want $9,000 for your house, and Mr. Lawrence is to trade you for lot worth $2,000 and $2,000 worth of notes, and the cost of real estate commission, amounting to $330.” White did not explain to him all the provisions in the written contract. He said nothing about the notes being turned over without recourse. They then went to see Dominick Buttitta, who was laying the brick on his own home on Washington Street. Both Jim and Dominick Buttitta testified that Dominick asked White what the contract was, and that White told him it meant they were trading their property for a lot and $2,000 worth of notes, and that the real estate commission was $330; that White told them that the notes were good, guaranteed notes; that the people had been paying right along and that the notes were absolutely good.

On Cross-examination Dominick Buttitta testified that he asked Mr. White to read the paper to him and then asked Mr. White to tell him what the paper meant; that he didn’t understand the reading and asked him. to explain the paper, and that what White told him “is not compared with that paper at all.”

The matter stood in abeyance at this time because Mr. Lawrence went to Wisconsin and because the Buttittas were having a $5,000 mortgage placed on their property in the Prudential Insurance Company, and the Stoughton Street property was to be deeded to Mr. Lawrence subject to this $5,000 first mortgage.

The plaintiffs were engaged in building new homes for themselves, and wanted to buy two player pianos and trade in an old piano. Since Mr. Lawrence was in this same line of business they decided to buy from him, and while he was in Wisconsin spoke to his daughter about it, and agreed on the price of approximately $1,100.

On September 12, 1927, Mr. White came in and told James Buttitta that Mr. Lawrence was ready to close the deal and it is undisputed that the plaintiffs with Mr. White went to the office of Mr. Lawrence that night. Mr. Lawrence met them at his store somewhere around 10 o’clock. The plaintiffs at once raised the question about paying for the player pianos by turning back part of the $2,000 worth of notes they were to receive in the deal. Mr. Lawrence told them he couldn’t do this because he had lost some money in a bank failure in Urbana and because he needed the cash in his business. It is undisputed that the plaintiffs got up and left the store and went out in front, refusing to go further with the deal. The defendant White came out on the sidewalk and urged them to go on and complete the deal and suggested that they could pay $550 for one piano and arrange about the other. They then went back and James Buttitta suggested to Mr. Lawrence that they would pay cash for one piano and would let the other piano sit on the floor for 90 days or so, until they could get the cash. Mr. Lawrence objected to this, however, and asked them to give him a note for the other piano. They finally agreed to this and did it. The deed of the Buttitta property on Stoughton Street was then delivered to Mr. Lawrence and the plaintiffs asked him for the notes which they were to get and the deed and abstract to the Poplar Street lot. He told them it was so late at night that he would send the notes, deed and abstract over the next day by Mr. White.

The record shows that Lawrence recorded his deed to the Stoughton Street property the next day, September 13, at 10:30 o’clock a. m. He also sold the note for the piano to the Urbana Banking Company, an innocent purchaser, for value. It is undisputed that the defendant White delivered the notes, and a list of the notes to James Buttitta at his shop on September 13. The Buttittas testified he also delivered the deed and abstract at that time.

A few days later, Mr. Showalter, a lawyer who was acquainted with the Buttittas, came in their shop and they gave him the abstract to examine for them, and either gave him or sent the notes to him to look over and arrange for their collection. Mr. Showalter at once sent out a letter to all of the makers of the notes and checked up their financial responsibility at the Champaign County Credit Bureau. Within a week or so he came back to James Buttitta and told him that he was afraid the notes were worthless. Buttitta then gave him the written contract, and after listening to . James Buttitta’s version of the deal, suggested that they go over at once and see the defendant Lawrence. They made more than one trip before they found Mr. Lawrence in. The first time they found him in, the defendant White was also there. Mr. Showalter told Mr. Lawrence that there must be some misunderstanding about the deal, because the plaintiffs understood they were to get good notes and that Mr. Lawrence would indorse the notes so that he would be responsible in case the makers did not pay. Mr. Lawrence ordered them out of his place and told them that he had a written contract and that he would stand upon his contract. Mr. James Buttitta became angry with Mr. Lawrence, and counsel for the defendants themselves insisted on the trial that all that occurred be told. James told them, “You lie to me, as soon as you die, you sure go to hell,” and he walked out. Both Mr. Showalter and Mr. Lawrence testified that as they talked about the matter there, White spoke up and said, “We figured that all we would make was the commission on the pianos.” Mr. Showalter suggested that the fair thing to do would be to trade back all the way around. This Mr. Lawrence refused to do.

There is no evidence in the record that any improvements had been made at the time Mr. Showalter and James Buttitta talked to Mr. Lawrence, and there is no pretense in the evidence that Mr. Lawrence ever stated that he wouldn’t trade back because he had made improvements.

The defendants claim that on August 3, 1927, they prepared a typewritten list of the notes in the presence of James Buttitta and that the defendant White and Buttitta went into a booth in Lawrence’s store and checked the notes against this list as to the names of the makers and the amounts, - and that White gave the notes to James Buttitta to examine for a few days. They claim at that time that the defendant Lawrence and his daughter told the Buttittas that the notes were slow and old and that Lawrence would turn them over only under an indorsement without recourse, and that both White and Lawrence explained in elaborate detail that “without recourse” meant that the notes would be their property, and that they could not come back on Mr. Lawrence for them.

The evidence shows that not a penny was ever collected on the notes themselves; that Mr. Showalter wrote to. all of the makers of the notes without getting any result; that they were placed in the hands of Ernest Duffield, a constable, for collection and that he was unable to collect anything on the notes; that he was acquainted with some of the makers both personally and by reputation and that they were worthless, and that over $500 of the notes were barred by the statute of limitations.

The witnesses for the defendants were Doris G-. Lawrence, a daughter of the defendant Lawrence, and two employees who were working for Mr. Lawrence at the time of the transaction, Miss Hartz, a bookkeeper, and I. C. Johnson who was waiting to get some paper to work on one of Mr. Lawrence’s houses.

The jury heard all the witnesses on both sides and returned a verdict in favor of the plaintiffs for $1,000. Motion for a new trial was made and the points specified in writing, and the motion was overruled. This appeal followed.

It is contended by defendants that the only charge in the declaration supported by the proofs or any proof, is the charge that defendants represented the notes to be good, and that the expression was one of mere opinion as to value and not an expression of fact upon which fraud and misrepresentation could be based. It is further contended by defendants that plaintiffs cannot recover upon any alleged misrepresentations that have not been pleaded in the declaration, citing various authorities. There can be no question as to the last principle of law stated, but we cannot agree with defendants that their expressions made as to the notes, as charged in the declaration, was a mere expression of opinion as to value. In Pomeroy, vol. 2 of Equity Jurisprudence, sec. 878, the rule was laid down.

“Wherever a party states a matter which might otherwise be only an opinion and does not state it as the mere expression of his own opinion, but affirms it as an existing fact, material to the transaction, so that the other party may reasonably treat it as a fact and rely and act upon it as such, then the statement clearly becomes an affirmation of fact within the meaning of the general rule and may be a fraudulent misrepresentation. The statements which most frequently come within this branch of the rule are those concerning value.”

It has been held in various cases that similar expressions, taken in connection with the situation of the parties and the facts in the case, were more than a mere expression of opinion and are sufficient misrepresentations upon which to ground an action of fraud: Leonard v. Springer, 197 Ill. 532, 536; Murray v. Tolman, 162 Ill. 417, 422; and Howell v. Wyatt, 168 Ill. App. 651, 655.

In Howell v. Wyatt, supra, the court held: “Where the vendee is wholly ignorant of the value of the property, and the vendor knows this, and also knows that the vendee is relying upon his (the vendor’s) representation as to value, and such representation is not a mere' expression of opinion but is made as a statement of fact, which statement the vendor knows to be untrue, such a statement is a representation by which the vendor is bound. Murray v. Tolman, 162 Ill. 417; Custer v. Harmon, 105 Ill. App. 76; Hicks v. Stevens, 121 Ill. 186. It cannot be said as a matter of law that value is never a material fact. Statements of value made in pursuance of a scheme on the part of the defendant constitute fraud and deceit. Leonard v. Springer, 197 Ill. 532.”

Under the contract as made, plaintiffs were to convey their house and lot to defendant Lawrence, and Lawrence was to convey to plaintiffs a vacant lot and assign notes to the amount of $2,000, which were represented to be good. The only issue in the case made was as to the false representations about the notes. There was no question but that defendants knew all about the house and lot and the plaintiffs knew or could see the value of the vacant lot. Defendants assign error-because they were not permitted to show the value of plaintiff’s house and lot and that it had little value above the mortgage, citing certain cases in Iowa, Michigan and another State to the effect that the damages may be minimized on the result of the entire transaction. This is not the rule in Illinois, nor in the great majority of the States, where it is held that the ' buyer is entitled to “his bargain” as to all matters about which there is no controversy. (Drew v. Beall, 62 Ill. 164, 168; Antle & Bro. v. Sexton, 137 Ill. 410, 416; Bates v. Zybell, 242 Ill. App. 655.) There was no error in the ruling of the court upon the evidence in question.

It was assigned as error that the court permitted defendant White’s statements, outside of the presence of his codefendant, to go to the jury before plaintiffs had introduced proofs establishing the conspiracy. The defendants were joint defendants and the admissions of either of the conspirators, in furtherance of the plan, were admissible against the other and are binding upon them all. (People v. Covitz, 262 Ill. 514, 547; Lasher v. Littell, 202 Ill. 551, and People v. Harrington, 310 Ill. 613, 617).

The order of proof is entirely within the discretion of the court, and when the proofs are all in, if there is no evidence tending to establish a conspiracy then a verdict should be directed in favor of the defendants. In many cases a conspiracy can only be established by the jury taking into consideration all of the proofs and all of the facts and circumstances in evidence. It is urged that. White was the agent of plaintiffs to effect the trade, and that any statements made by him were selfserving in aid of plaintiffs, We have yet to learn that the civil relationship of agency, established^ purges the agent of all fraud contemplated or carried out. The court did not err in admitting this testimony.

It is urged that none of plaintiffs’ instructions specifically define the charges of conspiracy and fraud in the declaration; however, the instructions given for defendants and their modified instructions do fully and completely advise the jury of every element of the offense, charged and the jury were fully advised as to the injury and damage, and the assignment of error cannot be sustained.

Finally defendants assigned error that the verdict was against the weight of the testimony. Apparently, this assignment of error is abandoned, as defendants do not argue it in their brief. The jury heard and saw the witnesses and after reading all of the testimony we cannot see how the jury could have arrived at a different conclusion. The notes turned over by defendants were conditional sales notes, many of them barred by the statute of limitations and all of them, by the proofs, worthless.

We are satisfied that the proofs justify the verdict ; therefore, the judgment of the circuit court of Champaign county is affirmed.

Per curiam: The above opinion having been filed in this case and thereafter a rehearing having been granted, upon a full hearing and reconsideration of the cause we adhere to the opinion as originally written, and the judgment of the circuit court of Champaign county is affirmed.

Affirmed.


text:
    The Edward Edinger Company v. J. E. Willis et al., Consolidated with Columbia Casualty Company, Appellant, v. The First Baptist Church of Decatur, Illinois, Appellee.
    Gen. No. 8,427.

      Heard in this court at the April term, 1930.
    Opinion filed January 26, 1931.
    Horace W. MoDavid and R. J. Monroe, for appellant.
    F. R. Wiley and Deck, Jack & Boggess, for appellee; Jesse L. Deck, of counsel.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

This appeal is brought to review a decree of the circuit court of Macon county in two cases brought to foreclose mechanics’ liens on the property of The First Baptist Church, a corporation, of Decatur, which arose out of a contract to build a new church for that corporation, one Ernest Widmer being the general contractor.

The first case designated in the records was instituted by Edward Edinger Company as a corporation by bill filed September 11, 1925, to foreclose a-lien for cut stone furnished as subcontractor, naming as parties defendant J. E. Willis et al., trustees of The First Baptist Church, Margaret Widmer, administratrix of the estate of Ernest Widmer, deceased (the contractor), and Columbia Casualty Company, a corporation (the surety), but the summons was served only upon the trustees. On* February 8, 1926, The First Baptist Church of Decatur, a corporation, was made defendant, entered its appearance and filed answer. The suit was dismissed as to Columbia Casualty Company without service of summons or notice. The trustees also filed their answer to the amended bill. Both answers are substantially alike and admit the making of the contract between the church corporation and Ernest Widmer in his lifetime for construction of a new church building in Decatur; that he died on July 24, 1925, without completing the job, and that the Columbia Casualty Company, his surety, entered upon the completion of the contract; denies any right to lien of the complainant Edinger, and further alleges that no notice of lien was given to the owner within 60 days after final- delivery of any materials by complainant Edinger, and further denies that any foreclosure proceeding was instituted by Edinger Company against said First Baptist Church within four months thereafter. Subsequently thereto it developed that Edward Edinger Company was a partnership and by leave of the court the copartners were substituted as complainants in lieu of the corporation.

While this suit was still pending and undetermined, the general contract was completed by the Columbia Casualty Company, and being unable to arrive at a settlement with the owner, the Columbia Casualty Company, appellant, filed its bill of foreclosure in the circuit court of Macon county, the proceedings being instituted on April 30, 1926.

The bill sets forth that on July 30, 1924, the defendant, The First Baptist Church of Decatur, Illinois, a corporation, was the owner of lots one and two in block eight of Western Addition to the City of Decatur, and that on that date it entered into a contract in writing with one Ernest Widmer for the construction of a church building, copy of the contract and specifications being attached to the bill of complaint. The bill further sets forth the death of Widmer during the construction and before completion; that the complainant surety company entered upon the construction of the work and completed same, and that the building was tendered to the owner on March 11, 1926, and was accepted on March 13, 1926. The bill further alleged that payment became due by the terms of the contract on April 12, 1926, but that payment was refused. It appeared by the construction contract made a part of the bill of complaint that the time of completion was originally fixed as of July 1, 1925, but the bill alleged that an extension of time had been given, extending the time to September 1, 1925.

By amendment to the bill of complaint it was further alleged that the owner did not give possession of the premises on or before September 1, 1924, as the contract between the defendant and The First Baptist Church, and the said Ernest Widmer required, but on the contrary did not give possession thereof until some time during the month of November, 1924.

A written contract was entered into between appellee and Widmer, doing business as the Widmer Construction Company, on July 30, 1924, in and by which contract Widmer agreed, for the sum of $144,-000, to erect for appellee a church building according to the plans and specifications of the architect. All of the rights and liabilities of the parties arise out of this contract, which is the basis of this case.

Among the other provisions this contract provides:

Art. I. That Widmer was to furnish the material and build the building according to the specifications of the architect. He was also to receive a commission of two per cent for supervising the removal of the brick building already on the lot to the rear of the lot. (This building was incorporated into the new building, as a part thereof.)

Art. III. Which reserved to the appellee the right to make alterations in the plans and specifications; but such changes could only be made upon the written order of the architect.

Art. V. Provided that if the contractor did not show proper diligence in prosecuting the work the appellee could furnish labor and materials upon giving the contractor five days’ notice in writing (this at the expense of the contractor). If the architect certified the neglect of the contractor this was sufficient grounds therefor, and the appellee could take over the work and complete it at the cost of the contractor; and the architect’s certificate should be final as to such costs.

Art. VI. Provided for the completion of the building by July 1, 1925, provided the contractor got possession of the premises by September 1, 1924. This article also provides for a forfeit of $50 per day for every day the building remained uncompleted after that date or the date to which extended, by the architect, as liquidated damages.

Art. VII. Provided that should the work be delayed by any act or failure of the appellee or the architect to do anything, the time for the completion of the building should be extended for a period equivalent to the time lost by reason of the conduct of appellee or the architect. Provided, that no allowance could thus be made for such extension of time unless a written claim was made to the architect asking for an extension, within 24 hours after the occurrence of such delay.

Art. IX. Provided that any controversy arising between the contractor and the appellee should be settled by the architect, whose decision should be final (except certain matters might be arbitrated); but no request for arbitration was ever asked by either party under this clause and, therefore, it is not in question.

Art. X. Provided that while $144,000 was the contract price, the list of changes attached to the contract formed a part of it, and that the appellee might accept any or all of such changes at any time before the work was actually started on them; and provided the amount set opposite each change should be deducted from the contract price.

This article also provided the manner of making-payments by appellee as follows: “that such sum shall be paid in current funds by the owner to the contractor in instalments, upon written certificates of the architect that payments have become due. Each certificate shall represent 85 per cent of the architect’s estimate of the value of the labor incorporated in the building and material delivered on the site sincé the preceding- certificate was issued. The 15 per cent reserved shall be payable when the final certificate is issued. Said payments on instalments shall be made on the 10th day of each month for the work and material for the building for the preceding month. The final payment shall be made within 30 days after this contract is fulfilled.”

Art. XI. That n‘o certificate except the final one shall be conclusive evidence of the performance of the contract.

After the execution of this contract, appellant executed Widmer’s bond, as surety, for the faithful performance of the work on his part.

In accordance with Art. X, and the list thereto appended, appellee elected to make certain changes in the specifications. For example, where terra cotta was provided in the contract, appellee made the change to plaster; and also elected to make other minor changes. This was done on February 25, 1925, and before any work had been started on such portion of the contract. Also, on August 29, 1924, the appellee asked other changes according to the list attached to Art. X.

After the execution of the contract Widmer began work on the building on September 10, 1924. He conr tinned to carry out the construction work from that time up until the date of his death, July 24, 1925. After his death, the appellant began, on August 19, 1925, the work of completing the building, its representative in this matter being one Neubauer.

The bill alleged that during July, August, September, October, November and December of 1925, the defendant was in' default under its contract in that it failed to furnish the complainant for installation a large portion of the art glass windows and finish hardware; also that the owner failed to select its color scheme for the painters within a reasonable time after color charts had been submitted to the owner for approval, and that by reason thereof and numerous other changes and delays occasioned by the act or fault of the owner, it was impossible to complete the work on" the building until on or about March 11, 1926; by reason whereof the complainant was forced to lay out $2,500 in extra pay rolls and insurance; that claims for extra painting in the auditorium and lobby where terra cotta was eliminated and plaster substituted ; claims for extras for leaded glass in the doors and pastor’s study and for painting of interior iron work and for glass furnished in auditorium doors and transoms, had been presented to the architect and wrongfully refused. • ,

That claims on account of delays of or chargeable to the owner or on account of other contractors had been presented, and the architect refused to issue certificates therefor; that the architect was not and is not a fair and impartial person to pass upon the claims for extras or damages accruing to complainant by reason of delays of or chargeable to the owner, and that complainant cannot have a fair and impartial judgment from said architect on such items by reason of the prejudice and partiality of the architect.

The bill further alleged that no final certificate was furnished complainant on completion of the work, nor within 30 days thereafter, nor ‘has any final certificate been made, but the architect has failed and refused to deliver the same, although on to wit, April 20, 1926, a demand was made of the owner for final payment and final payment was refused unless complainant would agree to forfeit $50 per day as liquidated damages on and after September 1, 1925, but no objection was made by the owner that a final certificate had not been obtained from the architect and production of such certificate was therefore waived; that defendant offered a settlement but made no objection to failure of appellant to produce an architect’s final certificate, and none was requested from complainant.

The bill named as defendants The First Baptist Church, a corporation, and George Troy, the painting contractor. The church was served with summons on April 30, 1926. Troy was not served, but later released any claim of lien.

To the bill as amended The First Baptist Church filed its answer, in which it admits the completion of the building on March 11, 1926, and that it was accepted March 13, 1926; admits that Troy claimed a lien, but denies that it failed to give possession of the premises to the contractor on or before September 1, 1924, as required by the contractor. The answer fur: ther denies that in July, August, September, October, November and December of 1925, it was in default under its contract, and further denies that it delayed the complainant in any way in the completion of the building; further denies that the architect wrongfully refused to issue a certificate for the extra work claimed in the bill; further denies that the architect was unfair and partial; denies that the amount claimed by complainant is due and states that there is due the complainant the sum of $776.38 only; further denies that any architect’s certificate was ever demanded and alleges that its production was not waived by the owner, and pleads recoupment of damages for delay in the construction according to the contract to the amount of $9,000; admits liability to the amount of $776.38 and denies liability for any other sums whatsoever.

Replications to this answer were filed by Columbia Casualty Company and on its motion the two causes were consolidated and referred to the master for hearing. In substance the master’s report found in favor of complainant, Columbia Casualty Company, as to all but two of its claims for extras, namely, the item claimed of $327.50 for painting of plaster in the auditorium and lobby where terra cotta was eliminated, and the item of $2,202.67 for damages on account of the delay of the owner. He also found that the defendant was entitled to the deduction of $46 for a lobby grille allowed by the architect, and allowed claimed damages to February 19, 1926, amounting- to $7,400. The architect in his report allowed $8,350 damages for delay in construction, which he had deducted from the amount remaining due. The architect had also deducted the amount of claim of Edward Edinger Company, but the latter claim was disallowed by the master and held nbt tb be a lien. The master found the total sum due complainant to be $3,507.06, but refused to allow any interest thereon. His report was filed April 19, 1929, three years after the completion of the contract.

Upon hearing before the court the exceptions to the master’s report were overruled, and decree was entered sustaining the master’s report and ordering the bill of Edinger Company dismissed for want of equity and ordering that complainant have foreclosure of its lien upon The First Baptist Church to the amount of $3,507.06.

The appellant, Columbia Casualty Company, has brought the record, by appeal, to this court for review.

The principal item of contention in this record is the allowance of liquidated damages to appellee in the sum of $7,400 for the delay of 148 days in the completion of the work, at the rate of $50 a day, in accordance with the terms of the contract.

It is contended by appellant and supported by the proofs that the delay of the house moving contractor seriously interfered with the work to be done by Widmer under his contract, and the architect called Mrs. David’s attention to that fact and reminded her that when the building contract was let, it was expected that the house be moved in 15 days. A letter was produced in which the building committee stated that because of the delay of the house mover the time was extended for 60 days. Because of this delay Widmer was not permitted to commence work on the basement until the month of November, 1924, and the basement was not completed at the time of the storm in December, and the contractor laid off men until January 10 following. The time of completion specified in the contract was upon the provision that the owner gave possession of the ground on or before September 1, 1924.

According to the witness Fisher, a licensed structural engineer and general contractor of broad experience, the extension of 60 days allowed by the owner was wholly disproportionate to the time actually lost by reason of delay of the house mover. It should have been about four months. For this delay and default the architect refused to allow Widmer any extra time. The trustees of the church, however, relented and allowed him 60 days ’ extension, but during a time when Widmer’s men could not work by reason of the wintry and stormy weather.

■ Art glass was reserved by the owner to be let to another contractor. On July 8, 1925, approximately two weeks before Widmer’s death, appellee, The First Baptist Church, entered into contract with Jacoby Art Glass Company of St. Louis, Missouri, for that company to furnish and install the art glass, in which contract it was specified that that contractor have 60 days after receipt of patterns and sizes for doing its work, and the window sash to be furnished and delivered to Jacoby Art Glass Company. This provision was contrary to the general specifications in the Widmer contract. On July 20,1925, Widmer wrote a letter to the architect claiming a delay at that time of two weeks on account of art glass and requesting an extension of time. This request was refused. On July 18, 1925, July 31, 1925, and August 4, 1925, Jacoby Art Glass Company was. writing letters to the architect Clausen, endeavoring to get blue prints and sizes for the art glass to be made by them. On August 1, 1925, Clausen mailed blue print of one light and promised a set of plans the following week. On August 25, 1925, the list and glass sizes were returned to the architect for further information, and again the Art Glass Company requested that the sash be sent to St. Louis.

Jacoby Art Glass Company finally sent a man to Decatur to get full information. He reached Decatur on August 25, 1925, and visited the site of the work and obtained additional information necessary to complete the contract. This would make the 60 days allowed for delivery of art glass expire October 25, 1925. During the latter part of August and the first part of September, appellant’s carpenters were busily engaged installing the window sash in the church as specified in the contract, and after the art glass company wanted the sash sent to St. Louis, as shown by correspondence mentioned, appellant was directed to remove the sash and ship the same to St. Louis, which was done, and the carpenters then had nothing to do; so that on September 12, 1925, Clausen gave an order for extra work in the old house and the men were used there until the bulk of the art glass sash came back in October. The carpenters were called back on the job when the art glass sash was received from St. Louis, the first shipment being made on October 3, 1925, another one on October 22, 1925, another October 27, 1925, another December 7, 1925, and another December 24, 1925. The first shipment was received on October 5 and the carpenters were recalled on October 7. The carpenters were through installing such sash as had been delivered on October 30, and were laid off then until after Christmas for lack of heat. These sash were put in as rapidly • as possible and the greater part of them were finally installed on October 30, 1925. There were some windows left with no glass in, and these were boarded up. Other glass was ordered changed by the owner on November 5, 1925. Other art glass was delivered from time to time, some of it not being shipped until in January, 1926.

By section 80 of the contract it is provided that finish hardware would be furnished by the owner and installed by the contractor. On June 29,1925, the witness Brinkoetter for Morehouse and Wells Company, hardware dealers, made up a hardware list, which was submitted to the building committee of The First Baptist Church, and an order for the same was finally placed on July 22,1925. Part of this was special hardware which would normally require from 10 to 14 weeks to get. Delivery began some time in September, 1925, and continued along until the late winter. In July, 1925, Widmer, by letter to the architect, requested an extension of time on account of delay in furnishing hardware, and this request was refused.

When the hardware came it was learned that not all of the items were in the shipment. The Norton door brackets did not come until February 26, 1926. Some were ordered extra. The Lemco Adjusters were wrong and were not replaced until some time in February. Clausen testified that the hardware list and order were made up by Widmer or his superintendent. This was denied by the hardware clerk who compiled the list and Clausen later retracted his statement.

Extra hardware was ordered from time to time beginning on January 19 and extending to March 10, 1926. The last order on March 10 was for 37 • casement adjusters, which were not ordered or delivered until after the inspection by the committee on March 5. According to Clausen, it takes a carpenter an hour to put one on. They were put on as soon as received. The escutcheons were not in the large shipment and did not come until January, 1926. The Norton door checks, of which the appellee, The First Baptist Church, purchased an additional 14 on January 19, 1926, each required one man one-half day to install. Neubauer was waiting on hardware and called at the hardware office nearly every day.

On October 25, 1925, demand was made of the heating contractor for heat by October 31. The heating contractor refused to make temporary heating connections unless he was paid extra for temporary settings. On October 26, 1925, the architect replied to the heating contractor, again requesting connections for heat, but not giving any order for temporary connection. On December 10, 1925, The First Baptist Church gave an order for heating connections and agreed to hold the heating contractor harmless for the use of the plant. This was accepted on December 12, 1925, and the heating plant turned over to appellant for use at that time.

It Was conceded by all parties that it was the duty of the owner to furnish heat. Appellee does not controvert these claims, but seeks to hold Widmer and appellant to the very letter of the contract as set out in Article VII, in spite of the fact that Widmer asked for an extension of time for delays on account of nondelivery of hardware and art glass four days before he took his own life, all of which requests were refused by Clausen, the architect. The master and court below did not follow the language of the contract in determining the rights between these parties, nevertheless the court below held that the record did not show that the architect was guilty of any actual fraud. It is not necessary that appellant establish actual fraud, as understood by appellee in other classes of cases.

Arbitrary nonaction is in law equivalent to a decision or exercise of judgment against a party without any ground or warrant of fact therefor, and is a fraud in fact and in law. Blome v. Wahl-Henius Institute, 150 Ill. App. 164, 171. If the architect, without the existence of any reason or excuse whatever, or warrant of fact therefor, arbitrarily decided against the appellant upon questions in dispute, then such action was in law a fraud. Blome v. Wahl-Henius Institute, supra.

Appellee has cited a number of cases laying down the measure and extent of proof required to show actual fraud. All of the eases cited relate to bills to set aside deeds, cancel contracts, bills of sale, or are bills in the nature of creditors’ bills, and all charge actual fraud.

Actual fraud, that is, fraud in which a dishonest motive prevails, as distinguished from constructive fraud, is not the only grounds of impeachment of an architect’s certificate. Proof of constructive fraud or gross mistake of such a character as to amount to a palpable and substantial wrong is sufficient. None of the cases cited by appellee apply to or throw any light upon the question of impeachment of an architect’s certificate in cases of this kind.

This record is replete with testimony showing arbitrary conduct amounting to constructive fraud on the part of the architect. During the months of January and February, 1926, nearly all of the work performed was upon extras and changes ordered by appellee. We call attention to the baptistry, which was to be constructed with a concrete core wall, plastered on the outside and lined with ceramic tile. The concrete core wall had been installed and was dried out and the outside plastered,,and they were ready to put on the lining of tile on December 28, 1925. The tile pattern was then laid out on the pulpit platform. The owner, through the building committee, stopped the work and ordered another contractor, Dennis & Son, to cut out the front of the baptistry and put in a glass front down 18 inches. This required cutting and re-water proofing. Appellant was unable to retain the ceramic tile setter which it had obtained for the work and when Dennis & Son turned the work back some time in January, 1926, for appellant to proceed, difficulty was had in obtaining a competent tile setter. A number of different workmen were tried and discharged, so that the work was not completed until March 3, 1926. Yet the owner now is in the position of claiming that it is entitled to $50 a day as damages during all that time that it had glass setters, water proofers and tile setters working on the baptistry in the auditorium. This is in keeping with the correspondence that passed between Widmer and the architect in July, 1925, as follows:

“July 20, 1925

“S. A. Clausen, Architect.

This letter will notify you in accordance with the terms of our contract that we have been delayed in our work on the First Baptist Church for two weeks on account of art glass and hardware and are now asking’ for extension of time on account of same.

(Signed) E. Widmer Construction Company.” “E. Widmer Construction Company.

Be your letter 20th asking for extension of time.

Be advised that the building in its present state with plastering only fairly begun, walls full of dampness and no trim delivered, any request for extension of time due to the fact that there has been no finish hardware delivered by the owner is ridiculous and cannot be granted. Allow me to call your attention to the fact that the owners will be damaged $50 per day after September 1st until completion.

(Signed) S. A. Clausen.”

On July 24, 1925, Widmer committed suicide.

Neubauer testified that in the presence of Marsh, Wiley and the attorney Clausen, the architect, said that “inasmuch as he had been insulted by Mr. Widmer and at times by Mr. Hess, he believed in making the Columbia Casualty Company pay every penny he possibly could.” The minister, Marsh, as to this conversation, stated that Mr. Monroe and Mr. Wiley were present. “I do not recall Mr. Clausen’s exact words. He said that there had been so much delay, and he had had so much difficulty that so far as he was concerned he didn’t care if the contractor had to fill the contract to the letter.”

Clausen’s reply to this testimony was: “I don’t remember the exact words but what I said was to the effect that they had tried to get out of their contract so many times that I believed in settling* on the basis of the contract. I was not angry.” Neither Mr. Monroe nor Mr. Wiley testified.

It is nowhere pointed out where Widmer or the appellant in any manner sought to get out of or abandon any of the terms of the contract, except in the matter of delay, and it is admitted that appellee caused the first delay in not delivering the possession of the premises to Widmer until about the middle of November, 1924, when the contract provided that the possession of the premises should be delivered to Widmer on or before the first of September, 1924. It is undisputed also that appellee was the cause of numerous delays in the furnishing of hardware, art glass, heat and other items, and during the late fall and early winter of 1925 and 1926, appellant’s work was almost exclusively devoted to extras required by appellee, so that it becomes the main question in the case whether appellee, in equity, is entitled to recover the penalty of $50 per day as liquidated damages as provided in the contract.

Clausen, the architect, for some reason other than from the judgment of an unbiased arbiter, seems to have been determined that appellant suffer the penalty of the bond. It is said that Widmer did not in all cases make requests for delay, according to the terms of the contract, within 24 hours. Widmer made repeated requests for delay, nearly all of which were refused, and when the possession of the building plot was denied to him or kept from him for 75 days, his request for delay was ignored by the architect; but later appellee recanted and allowed him 60 days. This conduct on the part of the architect was plainly in violation of the contract and fraudulent.

In the course of the construction of the edifice in the summer and fall of 1925, it appears that Widmer made claim for extension of time on account of delays for delivery of hardware and art glass, which were refused by the architect. Following this claim for extension on account of delay in delivering art glass, the appellant’s employees in the latter part of August and first part of September, 1925, were put upon the work of installing window sash in the building. Some time in the first part of September, the owner interfered with this work, and through its subcontractor, the art glass company, had the sash removed and shipped to St. Louis. There was nothing left for the carpenters to do, so the architect on September 12, 1925, issued an order for extra work in the old house and the workmen were transferred to that place and stayed there until October 7 following, when some of the art glass came back from St. Louis. Then the art glass installation continued at intervals from that time on until January, 1926. A substantial part of it was delivered the latter part of October, so that by October 30 the building, with the exception of some few windows, was enclosed in glass. The windows without glass were nailed up with boards to keep out the cold.

It is contended by appellee that appellant has not shown that the defaults and delays caused by appellee delayed the completion of the building. Neither has appellee undertaken in any manner to show that its defaults and delays did not delay the completion of the building. The burden of proof on this question, where appellee is seeking to recoup damages, is upon appellee. (Galbraith v. Chicago Architectural Iron Works, 50 Ill. App. 247; Snell v. Cottingham, 72 Ill. 161, 171.)

A set-off or recoupment by way of counterclaim is an action in the nature of which the defendant is the plaintiff and he must establish his rights as upon a distinct action, and if the action be for breach of contract must show that he himself is not in default as to the agreement. (Carterville Mining Co. v. Eldridge, 199 Ill. App. 534, 535; Cincinnati, Indianapolis & Western Ry. Co. v. Baker, 130 Ill. App. 414; Albrecht v. Dillon, 224 Ill. App. 421; Adlard v. Muldoon, 45 Ill. 193, 195.) The burden of proof is on the party claiming such damages, to prove that such damages were caused by default of the party to be charged, separate from any damages that may have resulted from act of claimant. (City of Elgin v. Welch, 16 Ill. App. 483; Walsh v. North American Cold Storage Co., 260 Ill. 322, 327; Weeks v. Little, 89 N. Y. 566, 569.) The appellee, The First Baptist Church, cannot recover damages by way of recoupment when it was in default on the contract and contributed to the delay. (Sage v. Purcell Co., 90 Ill. App. 160, 165; Carterville Mining Co. v. Eldridge, 199 Ill. App. 534; Sundstrom v. Weinrich, 207 Ill. App. 313; Sperry v. Fanning, 80 Ill. 371, 373; Belden v. Woodmansee, 81 Ill. 25; Regnell v. Meiswinkel Co., 191 Ill. App. 238.) It is incumbent upon one erecting a building to keep the work in such a state of forwardness as to enable the contractors to complete their work within the time limit. (Taylor v. Renn, 79 Ill. 181, 185.) "Where the owner fails to deliver the site of the work free of obstructions within the time specified and thereafter accepts the work, the owner waives any and all right to liquidated damages provided in the contract for delay on the part of the contractor. Strobel Steel Const. Co. v. Sanitary District of Chicago, 160 Ill. App. 554, 559. If the owner or his subcontractors interfere with the work of the contractor or delays it, the owner is estopped from claiming damages for delay in construction. Regnell v. Meiswinkel Co., 191 Ill. App. 238. Where the delay is caused by extra work or changes ordered by the architect, claims of the owner for damages for delays will not be allowed. (Stresenreuter Bros. v. Bowes, 233 Ill. App. 143; Raymond Concrete Pile Co. v. Hartman Furniture & Carpet Co., 187 Ill. App. 426; The Bloomington Hotel Co. v. Garthwait, 227 Ill. 613.)

It follows that the court below erred in allowing to appellee $7,400 damages for delay in not completing the work on or before February 19, 1926. Based upon the same reasoning, it was not error that the court did not allow to appellant the items amounting to $2,202.67 for damages on account of the delay of the owner. This claim was made up of additional expense incurred by appellant for salary of the construction superintendent, Hess, who, it was claimed, had nothing to do while the art glass was in St. Louis and again when he was laid off in the months of November and December for the lack of heat. The item also includes the salary of Neubauer, general superintendent of appellant company, and his expenses, from the first part of December until after Christmas, and some other items of delay claimed to have been caused by appellee.

It cannot be claimed by appellant that the Widmer contract was performed without any delay on the part of the contractor, inasmuch as Widmer died on July 24, 1925, and the work was stopped completely until August 24 and 25 following, when appellant, after having been notified, secured the carpenters and plasterers and had them back at work upon the construction. This change necessitated a month’s delay in the completion of the work and appellant and the contractor, having caused a portion of the delay in the completion of the work, are not in a position to claim damages from appellee for its delay, where both parties have contributed to the delay, for the reasons heretofore stated.

Appellant further assigns error on the ground that the chancellor refused to allow a claim of $327.50 for painting plaster in the auditorium and lobby where terra cotta was eliminated. The original contract called for terra cotta on the walls and columns up 22 feet in the auditorium and hallways, but on January 24, 1925, The First Baptist Church, appellee, elected to change terra cotta to plaster. Nothing, was said about painting the plaster in the order of change. The subcontractor on painting had no notice of this change, and charged extra for it. When the order for it was given, it was claimed as extra. The reasonable and customary charge for this painting amounted to $281. It is not shown anywhere that the painting was ordered by the architect and was properly disallowed.

Appellant assigns error because the court refused to allow interest on the amount found due appellant from the date the balance was payable. This was error. The right to interest on mechanic lien demands is controlled by the Mechanics’ Liens Act and not by the statute on interest, and the claimant is entitled to interest at the legal rate from the time the money is due under the contract. (If 1, ch. 82, Cahill’s Rev. Stat. 1929; McDonald v. Patterson & Co., 186 Ill. 381 [affirming 84 Ill. App. 326] ; Walsh v. North American Cold Storage Co., 260 Ill. 322.) The amount of interest, in accordance with the statute, should be computed on the balance found due and payable from April 13, 1926, and added to the decree as modified in this opinion.

Appellee has filed an assignment of errors and the first is as follows: “If both parties agree by their contract in writing that the final payment is due only upon the final certificate of the architect, and that his finding shall be conclusive, can a suit be maintained where such final certificate is not produced and same has not been waived?” In other words, appellee insists that the actual letter of the contract should be carried out, regardless of the conduct of either party in relation thereto.

Upon the 13th day of March, 1926, the trustees of appellee, in writing, accepted the church building as completed, preserving their rights therein to have certain minor matters, such as a radiator shield, grading of lot and removing rubbish, etc., about which there is no contention, cared for. This action was taken by the trustees of the church'upon their own initiative and without consultation with the architect. He was ignored. The contract provides that final payment shall be made within 30 days after the contract is fulfilled. The 30 days expired on April 12, 1926. On April 13, 1926, a meeting was held at the National Bank of Decatur, at which meeting there were present Mr. Neubauer and the attorney for appellant, the trustees of the appellee, The First Baptist Church, the architect and attorneys for the church. An effort to arrive at a settlement took place. At the meeting the architect had before the board of trustees a statement of the account showing a balance' due appellant from appellee in the sum of $776.38, in which account appellant was charged the sum of $8,350 for 167 days’ delay in completing his contract. The attorney for the appellant stated that the time of settlement, 30 days after acceptance of the building, had expired, and unless the building was paid for appellant would have to take court action. He submitted a statement showing the company’s bill against the church. No demand by the church board for an architect’s certificate was made at that meeting. A bill was presented by Neubauer of from $10,000 to $12,000. The trustees were willing to pay $6,000 as testified to by the witness Gregory, cashier of the bank. No mention of an architect’s certificate was made by anyone. The architect did present a full statement of the account from his point of view. No settlement was made. The trustees had taken out of the hands of the architect the matter of granting extensions of time in some instances. The trustees had accepted the fulfilment of the contract without consulting the architect. This suit was commenced April 30, 1926. On May 4, the architect issued a form certificate, in accordance with the account he had presented, stating that appellant was entitled to receive a final payment of $776.38 for the completion of the contract. It is claimed that this suit was prematurely brought and that appellant is entitled to recover nothing because suit was commenced before any final certificate was issued. We cannot agree with this contention. The church building, having been accepted and all of the parties having met to accomplish an adjustment or settlement, the submission by the architect of all the figures and accounts, showing a balance due appellant, amounted to a final certificate, if the form of a final certificate be necessary.

When the appellant’s representatives at the meeting-in the National Bank of Decatur on April 13, 1926, made demand of the owner for final settlement, and the same was refused on other grounds, and no request was made for the architect’s final certificate, the owner waived the production of the certificate. (Downey v. O’Donnell, 92 Ill. 559, 563; Lohr Bottling Co. v. Ferguson, 122 Ill. App. 270, 272 [affirmed, 223 Ill. 88]; Masek v. Chmelik, 169 Ill. App. 589, 591; Supreme Lodge O. M. P. v. Meister, 204 Ill. 527; Kleinschnittger v. Dorsey, 152 Ill. App. 602.) The duty to produce an architect’s certificate as a condition precedent to payment may be released by his non-action or failure to act when the final figures were requested. Vermont Street M. E. Church v. Brose, 104 Ill. 206, 218. The fact that the meeting at which demand for payment was made and no request made by the owner for final certificate, was a meeting- to settle the differences of the parties, does not render the evidence inadmissible. Such evidence has been considered by the courts. The Bloomington Hotel Co. v. Garthwait, 227 Ill. 613, 629. While an offer of compromise is not in itself admissible, independent admissions or statements of the facts made during the meeting may be given in evidence against the party making them. (Hook v. Bunch, 180 Ill. App. 39, 41; Kuhn v. Williams, 124 Ill. App. 390, 393.) Any act of the owner under a building contract which prevents the contractor from obtaining the certificate, or any conduct showing that he has waived such provision, will release the contractor from the duty of procuring such certificate. (Kleinschnittger v. Dorsey, supra.)

Appellee’s second and third assignments of errors are as follows: “If, by the terms of the contract, the architect is made the adjuster of all differences arising in the course of the construction of the building between the builder and the owner, as he is in this case, can the court substitute its findings in the place of those of the architect in regard to such controversies?

“In the absence of any fraud or unfairness on the part of the architect can there properly be any other evidence of the amount due from appellee to appellant than the final certificate of the architect, as contracted by the parties?”

It is sufficiently plain that neither the master nor the chancellor followed the findings of the architect, but in several instances found that his findings were arbitrary and unfair, amounting to constructive fraud. What we have said upon that subject should be sufficient. It cannot be out of place to quote definitions of fraud given in Corpus Juris, vol. 26, 1059: “Fraud in its generic sense, especially as the word is used in courts of equity, comprises all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another. Fraud has also been defined as any cunning or artifice used to cheat or deceive another. However, the wisdom of an exact legal definition of fraud has been questioned, and it has been stated that fraud is better left undefined, and some courts have said that the common law not only fails to define fraud but perhaps asserts as a principle that there shall be no definition. Further it is frequently stated that owing to the multiform character of fraud and the great variety of attendant circumstances no definition which is all inclusive can be framed, but each case must be determined on its particular facts.” And again in the same volume of Corpus Juris, page 1061: “Constructive fraud is a breach of legal or equitable duty which, irrespective of the moral guilt of the fraud feasor, the law declares fraudulent because of its tendency to deceive others, to violate public or private confidence, or to injure public interests. Neither actual dishonesty of purpose nor intent to deceive is an essential element of constructive fraud. An intent to' deceive is an essential element of actual fraud. The presence or absence of such an intent distinguishes actual fraud from constructive fraud.”

In the opinion of this court the conduct of the architect in many instances was arbitrary, unfair and prejudicial and amounted to a constructive fraud, and this court, the same as the master and the chancellor, has not felt bound by his determinations, and the cross assignment of errors by appellee should be and is overruled.

It is argued by appellee that the mere fact that the building was turned over to the owners is not a waiver of the architect’s certificate, nor of any of appellee’s rights under the contract, which may be conceded. And appellee further contends that this is a- chancery proceeding and that all equitable principles apply, by which this court has sought to be guided in this case.

As to the minor matters not completed at the time the trustees accepted the building, not argued by appellee, and no proofs having been submitted as to the expense of completing or failure to complete the minor matters, the rule is that a substantial compliance with a construction contract is sufficient, and recovery may be had thereon even though there may be technical or unimportant omissions or defects. (Peterson v. Pusey, 237 Ill. 204, 209; Shepard v. Mills, 173 Ill. 223; Evans v. Howell, 211 Ill. 85; Erikson v. Ward, 266 Ill. 259, 264; Kleinschnittger v. Dorsey, 152 Ill. App. 598, 603.) The test is whether a substantial sum is required to complete the work. (Errant v. Columbia Western Mills, 195 Ill. App. 14.)

Upon a full reading of the record, this court is impressed that the attempt to charge appellant penal damages in this case to the amount of $7,400 for delays and defaults, to which appellee was the greater contributor, is inequitable and unconscionable and is not compatible with the principles of equity.

It follows that the decree of the circuit court of Macon county should be and is reversed and the cause remanded to that court, with directions to enter a decree in favor of the appellant and against the appellee for the sum of $10,907.06, with interest thereon in accordance with the Mechanics’ Liens Act from April 13, A. D. 1926, to the date of the entry of the decree hereafter in said circuit court of Macon county, and that by said decree appellant have the relief prayed for in his bill of complaint.

Reversed and remanded with directions.